Perez vs.

The Medical City General Hospital

DOMINADOR S. PEREZ and CELINE CAMPOS, Petitioners, vs. THE MEDICAL CITY GENERAL HOSPITAL, ALFREDO BENGZON, BENITA MACALAGAY and MARIANNE FRANCISCO, Respondents. G.R. No. 150198 March 6, 2006 AZCUNA, J.: FACTS: Petitioners were orderlies of respondent Medical City. In their lockers were found some medicines and supplies owned by the latter. After refusing to voluntarily resign with separation pay, petitioners were dismissed from service. The LA found respondents guilty of illegal dismissal. On appeal to the NLRC, the LAs decision was reversed and the complaint was dismissed. Petitioners then went to the CA on a petition for certiorari which issued the assailed decision, denying the petition and affirming the decision of the NLRC. Hence, this petition. ISSUE: WON petitioners were illegally dismissed. RULING: In reversing the Labor Arbiter, the NLRC concluded: The hospital has convincingly established that all employees, including the herein complainants, are not allowed to place hospital items in their respective lockers as this is contrary to the rules and procedures of the hospital x x x. Contrary to the position taken by the Labor Arbiter, the Hospitals dismissal of petitioners did not rest on speculative inferences. Petitioners themselves have admitted that properties belonging to the Hospital were found inside their lockers. As to how these items got inside the lockers, petitioners acknowledged having placed them there against company rules. In view of these admissions, there is ample evidence to support a charge for pilferage unless petitioners can satisfactorily explain their possession.

St. Lukes Medical Center EmployeesAssociationvs. NLRC [G.R. No. 162053.March 7, 2007] Facts: Maribel S. Santos was an X-Ray Technician in the Radiology department of St. Lukes. Subsequently, Congress passed and enacted Republic Act No. 7431 known as the Radiologic Technology Act of

1992, which required that a person must obtain the proper certificate of registration from the Board of Radiologic Technology for the practice or offer to practice as a radiology and/or x-ray technologist in the Philippines. In turn, the Director of the Institute of Radiology issued a final notice to Santos requiring her to comply by taking and passing the examination; otherwise St. Lukes may be compelled to retire her from employment should there be no other position available where she may be absorbed. Despite extensions of time within which she could comply, Santos failed to comply with the requirement for her continued employment. Issue: Was Santos validly dismissed for failure to secure a certificate of registration from the Board of Radiologic Technology? Held: While the right of workers to security of tenure is guaranteed by the Constitution, its exercise may be reasonably regulated pursuant to the police power of the State to safeguard health, morals, peace, education, order, safety, and the general welfare of the people. Consequently, persons who desire to engage in the learned professions requiring scientific or technical knowledge may be required to take an examination as a prerequisite to engaging in their chosen careers. The most concrete example of this would be in the field of medicine, the practice of which in all its branches has been closely regulated by the State. It has long been recognized that the regulation of this field is a reasonable method of protecting the health and safety of the public to protect the public from the potentially deadly effects of incompetence and ignorance among those who would practice medicine. The same rationale applies in the regulation of the practice of radiologic and x-ray technology. The enactment of R.A. (Nos.) 7431 and 4226 are recognized as an exercise of the States inherent police power. It should be noted that the police power embraces the power to prescribe regulations to promote the health, morals, educations, good order, safety or general welfare of the people. The state is justified in prescribing the specific requirements for x-ray technicians and/or any other professions connected with the health and safety of its citizens. St. Lukes being engaged in the hospital and health care business, is a proper subject of the cited law; thus, having in mind the legal requirements of these laws, the latte
PLDT v NLRC and Marilyn Abucay, G.R. No. L80609http://www.lawphil.net/judjuris/juri1988/aug1988/gr_80609_1988.htmlFACTS: Marilyn Abucay, a traffic operator of the Philippine Long Distance Telephone Company, was accused by two complainants of havingdemanded and received from them the total amount of P3,800.00 inconsideration of her promise to facilitate approval of their applications fortelephone installation. 1 Investigated and heard, she was found guilty ascharged and accordingly separated from the service. 2 She went to theMinistry of Labor and Employment claiming she had been illegallyremoved. After consideration of the evidence and arguments of theparties, the company was sustained and the complaint was dismissed forlack of merit.Both the petitioner and the private respondent appealed to the NationalLabor Relations Board, which upheld the said decision in toto anddismissed the appeals.

4 The private respondent took no further action,thereby impliedly accepting the validity of her dismissal. The petitioner,however, is now before us to question the affirmance of the above- quotedaward as having been made with grave abuse of discretion. The position of the petitioner is simply stated: It is conceded that anemployee illegally dismissed is entitled to reinstatement and backwages asrequired by the labor laws. However, an employee dismissed for cause isentitled to neither reinstatement nor backwages and is not allowed anyrelief at all because his dismissal is in accordance with law. In the case of the private respondent, she has been awarded financial assistanceequivalent to ten months pay corresponding to her 10 year service in thecompany despite her removal for cause. She is, therefore, in effectrewarded rather than punished for her dishonesty, and without any legalauthorization or justification. The award is made on the ground of equityand compassion, which cannot be a substitute for law. Moreover, suchaward puts a premium on dishonesty and encourages instead of deterringcorruption.For its part, the public respondent claims that the employee is sufficientlypunished with her dismissal. The grant of financial assistance is notintended as a reward for her offense but merely to help her for the loss of her employment after working faithfully with the company for ten years.ISSUE: The legality of the award of financial assistance to an employeewho had been dismissed for cause as found by the public respondent.HELD: The Court notes, however, that where the exception has been applied, thedecisions have not been consistent as to the justification for the grant of separation pay and the amount or rate of such award. Thus, the employeesdismissed for theft in the Firestone case and for animosities with fellowworkers in the Engineering Equipment case were both awarded separationpay not withstanding that the first cause was certainly more serious thanthe second. No less curiously, the employee in the Soco case was allowedonly one-half month pay for every year of his 18 years of service, but inFilipro the award was two months separation pay for 2 years service. InFirestone, the employee was allowed full separation pay corresponding tohis 11 years of service, but in Metro, the employee was granted only one-half month separation pay for every year of her 15year service. It wouldseem then that length of service is not necessarily a criterion for the grantof separation pay and neither apparently is the reason for the dismissal. The Court feels that distinctions are in order. We note that heretofore theseparation pay, when it was considered warranted, was requiredregardless of the nature or degree of the ground proved, be it mereinefficiency or something graver like immorality or dishonesty. Thebenediction of compassion was made to cover a multitude of sins, as itwere, and to justify the helping hand to the validly dismissed employeewhatever the reason for his dismissal. This policy should be reexamined. Itis time we rationalized the exception, to make it fair to both labor andmanagement, especially to labor. There should be no question that where it comes to such valid but notiniquitous causes as failure to comply with work standards, the grant of separation pay to the dismissed employee may be both just andcompassionate, particularly if he has worked for some time with thecompany. For example, a subordinate who has irreconcilable policy orpersonal differences with his employer may be validly dismissed fordemonstrated loss of confidence, which is an allowable ground. A workingmother who has to be frequently absent because she has also to take careof her child may also be removed because of her poor attendance, thisbeing another authorized ground. It is not the employee's fault if he doesnot have the necessary aptitude for his work but on the other hand thecompany cannot be required to maintain him just the same at the expenseof the efficiency of its operations. He too may be validly replaced. Underthese and similar circumstances, however, the award to the employee of separation pay would be sustainable under the social justice policy even if the separation is for cause.But where the cause of the separation is more serious than mereinefficiency, the generosity of the law must be more discerning. There is nodoubt it is compassionate to give separation pay to a salesman if he isdismissed for his inability to fill his quota but surely he does not deservesuch generosity if his offense is misappropriation of the receipts of hissales. This is no longer mere incompetence but clear dishonesty. A securityguard found sleeping on the job is doubtless subject to dismissal but maybe allowed separation pay since his conduct, while inept, is not depraved.But if he was in fact not really sleeping but sleeping with a prostituteduring his tour of duty and in the company premises, the situation ischanged completely. This is not only inefficiency but immorality and thegrant of separation pay would be entirely unjustified.We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is validlydismissed for causes other than serious misconduct or those reflecting onhis moral character. Where the reason for the valid dismissal is, forexample, habitual intoxication or an offense involving moral turpitude, liketheft or illicit sexual relations with a fellow worker, the employer may notbe required to give the dismissed employee separation pay, or financialassistance, or whatever other name it is called, on the ground of social justice.We hold that the grant of separation pay in the case at bar is unjustified. The private respondent has been dismissed for dishonesty, as found by thelabor arbiter and affirmed by the NLRC and as she herself has impliedlyadmitted. The fact that she has worked with the PLDT for more than adecade, if it is to be considered at all, should be taken against her as itreflects a regrettable lack of loyalty that she should have strengthenedinstead of betraying during all of her 10 years of service with the company.If regarded as a justification for moderating the penalty of dismissal, it willactually become a prize for disloyalty, perverting the meaning of social justice and undermining the efforts of labor to cleanse its ranks of allundesirables. The Court also rules that the separation pay, if found due under thecircumstances of each case, should be computed at the rate of one

monthsalary for every year of service, assuming the length of such service isdeemed material. This is without prejudice to the application of specialagreements between the employer and the employee stipulating a higherrate of computation and providing for more benefits to the dischargedemployee. The petition is GRANTED. PNOC-EDC, et al. vs Frederick Abella G.R. No. 153904 January 17, 2005 FACTS: On 01 June 1989, Frederick V. Abella started working with PNOC-EDC as a probationary Security Assistant at its SNGP in Ticala, Valencia, Negros Oriental. Subsequently, he became a regular employee. On 20 April 1990, Abella was informed that his employment with PNOC-EDC would be terminated effective 21 May 1990, allegedly due to a company-wide reorganization pursuant to its Manpower Reduction Program, wherein the position of Security Assistant at PNOC-EDC SNGP had been abolished. Aggrieved, Abella filed a case of illegal dismissal, and for actual, moral, and exemplary damages with the NLRC at Dumaguete City. NLRC held that Abella was illegally dismissed as the company and its officers failed to show a "clear scheme and convincing proof of reorganization. All other claims are dismissed. An appeal was timely filed with the NLRC. Meanwhile, with said appeal still pending in the NLRC, the labor arbiter issued an order dated 20 November 1991, directing the company to "admit back to work or reinstate the complainant under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll." Pursuant to the above order, Abella was reinstated in the payroll as a General Services Assistant (PAL II), his original position of Security Assistant having been abolished by virtue of the company-wide reorganization. Subsequently, he was re-slotted as a Pipeline Foreman, while he was actually discharging the functions of a Security Assistant. As insisted by the petitioners, this situation was due to the fact that the original position of the private respondent had already been abolished in the previous company-wide reorganization in 1991. But then, the private respondent was re-slotted as Security Assistant when he was transferred to the Leyte Geothermal Project. He was, thus, performing the functions of a Security Assistant and at the same time occupying the official position of a Security Assistant though in a geographically different location, when said position became vacant. In the meantime, for failing to heed the directives of his supervisors, Abella received another "show cause" memorandum dated 14 July 1994, from Tongco, ordering him to explain in writing why no disciplinary action should be taken against him for insubordination and for being AWOL. Abella, in his reply dated 16 July 1994, countered that "he is not guilty of insubordination since he was not reinstated to his former position as Security Assistant at Ticala, Valencia, Negros Oriental, per Writ of Execution issued by the labor arbiter." Abella ended up filing three complaint before the NLRC for unfair labor practice, illegal suspension, nonpayment of mid-year bonus and 13th month pay for 1990 and 1991, claim for hazard pay, and annual salary increase against the company and its officers. After hearing the parties, the Labor Arbiter Geoffrey Villahermosa rendered declaring the respondents not guilty of unfair labor practice and illegally dismissing the complainant. On appeal, the NLRC reversed and set aside the Decision. The company came to the Court of Appeal, wherein the appellate court dismissed the petition for lack of merit. ISSUE: Whether or not the reinstatement of respondent was a faithful compliance of the provisions of Paragraph 3, Article 223 of the Labor Code. RULING: Reinstatement presupposes that the previous position from which one had been removed still exists, or that there is an unfilled position more or less of a similar nature as this previously occupied by the employee. Accordingly, an employee who is separated from his employment on a false or nonexistent cause is entitled to be reinstated to his former position because the separation is illegal. If the position is no longer available for any other valid and justifiable reason, however, the reinstatement of the illegally dismissed employee to his former position would neither be fair nor just. The law itself can not exact compliance with what is impossible. Ad imposible tenetur. The employers remedy is to reinstate the employee to a substantially equivalent position without loss of seniority rights as provided for above. Of relevant significance in the case at bar is the right of the employer to transfer employees in their work station. We have previously held that it is the employers prerogative, based on its assessment and

perception of its employees qualifications, aptitudes and competence, to move them around in the various areas of its business operations in order to ascertain where they will function with maximum benefit of the company. This right flows from ownership and from the established rule that labor (law) does not authorize the substitution of judgment of the employer in the conduct of his business, unless it is shown to be contrary to law, morals, or public policy. The rationale behind this rule is that an employees right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. Especially so in this case where the respondent was not appointed for a security assistant for a specified place but was only designated therein. But of course, the managerial prerogative to transfer personnel must be exercised without grave abuse of discretion --- not unnecessary, inconvenient nor prejudicial to the displaced employee, meaning there is no demotion in rank or diminution of salary, benefits and other privileges.

THE COCA-COLA EXPORT CORPORATION v. CLARITA P. GACAYANG.R. No. 149433December 15, 2010LEONARDO-DE CASTRO, J.: FACTS Clarita P. Gacayan was a Senior Financial Accountant of Coca Cola ExportCorporation.One of her benefits was the reimbursement of meal and transportationexpenses incurred while rendering overtime work. This reimbursement was allowedonly when the employee worked overtime. The maximum amount allowed to bereimbursed wasP150.00 pesos. Because of thealleged alterations(date and foodpurchase) in three receipts (McDonalds and Shakeys) which Gacayan submitted tosupport her claim for reimbursement of meal expenses, Coca-cola called the attentionof Gacayan and required her to explain.Gacayan denied any personal knowledge inthe commission of the alterations in the subject receipts. She asserted that her sistersdriver/messenger may have caused the alteration, but she could not be certain aboutit. With regard to the Shakeys receipt, respondent maintained that what she orderedwas a buddy pack with extra mojos. Her explanation was referred to the AssistantManager of the Shakeys Pizza Parlor and upon verification, it was discovered that thereceipt was actually for three orders of Bunch of Lunch, and not for Buddy Pack whichhas a different item code.A memorandum was sent to Gacayan inviting her to a hearing and formalinvestigation and to give her an opportunity to explain the issues against her.Gacayanappeared at the initial hearing but failed to appear on the second due to her doctorsadvice to rest since she was suffering from severe mixed migraine and musclecontraction headache.Gacayan also complained of the alleged partiality of theinvestigating committee against her. During that second hearing the personnel of Shakeys denied the allegations of Gacayan. Coca Cola then sent another noticeinforming Gacayan of the re-setting of the continuation of the formal investigation butGacayan failed to attend such hearing. Coca Cola then concluded the formalinvestigation. In a letter,Coca Cola dismissed Gacayan for fraudulently submittingtampered and/or altered receipts in support of her petty cash reimbursements in grossviolation of the companys rules and regulations.Gacayan then filed a complaint for illegal dismissal. Gacayan averred that,assuming that she altered the receipts in question, dismissal was too harsh a penaltyfor her considering that: (a) it was her first offense in her 9 years of service; (b)the offense imputed was minor, as only the dates and items, not the amounts, werealtered or the amounts involved were very minimal; (c) the company did not suffermaterial damage, as she was really entitled to the P150.00 allowance even withoutaccompanying receipt; and (d) respondent acted without malice, as she reallyrendered (unpaid) overtime work on those three dates. Coca Cola maintained tha

Gacayan was dismissed for cause, that of tampering official receipts to substantiateher claim for (meal) reimbursement which reflects her questionable integrity andhonesty.Petitioner added that in terminating the services of an employee forbreach of trust, it is enough that the misconduct of the employee tends to prejudicethe employers interest since it would be unreasonable to require the employer towait until

he is materially injured before removing the cause of the impending evil.The Labor Arbiter ruled in favor of Coca Cola and dismissed the complaint.It was held that Coca Cola complied with the notice requirement strictly and thatGacayan was terminated for repeatedly submitting fraudulent items of expense,clearly in violation of company rules and regulations which consequently resulted inloss of trust and confidence. NLRC affirmed. The Court of Appeals reversed and setaside the Resolutions ruling that the penalty of dismissal imposed was too harsh.Coca Cola appealed, contending that Gacayans repeated submission of altered or tampered receipts to support her claim for reimbursement constitutes abetrayal of the employers trust and confidence and a serious misconduct, thus,giving cause for the termination of her employment. ISSUE WON there is serious misconduct. HELD The Labor Code mandates that before an employer may validly dismiss anemployee from the service, the requirement of substantial and procedural dueprocess must be complied with. Under the requirement of substantial due process,the grounds for termination of employment must be based on just or authorizedcauses.Article 282 of the Labor Code enumerates the just causes for thetermination of employment, thus:ART. 282. Termination by employer. - An employer may terminate anemployment for any of the following causes:(a) Serious misconduct or willful disobedience by the employee of the lawful ordersof his employer or representative in connection with his work;(b) Gross and habitual neglect by the employee of his duties;(c) Fraud or willful breach by the employee of the trust reposed in him by hisemployer or duly authorized representative; (d) Commission of a crime or offense by the employee against the person of hisemployer or any immediate member of his family or his duly authorizedrepresentative; and(e) Other causes analogous to the foregoing.In the instant case, it was only in theReply to Respondents Comment, thatpetitioner made mention of another ground for the dismissal of respondent, that of serious misconduct, when she submitted altered or tampered receipts to support herclaim for reimbursement. Such allegation appears to be a mere afterthought, beingtardily raised only in the Reply.In a case, it was held that: Misconduct has been defined as improper orwrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful character, and implies wrongfulintent and not mere error of judgment. The misconduct to be serious must be of such grave and aggravated character and not merely trivial and unimportant.Suchmisconduct, however serious, must nevertheless be in connection with theemployees work to constitute just cause for his separation. Thus, for misconduct orimproper behavior to be a just cause for dismissal, (a) it must be serious; (b) mustrelate to the performance of the employees duties; and (c) must show that theemployee has become unfit to continue working for the employer. Indeed, anemployer may not be compelled to continue to employ such person whosecontinuance in the service would be patently inimical to his employers business.In this light, the alleged infractions of respondent could hardly be consideredserious misconduct. It is well to stress that in order to constitute seriousmisconduct which will warrant the dismissal of an employee, it is notsufficient that the act or conduct complained of has violated someestablished rules or policies. It is equally important and required that theact or conduct must have been done with wrongful intent. Such is, however,lacking in the instant case Maternity Childrens Hospital vs. Secretary of Labor G.R. No. 78909 June 30, 1989

EN BANC: MEDIALDEA, J.: Facts: Petitioner is a semi-government hospital, managed by the Board of Directors of the Cagayan de Oro Women's Club and Puericulture Center, headed by Mrs. Antera Dorado, as holdover President. The hospital derives its finances from the club itself as well as from paying patients, averaging 130 per month. It is also partly subsidized by the Philippine Charity Sweepstakes Office and the Cagayan De Oro City government. Petitioner has forty-one (41) employees. Aside from salary and living allowances, the employees are given food, but the amount spent therefor is deducted from their respective salaries On May 23, 1986, ten (10) employees of the petitioner employed in different capacities/positions filed a complaint with the Office of the Regional Director of Labor and Employment, Region X, for underpayment of their salaries and ECOLAS, which was docketed as ROX Case No. CW71-86. On June 16, 1986, the Regional Director directed two of his Labor Standard and Welfare Officers to inspect the records of the petitioner to ascertain the truth of the allegations in the complaints. Based on their inspection report and recommendation, the Regional Director issued an Order dated August 4, 1986, directing the payment of P723,888.58, representing underpayment of wages and ECOLAs to all the petitioner's employees. Petitioner appealed from this Order to the Minister of Labor and Employment, Hon. Augusto S. Sanchez, who rendered a Decision on September 24, 1986, modifying the said Order in that deficiency wages and ECOLAs should be computed only from May 23, 1983 to May 23, 1986, On October 24, 1986, the petitioner filed a motion for reconsideration which was denied by the Secretary of Labor in his Order dated May 13, 1987, for lack of merit. Issue: Whether or not the Regional Director had jurisdiction over the case and if so, the extent of coverage of any award that should be forthcoming, arising from his visitorial and enforcement powers under Article 128 of the Labor Code. Held: This is a labor standards case, and is governed by Art. 128-b of the Labor Code, as amended by E.O. No. 111. Under the present rules, a Regional Director exercises both visitorial and enforcement power over labor standards cases, and is therefore empowered to adjudicate money claims, provided there still exists an employer-employee relationship, and the findings of the regional office is not contested by the employer concerned.

Labor standards refer to the minimum requirements prescribed by existing laws, rules, and regulations relating to wages, hours of work, cost of living allowance and other monetary and welfare benefits, including occupational, safety, and health standards (Section 7, Rule I, Rules on the Disposition of Labor Standards Cases in the Regional Office, dated September 16, 1987). Decision: ACCORDINGLY, this petition should be dismissed, as it is hereby DISMISSED, as regards all persons still employed in the Hospital at the time of the filing of the complaint, but GRANTED as regards those employees no longer employed at that time. SO ORDERED. Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Cortes, Grio-Aquino and Regalado, JJ., concur

Calalang vs. Williams G.R. No. 47800 2 December 1940 FIRST DIVISION, LAUREL (J): 4 CONCUR Facts: A resolution by the National Traffice Commission that animal drawn vehicles be prohibited from passing along Rosario Street extending from Plaza Calderon de la Barca to Dasmarias Street, from 7:30 a.m. to 12:30 p.m. and from 1:30 p.m. to 5:30 p.m.; and along Rizal Avenue extending from the railroad crossing at Antipolo Street to Echague Street, from 7 a.m. to 11 p.m., for a period of one year from the date of the opening of the Colgante Bridge to traffic was approved and adopted by the Secretary of Public Works and Communications upon indorsement by the Director of Public Works pursuant to Commonwealth Act 548 with modifications that Rosario Street and Rizal Avenue be closed to traffic of animal-drawn vehicles, between the points and during the hours as indicated. The Mayor of Manila and the Acting Chief of Police of Manila have enforced and caused to be enforced the rules and regulations thus adopted. Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila, brought before the Supreme Court the petition for a writ of prohibition against A. D. Williams, as Chairman of the National Traffic Commission; Vicente Fragante, as Director of Public Works; Sergio Bayan, as Acting Secretary of Public Works and Communications; Eulogio Rodriguez, as Mayor of the City of Manila; and Juan Dominguez, as Acting Chief of Police of Manila. Issue: Whether the rules and regulations promulgated by the Director of Public Works infringe upon the constitutional precept regarding the promotion of social justice to insure the well-being and economic security of all the people. Held: The promotion of social justice is to be achieved not through a mistaken sympathy towards any given group. Social justice is "neither communism, nor despotism, nor atomism, nor anarchy," but the humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objectively secular conception may at least be approximated. Social justice means the promotion of the welfare of all the people, the adoption by the Government of measures calculated to insure economic stability of all the competent elements of society, through the maintenance of a proper economic and social equilibrium in the interrelations of the members of the community, constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally, through the exercise of powers underlying the existence of all governments on the time-honored principle of salus populi est suprema lex. Social justice, therefore, must be founded on the recognition of the necessity of interdependence among divers and diverse units of a society and of the protection that should be equally and evenly extended to all groups as a combined force in our social and economic life, consistent with the fundamental and paramount objective of the state of promoting the

health, comfort, and quiet of all persons, and of bringing about "the greatest good to the greatest number." Decision: IN VIEW OF THE FOREGOING, the Writ of Prohibition Prayed for is hereby denied, with costs against the petitioner. So ordered.

MARIVELES SHIPYARD CORP V CA (REGONDOLA) 415 SCRA 573 QUISUMBING; November 11, 2003
NATURE Petition for review on certiorari of the decision of the CA FACTS - In Oct 1993, Mariveles Shipyard Corp engaged the services of Longest Force Investigation and Security Agency, Inc. to render security services at the formers premises. - Petitioner religiously complied with the terms and conditions of the security contract with Longest Force, promptly paying its bills and contract rates. However, it found the services being rendered by the assigned guards unsatisfactory and inadequate, causing Mariveles Shipyard Corp to terminate its contract with Longest Force on April 1995. Longest Force, in turn, terminated the employment of the security guards it had deployed at the shipyard. - Private respondents filed a case with the Labor Arbiter. Longest Force, in turn, filed a cross-claim against Mariveles Shipyard. - Longest force admitted the following: > that it employed private respondents as security guards and assigned them to work at petitioners shipyard, rendering 12 hours duty per shift > it is liable as to the non-payment of the alleged wage differential, but passed liability to petitioner alleging that the service fee paid by Mariveles was way below the PNPSOSIA and PADPAO rates - Petitioner denied liability on account of alleged illegal dismissal, stressing that no employer-employee relationship exists between it and security guards - Labor Arbiter declared Mariveles and Longest Force jointly and severally liable to pay the money claims of private respondents, and ordered their reinstatement. - NLRC affirmed in toto the decision of the Labor Arbiter. CA denied due course to petitioners appeal and dismissed the case ISSUE WON petitioner Mariveles should be held jointly and severally liable with Longest Force for the payment of wage differentials and overtime pay owing to private respondents HELD YES, petitioners liability is joint and several that of Longest Force pursuant to Articles 106, 107 and 109 of the Labor Code. Art 106. CONTRACTOR OR SUBCONTRACTOR Whenever an employer enters into a contract with another person in the performance of the formers work, the employees of the contractor and of the latters subcontractor, if any, shall be paid in accordance with the provisions of this Code. In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severally liable with this contractor or subcontractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employee directly employed by him. Art 107. INDIRECT EMPLOYER The provisions of the immediately preceding Article shall likewise apply to any person, partnership, association or corporation which, not being an employer, contracts with an independent contractor for the performance of any work, task, job or project. Art 109. SOLIDARY LIABILITY The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code. For purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers. - When petitioner contracted for security services with Longest Force, petitioner became an indirect employer of private respondents. When the agency as contractor failed to pay the guards, the corporation as principal becomes jointly and severally liable to the guards wages. The security agency is held liable by virtue of its status as direct employer, while the corporation is deemed the indirect employer of the guards for the purpose of paying their wages in the event of failure of the agency to pay them. This statutory scheme gives the workers the ample protection consonant with labor and social justice provisions of the 1987 Constitution. - Labor standards are enacted by the legislature to alleviate the plight of workers whose wages barely meet the spiraling costs of basic needs. Labor laws are considered written in every contract. Stipulations in violation thereof are considered null. Similarly, legislated wage increases are deemed amendments to the contract. Thus, employers cannot hide behind their contracts in order to evade their (or their contractors or subcontractors) liability for noncompliance with the statutory minimum wage. - However, the solidary liability of petitioner with that of Longest Force does not preclude the application of the Civil Code provisions on the right of reimbursement from his co-debtor by the one who paid. Disposition Decision of Appellate Court affirmed. Petitioner and Longest Force are held liable jointly and severally for underpayment of wages and overtime pay of the security guards, without prejudice to petitioners right of reimbursement from Longest Force Investigation and Security Agency, Inc.

PNB vs CABANSAG Case Digest

[G.R. No. 157010. June 21, 2005] PHILIPPINE NATIONAL BANK, petitioner, vs. FLORENCE O. CABANSAG, respondent. FACTS In late 1998, [herein Respondent Florence Cabansag] arrived in Singapore as a tourist. She applied for employment, with the Singapore Branch of the Philippine National Bank. At the time, the Singapore PNB Branch was under the helm of Ruben C. Tobias, a lawyer, as General Manager, with the rank of VicePresident of the Bank. She applied for employment as Branch Credit Officer, at a total monthly package of $SG4,500.00, effective upon assumption of duties after approval. Ruben C. Tobias found her eminently qualified and wrote on October 26, 1998, a letter to the President of the Bank in Manila, recommending the appointment of Florence O. Cabansag, for the position. On December 7, 1998, Ruben C. Tobias wrote a letter to Florence O. Cabansag offering her a temporary appointment, as Credit Officer, at a basic salary of Singapore Dollars 4,500.00, a month and, upon her successful completion of her probation to be determined solely, by the Bank, she may be extended at the discretion of the Bank, a permanent appointment and that her temporary appointment was subject to certain terms and conditions. Cabansag accepted the position and assumed office. In the meantime, the Philippine Embassy in Singapore processed the employment contract of Florence O. Cabansag and, on March 8, 1999, she was issued by the Philippine Overseas Employment Administration, an Overseas Employment Certificate, certifying that she was a bona fide contract worker for Singapore. Barely three (3) months in office Tobias told Cabansag that her resignation was imperative as a cost-cutting measure of the Bank. Tobias, likewise, told Cabansag that the PNB Singapore Branch will be sold or transformed into a remittance office and that, in either way, she had to resign from her employment. She then asked Ruben C. Tobias that she be furnished with a Formal Advice from the PNB Head Office in Manila. However, Ruben C. Tobias flatly refused. Florence O. Cabansag did not submit any letter of resignation. On April 16, 1999, Ruben C. Tobias again summoned Florence O. Cabansag to his office and demanded that she submit her letter of resignation, with the pretext that he needed a Chinese-speaking Credit Officer to penetrate the local market, with the information that a Chinese-speaking Credit Officer had already been hired and will be reporting for work soon. She was warned that, unless she submitted her letter of resignation, her employment record will be blemished with the notation DISMISSED spread thereon. Without giving any definitive answer, Florence O. Cabansag asked Ruben C. Tobias that she be given sufficient time to look for another job. Ruben C. Tobias told her that she should be out of her employment by May 15, 1999. However, on April 19, 1999, Ruben C. Tobias again summoned Florence O. Cabansag and adamantly ordered her to submit her letter of resignation. She refused. On April 20, 1999, she received a letter from Ruben C. Tobias terminating her employment with the Bank. On January 18, 2000, the Labor Arbiter rendered judgment in favor of the Complainant and against the Respondents. PNB appealed the labor arbiters Decision to the NLRC. In a Resolution dated June 29, 2001, the Commission affirmed that Decision. Petitioner appealed to the Court of Appeals which rendered a decision in favor of Florence Cabansag. ISSUE Whether or not the arbitration branch of the NLRC in the National Capital Region has jurisdiction over the instant controversy. HELD The jurisdiction of labor arbiters and the NLRC is specified in Article 217 of the Labor Code and more specifically, Section 10 of RA 8042 reads in part: SECTION 10. Money Claims. Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages. Based on the foregoing provisions, labor arbiters clearly have original and exclusive jurisdiction over claims arising from employer-employee relations, including termination disputes involving all workers, among whom are overseas Filipino workers (OFW). We are not unmindful of the fact that respondent was directly hired, while on a tourist status in Singapore, by the PNB branch in that city state. Prior to employing respondent, petitioner had to obtain an employment pass for her from the Singapore Ministry of Manpower. Securing the pass was a regulatory requirement pursuant to the immigration regulations of that country. Noteworthy is the fact that respondent likewise applied for and secured an Overseas Employment Certificate from the POEA through the Philippine Embassy in Singapore. The Certificate, issued on March 8, 1999, declared her a bona fide contract worker for Singapore. Under Philippine law, this document authorized her working status in a foreign country and entitled her to all benefits and processes under our statutes. Thus, even assuming arguendo that she was considered at the start of her employment as a direct hire governed by and subject to the laws, common practices and customs prevailing in Singapore she subsequently became a contract worker or an OFW who was covered by Philippine labor laws and policies upon certification by the POEA. At the time her employment was illegally terminated, she already possessed the POEA employment Certificate. Whether employed locally or overseas, all Filipino workers enjoy the protective mantle of Philippine labor and social legislation, contract stipulations to the contrary notwithstanding. For purposes of venue, workplace shall be understood as the place or locality where the employee is regularly assigned when the cause of action arose. It shall include the place where the employee is supposed to report back after a temporary detail, assignment or travel. In the case of field employees, as well as ambulant or itinerant workers, their workplace is where they are regularly assigned, or where they are supposed to regularly receive their salaries/wages or work instructions from, and report the results of their assignment to their employers. Under the Migrant Workers and Overseas Filipinos Act of 1995 (RA 8042), a migrant worker refers to a person who is to be engaged, is engaged or has been engaged in a remunerated activity in a state of which he or she is not a legal resident; to be used interchangeably with overseas Filipino worker.[21] Undeniably, respondent was employed by petitioner in its branch office in Singapore. Admittedly, she is a Filipino and not a legal resident of that state. She thus falls within the category of migrant worker or overseas Filipino worker.

ISAE v Quisimbing G.R. No. 128845. June 1, 2000

J. Kapunan

Facts: The ISM, under Presidential Decree 732, is a domestic educational institution established primarily for dependents of foreign diplomatic personnel and other temporary residents. The local-hires union of the ISM were crying foul over the disparity in wages that they got compared to that of their foreign teaching counterparts. These questions are asked to qualify a teacher into a local or foreign hire. a.....What is one's domicile? b.....Where is one's home economy? c.....To which country does one owe economic allegiance? d.....Was the individual hired abroad specifically to work in the School and was the Schoolresponsible for bringing that individual to the Philippines? Should any answer point to Philippines, the person is a local hire. The School grants foreign-hires certain benefits to the foreign hires such as housing, transportation, and 25% more pay than locals under the theory of (a) the "dislocation factor" and (b) limited tenure. The first was grounded on leaving his home country, the second was on the lack of tenure when he returns home. The negotiations between the school and the union caused a deadlock between the parties. The DOLE resolved in favor of the school, while Dole Secretary Quisimbing denied the unions mfr. He said, The Union cannot also invoke the equal protection clause to justify its claim of parity. It is an established principle of constitutional law that the guarantee of equal protection of the laws is not violated by legislation or private covenants based on reasonable classification. A classification is reasonable if it is based on substantial distinctions and apply to all members of the same class. Verily, there is a substantial distinction between foreign hires and local hires, the former enjoying only a limited tenure, having no amenities of their own in the Philippines and have to be given a good compensation package in order to attract them to join the teaching faculty of the School. The union appealed to the Supreme Court. The petitioner called the hiring system discriminatory and racist. The school alleged that some local hires were in fact of foreign origin. They were paid local salaries. Issue: Whether or not the hiring system is violative of the equal protection clause Held: Yes, Petition granted Ratio: Public policy abhors discrimination. The Article on Social Justice and Human Rights exhorts Congress to "give highest priority to the enactment of measures that protect and enhance the right of all people to human dignity The very broad Article 19 of the Civil Code requires every person, "in the exercise of his rights and in the performance of his duties, [to] act with justice, give everyone his due, and observe honesty and good faith." International law prohibits discrimination, such as the Universal Declaration of Human Rights and the International Covenant on Economic, Social, and Cultural Rights. The latter promises Fair wages and equal remuneration for work of equal value without distinction of any kind. In the workplace, where the relations between capital and labor are often skewed in favor of capital, inequality and discrimination by the employer are all the more reprehensible. The Constitution also directs the State to promote "equality of employment opportunities for all." Similarly, the Labor Code provides that the State shall "ensure equal work opportunities regardless of sex, race or creed. Article 248 declares it an unfair labor practice for an employer to discriminate in regard to wages in order to encourage or discourage membership in any labor organization. In this jurisdiction, there is the term equal pay for equal work, pertaining to persons being paid with equal salaries and have similar skills and similar conditions. There was no evidence here that foreign-hires perform 25% more efficiently or effectively than the local-hires. The State, therefore, has the right and duty to regulate the relations between labor and capital. These relations are not merely contractual but are so impressed with public interest that labor contracts, collective bargaining agreements included, must yield to the common good.[ For the same reason, the "dislocation factor" and the foreign-hires' limited tenure also cannot serve as valid bases for the distinction in salary rates. The dislocation factor and limited tenure affecting foreign-hires are adequately compensated by certain benefits accorded them which are not enjoyed by local-hires, such as housing, transportation, shipping costs, taxes and home leave travel allowances. In this case, we find the point-of-hire classification employed by respondent School to justify the distinction in the salary rates of foreign-hires and local hires to be an invalid classification. There is no reasonable distinction between the services rendered by foreign-hires and local-hires. Obiter: However, foreign-hires do not belong to the same bargaining unit as the local-hires. It does not appear that foreign-hires have indicated their intention to be grouped together with local-hires for purposes of collective bargaining. The collective bargaining history in the Schoolalso shows that these groups were always treated separately. The housing and other benefits accorded foreign hires were not given to local hires, thereby such admixture will nbot assure any group the power to exercise bargaining rights. The factors in determining the appropriate collective bargaining unit are (1) the will of the employees (Globe Doctrine); (2) affinity and unity of the employees' interest, such as substantial similarity of work and duties, or similarity of compensation and working conditions (Substantial Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of employment status.

KASAPIAN NG MALAYANG MANGGAGAWA SA COCA-COLA (KASAMMA-CCO) V CA CHICO-NAZARIO; April 19, 2006

NATURE Petition for Review on Certiorari assailing the Decision of the Court of Appeals which affirmed the Decision of public respondent National Labor Relations Commission (NLRC) dismissing petitioners complaint against private respondent FACTS

- On 30 June 1998, the CBA for the years 1995-1998 executed between petitioner union and private respondent company expired. Petitioner submitted its demands to the company for another round of collective bargaining negotiations. Said negotiations came to a gridlock as the parties failed to reach a mutually acceptable agreement with respect to certain economic and non-economic issues. Thereafter, petitioner filed a notice of strike on 11 November 1998 with the National Conciliation and Mediation Board on the ground of CBA negotiation deadlock. Several conciliation conferences were conducted but the parties failed to reach a settlement. On 19 December 1998, petitioner held the strike in private respondents Manila and Antipolo plants. - Subsequently, both parties came to an agreement settling the labor dispute. Thus, on 26 December 1998, both parties executed and signed a MOA providing for salary increases and other economic and non-economic benefits. It likewise contained a provision for the regularization of contractual, casual and/or agency workers who have been working with private respondent for more than one year. Said MOA was later incorporated to form part of the 1998-2001 CBA and was thereafter ratified by the employees of the company. - Consequently, petitioner demanded the payment of salary and other benefits to the newly regularized employees retroactive to 1 December 1998, in accord with the MOA. However, the private respondent refused to yield to said demands contending that the date of effectivity of the regularization of said employees were 1 May 1999 and 1 October 1999. Meanwhile, a certification election was conducted on 17 August 1999 wherein the KASAMMA-CCO Independent surfaced as the winning union and was then certified by the DOLE as the sole and exclusive bargaining agent of the rank-and-file employees of private respondents Manila and Antipolo plants for a period of five years from 1 July 1999 to 30 June 2004. On 23 August 1999, the KASAMMA-CCO Independent demanded the renegotiation of the CBA which expired on 30 June 1998. Such request was denied by private respondent as there was already an existing CBA which was negotiated and concluded between petitioner and private respondent which was yet to expire on 30 June 2001. - On 9 December 1999, despite the pendency of petitioners complaint before the NLRC, private respondent closed its Manila and Antipolo plants resulting in the termination of employment of 646 employees. About 500 workers were given a notice of termination effective 1 March 2000 on the ground of redundancy. The affected employees were considered on paid leave from 9 December 1999 to 29 February 2000 and were paid their corresponding salaries. On 13 December 1999, four days after its closure of the Manila and Antipolo plants, private respondent served a notice of closure to the DOLE. - Petitioner contends that respondent violated the MOA by not recognizing the regularization of the 61 employees as of December 1, 1998 and giving them full benefits retroactive to that date. Petitioner likewise claims the closure of the plants was in bad faith, done in order to avoid renegotiations of the CBA, and therefore illegal. ISSUES 1. WON the regularization of the 61 employees was effective December 1, 1998 2. WON the closure of the plants was legal HELD 1. YES Ratio It must be noted that both parties admit the existence of said MOA and that they have voluntarily entered into said agreement. Furthermore, neither of the parties deny that the 61 employees have indeed been regularized by private respondent. The MOA, being a contract freely entered into by the parties, now constitutes as the law between them, and the interpretation of its contents purely involves an evaluation of the law as applied to the facts herein. It is the contention of petitioner that the date 1 December 1998 refers to the effective date of regularization of said employees, while private respondent maintains that said date is merely the reckoning date from which the one year employment requirement shall be computed. We agree with petitioner. It is logically absurd that the company will only begin to extend priority to these employees on a date that has already passed, when in fact they have already extended priority to these employees by agreeing to the contents of the MOA and signing said agreement. It is erroneous for the NLRC to conclude that extending to them the benefits of the MOA would violate the principle of "no-work-no-pay" as they are actually rendering service to the company even before 1 December 1998, and continued to do so thereafter. Moreover, under Article 280 of the Labor Code, any employee who has rendered at least one year of service, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. Also, under the law, a casual employee is only casual for one year, and it is the passage of time that gives him a regular status. Even if we were to follow private respondents contention that the date 1 December 1998 provided in the MOA is merely a reckoning date to determine who among the non-regular employees have rendered one year of service as of said date, all those who have been with the company for one year by said date must automatically be considered regular employees by operation of law. 2. YES Ratio The characterization of the employees service as no longer necessary or sustainable, and therefore properly terminable, is an exercise of business judgment on the part of the employer. The wisdom or soundness of such characterizing or decision is not subject to discretionary review on the part of the Labor Arbiter nor of the NLRC so long, of course, as violation of law or merely arbitrary and malicious action is not shown. The private respondents decision to close the plant was a result of a study conducted which established that the most prudent course of action for the private respondent was to stop operations in said plants and transfer production to other more modern and technologically advanced plants of private respondent. The subject closure and the resulting termination of the 639 employees was due to legitimate business considerations, as evidenced by the technical study conducted by private respondent. Disposition The assailed Decisions are hereby AFFIRMED with MODIFICATION. The 61 subject employees are hereby declared regular employees as of 1 December 1998 and are entitled to the benefits provided for in the Memorandum of Agreement.

DOLE PHILIPPINES INC V PAWIS NG MAKABAYNG OBRERO CORONA; (date) 2003

NATURE Petition for review on certiorari of the decision of the Court of Appeals FACTS - The petitioner and the respondent executed a CBA for the period starting February 1996 to February 2001. Under the bonuses and allowances section of the said CBA, a P10 meal allowance shall be given to employees who render at least 2 hrs of overtime work and free meals shall be given after 3 hours of actual overtime work. - Pursuant to this provision, some departments of granted free meals after exactly 3 ours of work. However, other departments granted free meals only after more than 3 hours of overtime work.

- The respondent filed a complaint against Dole, saying that free meals should be granted after exactly 3 hrs of overtime work, not after more than 3 hrs. The parties agreed to settle the dispute to voluntary arbitration. It was decided in favor of the respondent, directing the petitioner to grant free meals after exactly 3 hrs of overtime work. CA affirmed. ISSUES 1. WON free meals should be granted after exactly 3 hrs of work 2. WON the petitioner has the right to determine when to grant free meals and its conditions HELD 1. YES - The same meal allowance provision is found in their previous CBAs, the 1985-1988 CBA and the 1990-1995 CBA. However, it was amended in the 1993-1995 CBA, by changing the phrase after 3 hrs of overtime work to after more than 3 hrs of overtime work. In the 1996-2001 CBA, the parties had to negotiate the deletion of the said phrase in order to revert to the old provision. Clearly, both parties had intended that free meals should be given after exactly 3 hrs of overtime work. - The disputed provision is clear and unambiguous, hence the literal meaning shall prevail. No amount of legal semantics can convince the Court that after more than means the same as after. 2. NO - The exercise of management prerogative is not unlimited. It is subject to the limitations provided by law. In this case, there was a CBA, and compliance therewith is mandated by the express policy of the law. Disposition Petition denied

AMERICAN WIRE AND CABLE DAILY RATED EMPLOYEES UNION V AMERICAN WIRE AND CABLE CO., INC. CHICO-NAZARIO: April 29, 2005
FACTS - American Wire and Cable Co., is a corporation engaged in the manufacture of wires and cables. On Feb.16, 2001, an original action was filed before the NCMB of the DOLE by the two unions (American Wire and Cable Daily Rated Employees and American Wire and Cable Monthly Rated Employees) for voluntary arbitration. They alleged that respondent company, without valid cause, suddenly and unilaterally withdrew and denied certain benefits which they have long enjoyed. These are: a) Service Award b) 35% premium pay of an employees basic pay for the work rendered during Holy Monday, Holy Tuesday, Holy Wednesday, December 23, 26, 27, 28 and 29 c) Christmas party d) Promotional increase. - A promotional increase was sought by 15 of its members who were given new job classifications. These new hob classifications according to the union are in the form of a promotion. Increase was not given. Petitioners contention - withdrawal of the 35% premium pay for selected days during Holy Week and Christmas season, the holding of a Christmas party, and its incidental benefits, and the giving of service awards was a customary practice that can no longer be unilaterally withdrawn by respondent without consent of the petitioner. The benefits in question were given by respondent consistently, deliberately and unconditionally since time immemorial. The benefits given by the respondent cannot be considered as a bonus as they are not founded on profit. Even assuming that it can be treated as a bonus, the grant of the same, by reason of its ling and regular concession, may be regarded as part of regular compensation. Respondents contention -The grant of all subject benefits has not ripened into practice that the employees concerned can claim a demandable right over them. The grant of these benefits was conditional based upon the financial conditions that existed before have indeed substantially changed thereby justifying the discontinuance of said grants. ISSUE WON respondent is guilty of violating article 100 of the Labor Code, when the benefits/entitlements given to the members of petitioner union were withdrawn HELD *preliminary issue raised by respondent was the error in the mode of appeal by the petitioners. Respondent contends that petitioner should have raised a petition for review on certiorari under Rule 45, and not through a special civil action for certiorari under Rule 65 of the Rules on Civil Procedure. Thus, case should be dismissed outright. NO - Court ruled that the SC may brush aside the procedural barrier and take cognizance of the petition as it raises an issue of paramount importance. - ART. 100. PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS. -Nothing in this Book shall be construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of promulgation of this Code. - a determination must first be made on whether the benefits are in the nature of a bonus or no, and assuming they are so, whether they are demandable and enforceable obligations. - Definition of bonus (Producers Bank of the Philippines v. NLRC)

a bonus is an amount granted and paid to an employee for his industry and loyalty it is an act of generosity granted by an enlightened employer to spur the employee to greater efforts the granting of a bonus is a management prerogative thus a bonus is not a demandable and enforceable obligation except when it is made part of the wage, salary or compensation of the employee. - Court ruled that the benefits /entitlements subjects of the instant case are all bonuses given by respondent out of its generosity and munificence. Benefits/entitlements are all in excess of what the law requires each employer to give its employees. Since they are above what is strictly due, the granting of the same was a management prerogative, which, whenever management sees necessary, may be withdrawn. - the consequential question therefore that needs to be settled is if the subject benefits, which are bonuses, are demandable or not. - the Court does not believe so. For a bonus to be enforceable, it has to be promised by the employer and expressly agreed upon by the parties or it must have a fixed amount and had been a long and regular practice on the part of the employer. To be considered regular practice the giving of the bonus should have been done over a long period of time and must be shown to have been consistent and deliberate. - the benefits in question were never part of any express agreement. They were never even incorporated in the Collective Bargaining Agreement. The Christmas party and its incidental benefits and the giving of cash incentive together with the service award cannot be said to have fixed amounts. There was a downtrend in the amount given for service awards. There was also a downtrend with respect to the holding of Christmas parties as the locations were changed from paid venues to free ones. -The additional 35% premium pay for work during Holy Week and Christmas season cannot be held to have ripened into a company practice that the petitioners have a right to demand. This practice was only granted for two years and with the express reservation from respondent corporations owner that it cannot continue the same in view of the companys current financial condition.

DAVAO FRUITS CORPORATION V ASSOCIATED LABOR UNIONS (ALU) QUIASON; August 24, 1993
NATURE This is a petition for certiorari to set aside the resolution of the National Labor Relations Commission (NLRC) FACTS - On December 28, 1982 respondent Associated Labor Unions (ALU), for and in behalf of all the rank-and-file workers and employees of petitioner, filed a complaint (NLRC Case No. 1791-MC-XI-82) before the Ministry of Labor and Employment, Regional Arbitration Branch XI, Davao City, against petitioner, for "Payment of the Thirteenth-Month Pay Differentials." Respondent ALU sought to recover from petitioner the thirteenth month pay differential for 1982 of its rankand-file employees, equivalent to their sick, vacation and maternity leaves, premium for work done on rest days and special holidays, and pay for regular holidays which petitioner, allegedly in disregard of company practice since 1975, excluded from the computation of the thirteenth month pay for 1982. - In its answer, petitioner claimed that it erroneously included items subject of the complaint in the computation of the thirteenth month pay for the years prior to 1982, upon a doubtful and difficult question of law. According to petitioner, this mistake was discovered only in 1981 after the promulgation of the Supreme Court decision in the case of San Miguel Corporation v. Inciong (103 SCRA 139). - A decision was rendered on March 7, 1984 favoring ALU. That ordered Davao Fruits Corporation to pay the 1982 13th month pay differential to all its rankand-file workers/employees herein represented by complainant Union. Petitioner appealed the decision of the Labor Arbiter to the NLRC, which affirmed the said decision accordingly dismissed the appeal for lack of merit. Petitioner elevated the matter to the Supreme Court. ISSUES 1. WON the computation of the thirteenth month pay given by employers to their employees under P.D. No. 851, payments for sick, vacation and maternity leaves, premiums for work done on rest days and special holidays, and pay for regular holidays may be excluded in the computation and payment thereof, regardless of long-standing company practice 2. WON the petitioner may invoke the principle of solution indebiti HELD 1. The "Supplementary Rules and Regulations Implementing P.D. No. 851," which put to rest all doubts in the computation of the thirteenth month pay, was issued by the Secretary of Labor as early as January 16, 1976, barely one month after the effectivity of P.D. No. 851 and its Implementing Rules. And yet, petitioner computed and paid the thirteenth month pay, without excluding the subject items therein until 1981. Petitioner continued its practice in December 1981, after promulgation of the afore-quoted San Miguel decision on February 24, 1981, when petitioner purportedly "discovered" its mistake. From 1975 to 1981, petitioner had freely, voluntarily and continuously included in the computation of its employees' thirteenth month pay, the payments for sick, vacation and maternity leaves, premiums for work done on rest days and special holidays, and pay for regular holidays. The considerable length of time the questioned items had been included by petitioner indicates a unilateral and voluntary act on its part, sufficient in itself to negate any claim of mistake. - A company practice favorable to the employees had indeed been established and the payments made pursuant thereto, ripened into benefits enjoyed by them. And any benefit and supplement being enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by the employer, by virtue of Section 10 of the Rules and Regulations Implementing P.D. No. 851, and Article 100 of the labor of the Philippines, which prohibit the diminution or elimination by the employer of the employees' existing benefits (Tiangco v. Leogardo, Jr., 122 SCRA 267, [1983]). 2. Petitioner cannot invoke the principle of solutio indebiti which as a civil law concept that is not applicable in Labor Law. Besides, in solutio indebiti, the obligee is required to return to the obligor whatever he received from the latter (Civil Code of the Philippines, Arts. 2154 and 2155). Petitioner in the instant case, does not demand the return of what it paid respondent ALU from 1975 until 1981; it merely wants to "rectify" the error it made over these years by excluding unilaterally from the thirteenth month pay in 1982 the items subject of litigation. Solutio indebiti, therefore, is not applicable to the instant case. Disposition finding no grave abuse of discretion on the part of the NLRC, the petition is hereby DISMISSED, and the questioned decision of respondent NLRC is AFFIRMED

Suico vs. NLRC

- Petitioners Suico, Ceniza, and Dacut were employees of PLDT Cebu Jones Exchange and members of Manggagagaw Komunikasyon Pilipinas (MKP). They participated in the strike (by picketing) staged by MKP on Sept. 1997. The DOLE assumed jurisdiction over the dispute and ordered the striking employees to return to work but this was not heeded and instead, an Opposition was filed. The Opposition was denied by DOLE but the employees continued the strike. During the continuance of the strike, a managerial employee of PLDT was injured when strikers blocked her way to the premises of PLDT. Petitioners were implicated and were sent notices to explain, within 48 hrs., why they should not be terminated. However, the petitioners did not give any explanation and two more notices were sent to them. Petitioners replied to the last notice by saying that they wished to exercise their right to be heard in a formal hearing to be set within 5 days from their receipt of formal written complaint and statements of witnesses. PLDT replied that the formal hearing is being deferred until the petitioners file their answer to the complaints. Petitioners, however, merely reiterated their request for formal hearing. Thereafter, PLDT sent them notices of termination, citing as just causes therefor, the petitioners participation in the illegal strike, the physical assault on the manager, Art. 264 of the Labor Code, and their repeated failure to answer the charges against them. - Petitioner Mariano is an employee of PLDT Laoag City Sub-Exchange and a member of MKP. Mariano participated in the strike staged on Sept. 1997. During the strike, a PLDT subscriber was injured and humiliated. The subscriber identified Mariano as the culprit. PLDT sent a notice to Mariano, asking him to explain why he should not be terminated for violation of Art. 264. Mariano did not reply to the notice and another letter was sent to him by PLDT. To this, Mariano replied that he wished to be heard in a formal hearing. For his failure to answer the charge against him, PLDT terminated his employment, saying that his actions were just causes for termination. - Petitioner Borje was an employee of PLDT SFU Mother Exchange and a member of MKP. In the Sept. 1997 strike. He received a notice from PLDT, charging him with committing illegal acts (hurling stones at a supervisor, security guard, and PLDT vehicle) during the strike and asking for an explanation why he should not be terminated. In response, Borje invoked his right to be heard in a formal hearing. PLDT, in turn, sent a termination letter to Borje for his failure to give a written explanation.

- 1. Whether the termination of the petitioners were based on just cause. - 2. Whether the termination followed the rudiments of procedural due process. -

- 1. Yes. Art. 264 (a) and (e) are just causes for terminating employees by reason of strike-related cases. - 2. No. Even with strike-related cases, the procedure laid down by Art. 277 should be followed. Art. 277(b) provides that the procedure for termination prescribed therein is without prejudice to the adoption by the employer of company policy on the matter, provided this conforms with the guidelines set by the DOLE such as Rule XXII of the Implementing Rules of Book V. Company policies or practices are binding on the parties. Some can ripen into an obligation on the part of the employer, such as those which confer benefits on employees or regulate the procedures and requirements for their termination. - PLDTs company policy provides that an employee under investigation for the commission of an offense or infraction shall be informed in writing of the particular act constituting the offense or infraction imputed to him. He may answer the charges against him in writing within a reasonable period of time (at least 48 hours but not more than 72 hours) or be afforded the opportunity to be heard and defend himself with the assistance of his counsel or union representative, if he so desires. PLDT, however, refused to implement said policy, contending that it applies to administrative cases only and not to strike-related cases such as the ones involving Suico, et al. PLDT failed to prove that a termination proceeding arising from strike-related violence is not an administrative case. If by administrative case, PLDT refers to cases arising from violation of company rules and regulations, then the proceedings against Suico, et al. were of that nature for the notices sent to said employees accused them not just of breach of Art. 264 of the Labor Code but also of behavior prejudicial to company operations and violative of the company code of conduct. The termination proceedings against Suico, et al. were therefore administrative in nature, - While PLDT complied with the two-notice requirement (the first set out in detail the nature and circumstances of the violations imputed to them, required them to explain their side and expressly warned them of the possibility of their dismissal should their explanation be found wanting, the second informed them of the decision to terminate their employment and cited the evidence upon which the decision was based), this is not sufficient in the light of the company policy quoted. The requests for formal hearing was an exercise of the option under company rules and this forms part of their right to due process. -

- However, the violation of the rudiments of procedural due process did not invalidated their dismissal as the substantive bases therefor were never questioned. Petitioners entitled to nominal damages.