PART TWO

1
CASE: GOLDEN ACE BUILDERS and ARNOLD U. AZUL vs. JOSE A. TALDE, G.R. No. 187200, May 5, 2010.

FACTS:

Respondent, Jose A. Talde was hired as a carpenter by petitioner Golden Ace Builders owned by Arnold
Azul. He alleged that due to the unavailability of construction projects petitoner stopped giving work assignments
prompting him to file a complaint for illegal dismissal.

The Labor Arbiter ruled in favor of respondent and ordered his immediate reinstatement without loss of
seniority rights and other privileges, and with payment of full backwages. Pending on appeal to the NLRC,
respondent was advised to report for work in the construction site within 10 days from receipt thereof. However, a
manifestation was submitted to the Labor Arbiter that actual animosities existed between him and petitioners and
there had been threats to his life and his family’s safety, hence, he opted for the payment of separation pay.
Petitioners denied the existence of any such animosity.

NLRC dismissed petitioners’ appeal holding that respondent was a regular employee and not a project
employee, and that there was no valid ground for the termination of his services. As an agreement could not be
forged by the parties on the satisfaction of the judgment. Hence, this petition.

ISSUE:

Whether or not Court of Appeals erred in awarding of separation pay?

RULING:

No. The basis for the payment of backwages is different from that for the award of separation pay.
Separation pay is granted where reinstatement is no longer advisable because of strained relations between the
employee and the employer. Backwages represent compensation that should have been earned but were not
collected because of the unjust dismissal. The basis for computing backwages is usually the length of the
employee’s service while that for separation pay is the actual period when the employee was unlawfully prevented
from working

Article 279 provides, an employee who is dismissed without just cause and without due process is entitled
to backwages and reinstatement or payment of separation pay in lieu thereof. Thus, an illegally dismissed employee
is entitled to two reliefs: backwages and reinstatement. The two reliefs provided are separate and distinct. In
instances where reinstatement is no longer feasible because of strained relations between the employee and the
employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement, if
viable, or separation pay if reinstatement is no longer viable, and backwages.

The accepted doctrine is that separation pay may avail in lieu of reinstatement if reinstatement is no longer
practical or in the best interest of the parties. Separation pay in lieu of reinstatement may likewise be awarded if
the employee decides not to be reinstated.

Under the doctrine of strained relations, the payment of separation pay is considered an acceptable
alternative to reinstatement when the latter option is no longer desirable or viable. On one hand, such payment
liberates the employee from what could be a highly oppressive work environment. On the other hand, it releases
the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust.
 Strained relations must be demonstrated as a fact, however, to be adequately supported by evidence—
substantial evidence to show that the relationship between the employer and the employee is indeed strained as a
necessary consequence of the judicial controversy.

In the present case, the Labor Arbiter found that actual animosity existed between petitioner Azul and
respondent as a result of the filing of the illegal dismissal case. Affirmed by the appellate court, thus binding upon
the Court. Clearly then, respondent is entitled to backwages and separation pay as his reinstatement has been
rendered impossible due to strained relations. As correctly held by the appellate court, the backwages due
respondent must be computed from the time he was unjustly dismissed until his actual reinstatement.
2.
CASE: SECURITY BANK SAVINGS CORPORATION/HERMINIO M. FAMATIGAN, JR. vs. CHARLES M. SINGSON,
G.R. No. 214230, February 10, 2016

FACTS:

Respondent was employed by petitioner Security Bank Savings Corporation as messenger until his
promotion to its Quezon Avenue Branch and held the position of Customer Service Operations Head (CSOH) tasked
with the safekeeping of its checkbooks and other bank forms.

Respondent received a show-cause memorandum charging him of violating the bank's Code of Conduct
when he mishandled various checkbooks under his custody. Pending investigation, respondent was transferred to
SBSC's Pedro Gil Branch. He was again issued a memorandum directing him to explain his inaccurate reporting of
some Returned Checks and Other Cash Items (RCOCI). Thereafter, respondent was again transferred and reassigned
to another branch in Sampaloc, Manila. Dismayed by his frequent transfer to different branches, respondent
tendered his resignation. However, SBSC rejected the same in view of its decision to terminate his employment on
the ground of habitual neglect of duties.

Consequently, respondent instituted a complaint for illegal dismissal with prayer for backwages, damages,
and attorney's fees against SBSC and its President. Petitioners maintained that respondent was validly dismissed for
cause on the ground of gross negligence in the performance of his duties. Labor Arbiter dismissed the complaint
and declared respondent terminated for a valid cause, notwithstanding, awarded respondent separation pay by
way of financial assistance. NLRC affirmed the LA decision. CA denied the petition and sustained the award of
separation pay.

ISSUE:

Whether or not the CA erred in upholding the award of separation pay as financial assistance to respondent
despite having been validly dismissed?

RULING:

Separation pay is warranted when the cause for termination is not attributable to the employee's fault, as
provided in Art 298 and 299, as well as in cases of illegal dismissal where reinstatement is no longer feasible. On the
other hand, an employee dismissed for any of the just causes, under Art 297, being causes attributable to the
employee's fault, is not, as a general rule, entitled to separation pay. The non-grant of such right to separation pay
is premised on the reason that an erring employee should not benefit from their wrongful acts. As an exception,
case law instructs that in certain circumstances, the grant of separation pay or financial assistance to a legally
dismissed employee has been allowed as a measure of social justice or on grounds of equity.

To reiterate the ruling in Toyota, labor adjudicatory officials and the CA must demur the award of
separation pay based on social justice when an employee's dismissal is based on serious misconduct or willful
disobedience; gross and habitual neglect of duty; fraud or willful breach of trust; or commission of a crime against
the person of the employer or his immediate family - grounds under Article 282 of the Labor Code that sanction
dismissals of employees.

In the present case, it bears stressing that the banking industry is imbued with public interest. Banks are
required to possess not only ordinary diligence in the conduct of its business but extraordinary diligence in the care
of its accounts and the interests of its stakeholders. The banking business is highly sensitive with a fiduciary duty
towards its client and the public in general, such that central measures must be strictly observed. It is undisputed
that respondent failed to perform his duties diligently, and therefore, not only violated established company policy
but also put the bank's credibility and business at risk. Hence, under these circumstances, the award of separation
pay based on social justice would be improper.

Notably, respondent's long years of service and clean employment record will not justify the award of
separation pay in view of the gravity of the foregoing infractions. Length of service is not a bargaining chip that can
simply be stacked against the employer.

The Court finds that the award of separation pay to respondent as a measure of social justice is riot
warranted in this case. A contrary ruling would effectively reward respondent for his negligent acts instead of
punishing him for his offense, in observation of the principle of equity.

WHEREFORE, the petition is GRANTED. The Decision the Court of Appeals is hereby REVERSED and SET
ASIDE deleting the award of separation pay in favor of Charles M. Singson.
3.

CASE: ZAIDA R. INOCENTE vs. ST. VINCENT FOUNDATION FOR CHILDREN AND AGING, INC., G.R. No. 202621,
June 22, 2016.

FACTS:

St. Vincent Foundation for Children and Aging, Inc. (St. Vincent) is a non-stock, non-profit foundation
engaged in providing assistance to children and aging people. St. Vincent hired Zaida Inocente as Program Assistant
and later Program Officer. Zaida, then single, met Marlon D. Inocente. He was then assigned at St. Vincent's Bataan
sub-project but later transferred to its sub-project in Quezon City. They became close and soon were romantically
involved with each other.

St. Vincent adopted the CFCA's Non-Fraternization Policy, which discouraged its employees from engaging
in consensual romantic or sexual relationship with any employee or volunteer of CFCA. Despite the policy, Zaida and
Marlon discretely continued their relationship even after Marlon resigned. Due to severe abdominal pain, Zaida
went to the hospital and was informed that she had suffered miscarriage. She informed St. Vincent of her situation
and was allowed to go on maternity.

The foundation required Zaida to explain in writing why no administrative action should be taken against
her for the violation of the CFCA Non-Fraternization Policy and of the St. Vincent's Code of Conduct for her
relationship with Marlon. She explained that her relationship with Marlon started long before the foundation
adopted the policy; that Marlon was no longer connected with the foundation; her relationship with Marlon is not
immoral as they were both of legal age and with no impediments to marry and they already planned to get married
as soon as she recovers and their finances improve.

The foundation found her explanation unconvincing and terminated her services. Zaida later filed a
complaint for illegal dismissal. LA dismissed the complaint, her acts considered acts of dishonesty constituting
willful breach of trust and confidence. NLRC affirmed LA decision. CA denied Zaida's certiorari petition for lack of
merit.

ISSUE:

Whether or not petioner was validly dismissed?

RULING:

No. The Court found Zaida's dismissal illegal for lack of valid cause. St. Vincent failed to sufficiently prove its
charges against Zaida to justify her dismissal for serious misconduct and loss of trust and confidence.

In every dismissal situation, the employer bears the burden of proving the existence of just or authorized
cause for the dismissal and the observance of due process requirements. Willful breach of trust or loss of
confidence and serious misconduct are just causes for the dismissal of an employee. To justify the employee's
dismissal on these grounds, the employer must show that the employee indeed committed act/s constituting
breach of trust or serious misconduct.

Immorality pertains to a course of conduct that offends the morals of the community. It connotes conduct
or acts that are willful, flagrant or shameless, and that shows indifference to the moral standards of the upright and
respectable members of the community. Conducts described as immoral or disgraceful refer to those acts that
plainly contradict accepted standards of right and wrong behavior; they are prohibited because they are
detrimental to the conditions on which depend the existence and progress of human society.

In general, in determining whether the acts complained of constitute "disgraceful and immoral" behavior
under our laws, the distinction between public and secular morality on the one hand, and religious morality, on the
other hand, should be kept in mind. This distinction as expressed - albeit not exclusively - in the law, on the one
hand, and religious morality, on the other, is important because the jurisdiction of the Court extends only to public
and secular morality.

While their actions might not have strictly conformed with the beliefs, ways, and mores of St. Vincent -
which is governed largely by religious morality - or with the personal views of its officials, these actions are not
prohibited under any law nor are they contrary to conduct generally accepted by society as respectable or moral.
Moreover, aside from the relationship that St. Vincent considered to be immoral, it did not specify, nor prove any
other act or acts that Zaida might have committed to the prejudice of St. Vincent's interest. A mere allegation that
Zaida committed act or acts prejudicial to St. Vincent's interest, without more, does not constitute sufficient basis
for her dismissal.

We thus reiterate that mere private sexual relations between two unmarried and consenting adults, even if
the relations result in pregnancy or miscarriage out of wedlock and without more, are not enough to warrant
liability for illicit behavior. The voluntary intimacy between two unmarried adults, where both are not under any
impediment to marry, where no deceit exists, and which was done in complete privacy, is neither criminal nor so
unprincipled as to warrant disciplinary action.

WHEREFORE, we hereby GRANT the petition. We REVERSE and SET ASIDE the decision.
4.

CASE: MANILA MEMORIAL PARK CEMETERY, INC vs. EZARD D. LLUZ, et al., G.R. No. 208451, February 3, 2016.

FACTS:

Petitioner Manila Memorial Park Cemetery, Inc. (Manila Memorial) entered into a Contract of Services with
respondent Ward Trading and Services (Ward Trading). The Contract of Services provided that Ward Trading, as an
independent contractor, will render interment and exhumation services and other related work to Manila
Memorial.

Among those assigned by Ward Trading to perform services were respondents Ezard Lluz, et al.
Respondents filed a Complaint for regularization against Manila Memorial, after which they amended their
complaint to include illegal dismissal, underpayment of 13th month pay, and payment of attorney’s fees. They
alleged that they asked Manila Memorial to consider them as regular workers within the appropriate bargaining
unit established in the collective bargaining agreement by Manila Memorial and its union, the Manila Memorial
Park Free Workers Union (MMP Union). The request was refused since respondents were employed by Ward
Trading. Thereafter, respondents joined the MMP Union, who on behalf of respondents, sought their regularization
which was again declined. Subsequently, respondents were dismissed.

Meanwhile, Manila Memorial sought the dismissal of the complaint for lack of jurisdiction since there was
no employer-employee relationship. It argued that respondents were the employees of Ward Trading.

The Labor Arbiter dismissed the complaint for failing to prove the existence of an employer-employee
relationship. On appeal, the NLRC reversed the Labor Arbiter’s findings and ruled that Ward Trading was a labor-
only contractor and an agent of Manila Memorial. Thus, complainants were regular employees. The CA affirmed the
ruling of the NLRC.

ISSUE:

Whether or not an employer-employee relationship exists between Manila Memorial and respondents for
the latter to be entitled to their claim for wages and other benefits?

RULING:

Contracting arrangements for the performance of specific jobs or services under the law and its
implementing rules are allowed. However, contracting must be made to a legitimate and independent job
contractor since labor rules expressly prohibit labor-only contracting.

Labor-only contracting exists when the contractor or subcontractor merely recruits, supplies or places
workers to perform a job, work or service for a principal and any of the following elements are present:

1) The contractor or subcontractor does not have substantial capital or investment which relates to the job, work or
service to be performed and the employees recruited, supplied or placed by such contractor or subcontractor are
performing activities which are directly related to the main business of the principal; or

2) The contractor does not exercise the right to control the performance of the work of the contractual employee.

In the present case, the Contract of Services reveals that Ward Trading does not have substantial capital or
investment in the form of tools, equipment, machinery, work premises and other materials since it is Manila
Memorial which owns the equipment used in the performance of work needed for interment and exhumation
services. Also, it reveals that respondent Ward is still subject to petitioner’s control as it specifically provides that
although Ward shall be in charge of the supervision over individual respondents, the exercise of its supervisory
function is heavily dependent upon the needs of petitioner Memorial Park.

For failing to register as a contractor, a presumption arises that one is engaged in labor-only contracting
unless the contractor overcomes the burden of proving that it has substantial capital, investment, tools and the like.

In this case, however, Manila Memorial failed to adduce evidence to prove that Ward Trading had any
substantial capital, investment or assets to perform the work contracted for. Thus, the presumption that Ward
Trading is a labor-only contractor stands. Consequently, Manila Memorial is deemed the employer of respondents.
As regular employees of Manila Memorial, respondents are entitled to their claims for wages and other benefits as
awarded by the NLRC and affirmed by the CA.

WHEREFORE, we DENY the petition. We AFFIRM the Decision.

CASE: ALUMAMAY O. JAMIAS v. NLRC, GR No. 159350, Mar 09, 2016

FACTS:

Respondent Innodata Philippines, Inc. (Innodata), a domestic corporation engaged in the business of data
processing and conversion for foreign clients hired the hired the petitioners on various dates and under a project
based contract for a period of one year.

After their respective contracts expired, the petitioners filed a complaint for illegal dismissal claiming that
Innodata had made it appear that they had been hired as project employees in order to prevent them from
becoming regular employees.

Labor Arbiter rendered his decision dismissing the complaint for lack of merit, finding that the petitioners
had knowingly signed their respective contracts in which the durations of their engagements were clearly stated;
and that their fixed term contracts, being exceptions to Article 280 of the Labor Code, precluded their claiming
regularization. On appeal, the NLRC affirmed the decision of LA. The CA upheld the NLRC.

ISSUE:

Whether or not the petitioners were regular or project employees of Innodata?

RULING:

A fixed period in a contract of employment does not by itself signify an intention to circumvent Article 280
of the Labor Code.

A fixed term agreement, to be valid, must strictly conform with the requirements and conditions provided
in Article 280 of the Labor Code. The test to determine whether a particular employee is engaged as a project or
regular employee is whether or not the employee is assigned to carry out a specific project or undertaking, the
duration or scope of which was specified at the time of his engagement. There must be a determination of, or a
clear agreement on, the completion or termination of the project at the time the employee is engaged. Otherwise
put, the fixed period of employment must be knowingly and voluntarily agreed upon by the parties, without any
force, duress or improper pressure being brought to bear upon the employee and absent any other circumstances
vitiating his consent, or it must satisfactorily appear that the employer and employee dealt with each other on more
or less equal terms with no moral dominance whatsoever being exercised by the former on the latter.

There is no indication that the petitioners were made to sign the contracts against their will. Hence, the
petitioners knowingly agreed to the terms of and voluntarily signed their respective contracts. The fixing by
Innodata of the period specified in the contracts of employment did not also indicate its ill-motive to circumvent
the petitioners' security of tenure. Indeed, the petitioners could not presume that the fixing of the one-year term
was intended to evade or avoid the protection to tenure under Article 280 of the Labor Code in the absence of
other evidence establishing such intention.

The necessity and desirability of the work performed by the employees are not the determinants in term
employment, but rather the "day certain" voluntarily agreed upon by the parties.

In fine, the employment of the petitioners who were engaged as project employees for a fixed term legally
ended upon the expiration of their contract. Their complaint for illegal dismissal was plainly lacking in merit.
6.
CASE: PMI-FACULTY AND EMPLOYEES UNION vs. PMI COLLEGES BOHOL, G.R. No. 211526, June 29, 2016.

FACTS:

Respondent PMI Colleges Bohol (respondent) is an educational institution that offers maritime and customs
administration courses to the public. Petitioner PMI-Faculty and Employees Union (Union) is the collective
bargaining representative of the respondent's rank-and-file faculty members and administrative staff.

The Union filed a notice of strike against the respondent, on grounds of gross violation of their collective
bargaining agreement (CBA). The Department of Labor and Employment (DOLE) certified the dispute to the National
Labor Relations Commission (NLRC) for compulsory arbitration.

The Union filed a second notice of strike allegedly over the same CBA violation. The respondent filed a
Motion to Strike Out Notice of Strike and to Refer the Dispute to Voluntary Arbitration, claiming that the Union
failed to exhaust administrative remedies before resorting to a 2nd notice of strike. The respondent filed a Motion
for Joinder of Issues under the 2nd notice of strike with those of the 1st notice.

The Union submitted its strike vote. It alleged that while waiting for the expiration of the 15-day cooling-off
period and/or the completion of the 7-day strike vote period, its members religiously reported for duty but they
were allegedly not allowed entry to the school premises. In protest of what it considered a lock-out by the
respondent, the Union staged a strike on the same day. The respondent reacted with a Petition to Declare the Strike
Illegal, also filed on the same day. DOLE assumed jurisdiction over the dispute and directed the strikers to return
rework, and the school to resume operations.

The Labor Arbiter dismissed the petition for lack of merit, declaring that the petitioner substantially
complied with all the requirements of a valid strike, except for staging the strike a day earlier. LA considered the
staging of the strike one day earlier not sufficient for a declaration of illegality as the Union "officers/members were
illegally locked out by the petitioner in not allowing them to enter the school premises to perform their respective
jobs.

On appeal the NLRC reversed LA decision as it found the strike "to be illegal for having failed to comply with
the requisites of a valid strike. Thus, the Union officers serving and acting as such during the period of the illegal
strike are deemed to have lost their employment status with complainant PMI Colleges Bohol."10chanrobleslaw

ISSUE:

Whether or not the strike is illegal?

RULING:

No. The declaration of the strike a day before the completion of the cooling-off and strike vote periods was
but a reaction to the respondent's locking out the officers and members of the Union.

We find the statements credible. While they are Union members, they are first and foremost teachers who
were reporting for duty on that day. The same thing can be said of the Union officers who were also refused entry
by the guards. We likewise find no reason for the officers to throw away all their preparations for a lawful strike on
the very last day, had they not been pushed to act by the respondent's closing of the gates.
 It was thus grave abuse of discretion for the NLRC to completely ignore the affidavits of the officers and
members of the Union directly saying that they were refused entry into the school premises. In sharp contrast, the
NLRC readily admitted the video footage of the strike area on August 9, 2010, which the respondent offered in
evidence only on appeal or more than a year (15 months) after it was supposed to have been taken.

The inordinate delay in the submission of the compact disc cannot but generate negative speculations on
why it took so long for the respondent to introduce it in evidence. We thus find the Union's apprehension about the
authenticity and credibility of the compact disc not surprising; 15 months are too long a period to wait for the
submission of a piece of evidence which existed on the first day of the strike way back on August 9, 2010.

At this point, it is well to stress that under Article 4 of the Labor Code, "all doubts in the implementation
and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved
in favor of labor." Consistent with Article 4 of the Labor Code, we resolve the doubt in the Union's favor.

In sum, we find merit in the petition. The CA reversibly erred when (1) it decided the present labor dispute
and dismissed the Union's certiorari petition purely on technical grounds, and (2) in blindly ignoring the blatant
grave abuse of discretion on the part of the NLRC that completely disregarded the affidavits of the officers and
members of the Union and readily admitted the respondent's belatedly submitted video footage.

WHEREFORE, the petition for review on certiorari is GRANTED. The assailed resolutions of the Court of
Appeals are SET ASIDE. The decision of Labor Arbiter REINSTATED, and decision of the National Labor Relations
Commission VACATED.
7.
CASE: DIVINE WORD COLLEGE OF LAOAG vs. SHIRLEY B. MINA, as heir-substitute of the late DELFIN A. MINA,
G.R. No. 195155, April 13, 2016.

FACTS:

DWCL is a non-stock educational institution offering catholic education to the public. It is run by the Society
of Divine Word (SVD), a congregation of Catholic priests.

Mina was first employed as a high school teacher and later on a high school principal. He transferred to
DWCL and was accorded a permanent status. He was subsequently transferred to DWCL’s college department as
an Associate Professor III. Thereafter, Mina was assigned as the College Laboratory Custodian of the School of
Nursing and was divested of his teaching load, subject to automatic termination and without need for any further
notification. He was the only one among several teachers transferred to the college department who was
divested of teaching load.

Mina was offered early retirement. He initially declined the offer. He later received a Memorandum
enumerating specific acts of gross or habitual negligence, insubordination, and reporting for work under the
influence of alcohol. Sensing that it was pointless to continue employment with DWCL, he requested that his
retirement date be adjusted to enable him to avail better benefits which were denied. Instead, he was paid
retirement pay. It was made to appear that his services were terminated by reason of redundancy to avoid any tax
implications. Mina was also made to sign a deed of waiver and quitclaim.

Mina filed a case for illegal dismissal and recovery of separation pay and other monetary claims. Pending
resolution of his case, Mina passed away.

LA ruled that the actuation of DWCL is not constitutive of constructive dismissal. However, his retirement
pay based on redundancy is illegal; hence, it was modified. NLRC ruled that Mina was constructively dismissed. CA
sustained the NLRC’s ruling that Mina was indeed constructively dismissed from work.

ISSUE:

Whether or not the transfer of Mina amounted to constructive dismissal?

RULING:

Yes, Mina was constructively dismissed. His appointment as laboratory custodian was a demotion.

Constructive dismissal is a dismissal in disguise. There is cessation of work in constructive dismissal because
‘"continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank
or a diminution in pay’ and other benefits. To be considered as such, an act must be a display of utter discrimination
or insensibility on the part of the employer so intense that it becomes unbearable for the employee to continue
with his employment. The law recognizes and resolves this situation in favor of employees in order to protect their
rights and interests from the coercive acts of the employer.

In this case, Mina’s transfer clearly amounted to a constructive dismissal. For almost 22 years, he was a high
school teacher enjoying a permanent status in DWCL’s high school department. In 2002, he was appointed as an
associate professor at the college department but shortly thereafter, or on June 1, 2003, he was appointed as a
college laboratory custodian, which is a clear relegation from his previous position. Not only that. He was also
divested of his teaching load. His appointment even became contractual in nature and was subject to automatic
termination after one year "without any further notification." Aside from this, Mina was the only one among the
high school teachers transferred to the college department who was divested of teaching load. More importantly,
DWCL failed to show any reason for Mina’s transfer and that it was not unreasonable, inconvenient, or prejudicial
to him.

There is demotion when an employee occupying a highly technical position requiring the use of one’s
mental faculty is transferred to another position, where the employee performed mere mechanical work – virtually
a transfer from a position of dignity to a servile or menial job.

Mina’s transfer amounted to a demotion that is, from an associate college professor, he was made a keeper
and inventory-taker of laboratory materials. Clearly, Mina’s new duties as laboratory custodian were merely
perfunctory and a far cry from his previous teaching job, which involved the use of his mental faculties. And while
there was no proof adduced showing that his salaries and benefits were diminished, there was clearly a demotion in
rank.

Given the finding of constructive dismissal, Mina, therefore, is entitled to reinstatement without loss of
seniority rights, and payment of backwages and full compulsory retirement pay.