75314086 Part 1 Case Digest of Labor Standards

Maternity Childrens Hospital vs. Secretary of LaborG.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. CW-71-86.

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.

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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

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Calalang vs. WilliamsG.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

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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.

Avancea, C.J., Imperial, Diaz and Horrilleno, JJ., concur.

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People vs. Vera ReyesG.R. No. L-45748 April 5, 1939

EN BANC, IMPERIAL, J.:

Facts:

The defendant was charged in the Court of First Instance of Manila by the assistant city fiscal with a violation of Act No. 2549, as amended by Acts Nos. 3085 and 3958. The information alleged that from September 9 to October 28, 1936, and for the some time after, the accused, in his capacity as president and general manager of the Consolidated Mines, having engaged the services of Severa Velasco de Vera as stenographer, at an agreed salary of P35 a month willfully and illegally refused to pay the salary of said stenographer corresponding to the above-mentioned period of time, which was long due and payable, in spite of her repeated demands.

The accused interposed a demurrer on the ground that the facts alleged in the information do not constitute any offense, and that even if they did, the laws penalizing it are unconstitutional. After the hearing, the court sustained the demurrer, declaring unconstitutional the last part of section 1 of Act No. 2549 as last amended by Act No. 3958 for the reason that it violates the constitutional prohibition against imprisonment for debt, and dismissed the case.

The last part of Section 1 of Act No. 2549, as last amended by section 1 of Act No. 3958 considers as illegal the refusal of an employer to pay when he can do so, the salaries of his employers or laborers on the 15th or last day of every month or on Saturday of every week, with only two days extension, and the non-payment of the salary within the period specified is considered as a violation of the law. The same act exempts from criminal responsibility the employer who, having failed to pay the salary, should prove satisfactorily that it was impossible to make such payment.

The fiscal appealed from said order. In this appeal the Solicitor-General contends that the court erred in declaring Act No. 3958 unconstitutional, and in dismissing the cause.

Issue:

Whether or not the last part of Sec. 1 of Act No. 2594 as amended by Act No. 3958 is constitutional and valid.

Held:

We hold that the last part of section 1 of Act No. 2549, as last amended by section 1 of Act No. 3958, is valid. We do not believe that this constitutional provision has been correctly applied in this case. A close perusal of the last part of section 1 of Act No. 2549, as amended by section 1 of Act No. 3958, will show that its language refers only to the employer who, being able to make payment, shall abstain or refuse to do so, without justification and to the prejudice of the laborer or employee. An employer so circumstanced is not unlike a person who defrauds another, by refusing to pay his just debt. In both cases the deceit or fraud is the essential element constituting the offense. The first case is a violation of Act No. 3958, and the second is estafa punished by the Revised Penal Code. In either case the offender cannot certainly invoke the constitutional prohibition against imprisonment for debt.

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Police power is the power inherent in a government to enact laws, within constitutional limits, to promote the order, safety, health, morals, and general welfare of society. In the exercise of this power the Legislature has ample authority to approve the disputed portion of Act No. 3958 which punishes the employer who, being able to do so, refuses to pay the salaries of his laborers or employers in the specified periods of time. Undoubtedly, one of the purposes of the law is to suppress possible abuses on the part of employers who hire laborers or employees without paying them the salaries agreed upon for their services, thus causing them financial difficulties. Without this law, the laborers and employees who earn meager salaries would be compelled to institute civil actions which, in the majority of cases, would cost them more than that which they would receive in case of a decision in their favor.

Decision:

We hold that the last part of section 1 of Act No. 2549, as last amended by section 1 of Act No. 3958, is valid, and we reverse the appealed order with instructions to the lower court to proceed with the trial of the criminal case until it is terminated, without special pronouncement as to costs in this instance. So ordered.

Avancea, C. J., Villa-Real, Diaz, Laurel, Concepcion, and Moran, JJ., concur

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People vs. PomarG.R. No. L-22008 November 3, 1924

EN BANC, JOHNSON, J.:

Facts:

On the 26th day of October, 1923, the prosecuting attorney of the City of Manila presented a complaint in the Court of First Instance, accusing the defendant of a violation of section 13 in connection with section 15 of Act No. 3071 of the Philippine Legislature. The complaint alleged that the defendant being the manager and person in charge of La Flor de la Isabela (a tobacco factory) failed and refused to pay Macaria Fajardo (employed as cigar maker) the sum of P80 to which she was entitled as her regular wages on time of delivery and confinement by reason of pregnancy depite and over the demands to do so.

To said complaint, the defendant demurred, alleging that the facts therein contained did not constitute an offense. The demurrer was overruled, whereupon the defendant answered and admitted at the trial all of the allegations contained in the complaint, and contended that the provisions of said Act No. 3071, upon which the complaint was based were illegal, unconstitutional and void.

Upon a consideration of the facts charged in the complaint and admitted by the defendant, the Honorable C. A. Imperial, judge, found the defendant guilty of the alleged offense described in the complaint, and sentenced him to pay a fine of P50, in accordance with the provisions of section 15 of said Act, to suffer subsidiary imprisonment in case of insolvency, and to pay the costs. From that sentence the defendant appealed.

Issue:

Whether or not the provisions of sections 13 and 15 of Act No. 3071 are a reasonable and lawful exercise of the police power of the state.

Held:

The provisions of section 13, of Act No. 3071 of the Philippine Legislature, are unconstitutional and void, in that they violate and are contrary to the provisions of the first paragraph of section 3 of the Act of Congress of the United States of August 29, 1916.

Said section 13 was enacted by the Legislature of the Philippine Islands in the exercise of its supposed police power, with the praiseworthy purpose of safeguarding the health of pregnant women laborers in "factory, shop or place of labor of any description," and of insuring to them, to a certain extent, reasonable support for one month before and one month after their delivery. It has been said that the particular statute before us is required in the interest of social justice for whose end freedom of contract may lawfully be subjected to restraint.

The right to liberty includes the right to enter into contracts and to terminate contracts. One citizen cannot be compelled to give employment to another citizen, nor can anyone be compelled to be employed against his will. The Act of 1893, now under consideration, deprives the employer of the right to terminate his contract with his employee. Clearly, therefore, the law has deprived, every person, firm, or corporation owning or managing a factory, shop or place of

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labor of any description within the Philippine Islands, of his right to enter into contracts of employment upon such terms as he and the employee may agree upon. The law creates a term in every such contract, without the consent of the parties. Such persons are, therefore, deprived of their liberty to contract. The constitution of the Philippine Islands guarantees to every citizen his liberty and one of his liberties is the liberty to contract.

Every law for the restraint and punishment of crimes, for the preservation of the public peace, health, and morals, must come within this category. But the state, when providing by legislation for the protection of the public health, the public morals, or the public safety, is subject to and is controlled by the paramount authority of the constitution of the state, and will not be permitted to violate rights secured or guaranteed by that instrument or interfere with the execution of the powers and rights guaranteed to the people under their law the constitution.

The police power of the state is a growing and expanding power. But that power cannot grow faster than the fundamental law of the state, nor transcend or violate the express inhibition of the people's law the constitution. If the people desire to have the police power extended and applied to conditions and things prohibited by the organic law, they must first amend that law.

It will also be noted from an examination of said section 13, that it takes no account of contracts for the employment of women by the day nor by the piece. The law is equally applicable to each case. It will hardly be contended that the person, firm or corporation owning or managing a factory, shop or place of labor, who employs women by the day or by the piece, could be compelled under the law to pay for sixty days during which no services were rendered.

Decision:

The rule in this jurisdiction is, that the contracting parties may establish any agreements, terms, and conditions they may deem advisable, provided they are not contrary to law, morals or public policy. (Art. 1255, Civil Code.)

Therefore, the sentence of the lower court is hereby revoked, the complaint is hereby dismissed, and the defendant is hereby discharged from the custody of the law, with costs de oficio. So ordered.

Street, Malcolm, Avancea, Villamor, Ostrand and Romualdez, JJ., concur

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Philippine Association of Service Expporters, Inc. vs. DrilonG.R. No. 81958 June 30, 1988

EN BANC, SARMIENTO, J:

Facts:

The petitioner, Philippine Association of Service Exporters, Inc. (PASEI), a firm "engaged principally in the recruitment of Filipino workers for overseas placement," challenges the Constitutional validity of Department Order No. 1, Series of 1988, of the Department of Labor and Employment, in the character of "GUIDELINES GOVERNING THE TEMPORARY SUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD WORKERS," and specifically assailed for "discrimination against males or females;" 2 that it "does not apply to all Filipino workers but only to domestic helpers and females with similar skills;" 3 and that it is violative of the right to travel. It is held likewise to be an invalid exercise of the lawmaking power, police power being legislative, and not executive, in character.

On May 25, 1988, the Solicitor General, on behalf of the respondents Secretary of Labor and Administrator of the Philippine Overseas Employment Administration, filed a Comment informing the Court that on March 8, 1988, the respondent Labor Secretary lifted the deployment ban in the states of Iraq, Jordan, Qatar, Canada, Hongkong, United States, Italy, Norway, Austria, and Switzerland. In submitting the validity of the challenged "guidelines," the Solicitor General invokes the police power of the Philippine State.

Issue:

Whether the challenged Department Order is a valid regulation in the nature of a police power measure under the Constitution.

Held:

The concept of police power is well-established in this jurisdiction. It has been defined as the "state authority to enact legislation that may interfere with personal liberty or property in order to promote the general welfare." 5 As defined, it consists of (1) an imposition of restraint upon liberty or property, (2) in order to foster the common good. It is not capable of an exact definition but has been, purposely, veiled in general terms to underscore its all-comprehensive embrace.

Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future where it could be done, provides enough room for an efficient and flexible response to conditions and circumstances thus assuring the greatest benefits.

It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the Charter. Along with the taxing power and eminent domain, it is inborn in the very fact of statehood and sovereignty. It is a fundamental attribute of government that has enabled it to perform the most vital functions of governance. The police power of the State ... is a power coextensive with self- protection. It may be said to be that inherent and plenary power in the State which enables it to prohibit all things hurtful to the comfort, safety, and welfare of society.

As a general rule, official acts enjoy a presumed validity. 13 In the absence of clear and convincing evidence to the contrary, the presumption logically stands.

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The petitioner has shown no satisfactory reason why the contested measure should be nullified. There is no question that Department Order No. 1 applies only to "female contract workers," 14 but it does not thereby make an undue discrimination between the sexes. It is well-settled that "equality before the law" under the Constitution 15 does not import a perfect Identity of rights among all men and women.

"Protection to labor" does not signify the promotion of employment alone. What concerns the Constitution more paramountly is that such an employment be above all, decent, just, and humane. Under these circumstances, the Government is duty-bound to insure that our toiling expatriates have adequate protection, personally and economically, while away from home. In this case, the Government has evidence, an evidence the petitioner cannot seriously dispute, of the lack or inadequacy of such protection, and as part of its duty, it has precisely ordered an indefinite ban on deployment.

This Court understands the grave implications the questioned Order has on the business of recruitment. The concern of the Government, however, is not necessarily to maintain profits of business firms. In the ordinary sequence of events, it is profits that suffer as a result of Government regulation. The interest of the State is to provide a decent living to its citizens.

Decision:

The Government has convinced the Court in this case that this is its intent. We do not find the impugned Order to be tainted with a grave abuse of discretion to warrant the extraordinary relief prayed for.

WHEREFORE, the petition is DISMISSED. No costs. SO ORDERED.

Yap, C.J., Fernan, Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Cortes and Grio-Aquino, JJ., concur.

Gutierrez, Jr. and Medialdea, JJ., are on leave

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Cerezo vs. Atlantic Gulf & Pacific CompanyG.R. No. L-10107 February 4, 1916

EN BANC: TRENT, J.:

Facts:

Jorge Ocumen (plaintiffs son and only means of support) was an employee of the defendant as a day laborer on the 8th of July, 1913, assisting in laying gas pipes on Calle Herran in the City of Manila. The digging of the trench was completed both ways from the cross-trench in Calle Paz, and the pipes were laid therein up to that point. The men of the deceased's gang were filling the west end, and there was no work in the progress at the east end of the trench. Shortly after the deceased entered the trench at the east end to answer a call of nature, the bank caved in, burying him to his neck in dirt, where he died before he could be released. It has not been shown that the deceased had received orders from the defendant to enter the trench at this point; nor that the trench had been prepared by the defendant as a place to be used as a water-closet; nor that the defendant acquiesced in the using of this place for these purposes. At the time of the accident the place where the deceased's duty of refilling the trench required him to be was at the west end. There is no contention that there was any danger whatever in the refilling of the trench.

The plaintiff insists that the defendant was negligent in failing to shore or brace the trench at the place where the accident occurred. While, on the other hand, the defendant urges (1) that it was under no obligation, in so far as the deceased was concerned, to brace the trench, in the absence of a showing that the soil was of a loose character or the place itself was dangerous, and (2) that although the relation of master and servant may not have ceased, for the time being, to exist, the defendant was under no duty to the deceased except to do him no intentional injury, and to furnish him with a reasonably safe place to work.

Judgment was entered in a favor of the plaintiff for the sum of P1,250, together with interest and costs. Defendant appealed.

Issue:

Whether or not the plaintiff has the right to recover based on the Employers' Liability Act (Act No. 1874) or the Civil Code.

Held:

Act No. 1874 is essentially a copy of the Massachusetts Employers' Liability Act, it having been originally enacted in that jurisdiction in 1887. The Massachusetts statute was "copied verbatim, with some variations of detail, from the English statute.

We agree with the Supreme Court of Massachusetts that the Act should be liberally construed in favor of employees. The main purpose of the Act was to extend the liability of employers and to render them liable in damages for certain classes of personal injuries for which it was thought they were liable under the law prior to the passage of the Act.

We do not doubt that it was, prior to the passage of Act No. 1874 and still is, the duty of the employer in this jurisdiction to perform those duties, in reference to providing reasonably safe

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places, and safe and suitable ways, works, and machinary, etc., So, to this extent, the first subsection of section 1 of the Act is simply declaratory of the law as it stood previous to the enactment. Standing in this form, it is quite clear that it was not intended that all rights to compensation and of action against employers by injured employees or their representatives must be brought under be governed by the Act.

Assuming that the excavation for the gas pipe is within the category of "ways, works, or machinery connected with the used in the business of the defendant, " we are of the opinion that recovery cannot be had under the Act for the reason that, as we have indicated, the deceased was at a place where he had no right to be at the time he met his death. His work did not call him there, nor is it shown that he was permitted there tacitly or otherwise. Under the Anglo-American law the applicable to such a set of facts is that the master is not responsible, under the Employers' Liability Act, for accidents to his employees when they are outside the scope of their employment for purpose of their own.

The case under consideration does not fall within the exceptions of Art 1105 of the Civil code. Mentioned. After providing a reasonably safe place in and about which the deceased was required to work, the defendant's liability was then limited to those events which could have been foreseen. Article 1902 provides that a person who, by an act or omission causes damage to another when there is fault or negligence shall be obliged to repair the damage so done. Article 1903 after providing for the liability of principals for the acts of their employees, agents, or these for whom they are otherwise responsible, provides that such liability shall cease when the persons mentioned therein prove that they employed all the diligence of a good father of a family to avoid the damage. We have then, on the one hand, nonliability of an employer for events which could not be foreseen (article 1105), and where he has exercised the care of a good father of a family (article 1903), and, on the other hand, his liability where fault or negligence may be attributed to him (article 1902).

The cause of Ocumen's death was not the weight of the earth which fell upon him, but was due to suffocation. The accident was of a most unusual character. Experience and common sense demonstrate that ordinarily no danger to employees is to be anticipated from such a trench as that in question. The fact that the walls had maintained themselves for a week, without indication of their giving way, strongly indicates that the necessity for bracing or shoring the trench was remote. To require the company to guard against such an accident as the one in question would virtually compel it to shore up every foot of the miles of trenches dug by it in the city of Manila for the gas mains. Upon a full consideration of the evidence, we are clearly of the opinion that ordinary care did not require the shoring of the trench walls at the place where the deceased met his death. The event properly comes within the class of those which could not be foreseen; and, therefore, the defendant is not liable under the Civil Code.

Effect upon the Law in this country

The act was not intended to curtail the any of the rights which an employee had under the pre-existing law. Under the act, the defense of contributory negligence would defeat an action for damages.

Decision:

Having reached the conclusions above set forth, it is unnecessary to inquire into the right of the plaintiff to bring and maintain this action.

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For the foregoing reasons the judgment appealed from is reversed and the complaint dismissed, without costs. So ordered.

Arellano, C.J., Torres, Johnson and Araullo, JJ., Concur

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Abella vs. NLRCG.R. No. 71813 July 20, 1987

EN BANC: PARAS (J), 13 CONCUR

Facts:

Ricardo Dionele, Sr. (private respondent) has been a regular farm worker since 1949 in Hacienda Danao-Ramona located in Ponteverde, Negros Occidential. Said farm land was leased to Rosalina Abella (petitioner) for a period of ten (10) years, renewable for another ten years.

Upon the expiration of her leasehold rights, petitioner dismissed Ricardo and another co-employee.

Private respondents filed a complaint against the petitioner at the Ministry of Labor and Employment for overtime pay, illegal dismissal and reinstatement with backwages. After presenting their respective evidence, the Labor Arbiter ruled that the dismissal is warranted by the cessation of business, but granted the private respondents separation pay.

Petitioner filed a motion for reconsideration but the same was denied. Hence, the present petition.

Issue:

Whether or not private respondents are entitled to separation pay.

Held:

The petition is devoid of merit.

Article 284 of the Labor code provides that the employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this title, by serving a written notice on the workers and the Ministry of Labor and Employment at least month before the intended date thereof. In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one month pay or to at least one month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closure or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one month pay or at least one-half month pay for every year of service whichever is higher. A fraction of at least six months shall be considered one whole year."

The purpose of the said article is obvious: the protection of the workers whose employment is terminated because of the closure of establishment and reduction of personnel. Without said law, employees like private respondents in the case at bar will lose the benefits to which they are entitled for the number of years served. Although they were absorbed by the new management of the hacienda, in the absence of any showing that the latter has assumed the responsibilities of the former employer, they will be considered as new employees and the years

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of service behind them would amount to nothing.

In any event, it is well-settled that in the implementation and interpretation of the provisions of the Labor Code and its implementing regulations, the workingmans welfare should be the primordial and paramount consideration.

Decision:The instant petition is hereby dismissed and the decision of the Labor Arbiter and the Resolution of the Ministry of Labor and Employment are hereby affirmed.

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Euro-Linea Phil, Inc. vs. NLRCG.R. No. 78782 December 1, 1987

FIRST DIVISION, PARAS, (J):

Facts:

Petitioner Euro-Linea Phil, Inc hired private respondent Pastoral as shipping expediter on a probationary basis for a period of six months. Prior to hiring by petitioner, Pastoral had been employed by Fitscher Manufacturing Corporation also as shipping expediter. On 4 February 1984, Pastoral received a memorandum terminating his probationary employment in view of his failure to meet the performance standards set by the company. Pastoral filed a complaint for illegal dismissal against petitioner. On 19 July 1985, the Labor Arbiter found petitioner guilty of illegal dismissal. Petitioner appealed the decision to the NLRC on 5 August 1985 but the appeal was dismissed. Hence the petition for review seeking to reverse and set aside the resolution of public respondent NLRC, affirming the decision of the Labor Arbiter, which ordered the reinstatement of complainant with six months backwages.

Issue:

Whether or not the National Labor Relations Commission acted with grave abuse of discretion amounting to excess of jurisdiction in ruling against the dismissal of the respondent, a temporary or probationary employee, by his employer.

Held:

Although a probationary or temporary employee has a limited tenure, he still enjoys the constitutional protection of security of tenure.

Furthermore, what makes the dismissal highly suspicious is the fact that while petitioner claims that respondent was inefficient, it retained his services until the last remaining two weeks of the six months probationary employment. No less important is the fact that private respondent had been a shipping expediter for more than one and a half years before he was absorbed by petitioner. It therefore appears that the dismissal in question is without sufficient justification.

It must be emphasized that the prerogative of management to dismiss or lay-off an employee must be done without abuse of discretion, for what is at stake is not only petitioner's position but also his means of livelihood. The right of an employer to freely select or discharge his employees is subject to regulation by the State, basically in the exercise of its paramount police power.

Decision:

In the instant case, it is evident that the NLRC correctly applied Article 282 in the light of the foregoing and that its resolution is not tainted with unfairness or arbitrariness that would amount to grave abuse of discretion or lack of jurisdiction (Rosario Brothers Inc. v. Ople, 131 SCRA 73 [1984]).

PREMISES CONSIDERED, the petition is DISMISSED for lack of merit, and the resolution of the NLRC is affirmed. SO ORDERED.

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Meralco vs. NLRCG.R. No. 7876 July 12,1989

FIRST DIVISION: MEDIALDEA, J.:

Facts:

Private respondent Signo was employed in petitioner company as supervisor-leadman since January 1963 up to the time when his services were terminated on May 18, 1983.

In 1981, a certain Fernando de Lara filed an application with the petitioner company for electrical services at his residence at Peafrancia Subdivision, Marcos Highway, Antipolo, Rizal. Private respondent Signo facilitated the processing as well as the required documentation for said application at the Municipality of Antipolo, Rizal. In consideration thereof, private respondent received from Fernando de Lara the amount of P7,000.00. Signo thereafter filed the application for electric services with the Power Sales Division of the company.

It was established that the area where the residence of de Lara was located is not yet within the serviceable point of Meralco. But In order to expedite the electrical connections at de Lara's residence, certain employees of the company, including respondent Signo, made it appear in the application that the sari-sari store located in the entrance to the subdivision, is applicant de Lara's establishment, which, in reality is not owned by the latter.

As a result of this scheme, the electrical connections to de Lara's residence were installed. However, due to the fault of the Power Sales Division of petitioner company, Fernando de Lara was not billed for more than a year.

Petitioner company conducted an investigation of the matter and found respondent Signo responsible for the said irregularities in the installation. Thus, the services of the latter were terminated on May 18, 1983 which prompted him to file a complaint for illegal dismissal, unpaid wages, and separation pay.

Labor Arbiter rendered a decision based on position papers submitted directing the petitioner to reinstate private respondent to his former position without backwages. Both parties appealed from the decision to the respondent Commission but were dismissed for lack of merit and who in turn affirmed in toto the decision of the Labor Arbiter. Hence, this petition.

Issue:

Whether or not private respondents dismissal from petitioner company is valid on grounds of serious misconduct and loss of trust and confidence.

Held:

This Court has held time and again, in a number of decisions, that notwithstanding the existence of a valid cause for dismissal, such as breach of trust by an employee, nevertheless, dismissal

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should not be imposed, as it is too severe a penalty if the latter has been employed for a considerable length of time in the service of his employer.

The power to dismiss is the normal prerogative of the employer. An employer, generally, can dismiss or lay-off an employee for just and authorized causes enumerated under Articles 282 and 283 of the Labor Code. However, the right of an employer to freely discharge his employees is subject to regulation by the State.

There is no question that herein respondent Signo is guilty of breach of trust and violation of company rules, the penalty for which ranges from reprimand to dismissal depending on the gravity of the offense. However, as earlier stated, the respondent Commission and the Labor Arbiter found that dismissal should not be meted to respondent Signo considering his twenty (20) years of service in the employ of petitioner, without any previous derogatory record, in addition to the fact that petitioner company had awarded him in the past, two (2) commendations for honesty. If ever the petitioner suffered losses resulting from the unlisted electric consumption of de Lara, this was found to be the fault of petitioner's Power Sales Division.

Further, in carrying out and interpreting the Labor Code's provisions and its implementing regulations, the workingman's welfare should be the primordial and paramount consideration. This kind of interpretation gives meaning and substance to the liberal and compassionate spirit of the law as provided for in Article 4 of the New Labor Code which states that "all doubts in the implementation and interpretation of the provisions of the Labor Code including its implementing rules and regulations shall be resolved in favor of labor" .

Decision:

In view of the foregoing, reinstatement of respondent Signo is proper in the instant case, but without the award of backwages, considering the good faith of the employer in dismissing the respondent.

ACCORDINGLY, premises considered, the petition is hereby DISMISSED and the assailed decision of the National Labor Relations Commission dated March 12, 1987 is AFFIRMED. The temporary restraining order issued on August 3, 1987 is lifted. SO ORDERED.

Narvasa, Cruz, Gancayco and Grio-Aquino, JJ., concur

18

Sosito vs. Aguinaldo Development Corp.G.R. No. L-48926 December 14, 1987

FIRST DIVISION: CRUZ, J.:

Facts:

Petitioner Manuel Sosito was employed in 1964 by the private respondent, a logging company, and was in charge of logging importation, with a monthly salary of P675.00, 1 when he went on indefinite leave with the consent of the company on January 16, 1976.

On July 20, 1976, the private respondent, through its president, announced a retrenchment program and offered separation pay to employees in the active service as of June 30, 1976, who would tender their resignations not later than July 31, 1976. The petitioner decided to accept this offer and so submitted his resignation on July 29, 1976, "to avail himself of the gratuity benefits" promised. However, his resignation was not acted upon and he was never given the separation pay he expected. The petitioner complained to the Department of Labor, where he was sustained by the labor arbiter. The company was ordered to pay Sosito the sum of P 4,387.50, representing his salary for six and a half months. On appeal to the National Labor Relations Commission, this decision was reversed and it was held that the petitioner was not covered by the retrenchment program.

Issue:

Whether or not the petitioner is covered by the retrenchment program and thus entitled to separation benefits.

Held:

It is clear from the memorandum that the offer of separation pay was extended only to those who were in the active service of the company as of June 30, 1976. It is equally clear that the petitioner was not eligible for the promised gratuity as he was not actually working with the company as of the said date. Being on indefinite leave, he was not in the active service of the private respondent although, if one were to be technical, he was still in its employ. Even so, during the period of indefinite leave, he was not entitled to receive any salary or to enjoy any other benefits available to those in the active service.

We note that under the law then in force the private respondent could have validly reduced its work force because of its financial reverses without the obligation to grant separation pay. This was permitted under the original Article 272(a), of the Labor Code, which was in force at the time. To its credit, however, the company voluntarily offered gratuities to those who would agree to be phased out pursuant to the terms and conditions of its retrenchment program, in recognition of their loyalty and to tide them over their own financial difficulties. The Court feels that such compassionate measure deserves commendation and support but at the same time rules that it should be available only to those who are qualified therefore. We hold that the petitioner is not one of them.

While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be supposed that every labor dispute will be automatically decided in favor of labor. Management also has its own rights which, as such, are entitled to respect and

19

enforcement in the interest of simple fair play. Out of its concern for those with less privileges in life, this Court has inclined more often than not toward the worker and upheld his cause in his conflicts with the employer. Such favoritism, however, has not blinded us to the rule that justice is in every case for the deserving, to be dispensed in the light of the established facts and the applicable law and doctrine.

Decision:

WHEREFORE, the petition is DISMISSED and the challenged decision AFFIRMED, with costs against the petitioner. SO ORDERED.

Teehankee, C.J., Narvasa, Paras and Gancayco, JJ., concur.

20

Colgate Palmolive Philippines, Inc., vs. OpleG.R. No. 73681 June 30, 1988

SECOND DIVISION: PARAS, J.:

Facts:

On March 1, 1985, the respondent Union filed a Notice of Strike with the Bureau of Labor Relations (BLR) on ground of unfair labor practice consisting of alleged refusal to bargain, dismissal of union officers/members; and coercing employees to retract their membership with the union and restraining non-union members from joining the union.

After efforts at amicable settlement proved unavailing, the Office of the MOLE, upon petition of petitioner assumed jurisdiction over the dispute pursuant to Article 264 (g) of the Labor Code.

In its position paper, the petitioner pointed out that the infractions committed by the three salesmen fully convinced the company, after investigation of the existence of just cause for their dismissal, that their dismissal was carried out pursuant to the inherent right and prerogative of management to disciplne erring employees. Moreover, the petitioner refuted the unions charge that the membership in union and refusal to retract precipitated their dismissal was totally false and amounted to malicious imputation of union busting. Thre respondent union on hte other hand assailed its answers to the petitioners position paper.

On August 9,1985, respondent Minister rendered a decision whichfound no merit in the Union's Complaint for unfair labor practice allegedly committed by petitioner and that the the three salesmen, Peregrino Sayson, Salvador Reynante & Cornelio Mejia, "not without fault" hence "the company has grounds to dismiss above named salesmen".

At the same time respondent Minister directly certified the respondent Union as the collective bargaining agent for the sales force in petitioner company and ordered the reinstatement of the three salesmen to the company on the ground that the employees were first offenders.

Petitioner filed a Motion for Reconsideration which was denied by respondent Minister in his assailed Order, dated December 27, 1985. Hence, this petition.

Issue:

Whether the respondent Minister committed a grave abuse of discretion when, notwithstanding his very own finding that there was just cause for the dismissal of the three (3) salesmen, he nevertheless ordered their reinstatement.

Held:

The respondent Minister has the power to decide a labor dispute in a case assumed by him under Art. 264 (g) of the Labor Code.

21

The order of the respondent Minister to reinstate the employees despite a clear finding of guilt on their part is not in conformity with law. Reinstatement is simply incompatible with a finding of guilt. Where the totality of the evidence was sufficient to warrant the dismissal of the employees the law warrants their dismissal without making any distinction between a first offender and a habitual delinquent. Under the law, respondent Minister is duly mandated to equally protect and respect not only the labor or workers' side but also the management and/or employers' side. The law, in protecting the rights of the laborer, authorizes neither oppression nor self-destruction of the employer. To order the reinstatement of the erring employees would in effect encourage unequal protection of the laws as a managerial employee of petitioner company involved in the same incident was already dismissed and was not ordered to be reinstated. As stated by Us in the case of San Miguel Brewery vs. National Labor Union, "an employer cannot legally be compelled to continue with the employment of a person who admittedly was guilty of misfeasance or malfeasance towards his employer, and whose continuance in the service of the latter is patently inimical to his interest."

Decision:

WHEREFORE, judgment is hereby rendered REVERSING and SETTING ASIDE the Order of the respondent Minister, dated December 27, 1985 for grave abuse of discretion. However, in view of the fact that the dismissed employees are first offenders, petitioner is hereby ordered to give them separation pay. The temporary restraining order is hereby made permanent.

SO ORDERED.

Yap, C.J., Melencio-Herrera, Padilla and Sarmiento, JJ., concur.

22

Mendoza vs. Rural Bank of LucbanG.R. No. 155421 July 7, 2004

FIRST DIVISION: PANGANIBAN, J.:

Facts:

On April 25, 1999, the Board of Directors of the Rural Bank of Lucban, Inc., issued Board Resolution Nos. 99-52 and 99-53, providing that in line with the policy of the bank to familiarize bank employees with the various phases of bank operations and further strengthen the existing internal control system, all officers and employees are subject to reshuffle of assignments and that those affected branch employees are reshuffled to their new assignments without changes in their compensation and other benefits.

On May 3, 1999, in an undated letter addressed to Daya, the Banks Board Chairman, petitioner Elmer Mendoza expressed his opinion on the reshuffle alleging that "his reshuffling is deemed to be a demotion without any legal basis and thus asking to be allowed to remain in his position.

On May 10, 1999, Daya replied reitirating that it was never the intention (of the management) to downgrade his position in the bank considering that due compensation is maintained and no future reduction was intended. It was further reiterated that the conduct of reshuffle is also a prerogative of bank management.".

On June 7, 1999, petitioner submitted to the bank's Tayabas branch manager a letter in which he applied for a leave of absence from work.

On June 21, 1999, petitioner again submitted a letter asking for another leave of absence for twenty days effective on the same date.

On June 24, 1999, while on his second leave of absence, petitioner filed a Complaint before Arbitration Branch No. IV of the National Labor Relations Commission (NLRC). The Complaint -- for illegal dismissal, underpayment, separation pay and damages -- was filed against the Rural Bank of Lucban and/or its president, Alejo B. Daya; and its Tayabas branch manager, Briccio V. Cada. The case was docketed as NLRC Case SRAB-IV-6-5862-99-Q.The labor arbiter's June 14, 2000 Decision upheld petitioner's claims.

On appeal, the NLRC reversed the labor arbiter. In its July 18, 2001 Resolution. After the NLRC denied his Motion for Reconsideration, petitioner brought before the CA a Petition for Certiorari assailing the foregoing Resolution.

Finding that no grave abuse of discretion could be attributed to the NLRC, the CA Decision ruled in favor of the private respondent rural bank.

Issue:

23

Whether or not the the petitioner was constructively dismissed from employment and that the reshuffling pursuant to Board Res. Nos. 99-52 and 99-53 is a valid exercise of management prerogative.

Held:

The Petition has no merit.

Constructive dismissal is defined as an involuntary resignation resorted to when continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution of pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee.

Jurisprudence recognizes the exercise of management prerogatives. For this reason, courts often decline to interfere in legitimate business decisions of employers. Indeed, labor laws discourage interference in employers' judgments concerning the conduct of their business. The law must protect not only the welfare of employees, but also the right of employers.

In the pursuit of its legitimate business interest, management has the prerogative to transfer or assign employees from one office or area of operation to another -- provided there is no demotion in rank or diminution of salary, benefits, and other privileges; and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause. This privilege is inherent in the right of employers to control and manage their enterprise effectively. The right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to change their assignments or to transfer them.

Managerial prerogatives, however, are subject to limitations provided by law, collective bargaining agreements, and general principles of fair play and justice.

Decision:

WHEREFORE, this Petition is DENIED, and the June 14, 2002 Decision and the September 25, 2002 Resolution of the Court of Appeals are AFFIRMED. Costs against petitioner. SO ORDERED.

Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ., concur.

24

Gelmart Industries Phils., Inc. vs. NLRCG.R. No. 85668 August 10, 1989

FIRST DIVISION: GANCAYCO, J.:

Facts:

Private respondent Felix Francis started working as an auto-mechanic for petitioner Gelmart Industries Phils., Inc. (GELMART) sometime in 1971. As such, his work consisted of the repair of engines and underchassis, as well as trouble shooting and overhauling of company vehicles. He is likewise entrusted with some tools and spare parts in furtherance of the work assigned to him.

On April 11, 1987, private respondent was caught by the security guards taking out of GELMART's premises one (1) plastic container filled with about 16 ounces of "used' motor oil, without the necessary gate pass to cover the same as required under GELMART's rules and regulations which provides that theft and/or pilferage of company property merits an outright termination from employment. By reason thereof, petitioner was placed under preventive suspension pending investigation for violation of company rules and regulations on April 13, 1987.

After due investigation, or on May 20, 1987, private respondent was found guilty of theft of company property. As a consequence, his services were severed.

Thereafter, private respondent filed a complaint for illegal dismissal before the NLRC. In a decision dated February 26, 1988, Labor Arbiter Ceferina J. Diosana ruled that private respondent was illegally dismissed and, accordingly, ordered the latter's reinstatement with full backwages from April 13, 1987 up to the time of actual reinstatement.

From this decision, GELMART interposed an appeal with the NLRC. In its decision dated October 21, 1988, the NLRC affirmed with modification the ruling of Labor Arbiter Diosana.

On December 12, 1988, GELMART filed before this Court a special civil action for certiorari with a prayer for the issuance of a temporary restraining order.

On January 18, 1989, this Court, without necessarily giving due course to the petition, issued a temporary restraining order enjoining respondents from enforcing the assailed decision.

Issue:

Whether or not the NLRC committed a grave abuse of discretion for rendering a decision that is contrary to law and existing jurisprudence in ordering the reinstatement of private respondent to his former position with payment of backwages.

Held:

We find no merit in this petition.

25

Consistent with the policy of the State to bridge the gap between the underprivileged workingmen and the more affluent employers, the NLRC rightfully tilted the balance in favor of the workingmen and this was done without being blind to the concomitant right of the employer to the protection of his property.

On the other hand, without being too harsh to the employer, and naively liberal to labor, on the other, the NLRC correctly pointed out that private respondent cannot totally escape liability for what is patently a violation of company rules and regulations.

To reiterate, be it of big or small commercial value, intended to be re-used or altogether disposed of or wasted, the "used" motor oil still remains, in legal contemplation, the property of GELMART. As such, to take the same out of GELMART's premises without the corresponding gate pass is a violation of the company rule on theft and/or pilferage of company property.

In this score, it is very difficult for this Court to discern grave abuse of discretion on the part of the NLRC in modifying the appealed decision. The suspension imposed upon private respondent is a sufficient penalty for the misdemeanor committed.

Considering that private respondent herein has no previous derogatory record in his fifteen (15) years of service with petitioner GELMART the value of the property pilfered (16 ounces of used motor oil) is very minimal, plus the fact that petitioner failed to reasonably establish that non-dismissal of private respondent would work undue prejudice to the viability of their operation or is patently inimical to the company's interest, it is more in consonance with the policy of the State, as embodied in the Constitution, to resolve all doubts in favor of labor.

Thus, the penalty of preventive suspension was sufficient punishment for the violation under the circumstance and that complainant-appellees dismissal unwarranted.

Decision:

WHEREFORE, in view of the foregoing, the petition is DISMISSED for lack of merit. The, restraining order issued by this Court on January 18, 1989 enjoining the enforcement of the questioned decision of the National Labor Relations Commission is hereby lifted. No pronouncement as to costs. SO ORDERED.

Narvasa, Cruz, Gri;o-Aquino and-in Medialdea, JJ., concur.

26

Lagatic vs. NLRCG.R. No. 121004 January 28, 1998

THIRD DIVISION: ROMERO, J.:

Facts:

Petitioner Romeo Lagatic was employed in May 1986 by Cityland. As a marketing specialist, he was tasked with soliciting sales for the company, with the corresponding duties of accepting call-ins, referrals, and making client calls and cold calls (the practice of prospecting for clients through the telephone directory). Cityland, believing that the same is an effective and cost-efficient method of finding clients, requires all its marketing specialists to make cold calls but nonetheless requires submission of daily progress reports on the same in order to assess to determine the results thereof.

On November 1992, petitioner was suspended for three days for failing to submit cold call reports on various dates of September and October 1992 notwithstanding a written reprimand for infraction of the same committed a year earlier and a warning that further non-compliance would result to termination.

Notwithstanding the aforesaid suspension and warning, petitioner again failed to submit cold call reports for five (5) days of February 1993. He was verbally reminded to submit the same and was even given up to February 17, 1993 to do so. Instead of complying with said directive, Petitioner, on February 16, 1993, wrote a note, TO HELL WITH COLD CALLS! WHO CARES? and exhibited the same to his co-employees. To worsen matters, he left the same lying on his desk where everyone could see it.

On February 23, 1993, petitioner received a memorandum requiring him to explain why Cityland should not make good its previous warning for his failure to submit cold call reports, as well as for issuing the written statement aforementioned. On February 24, 1993, he sent a letter-reply alleging that his failure to submit cold call reports should not be deemed as gross insubordination. He denied any knowledge of the damaging statement, TO HELL WITH COLD CALLS!

Finding petitioner guilty of gross insubordination, Cityland served a notice of dismissal upon him on February 26, 1993. Aggrieved by such dismissal, petitioner filed a complaint against Cityland for illegal dismissal, illegal deduction, underpayment, overtime and rest day pay, damages and attorneys fees. The labor arbiter dismissed the petition for lack of merit. On appeal, the same was affirmed by the NLRC; hence the present recourse.

Issue:

Whether or not the respondent NLRC gravely abused its discretion in not finding the petitioner illegally dismissed.

Held:

The petition lacks merit.

27

To constitute a valid dismissal from employment, two requisites must be met, namely: (1) the employee must be afforded due process, and (2) the dismissal must be for a valid cause.

Petitioner loses sight of the fact that except as provided for, or limited by, special laws, an employer is free to regulate, according to his discretion and judgment, all aspects of employment. Employers may, thus, make reasonable rules and regulations for the government of their employees, and when employees, with knowledge of an established rule, enter the service, the rule becomes a part of the contract of employment. It is also generally recognized that company policies and regulations, unless shown to be grossly oppressive or contrary to law, are generally valid and binding on the parties and must be complied with.

Corollarily, an employee may be validly dismissed for violation of a reasonable company rule or regulation adopted for the conduct of the company business. An employer cannot rationally be expected to retain the employment of a person whose x x x lack of regard for his employers rules x x x has so plainly and completely been bared. Petitioners continued infraction of company policy requiring cold call reports, as evidenced by the 28 instances of non-submission of aforesaid reports, justifies his dismissal. He cannot be allowed to arrogate unto himself the privilege of setting company policy on the effectivity of solicitation methods. To do so would be to sanction oppression and the self-destruction of the employer.

More than that, his written statement shows his open defiance and disobedience to lawful rules and regulations of the company. Likewise, said company policy of requiring cold calls and the concomitant reports thereon is clearly reasonable and lawful, sufficiently known to petitioner, and in connection with the duties which he had been engaged to discharge. There is, thus, just cause for his dismissal.

Decision:

WHEREFORE, premises considered, the assailed Resolution is AFFIRMED and this petition is hereby DISMISSED for lack of merit. Costs against petitioner. SO ORDERED.

Narvasa, C.J., (Chairman), Melo, Francisco, and Panganiban, JJ., concur.

28

China Banking Corp., vs. BorromeoG.R. No. 156515 October 19, 2004

SECOND DIVISION: CALLEJO, SR., J.:

Facts:

Respondent Mariano M. Borromeo joined the petitioner Bank on June 1, 1989 as Manager Level 1 assigned at the latters Regional Office in Cebu City. Subsequently, the respondent was laterally transferred to Cagayan de Oro City as Branch Manager of the petitioner Banks branch thereat.

For the years 1989-1995 he was promoted from Manager Level I to Senior Manager Level II having consistently received a "highly satisfactory" performance rating (1989-1990) and a "very good" performance rating (1991-1995). Finally, in 1996, with a "highly satisfactory" performance rating, the respondent was promoted to the position of Assistant Vice-President, Branch Banking Group for the Mindanao area effective October 16, 1996.

However, prior to his last promotion and then unknown to the petitioner Bank, the respondent, without authority from the Executive Committee or Board of Directors, approved several DAUD/BP (Drawn Against Uncollected Deposits/Bills Purchased) accommodations amounting to P2,441,375 in favor of certain Joel Maniwan. Such checks, which are not sufficiently funded by cash, are generally not honored by banks. Further, such accommodations may be granted only by a bank officer upon express authority from its Executive Committee or Board of Directors.

Upon knowing of this by the bank authorities, Samuel L. Chiong, First Vice-President and Head-Visayas Mindanao Division of the petitioner bank issued a memorandum seeking clarification on issues relative thereto. In reply, the respondent answered the queries but nonetheless, accepted full responsibility for committing an error in judgment, lapses in control and abuse of discretion. However, respondent vehemently denied benefiting therefrom. Apology was accorded by the respondent in relation to this and subsequently tendered his irrevocable resignation effective May 31, 1997.

His acts having constituted a violation of the Banks Code of Ethics, respondent was directed to restitute the amount of P1,507,736.79 representing 90% of the total loss of P1,675,263.10 incurred by the petitioner Bank. However, in view of his resignation and considering the years of service in the petitioner Bank, the management earmarked only P836,637.08 from the respondents total separation benefits or pay. The said amount would be released upon recovery of the sums demanded from Maniwan in a civil case.

Consequently, the respondent, through counsel, made a demand on the petitioner Bank for the payment of his separation pay and other benefits but the petitioner Bank maintained its position to withhold the sum earmarked. Thus, the respondent filed with the National Labor Relations Commission (NLRC), the complaint for payment of separation pay, mid-year bonus, profit share and damages against the petitioner Bank. The Labor Arbiter ruled in favor of the bank. Respondent appealed to the NLRC but it affirmed in toto the findings of the Labor Arbiter. However, the CA upon petition set aside the NLRC decision and alleged that repondent was denied his rights to due process. Hence, this petition.

29

Issue:

Whether the bank has the prerogative/right to impose the withholding of respondents benefits as what it considered the appropriate penalty under the circumstances pursuant to its company rules and regulations.

Held:

The petition is meritorious. The petitioner Bank was left with no other recourse but to impose the ancillary penalty of restitution in view of his voluntary separation from the petitioner Bank. It was certainly within the petitioner Banks prerogative to impose on the respondent what it considered the appropriate penalty under the circumstances pursuant to its company rules and regulations.

It is well recognized that company policies and regulations are, unless shown to be grossly oppressive or contrary to law, generally binding and valid on the parties and must be complied with until finally revised or amended unilaterally or preferably through negotiation or by competent authority. Moreover, management has the prerogative to discipline its employees and to impose appropriate penalties on erring workers pursuant to company rules and regulations.

The petitioner Banks business is essentially imbued with public interest and owes great fidelity to the public it deals with. It is expected to exercise the highest degree of diligence in the selection and supervision of their employees. As a corollary, and like all other business enterprises, its prerogative to discipline its employees and to impose appropriate penalties on erring workers pursuant to company rules and regulations must be respected. The law, in protecting the rights of labor, authorized neither oppression nor self-destruction of an employer company which itself is possessed of rights that must be entitled to recognition and respect.

Significantly, the respondent ids not wholly deprived of his separation benefits but were merely withheld and will be released without delay as soon as the bank has satisfied a judgment in the civil case.

Decision:

WHEREFORE, the petition is GRANTED. The Decision dated July 19, 2002 of the Court of Appeals and its Resolution dated January 6, 2003 in CA-G.R. SP No. 57365 are REVERSED AND SET ASIDE. The Resolution dated October 20, 1999 of the NLRC, affirming the Decision dated February 26, 1999 of the Labor Arbiter, is REINSTATED. SO ORDERED.

Puno, Austria-Martinez, Tinga, and Chico-Nazario*, JJ., concur.

30

Associated Watchmen and Security Union (PTWO) vs. LantingG.R. No. L-14120 February 29, 1960

EN BANC: LABRADOR, J.:

Facts:

Three agencies (K. Tagle Ship Watchmen Agency, City Watchmen and Security Agency and Republic Ships Security Agency) were employed by certain shipping agencies in the City of Manila and private respondent Macondray and Company Inc., in guarding ships or vessels arriving at the port of Manila. and in discharging cargo on its piers. Thirty-eight affiliates of the Republic Ships Security Agency belong to the petitioner labor union.

On or about February 18, 1956, petitioner union and its members declared a strike against 19 shipping firms in the City of Manila. Attempts were made by the Court of Industrial Relations to settle the strike.

On April 6, 1956, a petition was filed before the Court of Industrial Relations asking for reinstatement of 47 strikers who belong to the petitioner Associated Watchmen and Security Union (PTWO).

The manager of respondent Macondray and Company, Inc. expressed willingness to employ the strikers belonging to the petitioner union under the condition that the agency to which they belong file a bond in the sum of P5,000 in favor of Macondray and Company, Inc. to respond for any negligence, misfeasance or malfeasance of any of the watchmen of petitioner. This requirement of filing a bond was also demanded of the other two security agencies, the K. Tagle Ship Watchmen Agency and the City Watchmen and Security Agency. However, the Republic Ships Security Agency, to which most of the members of the petitioner union belonged, failed to comply with the demands of Macondray and Company, Inc. that they furnish such a bond.. Because of the failure of the Republic Ships Security Agency to furnish a bond, Macondray and Company, Inc. refused to employ watchmen from the said agency. Some of the members of the agency transferred to the other two agencies that had furnished a bond and after having joined the said agencies they were employed as watchmen by the respondent Macondray and Company, Inc.

On November 15, 1956, Macondray and Company, Inc. was charged with unfair labor practice. Macondray and Company, Inc. answered the complaint.

The judge of the Court of Industrial held that defendant-respondent is guilty of unfair labor practice in view of the circumstances of the case and ordered the members of the union to be reinstated with full back wages from February 18, 1956 up to their actual reinstatement and prohibited the respondent from committing further acts of unfair labor practice. The respondent appealed this decision to the court in banc. On the appeal, three of the judges of the court, Judges Lanting, Martinez and Tabigne, voted to reverse the decision of the trial judge and to dismiss the petition for lack of merit. The other two judges voted for the affirmance of the decision.

Issue:

31

Whether or not Macondray and Co. Committed unfair labor practice for having dismissed and refused to employ 38 members of the petitioner in relation to the failure of the Republic Ships Security Agency to furnish a bond required by herein respondent.

Held:

On the whole, therefore, we find that the majority decision is fully supported by the evidence and by the documents and papers on the record, insofar as it declares that respondent has not been guilty of unfair labor practice.

The refusal of the respondent to employ guards affiliated with a security or watchmen agency that does not furnish bond can not constitute an unfair labor practice. Such refusal is merely the exercise of respondent's legitimate right to protect its own interests, especially as the members of the petitioner had abandoned a ship they were guarding without previous notice and exposed the ship losses due to theft and pilferage. It is to be noted that the requirement of filing of a bond was not demanded from any of the labor unions, or from the petitioner union herein. We cannot conclude that because the respondent company refused to employ the guards affiliated with the Republic Ships Security Agency, which affiliates are members of the petitioner union, respondent committed an unfair labor practice or a discrimination against petitioner union.

Decision:

Wherefore, we find no sufficient reasons for disturbing the findings of the majority of the judges of the court below to the effect that the acts of the respondent Macondray and Company, Inc. do not constitute an unfair labor practice, and we, therefore, affirm the decision of the said majority, with costs against the petitioner herein.

Bengzon, Montemayor, Bautista Angelo, Concepcion, J.B.L. Reyes, Endencia, and Gutierrez David, JJ., Concur.

32

Pampanga Bus Company, INC., vs. PAMBUSCO Employees' Union, Inc.G.R. No. 46739 September 23, 1939

EN BANC: MORAN, J.:

Facts:

On May 31, 1939, the Court of Industrial Relations issued an order, directing the petitioner herein, Pampanga Bus Company, Inc., to recruit from the respondent, Pambusco Employees' Union, Inc., new employees or laborers it may need to replace members of the union who may be dismissed from the service of the company, with the proviso that, if the union fails to provide employees possessing the necessary qualifications, the company may employ any other persons it may desire. This order, in substance and in effect, compels the company, against its will, to employ preferentially, in its service, the members of the union.

Issue:

Whether or not the said order issued by the CIR valid and not violative of the right of the employer to select employees.

Held:

We hold that the court has no authority to issue such compulsory order.

The general right to make a contract in relation to one's business is an essential part of the liberty of the citizens protected by the due-process clause of the Constitution. The right of the laborer to sell his labor to such person as he may choose is, in its essence, the same as the right of an employer to purchase labor from any person whom it chooses. The employer and the employee have thus an equality of right guaranteed by the Constitution.

Section of Commonwealth Act No. 213 confers upon labor organizations the right "to collective bargaining with employers for the purpose of seeking better working and living conditions, fair wages, and shorter working hours for laborers, and, in general, to promote the material, social and moral well-being of their members." This provision in granting to labor unions merely the right of collective bargaining, impliedly recognizes the employer's liberty to enter or not into collective agreements with them. Indeed, we know of no provision of the law compelling such agreements. Such a fundamental curtailment of freedom, if ever intended by law upon grounds of public policy, should be effected in a manner that is beyond all possibility of doubt. The supreme mandates of the Constitution should not be loosely brushed aside. As held by the Supreme Court of the United States in Hitchman Coal & Co. vs. Mitchell (245 U. S., 229; 62 Law. ed., 260, 276):

Decision:

Thus considered, the order appealed from is hereby reversed, with costs against the respondent Pambusco Employees' Union, Inc.

33

Pampanga Bus Company, INC., vs. PAMBUSCO Employees' Union, Inc.G.R. No. 46739 September 23, 1939

EN BANC: MORAN, J.:

Facts:

On May 31, 1939, the Court of Industrial Relations issued an order, directing the petitioner herein, Pampanga Bus Company, Inc., to recruit from the respondent, Pambusco Employees' Union, Inc., new employees or laborers it may need to replace members of the union who may be dismissed from the service of the company, with the proviso that, if the union fails to provide employees possessing the necessary qualifications, the company may employ any other persons it may desire. This order, in substance and in effect, compels the company, against its will, to employ preferentially, in its service, the members of the union.

Issue:

Whether or not the said order issued by the CIR valid and not violative of the right of the employer to select employees.

Held:

We hold that the court has no authority to issue such compulsory order.

The general right to make a contract in relation to one's business is an essential part of the liberty of the citizens protected by the due-process clause of the Constitution. The right of the laborer to sell his labor to such person as he may choose is, in its essence, the same as the right of an employer to purchase labor from any person whom it chooses. The employer and the employee have thus an equality of right guaranteed by the Constitution.

Section of Commonwealth Act No. 213 confers upon labor organizations the right "to collective bargaining with employers for the purpose of seeking better working and living conditions, fair wages, and shorter working hours for laborers, and, in general, to promote the material, social and moral well-being of their members." This provision in granting to labor unions merely the right of collective bargaining, impliedly recognizes the employer's liberty to enter or not into collective agreements with them. Indeed, we know of no provision of the law compelling such agreements. Such a fundamental curtailment of freedom, if ever intended by law upon grounds of public policy, should be effected in a manner that is beyond all possibility of doubt. The supreme mandates of the Constitution should not be loosely brushed aside. As held by the Supreme Court of the United States in Hitchman Coal & Co. vs. Mitchell (245 U. S., 229; 62 Law. ed., 260, 276):

Decision:

Thus considered, the order appealed from is hereby reversed, with costs against the respondent Pambusco Employees' Union, Inc.

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People v Panis142 SCRA 664 1986

Facts:Four informations were filed on January 9, 1981, in the Court of First Instance of Zambales and Olongapo City alleging that SerapioAbug, private respondent herein, "without first securing a license from the Ministry of Labor as a holder of authority to operate a fee-charging employment agency, did then and there wilfully, unlawfully and criminally operate a private fee-charging employment agency by charging fees and expenses (from) and promising employment in Saudi Arabia" to four separate individuals named therein, in violation of Article 16 in relation to Article 39 of the Labor Code.

Abug filed a motion to quash on the ground that the informations did not charge an offense because he was accused of illegally recruiting only one person in each of the four informations. Under the proviso in Article 13(b), he claimed, there would be illegal recruitment only "whenever two or more persons are in any manner promised or offered any employment for a fee."

The posture of the petitioner is that the private respondent is being prosecuted under Article 39 in relation to Article 16 of the Labor Code; hence, Article 13(b) is not applicable. However, as the first two cited articles penalize acts of recruitment and placement without proper authority, which is the charge embodied in the informations, application of the definition of recruitment and placement in Article 13(b) is unavoidable.

Issue:Whether or not the petitioner is guilty of violating Article 13(b) of P. D. 442, otherwise known as the Labor Code.

Held:Article 13(b) of P. D. 442, otherwise known as the Labor Code, states that, "(b) 'Recruitment and placement' refers to any act of canvassing, 'enlisting, contracting, transporting, hiring, or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not: Provided, That any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement."

As we see it, the proviso was intended neither to impose a condition on the basic rule nor to provide an exception thereto but merely to create a presumption. The presumption is that the individual or entity is engaged in recruitment and placement whenever he or it is dealing with two or more persons to whom, in consideration of a fee, an offer or promise of employment is made in the course of the "canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring (of) workers."

At any rate, the interpretation here adopted should give more force to the campaign against illegal recruitment and placement, which has victimized many Filipino workers seeking a better life in a foreign land, and investing hard-earned savings or even borrowed funds in pursuit of their dream, only to be awakened to the reality of a cynical deception at the hands of their own countrymen.

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People vs GoceGR No 113161 August 29, 1995

Parties:PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.LOMA GOCE y OLALIA, DAN GOCE and NELLY D. AGUSTIN, accused. NELLY D.

AGUSTIN,accused-appellant. Regalado, J.

Facts:On January 12, 1988, an information for illegal recruitment committed by a syndicate

and in large scale, punishable under Articles 38 and 39 of the Labor Code as amended by Section 1(b) of Presidential Decree No. 2018, was filed against spouses Dan and Loma Goce and herein accused-appellant Nelly Agustin in the Regional Trial Court of Manila, Branch 5.

On January 21, 1987, a warrant of arrest was issued against the three accused but not one of them was arrested. Hence, on February 2, 1989, the trial court ordered the case archived but it issued a standing warrant of arrest against the accused.Thereafter, on learning of the whereabouts of the accused, at around midday of February 26, 1993, Nelly Agustin was apprehended by the Paraaque police. On November 19, 1993, the trial court rendered judgment finding herein appellant guilty as a principal in the crime of illegal recruitment in large scale, and sentencing her to serve the penalty of life imprisonment, as well as to pay a fine of P100,000.00.

In her appeal, appellant Agustin raises the following arguments: (1) her act of introducing complainants to the Goce couple does not fall within the meaning of illegal recruitment and placement under Article 13(b) in relation to Article 34 of the Labor Code; (2) there is no proof of conspiracy to commit illegal recruitment among appellant and the Goce spouses; and (3) there is no proof that appellant offered or promised overseas employment to the complainants.

Appellant counsel agreed to stipulate that she was neither licensed nor authorized to recruit applicants for overseas employment. Appellant, however, denies that she was in any way guilty of illegal recruitment.

It is appellant's defensive theory that all she did was to introduce complainants to the Goce spouses. Being a neighbor of said couple, and owing to the fact that her son's overseas job application was processed and facilitated by them, the complainants asked her to introduce them to said spouses. Allegedly out of the goodness of her heart, she complied with their request.

Issues:Whether or not appellant Agustin actions in relation with the Goce couple constitute illegal recruitment.

Held:Appellant is accused of violating Articles 38 and 39 of the Labor Code. Article 38 of the Labor Code, as amended by Presidential Decree No. 2018, provides that any recruitment activity,

36

including the prohibited practices enumerated in Article 34 of said Code, undertaken by non-licensees or non-holders of authority shall be deemed illegal and punishable under Article 39 thereof. The same article further provides that illegal recruitment shall be considered an offense involving economic sabotage if any of these qualifying circumstances exist, namely,

(a) when illegal recruitment is committed by a syndicate,i.e., if it is carried out by a group of three or more persons conspiring and/or confederating with one another; or (b) when illegal recruitment is committed in large scale, i.e., if it is committed against three or more persons individually or as a group.

Recruitment and placement refers to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not; provided, that any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement. On the other hand, referral is the act of passing along or forwarding of an applicant for employment after an initial interview of a selected applicant for employment to a selected employer, placement officer or bureau.

There is illegal recruitment when one gives the impression of having the ability to send a worker abroad." It is undisputed that appellant gave complainants the distinct impression that she had the power or ability to send people abroad for work such that the latter were convinced to give her the money she demanded in order to be so employed.

Decision:WHEREFORE, the appealed judgment of the court a quo is hereby AFFIRMED in toto, with costs against accused-appellant Nelly D. Agustin.

37

Darvin vs. CA and People of the Philippines

G.R. No. 125044, July 13, 1998

FACTS:

Maria Toledo convinced by the petitioner that she has the authority to recruit workers for abroad and that she can facilitate the necessary papers, gave Darvin Php150,000 for airfare and US visa. However, she was not given a work permit to validly work in the US.

Issue:Whether or not the petitioner is guilty of illegal recruitment?

Held:There is lack of evidence that accused offered Toledo a job. Procuring of an airfare ticket

and a US visa does not qualify illegal recruitment.

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Eastern Shipping Lines vs. POEA G.R. No. 76633, Oct. 18, 1988

Facts: Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accident in Tokyo, Japan, March 15, 1985. His widow sued for damages under Executive Order No. 797 and Memorandum Circular No. 2 of the POEA. The petitioner, as owner of the vessel, argued that the complaint was cognizable not by the POEA but by the Social Security System and should have been filed against the State Insurance Fund. The POEA nevertheless assumed jurisdiction and after considering the position papers of the parties ruled in favor of the complainant. The award consisted of P180,000.00 as death benefits and P12,000.00 for burial expenses. The petitioner immediately came to this Court, prompting the Solicitor General to move for dismissal on the ground of non-exhaustion of administrative remedies.

Issue: Is Saco an overseas worker or a domestic employee?

Decision: We see no reason to disturb the factual finding of the POEA that Vitaliano Saco was an overseas employee of the petitioner at the time he met with the fatal accident in Japan in 1985. Under the 1985 Rules and Regulations on Overseas Employment, overseas employment is defined as "employment of a worker outside the Philippines, including employment on board vessels plying international waters, covered by a valid contract. A contract worker is described as "any person working or who has worked overseas under a valid employment contract and shall include seamen" or "any person working overseas or who has been employed by another which may be a local employer, foreign employer, principal or partner under a valid employment contract and shall include seamen." These definitions clearly apply to Vitaliano Saco for it is not disputed that he died while under a contract of employment with the petitioner and alongside the petitioner's vessel, the M/V Eastern Polaris, while berthed in a foreign country. It is worth observing that the petitioner performed at least two acts which constitute implied or tacit recognition of the nature of Saco's employment at the time of his death in 1985. The first is its submission of its shipping articles to the POEA for processing, formalization and approval in the exercise of its regulatory power over overseas employment under Executive Order NO. 797. The second is its payment of the contributions mandated by law and regulations to the Welfare Fund for Overseas Workers, which was created by P.D. No. 1694 "for the purpose of providing social and welfare services to Filipino overseas workers." WHEREFORE, the petition is DISMISSED, with costs against the petitioner. The temporary restraining order dated December 10, 1986 is hereby LIFTED. It is so ordered.

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PHILSA INTERNATIONAL PLACEMENT and SERVICES CORPORATION, V.S,THE HON. SECRETARY OF LABOR AND EMPLOYMENT, VIVENCIO DE MESA, RODRIGO

MIKIN and CEDRIC LEYSON

FACTS:

Petitioner Philsa is a domestic corporation engaged in the recruitment of workers for overseas employment. Sometime in January 1985, private respondents, who were recruited by petitioner for employment in Saudi Arabia, were required to pay placement fees in the amount of P5,000.00 for private respondent Rodrigo L. Mikin and P6,500.00 each for private respondents Vivencio A. de Mesa and Cedric P. Leyson.

After the execution of their respective work contracts, private respondents left for Saudi Arabia on January 29, 1985. They then began work for Al-Hejailan Consultants A/E, the foreign principal of petitioner.

While in Saudi Arabia, private respondents were allegedly made to sign a second contract on February 4, 1985 which changed som