Labor Standards Case Digests

Employer Recognition

Romares v NLRCFacts:Romares was hired by PILMICO to perform maintenance work and sometimes to operate company machinery (mason). He was hired at different periods, terminated and rehired again for the same job as per his employment contract. One day, with out the requisite due process, he was terminated. He filed a case for illegal dismissal.Ruling: Petition meritorious, NLRC ruling set aside.Ratio: In determining the status as a regular employee, reference should be made to Art. 280 of the Labor Code. The 2 kinds of regular employees are: 1. Those who are engaged to perform activities which are necessary or desirable in the usual business or trade of the employer; and 2. Those casual employees who rendered at least 1 year of service, whether continuous or broken, with respect to the activity in which they are employed.

Petitioner comes within the definition of number 1. Assuming arguendo that he does not, he still comes under number 2 because of having worked with PILMICO for over 1 year. The limited period specified in the employment contract is a convenient subterfuge to prevent his regularization. This is a clear circumvention of Romares right to security of tenure. His status as a regular employee is established by operation of law and not by what his employer dictates.Employer Determination/DesignationPhil. Federation of Credit Cooperatives (PFCCI) v NLRC

Facts:Victoria Abril was hired by PFCCI in Sept. 1982 and held different positions until 1988. She went on leave until she gave birth and came back to realize that her former position has been given to someone else. Nevertheless, she accepted another position but with an accompanying contract which stated that her employment was on probationary status for a period of 6 mos. This was followed by another contract which provided for a period of 1 year and after it elapsed, her employment was terminated. She filed a case for illegal dismissal.

Ruling:Petition dismissed. Abril reinstated with back wages.

Ratio:Art. 281 provides that a probationary employee who was engaged to work beyond the probationary term of 6 mos or for any length of time set by the employer shall be considered as a regular employee.

Even probationary employees enjoy security of tenure and may only be terminated for just cause or upon failure to qualify with the reasonable standards set by the employer at the time of his engagement. In this case, the contract stated first that Abrils employment was for a fixed period, the succeeding provisions contradicted this by stating that she shall be probationary until 6 months. Regardless of the designation petitioner may have conferred upon Abrils employment status, she has completed the probationary period and was allowed to work thereafter, became a regular employee who may be dismissed only for just and authorized causes. Nature of Work

Poseidon Fishing v NLRC

Facts:Jimmy Estoquia was hired by Poseidon in 1988 as Chief Mate and after 5 years was promoted to Boat Captain. In 1999, Poseidon, without reason, demoted him to Radio Operator. One day, he was not able to record a call in his logbook. At 2pm the same day, he was terminated. He filed a case for illegal dismissal.

Ruling:Petition denied, dismissal illegal.

Ratio:Petitioners assert their right to terminate its contract with Estoquia per their Kasunduan which stated that he was employed on a per trip basis.

It has been held in Brent v Zamora that the test for the validity of fixed-term employment is that if from the circumstances it is apparent that periods have been imposed to preclude the acquisition of tenurial security by the employee, they should be disregarded for being contrary to public policy.

The Kasunduan was intended by the employer to evade the application of Art. 280. In Integrated Contractor and Plumbing Works v NLRC, the SC held that the test in determining regular employment is the reasonable connection between the particular activity performed in relation to the usual trade or business of the employer, even if broken but for a period of 1 year.

Lastly, an employee is regular due to the nature of his work and the length of service not because of the mode or reason for hiring him.

WPP Marketing Commission Inc, et al. v Galera

Facts:Galera, an American citizen, was recruited from the USA to work in the Philippines by WPP as Managing Director. After more than 1 year and without substantive nor procedural due process, her employment was terminated. She filed a case for illegal dismissal with the LA.

Ruling:Dismissal illegal but status quo prevails because Galera did not follow the law regarding AEP.

Ratio:WPP contends that LA, NLRC have no jurisdiction because Galera is a corporate officer and not an employee as defined in the LC. However, her position and appointment to such are not in the by-laws and as such, are ultra vires acts of WPP which are null and void. Not being an officer, Galera is an employee and this was established by the 4 fold test as can be proven by stipulations in the employment contract. Also, her contract provided that she would be probationary for the first 3 months and when the company is pleased then she will be considered permanent.

Regular Employees Extended period

TOMAS LAO CONSTRUCTION, LVM CONSTRUCTION CORPORATION, THOMAS and JAMES DEVELOPERS (PHIL.), INC., petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, MARIO O. LABENDIA, SR., ROBERTO LABENDIA, NARCISO ADAN, FLORENCIO GOMEZ, ERNESTO BAGATSOLON, SALVADOR BABON, PATERNO BISNAR, CIPRIANO BERNALES, ANGEL MABULAY, SR., LEO SURIGAO, and ROQUE MORILLO

Private respondents were construction workers who work for Tomas Lao Construction. They individually filed complaints for illegal dismissal against petitioners with the National Labor Relations.

They alternately worked for petitioners Tomas Lao Corporation (TLC), Thomas and James Developers (T&J) and LVM Construction Corporation (LVM), altogether informally referred to as the Lao Group of Companies, the three (3) entities comprising a business conglomerate exclusively controlled and managed by members of the Lao family.

Sometime in 1989 Andres Lao, Managing Director of LVM and President of T&JHYPERLINK "http://sc.judiciary.gov.ph/jurisprudence/1997/sep1997/116781.htm" \l "_edn3"

issued a memorandum requiring all workers and company personnel to sign employment contract forms and clearances which were issued on 1 July 1989 but antedated 10 January 1989. These were to be used allegedly for audit purposes pursuant to a joint venture agreement between LVM and T&J.To ensure compliance with the directive, the company ordered the withholding of the salary of any employee who refused to sign. Quite notably, the contracts expressly described the construction workers as project employees whose employments were for a definite period

Except for Florencio Gomez HYPERLINK "http://sc.judiciary.gov.ph/jurisprudence/1997/sep1997/116781.htm" \l "_edn5" \o "" all private respondents refused to sign contending that this scheme was designed by their employer to downgrade their status from regular employees to mere project employees. The workers stood firm in their refusal to comply with the directives their services were terminated.

National Labor Relations Commission (NLRC) of Cebu City which found that private respondents were regular employees who were dismissed without just cause and denied due process.

ISSUE: whether or not the respondents were regular employees of Lao Construction

HELD: YES. All the employees of either of the three petitioners were actually assigned to a particular project to remain in said project until the completion or termination of that project. However, after the completion of that particular project or when their services are no longer needed in the project or particular phase of the project where they were assigned, they were transferred and rehired in another on-going project. Clearly, the continuous rehiring of the same set of employees within the framework of the Lao Group of Companies is strongly indicative that private respondents were an integral part of a work pool from which petitioners drew its workers for its various projects.SC RULING: Affirmed the ruling of NLRCPetitioners are ordered to reinstate private respondents to their former positions without loss of seniority rights and other privileges with full back wages, inclusive of allowances, computed from the time compensation was withheld up to the time of actual reinstatement. In the event that reinstatement is no longer feasible, petitioners are directed to pay private respondents separation pay equivalent to one month salary for every year of service, a fraction of at least six (6) months being considered one (1) year in the computation thereof, and full back wages computed from the time compensation was withheld until the finality of this decisionRepeated Renewal of Contract

BETA ELECTRIC CORPORATION, Petitioner V. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER CRESENCIO INIEGO, BETA ELECTRIC EMPLOYEES ASSOCIATION and LUZVIMINDA PETILLA,Respondents.

The petitioner questions the decision of the National Labor Relations Commission affirming the judgment of the labor arbiter reinstating the private respondent with back wages.The petitioner hired the private respondent as clerk typist effective December 15, 1986 until January 16, 1987.

On January 16, 1987, the petitioner gave her an extension up to February 15, 1987. On February 15, 1987, it gave her another extension up to March 15, 1987.

On March 15, 1987, it gave her a further extension until April 30, 1987. On May 1, 1987, she was given until May 31, 1987. On June 1, 1987, she was given up to June 30, 1987. Her appointments were covered by corresponding written contracts. On June 22, 1987, her services were terminated without notice or investigation. On the same day she filed a case of illegal dismissal.

Both the labor arbiter and the NLRC ruled in her favor.

The petitioner argues mainly that the private respondent's appointment was temporary and, hence, she may be terminated at will. That she had been hired merely on a "temporary basis" "for purposes of meeting the seasonal or peak demands of the business

ISSUE: whether or not the private respondent was a regular employee

HELD:YES. Under Article 281 of the Labor Code, a probationary employee is "considered a regular employee" if he has been "allowed to work after the probationary period The private respondent's work, that of "typist-clerk" is far from being "specific" or "seasonal", but rather, one, according to the Code, "where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business." And under the Code, where one performs such activities, he is a regular employee, "the provisions of written agreement to the contrary notwithstanding."

SC RULING:

WHEREFORE, the petition is dismissed. The private respondent is ordered reinstated with backwages equivalent to three years with no qualifications or deductions. Project employeesHANJIN HEAVY INDUSTRIES AND CONSTRUCTION CO. V. FELICITO IBAEZThis is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the Decision, dated 28 July 2005, rendered by the Court of Appeals, reversing the Decision, promulgated by the National Labor Relations Commission (NLRC) on 7 May 2004. The Court of Appeals, in its assailed Decision, declared that respondents are regular employees who were illegally dismissed by petitioner Hanjin Heavy Industries and Construction Company, Limited (HANJIN).

Petitioner HANJIN is a foreign company duly registered with the Securities and Exchange Commission to engage in the construction business in the Philippines. Petitioners Hak Kon Kim and Jhunie Adajar were employed as Project Director and Supervisor, respectively, by HANJIN.

On 11 April 2002, respondents Felicito Ibaez, Aligwas Carolino, Elmer Gacula, Enrique Dagotdot, Ruel Calda, and four other co-workers filed a complaint before the NLRC, , for illegal dismissal with prayer for reinstatement and full backwages against petitioners.

Respondents stated that their tasks were usual and necessary or desirable in the usual business or trade of HANJIN, Hanjin dismissed respondents from employment. Respondents claimed that at the time of their dismissal, HANJIN had several construction projects that were still in progress, such as Metro Rail Transit (MRT) II and MRT III, and continued to hire employees to fill the positions vacated by the respondents.

HANJIN and respondents purportedly executed contracts of employment, in which it was clearly stipulated that the respondents were to be hired as project employees for a period of only three months, but that the contracts may be renewed

The Labor Arbiter found merit in the respondents' complaint and declared that they were regular employees who had been dismissed without just and valid causes and without due process. It ruled that HANJIN's allegation that respondents were project employees was negated by its failure to present proof thereof. It also noted that a termination report should be presented after the completion of every project or a phase thereof and not just the completion of one of these projects. The Labor Arbiter further construed the number of years that respondents rendered their services for HANJINThe LA rules that Hanjin is guilty of illegal dismissal, Ordering respondent to reinstate all the complainants to positions previously occupied by them with full backwages from the time compensation was withheld from them up to date of actual reinstatement and Ordering respondent to pay each complainant P50,000.00 for moral damages and P30,000.00 as exemplary damages

The NLRC gave probative value to the Termination Report submitted by HANJIN to the DOLE, receipts signed by respondents for their completion bonus upon phase completion, and the Quitclaims executed by the respondents in favor of HANJIN. The NLRC REVERSED the decision of the labor arbiter.

THE CA reversed the decision of the NLRC and reinstates the decision of the LA but deleting the award of damages.

ISSUE: Whether the respondents were regular employees or project employees?

HELD: They are Regular employees.

If respondents were actually project employees, petitioners should have filed as many Termination Reports as there were construction projects actually finished and for which respondents were employed. Thus, a lone Termination Report filed by petitioners only upon the termination of the respondents' final project, and after their previous continuous employment for other projects, is not only unconvincing, but even suspicious.Petitioners insist that the payment to the respondents of a completion bonus indicates that respondents were project employees. Court finds that the payments termed as "completion bonus" are not the completion bonus paid in connection with the termination of the project. A completion bonus is paid in connection with the completion of the project, and is not based on a fifteen-day period. Secondly, the amount paid to each employee as his completion bonus was uniformly equivalent to his fifteen-day wages, without consideration of the number of years of service rendered.

Due to petitioners' failure to adduce any evidence showing that petitioners were project employees who had been informed of the duration and scope of their employment, they were unable to discharge the burden of proof required to establish that respondents' dismissal was legal and valid

SC RULING: This Court AFFIRMS the assailed Decision of the Court of Appeals, declaring that the respondents are regular employees who have been illegally dismissed by Hanjin Heavy Industries Construction Company, Limited, and are, therefore, entitled to full backwages, separation pay, and litigation expenses.

Project EmploymentFELIX VILLA, vs. NATIONAL LABOR RELATIONS COMMISSIONFacts: Respondent National Steel Corporation produces hot rolled products, cold rolled products, tinplates and billets. These products are in turn transformed by downstream industries into truss assemblies, farm implements, pipe structures, shipbuilding and repairing materials, automotive structures and machine parts, etc. The NSC embarked on a Five-Year Expansion Program which had two phases. One of the major projects of the NSC was the billet steelmaking plant. To produce the billets, the plant would initially use 100% scrap as its raw materials. In line with its program to use 100% scrap, the NSC ventured into a shipbreaking operation. However, due to scarcity of vessels/ships for salvaging, the higher costs of operation and the unsuitability of raw materials, this experimental project was stopped after four or five ships had been chopped. When the project was completely phased out in November 1986, the laborers hired for said project 4 were terminated. Prior to the termination of the project, the NSC had been beset by labor problems already and one of which was the claim of employees group, the the National Steel Corporation Employees Association-Southern Philippines Federation of Labor (NSCEA-SPFL) filed a notice of strike. It charged the NSC with unfair labor practices consisting of (a) wage discrimination, (b) interference with the employees' right to self-organization, (c) nonregularization of contractual employees, (d) illegal termination of employees, (e) nonpayment of wage/benefit differentials, and (f) nonrecognition of NSCEA-SPFL as the sole bargaining representative of the company. In this other labor dispute, the Labor minister already said that the masons, carpenters, labourers, etc should not be regularized since they were on a contractual basis. The NLRC said that they were indeed casual employees only according to article 280 of the code This rule is, however, subject to exemptions. Where an employment or activity despite being usually necessary or desirable has been fixed for a specific project or undertaking the completion of which has been "pre-determined" at the time of engagement or where the services to be performed is seasonal in nature, the same is still considered "casual" or "temporary" in nature After the ruling another group, National Steel Corporation Workers Association (NSCWA), a break-away group from the NSCEA-SPFL composed of 204 workers, filed a motion for reconsideration of the NLRC Decision, 15 assailing the same for its incompleteness and failure to resolve the case with finality. The NLRC denied the motion but again the NSCWA also filed a motion to declare the 204 complainant-workers as regular employees. On April 14, 1994, the NLRC rendered a Resolution ruling that the project employees are not regular employees within the purview of Art. 280 of the Labor Code. Focusing on the shipbreaking operation which petitioners contend was a customary activity of the NSC, the NLRC found that: The shipbreaking operation being a developmental program had long been phased out due to non-viability. Since the employees assigned therein are project employees, those dismissed are therefore not entitled to reinstatement. The NLRC noted that, considering the immensity of the operations of the NSC, it was understandable that project employees would work alongside regular employees. However, such a situation did not imply that "a contract worker hired under the FYEP or peakload or as a temporary replacement of a regular employee who is on leave of absence," would be converted into a regular employee. Another motion of reconsideration was done but was again denied by the NLRC.

ISSUE : whether or not workers contracted as project employees may be considered as regular employees on account of their performance of duties inherent in the business of the employer.

HELD: NO

The court held that it is true that they performed other activities which were necessary or desirable in the usual business of the NSC and that the duration of their employment was for a period of more than one year, these factors did not make them regular employees in contemplation of Article 280 of the Labor Code, as amended. Thus, the fact that petitioners worked for NSC under different project employment contracts for several years cannot be made a basis to consider them as regular employees, for they remain project employees regardless of the number of projects in which they have worked. Length of service is not the controlling determinant of the employment tenure of a project employee.

The Court also distinguished two kinds of projects which a business or industry may undertake. First, "a project could refer to a particular job or undertaking that is within the regular or usual business of the employer company, but which is distinct and separate, and identifiable as such, from the other undertakings of the company." The example given is a construction company that may undertake two or more "projects" at the same time in different places. Second, a project may refer to "a particular job or undertaking that is not within the regular business of the corporation. Such a job or undertaking must also be identifiably separate and distinct from the ordinary or regular business operations of the employer. The job or undertaking also begins and ends at determined or determinable times." Classifying the NSC's "project" as of the second type

Application of Rule in Non-Construction Industries

Maraguinot v NLRC

FACTS: Alejandro Maraguinot, Jr. maintains that he was employed by respondents as part of the filming crew. He was later promoted as an electrician. Petitioners tasks contained of loading movie equipment in the shooting area. He sought the assistance of their supervisor, Cesario, to facilitate their request that respondents adjust their salary in accordance with the minimum wage law. Mrs. Cesario informed petitioners that del Rosario would agree to increase their salary only if they signed a blank employment contract. As petitioner refused to sign, respondents forced Enero (the other petitioner who worked as a crew member) to go on leave. However, when he reported to work, respondent refused to take him back. Maraguinot was dropped from the company payroll but when he returned, he was again asked to sign a blank employment contract, and when he still refused, respondents terminated his services. Petitioners thus sued for illegal dismissal. Private respondents assert that they contract persons called "producers" also referred to as "associate producers" to "produce" or make movies for private respondents; and contend that petitioners are project employees of the association producers who, in turn, act as independent contractors. As such, there is no employer-employee relationship between petitioners and private respondents.

However, petitioners cited that their performance of activities is necessary in the usual trade or business of respondents and their work in continuous

LA: there was illegal dismissal since the work being done were necessary and essential to the business of the respondents, that of movie-making and also he producer cannot be considered as an independent contractor but should be considered only as a labor-only contractor and as such, acts as a mere agent of the real employer, the herein respondent. Respondents even failed to name and specify who are the producers

NLRC: They were only project employees. They reverse the LA rulingISSUE: Whether or not the Employees are regular employees

Held : Ye s.

With regards to VIVAs contention that it does not make movies but merely distributes motion pictures, there is no sufficient proof to prove this contention.

In respect to respondents allegation that petitioners are project employees, it is a settled rule that the contracting out of labor is allowed only in case of job contracting. However, assuming that the associate producers are job contactors, they must then be engaged in the business of making motion pictures. Associate producers must have tools necessary to make motion pictures. However, the associate producers in this case have none of these. The movie-making equipment are supplied to the producers and owned by VIVA. Thus, it is clear that the associate producer merely leases the equipment from VIVA.

In addition, the associate producers of VIVA cannot be considered labor-only contractors as they did not supply, recruit nor hire the workers. It was Cesario, the Shooting Supervisor of VIVA, who recruited crew members. Thus, the relationship between VIVA and its producers or associate producers seems to be that of agency.

With regards to the issue of illegal dismissal, petitioners assert that they were regular employees who were illegally dismissed. Petitioners in this case had already attained the status of regular employees in view of VIVAs conduct. Thus, petitioners are entitled to back wages.

A project employee or a member of a work pool may acquire the status of a regular employee when:

a. there is a continuous rehiring of project employees even after a cessation of project

b. the tasks performed by the alleged project employee are vital and necessary to the business of

employer

The tasks of petitioners in loading movie equipment and returning it to VIVAs warehouse and fixing the lighting system were vital, necessary and indispensable to the usual business or trade of the employer.

Casual Employees Nature of Work

Maranaw Vs Court of Appeals

Facts: Sheryl Oabel was initially hired by Maranaw Hotels as an extra beverage attendant at Century Park Hotel on April 24, 1995. This lasted until February 7, 1997.On September 16, 1996, Maranaw contracted with Manila Resource Development Corporation. Subsequently, private respondent Oabel was transferred to MANRED, with the latter deporting itself as her employer. MANRED has intervened at all stages of these proceedings and has consistently claimed to be the employer of private respondent Oabel. For the duration of her employment, Oabel was the secretary of public relations, gift shop attendant, waitress and shot attendant. On July 20, 1998, private respondent filed before the Labor Arbiter a petition for regularization of employment against the petitioner. On August 1, 1998, however, private respondent Oabel was dismissed from employment.6 Respondent converted her petition for regularization into a complaint for illegal dismissal. LA: Dismiss complaint of Oabel since she never disputed the fact that her work with the same were on a per function basis or on a "need basis" co-terminus with the function she was hired fo.Considering that complainant job with the respondent hotel was on a per function basis or on a "need basis", complainant could not even be considered as casual employee or provisional employee.

NLRC: The NLRC reversed the ruling of the Labor Arbiter and held that: (1) MANRED is a labor-only contractor, and (2) private respondent was illegally dismissed. Century Park Hotel and Manila Resource Development Corporation are hereby declared jointly and severally liable

CA: Dismissed appeal because of noncompliance of the certificate of non-forum shopping

Issue: Whether or not Century Park Hotel is the real employer of Oabel

SC: Yes, century park is the real employer of Oabel. This is because the Hotel had already hired Oabel before having the contract with Manred. In this regard, it has not escaped the notice of the Court that the operations of the hotel itself do not cease with the end of each event or function and that there is an ever present need for individuals to perform certain tasks necessary in the petitioners business. Thus, although the tasks themselves may vary, the need for sufficient manpower to carry them out does not. In any event, as borne out by the findings of the NLRC, the petitioner determines the nature of the tasks to be performed by the private respondent, in the process exercising control.

This being so, the Court finds no difficulty in sustaining the finding of the NLRC that MANRED is a labor-only contractor.20 Concordantly, the real employer of private respondent Oabel is the petitioner.

It appears further that private respondent has already rendered more than one year of service to the petitioner, for the period 1995-1998, for which she must already be considered a regular employee, pursuant to Article 280 of the Labor Code.

Seasonal Employees

Philippine Tobacco Flue-curing & Redrying Corporation vs. NLRC, Lubat, Luris

FACTS:

Case involves two groups of seasonal workers, namely, the Lubat group and the Luris group. The Lubat group is composed of petitioners (P) seasonal employees who were not rehired for the 94 tobacco season. They claimed that Ps refusal to allow them to report for work w/o mention of any just or authorized cause constituted illegal dismissal.

Luris group is made up of seasonal employees who worked during the 94 season. On Aug 3, 94, they received a notice informing them that, due to serious business losses, P planned to close its Balintawak plant and transfer its tobacco processing and redrying operations to Ilocus Sur. Although the closure was to be effective Sep 15, they were no longer allowed to come to work starting Aug 4. Instead, they were awarded separation pay according to the following formula: ((total no. days worked/total no. of working days in a year)*daily rate*15).

LA ordered P to pay Rs separation pay differential plus attorneys fees. P appealed.

NLRC affirmed LAs decision that the closure of Ps operations were due to serious financial losses and ordered P to pay both the Lubat and Luris groups their separation pay equivalent to 1/2 month salary for every year of service.

ISSUE:

(1) WON P was able to prove that the closure of its operations was due to serious financial losses;

(2) WON dismissal of Rs was valid and (3) Computation of separation pay for seasonal employees.

HELD:

An audited financial statement is the normal method of proof of showing businesses are suffering from serious financial losses. But this norm does not compel the court to accept the contents of the said documents blindly and without thinking. The financial documents presented by P failed to show that it had incurred from its operations serious losses sufficient to justify the termination of the employment of its workers sans separation pay. Also, it did not comply with the at least one month notice required by law.

The Court held previously in Manila Hotel vs. CIR that seasonal workers who are called to work from time to time and are temporarily laid off during off-season are not separated from service in said period, but are merely considered on leave w/o pay until re-employed. Also, seasonal employees are considered as in-regular employment in cases involving the determination of an employer-employee relationship and security of tenure. Therefore P is guilty of illegal dismissal in the case of terminating in its employ those belonging to the Lubat group.

Computation used by P is unfair and inapplicable. Articles 283 and 284 of LC both state in connection w/ separation pay that a fraction of at least 6 months shall be considered one whole year. The amount should be 1/2 the respective average monthly pay during the last season they worked multiplied by the number of years they actually rendered service, provided that they worked for at least six months during a given year.

Decision by NLRC affirmed.

Mercado v. AMA Computer College-Paranaque City Inc. (AMACC)

Doctrine: Regular seasonal employees are those called to work from time to time. The nature of their relationship with the employes is such that during off season they are temporarily laid off but during summer season they are reemployed, or when their services may be needed. They are not, strictly speaking , separated from the services but are merely considered as on leave of absence without pay until they are reemployed. Their employment relationship is never severed but only suspended. As such those employees can be considered as in the regular employment of the employer.

Facts:

The (5) petitioners were all faculty members who started teaching at AMACC on May 25 1998.

Each of executed a Teachers contract for each of the trimester that they were engaged to teach, with ff. stipulation:

1. POSITION. The TEACHER has agreed to accept a non-tenured appointment to work in the college of xxx effective xxx for the duration of the last term that the TEACHER is given a teaching load based on the assignment duly approved by the DEAN/SAVP-COO For school year 2000-2001 AMACC implemented new faculty screening guidelines, set forth in its Guidelines on the Implementation of AMACC Faculty Plantillla. The performance standards under this new screening guidelines were also used to determine the present faculty members entitlement to salary increases.

The petitioners failed to pass the performance standards; hence, AMACC did not increase their salary.

In lieu of this, petitioners filed a complaint before the NLRC arbitration branch for underpayment of wages.

Sept. 7, 2000, the petitioners individually receive a memorandum from AMACC, informing them that with the expiration of their contract to teach, their contract would no longer be renewed.

Upon receipt of this notice, petitioners amended their complaint of underpayment of wages, and included the charge of illegal dismissal against AMACC.

Petitioners contention: Their dismissal was AMACCs retaliation for their complaint for monetary benefits

AMACCs contention: The petitioners worked under a contracted term under a non-tenured appointment and were still with the three year probationary period for teachers. And their contracts were not renewed because they failed to pass the performance Appraisal system, while the others failed to comply with other requirements for regularization.

Labor Arbiter: Petitioners were illegally dismissed.

NLRC: Affirmed LAs decision.

CA: dismissed petitioners complaint for illegal dismissal.

Issues:

Whether or not the teachers probationary status be disregarded simply because the contracts were fixed term?

Held: NO.

a. Rule on Employment on Probationary status.

The Labor Code is supplemented with respect to the period of probation by special rules found in the Maniual Regulations for Private Schools. On the matter of probationary period, sec. 92 of these regulations provides:

Subject in all instances to compliance with the Department and school requirements, the probationary period for academic personnel shall not be more than three consecutive years of satisfactory service for those in the elementary and secondary levels six consecutive regular semester of satisfactory service for those in the tertiary level and nine consecutive trimesters of satisfactory service for those in the tertiary level where collegiate courses are offered on a trimester basis.

On the other hand, Art. 281 of the Labor Code still fully applies:

X X X The services of an employee who has been engaged on a probationary basis may be

terminated for a just cause when he fails to qualify as a regular employee in accordance with

reasonable standards made know by the employes to the employee at the time of his engagement.

An employee who is allowed to work after a probationary period shall be considered a regular

employee

b. Fixed term Employment and Probationary Status

The existence of the term-to-term contracts covering the petitioners employment is not disputed, nor it is disputed that they were on probationary status-not permanent or regular status-from the time they were employed on May 25 1998 and until expiration of their Teaching Contracts on September 7, 2000.

Under the given facts where the school year is divided into trimester, the school apparently utilizes its fixed term contracts as convenient arrangement dictated by the trimestral system and not because the workplace parties really intended to limit the period of their relationship to any fixed term and to finish this relationship at the end of that term. The nature of the contract is a for a fixed-term conveniently used by the school to define and regulate its relations with its teachers during their probationary period. Although there is nothing illegitimate in this practice, the school however cannot forget that its system of fixed-term contract is a system that operates during the probationary period and for this reason is subject to the terms of Art 281 of the labor code.

We cannot but conclude that in a situation where the probationary status overlaps with a fixed term contract no specifically used for the fixed term it offers, art 281 should assume primacy and the fixed period character of the contract must give way. This conclusion is immeasurably strengthened by the petitioners and the AMACCs hardly concealed expectation that the employment on probation could lead to permanent status, and that the contracts are renewable unless the petitioners fail to pass the schools standards/Probationary Employees Definition/Purpose

Duration: Rule/ Exception

De la Cruz, Jr. vs. NLRC, December 11, 2003

Facts:

On May 27, 1996, petitioner Florencio M. De la Cruz was hired by Shemberg Marketing Corporation as senior sales manager with monthly salary of Php 40,500. Shemberg was engaged in manufacturing, trading, distributing and importing various consumer products. The position of senior sales manager is newly created with the aim of product positioning in the consumer market.

On September 14, 1996, Shemberg terminated petitioners services on the grounds of drop in companys sales. Petitioner requested for a meeting with Shembergs vice president but was told that the decision to terminate him is already final.

Petitioner then filed a complaint for illegal dismissal. Respondent then premised that the termination was due on the following grounds:

Poor performance evidenced by a steady and substantial drop in sales since his assumption as senior sales manager

Dissatisfaction of his subordinates over his management style

Unauthorized use of company cellular phone for overseas personal call

Unauthorized reimbursement of plane tickets for his wife and child

In short the petitioner was terminated for his failure to meet the required company standards for loss of trust and confidence.

The labor arbiter decided in favor of the petitioner and ordered the payment of his separation pay, back wages and unpaid wages totaling to Php 438, 750.00

The NLRC initially dismissed the appeal. It however partially granted Shembergs appeal by modifying the LAs decision. The NLRC ordered the payment of unpaid wages and indemnity amounting to Php 18,900 and Php 5,000 respectively.

The CA dismissed the petitioners case for lack of merit.

Hence this petition.

Issue:

In the course of the case, petitioner vigorously contends that he was not a probationary employee since Shemberg failed to disclose to him the reasonable standards for qualifying as a regular employee.

The court then resolved as to whether or not the petitioner, even though holding a managerial position, is deemed to be a probationary employee. The court decided against the petitioner.Ratio: The court notes that the petitioners service lasted for 4 months and that he is well informed of the standards to be met before he could qualify as a regular employee (as shown by his appointment papers). In relation to Art. 281 of the LC, a probationary employee is one who for a given period of time is under observation and evaluation to determine whether or not he is qualified for permanent employment. During this period the employer has the opportunity to observe the skill, competence and attitude of the employee.

There is no dispute that the petitioner is a probationary employee and enjoyed only a temporary employment status. That he was terminable anytime before permanent employment is attained. As long as the termination was made before the expiration of the six months probation period, the employer was well within his rights to sever the employee-employer upon valid cause, in this case, unsatisfactory performance and loss of trust and confidence.

Extension of Contract

PHIL. FEDERATION OF CREDIT COOPERATIVES, INC, (PFCCI) and FR. BENEDICTO JAYOMA, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION (First Division) and VICTORIA APRIL, respondents, G.R. No. 121071 December 11, 1998

Facts:

September 1982, private respondent Victoria Abril was employed by petitioner Philippine Federation of Credit Cooperatives, Inc. (PFCCI), a corporation engaged in organizing services to credit and cooperative entities, as Junior Auditor/Field Examiner

She also held different positions as office secretary in 1985 and as cashier-designate for four (4) months ending in April 1988.

Subsequently she went on leave until she gave birth to a baby girl.

Upon her return sometime in November 1989, however, she discovered that a certain Vangie Santos had been permanently appointed to her former position.

It is noteworthy to mention that the petitioner alleged that the private respondent abandoned her work as a secretary for 8 months.

The private respondent, nevertheless, accepted the position of Regional Field Officer as evidenced by a contract which stipulated, among other things, that respondent's employment status shall be probationary for a period of six (6) months.

Said period having elapsed, respondent was allowed to work until PFCCI presented to her another employment contract for a period of one year commencing on January 2, 1991 until December 31, 1991, after which period, her employment was terminated.

Private respondent then filed a complaint for illegal dismissal. The LA dismissed her complaint for lack of merit On appeal, however, the said decision was reversed by the NLRC, directing for her reinstatement as Regional Field Officer or to an equivalent position is such position no longer feasible

NLRC dismissed petitioners appeal.

Hence this petition.

Issue:

Whether or not the private respondent is a probationary employee notwithstanding her employment contract indicating her probationary status?

The court resolved in favor of the private respondent affirming the decision of NLRC.

Ratio:

Under the light of Art. 280, the court elucidate three kinds of employees

(a) regular employees or those whose work is necessary or desirable to the usual business of the employer

(b) project employees or those whose employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season; and

(c) casual employees or those who are neither regular nor project employees.

Then the court evaluated the employment contract between the petitioner and private respondent.

The Court notes:

contract show that respondent's employment was for a fixed period, the succeeding provisions thereof contradicted the same when it provided that respondent shall be under probationary status commencing on February 17, 1990 and ending six (6) months thereafter.

Petitioner manifested that respondent's employment for a period of one year, from January until December 1991, having been fixed for a specified period, could not have converted her employment status to one of regular employment.

Conversely, it likewise insisted that respondent was employed to perform work related to a project funded by the World Council of Credit Unions (WOCCU) and hence, her status is that of a project employee.

The Court is, thus, confronted with a situation under which the terms of the contract are so ambiguous as to preclude a precise application of the pertinent labor laws.

The Court resolved in the light of: Article 1702 of the Civil Code provides that, in case of doubt, all labor contracts shall be construed in favor of the laborer.

The termination due end of contract is in violation of right to security of tenure guaranteed in Section 3 of Article XIII of the Constitution and in Articles 279 and 281 of the Labor Code. The Court held that regardless of the designation petitioner may have conferred upon respondent's employment status, it is, however, uncontroverted that the latter, having completed the probationary period and allowed to work thereafter, became a regular employee who may be dismissed only for just or authorized causes under Articles 282, 283 and 284 of the Labor Code. (Absorbed Employees

CEBU STEVEDORING v. THE HONORABLE REGIONAL DIRECTOR/MINISTER OF LABOR, ARSENIO GELIG and MARIA LUZ QUIJANO

FACTS: Arsenio Gelig and Maria Luz Quijano were former employees of the Cebu Customs Arrastre Service (CCAS). On May 2, 1977, CCAS was abolished because its objectives had already been attained. Consequently, all the employees of CCAS, including Gelig and Quijano were terminated and given separation pay.

On May 1, 1977, Cebu Stevedoring Co. Inc. (CSCI) absorbed all employees of CCAS with the same positions that they held. However, private respondents were dismissed by petitioner allegedly for redundancy and other alleged grounds.

Regional Director ordered to reinstate Arsenio Gelig and Maria Luz Quijano to their positions without loss of seniority rights and with full backwages .Ministry of Labor and the Office of the President affirmed the decision.

ISSUE: Whether the absorbed employees should undergo probationary period employment when transferred to CSCI?

HELD: No.

RATIO: Complainants were employed by the Cebu Customs Arrastre Service long time ago whose functions were carried over when they were absorbed by respondent. There is no need to employ them as probationary considering that they are already well trained in their respective functions. They were not absorbed for a definite period but instead for an indefinite period.

A probationary period of employment means that an employee is hired for training for a certain period in order to determine whether they are qualified for the position. The complainants in this case cannot be mistakenly considered as probationary because they have been holding the same positions for a quite a long time at the CCAS before they were absorbed by CSCI with the same positions.

Private School Teachers Rule

LA SALETTE OF SANTIAGO, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and CLARITA JAVIER, respondents.

G.R. No. 82918 March 11, 1991, NARVASA, CJ.

Facts: The La Salette of Santiago, Inc., the petitioner in this case is one of a group of educational institutions known as the La Salette School System, which also includes the La Salette of Jones High School and La Salette College. Clarita Javier, private respondent, was employed by the La Salette School System as follows:

1. Principal of the La Salette of Jones High School for three years.

2. From 1969 to 1972, Teacher and Subject Area Coordinator ofthe La Salette of Santiago, Inc.

3. From 1972 to 1979, Full-time college instructor of the La Salette College.

4. From 1977 to 1978, Head of the College's Education and Liberal Arts Department.

5. In 1980, she accepted an offer to go back to La Salette of Santiago, Inc. as Assistant Principal. She however made known that she said "did not intend to sever . . . (her) professional and business relations with La Salette College . . . (expressing the hope that her stay in the High School Department) will deepen . . . (her) insight into the field of education and therefore be of service to the La Salette College." It was no doubt pursuant to that reservation, which the School System accepted, that while serving as such assistant Principal, she retained her teaching assignment as part-time instructor at La Salette College.

6. From 1981 to 1984, she returned to the La Salette College as a full time instructor. However, during the second semester of school year 1983-1984, Clarita Javier taught at La Salette College only on part-time because she was at the same time completing her doctorate degree.

7. In school year 1984-1985, she transferred back to La Salette of Santiago, Inc. as its High School Principal. She served as Principal in school year 1985-1986, too.

8. She was extended a written appointment for another year, 1985-1986, to complete the two-year term. The appointment specified her term as Principal to be from June 1, 1985 to May 31, 1986." During her two-year stint as high School Principal, Clarita Javier continued as professor on a part-time basis at the Graduate School and College Department of La Salette College.

On June 9, 1986, the La Salette School System instructed her to report to La Salette College. Sister Saturnina Pascual was named to replace her as a principal. On June 11, 1986, Clarita wrote to the Board of Trustees of La Salette of Santiago, Inc. complaining of the suddenness of her removal from her post of principal. She received no reply. However, on the same day, she received a letter from Ms. Yco, head of the Education Department of La Salette College, advising her of her teaching load of 12 units in that department.

Clarita went to Fr. Constante Dannog, Acting Chairman of the Board of Trustees and Director of La Salette of Santiago High School. According to her, he said that he was new to the position and could not give an explanation for the Board's decision not to continue with her services as high school principal, but that he saw no alternative but to implement that decision of the Board.

On June 18, 1986, Clarita filed a complaint for illegal dismissal against La Salette of Santiago, Inc.

On June 20, 1986, she received a letter from the President of La Salette College, Fr. Romeo Gonzales, assuring her that there would be neither dimunition of compensation nor loss of seniority in her transfer from the high school to department of education of the college. Nonetheless Clarita refused to accept the termination of her services as principal; she refused to report her teaching assignments at the education department, choosing instead to litigate for vindication of her right to retain the position of principal of the High School of La Salette of Santiago.

The Executive Labor Arbiter rendered judgment of January 26, 1987 in Clarita Javier's favor, reinstating her to her former position as Principal of High School Department.

La Salette of Santiago, Inc. appealed to the National Labor Relations Commission. The latter affirmed the Labor Arbiter's decision. The Commission subsequently denied La Salette's motion for reconsideration, by resolution dated February 18, 1988. Hence, this petition for certiorari by the latter.

Issue:

Whether or not she had also acquired permanency, or tenure in the position of high school principal of the educational system of La Salette of Santiago Inc.

Held:

The Supreme Court reversed the decision of the Executive Labor Arbiter and the NLRC. It held that unlike teachers (assistant instructors, assistant, professors, associate professors, full professors) who aspire for and expect to acquired permanency, or security of tenure, in their employment, as faculty members, teachers who are appointed as department heads or administrative officials (e.g., college or department secretaries principals, directors, assistant deans, deans) do not normally, and should not expect to, acquire a second status of permanency, or an additional or second security of tenure as such officer. The acquisition of such an additional tenure is not consistent with normal practice, constitutes the exception rather than the rule, and may take place only where categorically and explicitly provided by law or agreement of the parties.

While Clarita Javier's work as teacher in the La Salette School System was more or less continuous, or was evidently intended to be on a permanent basis, her assignment in one administrative office or another i.e., as high school principal, subject area coordinator, head of a college department, assistant principal was not. In these administrative posts, she served in a non-permanent capacity, either at the pleasure of the school or for a fixed term. She could not but have become aware of the pattern in her employment relationship with her employer, of the duality in the nature of her employment, particularly of the permanent character of her stints in the administrative positions to which she was designated.

The evidence indicates that she felt herself free to assert her preferences in accepting offers of administrative assignments. When she acceded to the request that she return to La Salette of Santiago, Inc. as Assistant Principal in 1980, she manifested that she "did not intend to sever . . . (her) professional and business relations with La Salette College . . .(and expressed the hope that her stay in the High School Department) will deepen . . . (her) insight into the field of education and therefore be of service to the La Salette College." In other words, she was fully aware that her stint as Assistant Principal of the High School was merely temporary, and she intended to return to the La Salette College thereafter; in fact, this is why, while serving as such Assistant Principal, she continued to teach, part-time, at La Salette College in the first semester of school year 1980-1981.

It thus appears to the Court that the practice and policy in the La Salette School System that administrative positions are held by faculty members only on a temporary or non-permanent basis, either for a fixed term or at the pleasure of the School Head or Board of Regents must be upheld, being entirely in accord with prevailing usage rule in private schools and corporations, and with case law.

Magis Young Achievers Learning Center, Petitioner, vs Manalo, Respondent

G.R. No. 178835, February 13, 2009, NACHURA, J.

Facts:

On April 18, 2002, respondent Adelaida P. Manalo was hired as a teacher and acting principal of petitioner Magis Young Achievers Learning Center with a monthly salary of P15,000.00. On March 29, 2003, respondent wrote a letter of resignation addressed to Violeta T. Cario, directress of petitioner. On March 31, 2003, respondent received a letter of termination from petitioner stating that she can no longer renew her contract with the petitioner. On April 4, 2003, respondent instituted against petitioner a Complaint for illegal dismissal and non-payment of 13th month pay, with a prayer for reinstatement, award of full backwages and moral and exemplary damages. Respondent claimed that her termination violated the provisions of her employment contract, and that the alleged abolition of the position of Principal was not among the grounds for termination by an employer under Article 282 of the Labor Code. She further asserted that petitioner infringed Article 283 of the Labor Code, as the required 30-day notice to the Department of Labor and Employment (DOLE) and to her as the employee, and the payment of her separation pay were not complied with. She also claimed that she was terminated from service for the alleged expiration of her employment, but that her contract did not provide for a fixed term or period. She likewise prayed for the payment of her 13th month pay under Presidential Decree (PD) No. 851.

Petitioner, in its position paper, countered that respondent was legally terminated because the one-year probationary period, from April 1, 2002 to March 3, 2003, had already lapsed and she failed to meet the criteria set by the school pursuant to the Manual of Regulation for Private Schools, adopted by the then Department of Education, Culture and Sports (DECS), paragraph 75 of which provides that: Full-time teachers who have rendered three years of satisfactory service shall be considered permanent.

Labor Arbiter (LA) Renell Joseph R. dela Cruz dismissed the complaint for illegal dismissal. The LA ratiocinated that Petitioner was not dismissed illegally but she resigned. On appeal, NLRC reversed the Arbiters judgment. Petitioner was ordered to reinstate respondent as a teacher, who shall be credited with one-year service of probationary employment, and to pay her the amounts of P3,750.00 and P325,000.00 representing her 13th month pay and backwages, respectively. Petitioners motion for reconsideration was denied by the NLRC. Petitioner went up to the CA via a petition for certiorari. The CA, in its Decision dated January 31, 2007, affirmed the NLRC decision and dismissed the petition. It likewise denied petitioners motion for reconsideration. Hence, this petition.

Issue:

Whether Manalo, a probationary employee, was illegally dismissed.

Held:

The Supreme Court dismissed the petition and affirmed the decision of the Court of Appeals.

It discussed that for academic personnel in private schools, colleges and universities, probationary employment is governed by Section 92 of the 1992 Manual of Regulations for Private Schools (Manual), which reads:

Section 92. Probationary Period. Subject in all instances to compliance with the Department and school requirements, the probationary period for academic personnel shall not be more than three (3) consecutive years of satisfactory service for those in the elementary and secondary levels, six (6) consecutive regular semesters of satisfactory service for those in the tertiary level, and nine (9) consecutive trimesters of satisfactory service for those in the tertiary level where collegiate courses are offered on a trimester basis.

The probationary period of three years for private school teachers was, in fact, confirmed earlier in Labajo v. Alejandro: There should be no question that the employment of the respondent, as teacher, in petitioner school on April 18, 2002 is probationary in character, consistent with standard practice in private schools. There should also be no doubt that respondents appointment as Acting Principal is merely temporary, or one that is good until another appointment is made to take its place. An acting appointment is essentially a temporary appointment, revocable at will.

The resignation of the respondent is not valid, not only because there was no express acceptance by the employer, but because there is a cloud of doubt as to the voluntariness of respondents resignation. In this case, respondent actively pursued her illegal dismissal case against petitioner, such that she cannot be said to have voluntarily resigned from her job. There was doubt as to the period of effectivity of employment agreement - respondents copy remained in blank while petitioners copy provided for one-year period, April 1, 2002 to March 31, 2003. Respondent was hired April 18, 2002. The SC ruled that where the very employment of respondent is at stake, the doubt as to the period of employment must be construed in her favor.

Probationary employees enjoy security of tenure during the term of their probationary employment such that they may only be terminated for cause as provided for by law, or if at the end of the probationary period, the employee failed to meet the reasonable standards set by the employer at the time of the employees engagement. Undeniably, respondent was hired as a probationary teacher and, as such, it was incumbent upon petitioner to show by competent evidence that she did not meet the standards set by the school. This requirement, petitioner failed to discharge. To note, the termination of respondent was effected by that letter stating that she was being relieved from employment because the school authorities allegedly decided, as a cost-cutting measure, that the position of Principal was to be abolished. Nowhere in that letter was respondent informed that her performance as a school teacher was less than satisfactory.

Security of Tenure

Espina et. al, Petitiones vs. CA and Monde MY San Biscuit, Inc., and Monde MY SAN Corporation, RespondentsG.R. No. 164582, March 28, 2007, CHICO-NAZARIO, J.:

Facts:

Respondent M.Y. San Biscuits, Inc. (M.Y. San) was sold to Monde M.Y. San Corporation (Monde). The M.Y. San Workers Union-PTGWO and M.Y. San Sales Force Union-PTGWO was informed of the closure or cessation of business operations of respondent M.Y. San and was notified of their termination, effective 31 January 2001.

On 22 January 2001, respondent M.Y. San and the Union signed a Memorandum of Agreement (MOA) embodying the agreements set forth in the Minutes/Agreement, dated 27 December 2000. Embodied in the MOA is an agreement that the existing Collective Bargaining Agreement shall cease to be effective on 31 January 2001 and shall in no way be binding upon the buyer, respondent Monde, and that respondent M.Y. San shall provide respondent Monde a list of all its present employees who shall be given preference in employment by the latter. All employees hired by Monde shall upon hiring, subject to the terms and conditions of their probationary employment, become members of the UNION.

On 31 January 2001, all the employees of respondent M.Y. San received their separation pay and the cash equivalent of their vacation and sick leaves. Thereafter, they signed their respective Quitclaims. On 2 February 2001, respondent Monde commenced its operations. All the former employees of respondent M.Y. San who were terminated upon its closure and who applied and qualified for probationary employment, including petitioners herein, started working for respondent Monde on a contractual basis for a period of six months.

Subsequently, petitioners, who were terminated on various dates, filed a Complaint for illegal dismissal and underpayment, damages and attorneys fees and litigation cost with the National Labor Relations Commission (NLRC), Regional Arbitration Branch No. IV. Petitioners alleged that respondent My San stopped its operations on 31 January 2001, but three days after, resumed its operation with the same top management running the business; the union officers, in exchange for being re-hired, acceded to bust the union; and the sale of respondent M.Y. San to respondent Monde was merely a ploy to circumvent the provisions of the Labor Code.

Respondent M.Y. San insisted that its employer-employee relationship with petitioners had ceased to exist, thus, the complaint for illegal dismissal against it could no longer prosper. It further contended that the power to hire and fire employees is now lodged in the new business owner, respondent Monde.

On the other hand, respondent Monde alleged that petitioners had no cause of action against it. Monde gave complainants the remainder of their probationary period within which to prove their qualification for regular employment but petitioners: (a) resigned from their employment with Monde; (b) refused to report for work on 02 May 2001 and on the days following; or (c) failed to qualify for regular employment at the expiration of the period of their probationary employment.

Labor Arbiter Vicente R. Layawen dismissed the case for lack of merit. It ruled that respondent M.Y. Sans Decision to shut down its operations by selling its assets is its sole prerogative which must be respected, and that it had faithfully complied with the requirements of the law, i.e., the notice and payment of separation pay. As to respondent Monde, the Labor Arbiter ruled that the former satisfactorily discharged the burden of establishing a just and authorized cause for terminating the services of petitioners.

On appeal, NLRC affirmed the Decision of the Labor Arbiter. Aggrieved, petitioners went to the Court of Appeals. However, the appellate court dismissed the petition on the ground that the Special Power of Attorney (SPA) executed by petitioners did not bear the signatures of their three other co-petitioners therein. Petitioners filed a motion to drop the names of their three co-petitioners who failed to sign the SPA and prayed for the reconsideration of the dismissal of their petition. The Motion was denied by the Court of Appeals on the ground that subsequent compliance does not warrant a reconsideration of the Order of dismissal. The appellate court further stated that there was no prima facie error committed by the NLRC in affirming the Decision of the Labor Arbiter. Petitioners again filed a Motion for Reconsideration but the same was denied by the Court of Appeals. According to the appellate court, the said motion for reconsideration was actually a second motion for reconsideration, which is a prohibited pleading under Sec. 2, Rule 52 of the Rules of Court. Hence, the petition to the Supreme Court.

Issues: 1. Whether the alleged sale of M.Y. San to Monde is a mere ploy to circumvent the provisions of the Labor Code, thus violated the tenurial security.

2. Whether the petitioners were illegally terminated from work by the Respondents.

Held: The Supreme Court affirmed the decision of the NLRC. It held that:1. Alleged Sale of M.Y. San to Monde

The right to close the operations of an establishment or undertaking is explicitly recognized under the Labor Code as one of the authorized causes in terminating employment of workers, the only limitation being that the closure must not be for the purpose of circumventing the provisions on terminations of employment embodied in the Labor Code, under Article 283. The phrase closure or cessation of operations of establishment or undertaking includes a partial or total closure or cessation. And the phrase closure or cessation not due to serious business losses or financial reverses recognizes the right of the employer to close or cease its business operations or undertaking even in the absence of serious business losses or financial reverses, as long as he pays his employees their termination pay in the amount corresponding to their length of service. As long as the companys exercise of the same is in good faith to advance its interest and not for the purpose of circumventing the rights of employees under the law or a valid agreement, such exercise will be upheld.

Under Article 283 of the Labor Code, three requirements are necessary for a valid cessation of business operations, namely:

(1) service of a written notice to the employees and to the DOLE at least one (1) month before the intended date thereof;

(2) the cessation must be bona fide in character; and

(3) payment to the employees of termination pay amounting to at least one half (1/2) month pay for every year of service, or one (1) month pay, whichever is higher.

The ultimate test of the validity of closure or cessation of establishment or undertaking is that it must be bona fide in character. And the burden of proving such falls upon the employer. Respondent M.Y. San in good faith complied with the requirements for closure; sold and conveyed all its assets to respondent Monde for valuable consideration; and there were no previous labor problems.

2. Illegal Dismissal

On the part of M.Y. SAN

M.Y. San employees were adequately informed of the intended business closure and a written notice to the Regional Director of DOLE was filed by respondent M.Y. San, informing the DOLE that M.Y. San will be closed effective 31 January 2001. The petitioners received their termination pay which was even beyond the amount required by law. The computation of their separation pay was 15 days for every year of service plus an additional nine days for every year of service, and cash equivalent of their vacation and sick leaves. Petitioners received their separation pay and accordingly signed their quitclaims. Therefore, there was no illegal dismissal here.

On the part of Monde

There is no dispute that petitioners were probationary employees as stated in their individual contracts of employment with respondent Monde. Petitioners were notified of the standards they have to meet to qualify as regular employees of respondent Monde when the latter apprised them.

a. Some of the petitioners voluntarily resigned from respondent Monde and signed their respective release, waiver and quitclaims.

b. Respondent Monde exercised its management prerogative in good faith when it dismissed other petitioners [Pilar Espina, Eleanor G. Aquino, Maricris S.J. Bandino, Julio M. Petalio, Jr., Emiliano A. Ebreo, Benjamin Paz, and Leonora Paz] due to absence without leave (AWOL), gross and habitual neglect of duties, and only after the personal delivery of the notices to their respective addresses or by registered mail. There were two notices sent to petitioners individually a notice apprising them of the particular acts or omissions for which their dismissal was sought and a memorandum informing them that they were terminated from work.

c. For the remaining petitioners, they failed to qualify as regular employees in accordance with the terms and conditions of their probationary employment nd were duly informed of their failure to qualify as regular employees terminating their probationary employment effective at the close of the business on 2 July 2001. Again, there were two notices sent to petitioners individually a notice apprising them of the particular acts or omissions for which their dismissal was sought and a memorandum informing them that they were terminated from work.

During the probationary period, the employer is given the opportunity to observe the skill, competence and attitude of the employee to determine if he has the qualification to meet the reasonable standards for permanent employment. The length of time is immaterial in determining the correlative rights of both the employer and the employee in dealing with each other during said period. Thus, as long as the termination was made before the expiration of the six-month probationary period, the employer was well within his rights to sever the employer-employee relationship. A contrary interpretation would defeat the clear meaning of the term probationary.

Management has the prerogative to discipline its employees and to impose appropriate penalties on erring workers pursuant to company rules and regulations. Respondent Monde exercised in good faith its management prerogative as there is no dispute that petitioners had been habitually absent, neglectful of their work, and rendered unsatisfactory service, to the damage and prejudice of the company.Nature of Right/TenureAlhambra Industries, Inc v. NLRC

The facts according to the case:

On 27 June 1987, petitioner Alhambra Industries, Inc. (ALHAMBRA for brevity), a Filipino cigar and cigarette manufacturing and distribution company, employed private respondent Danilo C. Rupisan as salesman on a six-month probationary basis. From 9-12 December 1989, ALHAMBRA conducted a surprise audit of the records of Rupisan. He was then called to the Head Office on 3 January 1990 where alleged violations of company rules purportedly committed by him were brought to his attention. On 8 January 1990, Rupisan was placed under a one-month preventive suspension for serious violations of company policies, rules and regulations, as reflected in the results of the surprise audit.

On 22 January 1990, Rupisan protested his suspension, reiterating vehement denial of the charges against him and exposing the threat of termination at their meeting of 3 January 1990. He alleges that as of30 December 1989 the charges against him had become academic when he was given a clearance of all his accountabilities.

On 6 February 1990, a day before the end of his suspension, ALHAMBRA wrote Rupisan terminating his services effective 8 February 1990.

Rupisan Sued Alhambra for illegal dismissal, unpaid comissions, illegal suspension and damages. The Labor Arbiter held that the termination was for a just cause but also held that Rupisan was denied due process. Alhambra failed to furnish Rupisan a copy of the audit on which his termination was based. Both appealed to the NLRC which held that Rupisan could have explained the charges against him had he been given a chance and thus ordered his reinstatement. Alhambra then went to the SC on rule 65.

The SC held that the NLRC should not have skirted the issue of WON respondent was terminated for just cause. As is the case, since he was terminated with just cause but was denied only procedural due process, he cannot demand for reinstatement or separation pay, but he is to be awarded only damages.

In relation to topic: quoted from the case.

Termination of employment is not anymore a mere cessation or severance of contractual relationship but an economic phenomenon affecting members of the family. This explains why under the broad principles of social justice the dismissal of employees is adequately protected by the laws of the state. Hence, Art. 277, par. (b), of theLabor Code of the Philippines, as amended by Sec. 33, R.A. 6715, provides

Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. The Secretary of Labor and Employment may suspend the effects of the termination pending resolution of the dispute in the event of aprima faciefinding by the appropriate official of the Department of Labor and Employment before whom such dispute is pending that the termination may cause a serious labor dispute or is in implementation of a mass lay-off.

Management Prerogative

Pantoja v. SCA Hygiene Products

Pantoja worked as a utility man in respondents paper mill no. 4. He was given a notice of transfer to mill no. 5, because the respondent wanted to close down mill no. 4. Petitioner rejected the transfer and was subsequently terminated because of redundancy. Pantoja received separation pay and executed a quitclaim, and SCA informed DOLE of its reorganization and termination of 31 employees.

Pantoja filed a case for illegal dismissal, claiming that there was no cause. He alleged that mill no. 4 remained open, with contractual employees running the mill. SCA refuted the claim of illegal dismissal and argued that Pantoja voluntarily separated himself from service instead of accepting the reassignment offer.

The Labor Arbiter dismissed Pantojas complaint. The NLRC reversed, giving weight to the continued operation of mill no. 4, thereby weakening the claim of redundancy by SCA. As such, the NLRC held that SCA was guilty of illegal dismissal and ordered Pantojas reinstatement.

The Court of appeals reversed the NLRC decision and reinstated the LAs decision.

Pantoja now appeals to the SC. The SC held that SCA exercised its management prerogative in good faith. SCA was able to prove that in 1999, sales were low. This led to the companys decision to streamline operations. Shutting down paper mill no. 4 was clearly a business judgement arrived at in the face of the low demand for the production of industrial paper at the timeAlso, the court said this As can be seen, retrenchment was utilized by respondent only as an available option in case the affected employee would not want to be transferred. Respondent did not proceed directly to retrench. This, to our mind, is an indication of good faith on respondents part as it exhausted other possible measures other than retrenchment.Requisite for Lawful dismissal: Concurrence of Substantive and Procedural Due Process

Coca-Cola Bottlers Philippines v. Valtentina GarciaCoca-Cola hired Valentina Garcia as a quality control technician. Coca-Cola then adopted modernization programs, thus substantially reducing each employees workload. One e,ployee in the department became redundant. Under the CBA, the most junor employee could be validly terminated. However, instead of termination, coca-cola decided to transfer Garcia from the Tacloban plant to the Ilo-ilo plant. Garcia resisted and brought the matter to their grievance machinery. Despite this, the transfer was made final. Garcia still refused and reported to the Tacloban plant. The Security guard refused her entry. Nearly a year after, Garcia then filed a case for illegal dismissal.

The labor arbiter found that Garcia was illegally dismissed. The NLRC reversed, holding that the transfer was valid, and thus, Garcia consequently abandoned her work by not heeding the transfer order.

Coca-cola then went to the CA which held that the dismissal was ineffectual since it did not comply with due process requirements. According to the CA, Garcia only received the notice of dismissal, she was not given the initial notice to give her an opportunity to explain herself.

The SC held that Garcias right to procedural due process was violated by coca-cola and is awarded nominal damages.

Coca-cola argues that it sent Garcia notices to her last known address to which they received no reply. However, only envelopes of the said notices were presented as evidence. The contents were never presented. Because of this, the court held that Coca-cola did not satisfy the 2 notice requirement.

Normal Consequences of Illegality of Dismissal

GOLDEN ACE BUILDERS and ARNOLD U. AZUL, vs. JOSE A. TALDE

TOPIC: Normal Consequences of Illegality of Dismissal

FACTS: Jose A. Talde (respondent) was hired in 1990 as a carpenter by petitioner Golden Ace Builders of which its co-petitioner Arnold Azul (Azul) is the owner-manager. In February 1999, Azul, alleging the unavailability of construction projects, stopped giving work assignments to respondent, prompting the latter to file a complaint for illegal dismissal. Labor Arbiter ruled in favor of respondent and ordered his immediate reinstatement without loss of seniority rights and other privileges.

Petitioners, through counsel, advised respondent to report for work in the construction site within 10 days from receipt thereof. On May 16, 2001, the respondent submitted a manifestation to the Labor Arbiter that actual animosities existed between him and petitioners and there had been threats to his life and his familys safety, hence, he opted for the payment of separation pay. Petitioners denied the existence of any such animosity.

NLRC dismissed petitioners 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. The matter was referred to the Fiscal Examiner of the NLRC who recomputed at P562,804.69 the amount due respondent, which was approved by the Labor Arbiter. Petitioners filed a motion for reconsideration with the NLRC, contending that since respondent refused to report back to work, he should be considered to have abandoned the same.

NLRC: granted petitioners motion and accordingly vacated the computation. He may not be afforded affirmative relief; and since he refused to go back to work, he may recover backwages only up to May 20, 2001, the day he was supposed to return to the job site.

Respondents motion for reconsideration: The appellate court set aside the NLRC Resolutions, holding that respondent is entitled to both backwages and separation pay.

Full backwages and separation pay to be awarded to the petitioner shall be computed as follows:

Full Backwages as of June 30, 2005 =P562,804.69

Separation Pay:P220.00 x 26 days = P5,720,00

P5,720/month x 8 years =45,760.00

P608,564.69

ISSUE: WON the appellate court erred in awarding the respondent separation pay.

HELD/RATIO: NO

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 employees service while that for separation pay is the actual period when the employee was unlawfully prevented from working.

Article 279 of the Labor Code: An employee who is dismissed without just cause and without due process is entitled to backwages and reinstatement or payment of separation pay.

The normal consequences of respondents illegal dismissal, then, are reinstatement without loss of seniority rights, and payment of backwages computed from the time compensation was withheld up to the date of actual reinstatement. Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year of service should be awarded as an alternative. The payment of separation pay is in addition to payment of backwages.

Velasco v. National Labor Relations Commission emphasizes:

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.

DECISION: petition denied

Respondent is entitled to backwages and separation pay as his reinstatement has been rendered impossible due to strained relations. The backwages due respondent must be computed from the time he was unjustly dismissed until his actual reinstatement, or from February 1999 until June 30, 2005 when his reinstatement was rendered impossible without fault on his part.

RE: computation of separation pay - He must be considered to have been in the service not only until 1999, when he was unjustly dismissed, but until June 30, 2005, the day he is deemed to have been actually separated (his reinstatement having been rendered impossible) from petitioner company or for a total of 15 years.

Burden of Proof

CHAVEZ vs NLRC

TOPIC: burden of proof employer

FACTS: Supreme Packing Inc. is in the business of manufacturing cartons and other packaging materials for export and distribution.Pedro Chavez is a truck driver who delivers the respondent companys products to its customers. He wanted to avail himself the benefits of a regular employee.

Alvin Lee, companys manager, failed to do so. Then the petitioner filed a complaint for REGULARIZATION. However, the company terminated his services. Thus, the petitioner amended the

complaint to ILLEGAL DISMISSAL.

Respondent company denied an employer-employee relationship.

RESPONDENTS CLAIM:

They averred that the petitioner was an INDEPENDENT CONTRACTOR. He has the control over the means and methods by which he will accomplish the work. They did not dismiss the petitioner but there was a violation of terms and conditions in the contract. Failed to observe the minimum degree of diligence in the proper maintenance of the truck he was usingISSUES: WON there is an employer-employee relationship.HELD/RATIO:

YES.

He was performing a service that was necessary and desirable to the company. He discharged his service for a continuous period of more than 10 years. CA: He cannot be considered as an Independent contractor since he had no substantial capital in the form of tools and machineries. The routing slips that the company issued to the petitioner showed that it exercised control over the latter.FOUR-FOLD TEST:

1. It was the respondents who engaged the services of the petitioner without the intervention of a 3rd party

2. He received wages. No payroll was shown to support the claim of the respondent company.

3. The companys power to dismiss is inherent in the fact that they engaged the services of the petitioner as a truck driver.

4. He performed his work under the respondents supervision and control.

Decision:

Respondents are guilty of illegally terminating the employment of Chavez.

Award of separation pay equivalent to 1 month for every year of service from the time of his illegal dismissal up to the finality of the judgment in addition to his full backwages, allowances and other benefits.

Measure of Penalty

TIPTEO vs CA

TOPIC: measure of penalty

FACTS: Petitioner Magdalena T. Salon (Salon) was a College Instructor 3 of the Humanities and Social Science Department (HSSD) of respondent Technological Institute of the Philippines (TIP) and a member of the Technological Institute of the Philippines Teachers and Employees Organization (TIPTEO). TIP received complaints from students claiming that Salon was collecting P1.50 per page for the test paper used in the subject she was teaching at the time. She reportedly asked her students not to write on the test papers; these test papers were not returned to the students after the test. An allegation was made, too, that Salon committed an anomaly in the grading of her students.

TIP President Dr. Teresita U. Quirino notified Salon of the termination of her service as member of the faculty of HSSD effective thirty (30) days from receipt of the notice. The dismissal was based on the investigation committee's recommendations.

Salon sought assistance from TIPTEO which then requested the TIP that a joint grievance investigation be conducted to take up her dismissal. The TIP denied the request arguing that Salon's dismissal was not proper for the grievance machinery because the ground for dismissal was a violation of the school's rules and regulations. TIPTEO opted to file a complaint for illegal dismissal with the National Conciliation and Mediation Board (NCMB).

DECISION of VOLUNTARY ARBITRATOR:

Rendered an award in Salons favor. Salon was dismissed without a valid cause and without due process The school was unable to prove by substantial evidence that Salon committed the acts charged. Salon was not afforded an opportunity for a real investigation. She was denied the right to counsel and the right to a hearing. TIP to reinstate Salon as College Instructor 3 with full backwages, but suspended her for one month for not getting a written permission from responsible officials of the school in charging students with the cost of examination papers.

CA DECISION:

FIRST: The appellate court agreed with the voluntary arbitrator that nothing in the TIP rules warrants the dismissal of a faculty member for selling examination papers without the school's written permission. It was not convinced that the violation committed by Salon is a grave offense referred to in Memorandum No. P-25 s. 2000-2001 that the TIP cited as justification for the dismissal of Salon

SECOND: It declared that Salon was dismissed for a valid cause, but awarded her separation pay at one month's basic salary for every year of service.PETITIONERS CLAIM:

1. Salon and her union complain about the CA's shifting appreciation of the nature of test/examination papers, from non-instructional material to instructional.

2. Petitioners speculate that it is incorrect to conclude that Salon is guilty of selling photocopied test questionnaires to her students; she was not selling but merely securing reimbursement for the personal expenses she incurred in the preparation of the test papers.

3. Salon submits that she changed the grade of Manalo the son of a fellow faculty member from a failing mark of 5.0 to a grade of 6.0 (dropped) for a noble intention to lessen the impact of the students mothers guilt and to keep the student from being punished by his father.

4. She submits that there was no malice in what she did or an intent to violate the school's grading system; at the very least, she committed an error in judgment