A.

UNION CASES (5)

1. T & H SHOPFITTERS CORPORATION/ GIN QUEEN CORPORATION vs. T & H SHOPFITTERS

CORPORATION/ GIN QUEEN CORPORATION WORKERS UNION
G.R. No. 191714 February 26, 2014

DOCTRINE:  A certification election is the sole concern of the workers, save when the employer itself has
to file the petition, but even after such filing, its role in the certification process ceases and becomes
merely a bystander. Petitioner-companies had no business persuading and/or assisting its employees in
their legally protected independent process of selecting their exclusive bargaining representative. To
interfere = ULP.

FACTS: The workers union filed their complaint for ULP against T & H SHOPFITTERS CORPORATION/ GIN
QUEEN CORPORATION before the Labor Arbiter. In their desire to improve their working conditions,
respondents and other employees of  petitioners held their first formal meeting to discuss the formation
of a union. The following day, the employees were barred from entering petitioners’ factory premises
located in Castillejos, Zambales, and ordered to transfer to Shopfitters warehouse at Subic purportedly
because of its expansion. Afterwards, the said seventeen (17)employees were repeatedly ordered to go
on forced leave due to the unavailability of work.

Respondents contended that the affected employees were not given regular work assignments, while
subcontractors were continuously hired to perform their functions. During mediation, Petitioners
agreed to give priority to regular employees in the distribution of work assignments. Respondents
averred, however, that petitioners never complied.

The Union filed a petition for certification election. An order was issued to hold the certification election
in both T & H SHOPFITTERS CORPORATION/ GIN QUEEN .

A day preceding the certification election, Petitioners sponsored a field trip to Iba, Zambales, for its
employees. The officers and members of the Union were purportedly excluded from the field trip. In
the evening of the field trip, a sales officer of petitioners, campaigned against the union in the
forthcoming certification election. The following day, the employees were escorted from the field trip to
the polling center in Zambales to cast their votes. Due to the heavy pressure exerted by petitioners, the
votes for “no union” prevailed. The Union filed its protest with respect to the certification election
proceedings.

LA: Dismissed respondents’ UNION complaint and all their money claims for lack of merit.
NLRC: Reversed and ruled in favor of respondents. It reasoned: The respondents (herein petitioners)
committed ULP acts consisting in interfering with the exercise of the employees’ right to self-
organization, specifically, sponsoring a field trip on the day preceding the certification election, warning
the employees of dire consequences should the union prevail, and escorting them to the polling

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centerand discriminating in regard to conditions of employment in order to discourage union
membership (assigning union officers and active union members as grass cutters on rotation basis).
CA: Sustained the NLRC ruling.
ISSUE: Whether Petitioner is interfered with respect to the union’s certification election

HELD:
YES. The questioned acts of petitioners, namely: sponsoring a field trip to Zambales for its employees,
to the exclusion of union members, before the scheduled certification election, the active campaign by
the sales officer of petitioners against the union prevailing as a bargaining agent during the field trip,
escorting its employees after the field trip to the polling center, the continuous hiring of subcontractors
performing respondents, assigning union members to the Cabangan site to work as grass cutters and
the enforcement of work on a rotational basis for union members, all reek of interference on the part of
petitioners.

Indubitably, the various acts of petitioners, taken together, reasonably support an inference that,
indeed, such were all orchestrated to restrict respondents free exercise of their right to self-
organization. The Court is of the considered view that petitioners’ undisputed actions prior and
immediately before the scheduled certification election, while seemingly innocuous, unduly meddled in
the affairs of its employees in selecting their exclusive bargaining representative. In Holy Child Catholic
School vs Hon. Patricia Sto.Tomas, the Court ruled that a certification election was the sole concern of
the workers, save when the employer itself had to file the petition, but even after such filing, its role in
the certification process ceased and became merely a bystander.

Here, petitioners had no business persuading and/or assisting its employees in their legally protected
independent process of selecting their exclusive bargaining representative. The fact and peculiar timing
of the field trip sponsored by petitioners for its employees not affiliated withTHS-GQ Union, although a
positive enticement, was undoubtedly extraneous influence designed to impede respondents in their
quest to be certified. This cannot be countenanced.

Not content with achieving a “no union” vote in the certification election, petitioners launched a
vindictive campaign against union members by assigning work on a rotational basis while subcontractors
performed the latter’s functions regularly. Worse, some of the respondents were made to work as grass
cutters in an effort to dissuade them from further collective action. Again, this cannot be countenanced.

Wherefore the decision of the Court of Appeals and its March 24, 2010 Resolution are AFFIRMED,
except with respect to the award of attorney’s fees which is hereby deleted.

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2. SAN MIGUEL INC. vs. SAN MIGUEL CORP. SUPERVISORS AND EXEMPT UNION G.R. No. L-146206

DOCTRINE : 1. Right to Self-Organization 2.Confidential Employee Rule: Confidential employees are

ineligible to join, form and assist any labor organization.

FACTS:
1. In G.R. No. 110399, entitled San Miguel Corporation Supervisors and Exempt Union v. Laguesma,
the Court held that even if they handle confidential data regarding technical and internal business
operations, supervisory employees 3 and 4 and the exempt employees of petitioner San Miguel Foods,
Inc. (SMFI) are not to be considered confidential employees, because the same do not pertain to labor
relations, particularly, negotiation and settlement of grievances. Consequently, they were allowed to
form an appropriate bargaining unit for the purpose of collective bargaining.
2. Pursuant to the Court's decision in G.R. No. 110399, the Department of Labor and Employment
National Capital Region (DOLE-NCR) conducted pre-election conferences. However, there was a
discrepancy in the list of eligible voters, i.e., petitioner submitted a list of 23 employees for the San
Fernando plant and 33 for the Cabuyao plant, while respondent listed 60 and 82, respectively.
3. On August 31, 1998, Med-Arbiter Agatha Ann L. Daquigan issued an Order directing Election Officer
Cynthia Tolentino to proceed with the conduct of certification election in accordance with Section 2,
Rule XII of Department Order No. 9.
4. Petitioner filed the Omnibus Objections and Challenge to Voters, questioning the eligibility to vote
by some of its employees on the grounds that some employees do not belong to the bargaining unit
which respondent seeks to represent or that there is no existence of employer-employee relationship
with petitioner. Specifically, it argued that certain employees should not be allowed to vote as they are:
(1) confidential employees; (2) employees assigned to the live chicken operations, which are not
covered by the bargaining unit; (3) employees whose job grade is level 4, but are performing managerial
work and scheduled to be promoted; (4) employees who belong to the Barrio Ugong plant; (5) non-SMFI
employees; and (6) employees who are members of other unions.
5. Med-Arbiter issued order directing the respondents to submit proof that the abovementioned are
eligible to vote. Respondent complied.
6. Petitioner appealed to DOLE Secretary, then to CA, averring its sentiments regarding eligibility.
Respondent counters that petitioners proposed exclusion of certain employees from the bargaining unit
was a rehashed issue, which was already settled in G.R. No. 110399. It maintains that the issue of union
membership coverage should no longer be raised as a certification election already took place on
September 30, 1998, wherein respondent won with 97% votes.
7. The Court of Appeals (CA) affirmed with modification the Resolution 9 of the DOLE Undersecretary,
stating that those holding the positions of Human Resource Assistant and Personnel Assistant are
excluded from the bargaining unit.
8. Petitioner asserts that the CA erred in not excluding the position of Payroll Master in the definition
of a confidential employee and, thus, prays that the said position and all other positions with access to
salary and compensation data be excluded from the bargaining unit.

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ISSUE: Whether or not the CA correctly ruled regarding the status of Payroll Master, Human Resource
Assistant and Personal Assistant as Confidential employees.

RULING: Yes to Human Resource assistant and Personal Assistant only.

Confidential employees are defined as those who (1) assist or act in a confidential capacity, in regard (2)
to persons who formulate, determine, and effectuate management policies in the field of labor
relations. The two criteria are cumulative, and both must be met if an employee is to be considered a
confidential employee - that is, the confidential relationship must exist between the employee and his
supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations. The
exclusion from bargaining units of employees who, in the normal course of their duties, become aware
of management policies relating to labor relations is a principal objective sought to be accomplished by
the confidential employee rule.

A confidential employee is one entrusted with confidence on delicate, or with the custody, handling or
care and protection of the employers property. Confidential employees, such as accounting personnel,
should be excluded from the bargaining unit, as their access to confidential information may become
the source of undue advantage.

Corollarily, although Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor
organization to managerial employees, jurisprudence has extended this prohibition to Confidential
employees or those who by reason of their positions or nature of work are required to assist or act in a
fiduciary manner to managerial employees and, hence, are likewise privy to sensitive and highly
confidential records. Confidential employees are thus excluded from the rank-and-file bargaining unit.

In this regard, the CA correctly ruled that the positions of Human Resource Assistant and Personnel
Assistant belong to the category of confidential employees and, hence, are excluded from the bargaining
unit, considering their respective positions and job descriptions.

Wherefore, Petition is denied, Private respondent won.

3. HOLY CHILD CATHOLIC SCHOOL, Petitioner, v. HON. PATRICIA STO. TOMAS, (G.R. NO. 179146; JULY
23, 2013)

Doctrine: Inclusion of supervisory employees in a labor organization seeking to represent the

bargaining unit of rank-and-file employees does not divest it of its status as a legitimate labor
organization.

FACTS: 

Petitioner Holy Child Catholic School has 98 teaching personnel, 25 non-teachingacademic employees
and 33 non-teaching and non-academic employees.

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On May 31, 2002, a petition for certification election was filed by private respondent Pinag-Isang Tinig at
Lakas ng Anakpawis Holy Child Catholic School Teachers and Employees Labor Union (HCCS-
TELUPIGLAS). In its Comment and Position Paper, petitioner raised that the members of the union are a
mixture of managerial, supervisory, and rank-and-file employees as three (3) are vice-principals, one (1)
is a department head/supervisor, and eleven (11) are coordinators. It is likewise a mixture of teaching
and non-teaching personnel. It insisted that, for not being in accord with Article 245 of the Labor Code,
private respondent is an illegitimate labor organization lacking in personality to file a petition for
certification election, as held in Toyota Motor Philippines Corporation v. Toyota Motor Philippines
Corporation Labor Union and in Dunlop Slazenger (Phils.), Inc. v. Secretary of Labor and Employment.

The med arbiter denied the petition for certification election on the ground that the bargaining unit is
inappropriate. Private respondent appealed to the Secretary of Labor and Employment (SOLE) and the
latter reversed the ruling of the med arbiter and ordered two certification elections, one among
teaching personnel and another for non- teaching personnel. Petitioner filed a petition for certiorari
before the CA with prayer for Temporary Restraining Order and Preliminary Injunction. The CA dismissed
the petition and ruled that the vice-principals, coordinators and department heads are not managerial
nor supervisory employees. Anent the alleged mixture of teaching and non-teaching personnel, the CA
agreed with petitioner that the nature of the formers work does not coincide with that of the latter.

Petitioner filed a motion for reconsideration but the same was denied. Hence, this petition before the
SC.

ISSUE:

Whether or not a petition for certification election is dismissible on the ground that the llabor organizati
on’s membership allegedly consists of supervisory and rank-and-file employees.

 RULING:

No. Before, when the 1989 Rules was still in application, mingling will prevent an otherwise legitimate a
nd duly registered labor organization from exercising its right to file a petition for certification election. B
ut then, the 1989 Amended Omnibus Rules was further amended by Department Order No. 9, series of 
1997 (1997 Amended Omnibus Rules). Specifically, the requirement under Sec. 2(c) of the 1989 Amende
d Omnibus Rules – that the petition for certification election indicate that the bargaining unit of rank-
and-file employees has not been mingled with supervisory employees – was removed.

Petitioner appears to have confused the concepts of membership in a bargaining unit and membership
in a union. In emphasizing the phrase "to the exclusion of academic employees" stated in U.P. v. Ferrer-
Calleja, petitioner believed that the petitioning union could not admit academic employees of the
university to its membership. But such was not the intention of the Supreme Court.

A bargaining unit is a group of employees sought to be represented by a petitioning union. Such

employees need not be members of a union seeking the conduct of a certification election. A union
certified as an exclusive bargaining agent represents not only its members but also other employees
who are not union members.

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In the same manner, the teaching and non-teaching personnel of petitioner school must form separate
bargaining units. Thus, the order for the conduct of two separate certification elections, one involving
teaching personnel and the other involving non-teaching personnel. It should be stressed that in the
subject petition, private respondent union sought the conduct of a certification election among all the
rank-and-file personnel of petitioner school. Since the decision of the Supreme Court in the U.P. case
prohibits us from commingling teaching and non-teaching personnel in one bargaining unit, they have to
be separated into two separate bargaining units with two separate certification elections to determine
whether the employees in the respective bargaining units desired to be represented by private
respondent. 

4. TAKATA Philippines CORPORATION VS Bureau of Labor Relations

G.R. No. 196276 June 4, 2014

DOCTRINE: For fraud and misrepresentation to be grounds for cancellation of union registration under
Article 239 of the Labor Code, the nature of the fraud and misrepresentation must be grave and
compelling enough to vitiate the consent of a majority of union members.

FACTS:

Petitioner filed with the Department of Labor and Employment (DOLE) Regional Office a Petition3 for
Cancellation of the Certificate of Union Registration of Respondent Samahang Lakas Manggagawa ng
Takata (SALAMA1) on the ground that the latter is guilty of misrepresentation, false statement and fraud
with respect to the number of those who participated in the organizational meeting, the adoption and
ratification of its Constitution and By-Laws, and in the election of its officers.

Petitioner’s contentions:

a. In the organizational meeting of respondent, only 68 attendees signed the attendance sheet, and
which number comprised only 17% of the total number of the 396 regular rank- and-file employees
which respondent sought to represent, and hence, respondent failed to comply with the 20% minimum
membership requirement.

b. the document "Pangalan ng mga Kasapi ng Unyon" bore no signatures of the alleged 119 union
members

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c. employees were not given sufficient information on the documents they signed

d. the document "Sama-Samang Pahayag ng Pagsapi" was not submitted at the time of the filing of
respondent's application for union registration

e. the 119 union members were actually only 117

f. that the total number of petitioner's employees as of May 1, 2009 was 470, and not 396 as
respondent claimed

3 Respondent’s defense:

a. denied the charge and claimed that the 119 union members were more than the 20% requirement
for union registration

b. contended that petitioner was estopped from assailing its legal personality as it agreed to a
certification election and actively participated in the pre-election conference of the certification election
proceedings

c. argued that the union members were informed of the contents of the documents they signed and
that the 68 attendees to the organizational meeting constituted more than 50% of the total union
membership, hence, a quorum existed for the conduct of the said meeting

DOLE Regional Director issued a Decision granting the petition for cancellation of respondent's
certificate of registration. The Regional Director found that the 68 employees who attended the
organizational meeting was obviously less than 20% of the total number of 396 regular rank-and-file
employees which respondent sought to represent, hence, short of the union registration requirement;

BLR rendered its Decision reversing the Order of the Regional Director. BLR found that the list of
employees who participated in the organizational meeting was a separate and distinct requirement from
the list of the names of members comprising at least 20% of the employees in the bargaining unit

CA affirmed BLR

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ISSUE: W/N respondent’s registration should be cancelled on the grounds of fraud and
misrepresentation bearing on the minimum requirement of the law as to its membership, considering
the big disparity in numbers, between the organizational meeting and the list of members

RULING: Registration should not be cancelled. No fraud or misrepresentation.

RATIO: It does not appear in Article 234 (b) of the Labor Code that the attendees in the organizational
meeting must comprise 20% of the employees in the bargaining unit. In fact, even the Implementing
Rules and Regulations of the Labor Code does not so provide. It is only under Article 234 (c) that
requires the names of all its members comprising at least twenty percent (20%) of all the employees in
the bargaining unit where it seeks to operate.

Clearly, the 20% minimum requirement pertains to the employees’ membership in the union and not to
the list of workers who participated in the organizational meeting. Indeed, Article 234 (b) and (c)
provide for separate requirements, which must be submitted for the union's registration, and which
respondent did submit.

Here, the total number of employees in the bargaining unit was 396, and 20% of which was about 79.
Respondent submitted a document entitled "Pangalan ng Mga Kasapi ng Unyon" showing the names of
119 employees as union members, thus respondent sufficiently complied even beyond the 20%
minimum membership requirement.

Respondent also submitted the attendance sheet of the organizational meeting which contained the
names and signatures of the 68 union members who attended the meeting. Considering that there are
119 union members which are more than 20% of all the employees of the bargaining unit, and since the
law does not provide for the required number of members to attend the organizational meeting, the 68
attendees which comprised at least the majority of the 119 union members would already constitute a
quorum for the meeting to proceed and to validly ratify the Constitution and By-laws of the union.

There is, therefore, no basis for petitioner to contend that grounds exist for the cancellation of
respondent's union registration. For fraud and misrepresentation to be grounds for cancellation of union
registration under Article 239 of the Labor Code, the nature of the fraud and misrepresentation must be
grave and compelling enough to vitiate the consent of a majority of union members.

5. Tabangao Shell Refinery Employees Association v. PilipinasShell Petroleum Corporation

G. R. No. 170007, 7 April 2014 720SCRA 631

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Doctrine: The duty to bargain does not compel any party to accept a proposal or to make any
concession. While the purpose of collective bargaining is the reaching of an agreement between the
employer and the employee’s union resulting in a binding contract between the parties, the failure to
reach an agreement after negotiations continued for a reasonable period does not mean lack of good
faith.

Facts: Tabangao Shell Refinery Employees Association and Pilipinas Shell negotiated for a new CBA
provided the 20% annual across-the- board basic salary increase for the next 3 years, with the counter-
offer from the company to grant all covered employees a yearly lump-sumamount of P80,000.00, which
was rejected by the union. On their next meeting, the union lowered its proposal to 12% annual across-
the- board increase for the next 3 years, with the company's increased counter-offer of P88,000.00. Still
unconvinced, the union requested for the justification of the company's basis of their counter-offer
which the latter denied, resulting in a deadlock. The union filed a notice of strike, followed by the
conciliation-mediation proceedings but they failed to reach an amicable settlement. After the
unanimous voting of the union for a strike, the company filed a petition for assumption of jurisdiction of
the Secretary of Labor which was granted by the latter, assuming jurisdiction over the case.

The union questioned the Secretary’s assumption of jurisdiction over the labor dispute between the uni
on and the company on the ground that the “Secretary erred in assuming jurisdiction over the ‘CBA’ cas
e when it is not the subject matter of the notice of strike” because the case was “all about ‘ULP’ in the fo
rm of bad faith bargaining.” For the union, the DOLE-Sec should not have touched the issue of the CBA a
s there was no CBA deadlock at that time, and should have limited the assumption of jurisdiction to the 
charge of unfair labor practice for bargaining in bad faith

 ISSUE:
Whether or not the Secretary of Labor and Employment’s assumption of jurisdiction is limited to the sub
ject of strike.

 RULING: No. The labor dispute between the union and the company concerned the unresolved matters 
between the parties in relation to their negotiations for a new CBA. The power of the DOLE-Sec to assu
me jurisdiction over this dispute includes and extends to all questions and controversies arising from the 
said dispute, such as, but not limited to the union’s allegation of bad faith bargaining. It also includes an
d extends to the various unresolved provisions of the new CBA such as compensation, particularly the m
atter of annual wage increase or yearly lump sum payment in lieu of such wage increase, whether or not 
there was deadlock in the negotiations.

As there is already an existing controversy on the matter of wage increase, the DOLE-Sec need not wait
for a deadlock in the negotiations to take cognizance of the matter. That is the significance of the power
of the DOLE- Sec under Article 263(g) of the Labor Code to assume jurisdiction over a labor dispute
causing or likely to cause a strike or lockout in an industry indispensable to the national interest. Article
263(g) is both an extraordinary and a preemptive power to address an extraordinary situation – a strike
or lockout in an industry indispensable to the national interest. This grant is not limited to the grounds
cited in the notice of strike or lockout that may have preceded the strike or lockout; nor is it limited to
the incidents of the strike or lockout that in the meanwhile may have taken place. As the term “assume
jurisdiction” connotes, the intent of the law is to give the Labor Secretary full authority to resolve all

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matters within the dispute that gave rise to or which arose out of the strike or lockout; it includes and
extends to all questions and controversies arising from or related to the dispute, including cases over
which the labor arbiter has exclusive jurisdiction.

JURISDICTION OF LABOR ARBITERS (5)

1. Augustin International Center, Inc. vs. Elfenito B. Bartolome and Rumby L. Yamat, G.R. No. 226578,
January 28, 2019

FACTS:
IN 2010, respondents Elfrenito B. Bartolome and Rumby L. Yamat, applied as carpenter and tile
setter, respectively, with petitioner Augustin International Center Inc. (AICI), an employment agency
providing manpower to foreign corporations. They were eventually engaged by Golden Arrow Company
Ltd. (Golden Arrow) which had its office in Khartoum, Republic of Sudan.

Upon their arrival in Sudan sometime in March and April 2011, Golden Arrow transferred their
employment to its sister company, Al Mamoun Trading and Investment Company (Al Mamoun). On May
2, 2012, Al Mamoun served notices of termination of service to respondents, causing them to return to
the Philippines. On March 22, 2012, they filed their complaint before the National Labor Relations
Commission (NLRC) seeking that AICI and Al Mamoun be held liable for illegal dismissal, breach of
contract and payment of the unexpired portion of the contract.
In denying their petition, the Court of Appeals (CA) held that AICI and Al Mamoun failed to comply with
the procedural and substantive due process in dismissing respondents from their employment.

AICI and Al Mamoun moved for reconsideration, arguing for the first time that they were denied due
process because respondents did not first contest their termination before the Labor Attaché or any
authorized representative of the Philippine embassy nearest the site of employment, as stipulated in the
employment contracts, before filing the complaint before the Labor Arbiter (LA).

ISSUE: Whether or not the contentions of AICI and Al Mamoun, that Respondents should first contest
their termination before the Labor Attaché or any authorized representative of the Philippine embassy
nearest the site of employment is tenable.

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HELD: No.

Preliminarily, it bears stressing that AICI does not assail the CA’s ruling of illegal dismissal but instead,
argues that the LA incorrectly took cognizance of the case at the onset. It insists that based on the
dispute settlement provision in respondents’ employment contracts, the “primary jurisdiction” to decide
this case is with the “Labor Attache or any authorized representative of the Philippine Embassy nearest
the site of employment” (designated person).

After a judicious review of the case, the Court denies the petition.

Section 10 of Republic Act (RA) 8042, as amended by RA 10022, explicitly provides that LAs have original
and exclusive jurisdiction over claims arising out of employer-employee relations or by virtue of any law
or contract involving Filipino workers for overseas deployment, as in this case. The relevant portion of
the provision reads:

Section 10. Money Claims. - Notwithstanding any provision of law to the contrary, the. Labor Arbiters of
the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear
and decide, within ninety (90) calendar days after filing of the complaint, the claims arising out of an
employer-employee relationship or by virtue of any law or contract involving Filipino workers for
overseas deployment including claims for actual, moral, exemplary and other forms of damages. x x x

Settled is the rule that jurisdiction over the subject matter is conferred by law and cannot be acquired or
waived by agreement of the parties. As herein applied, the dispute settlement provision in respondents’
employment contracts cannot divest the LA of its jurisdiction over the illegal dismissal case. Hence, it
correctly took cognizance of the complaint filed by respondents before it.

Moreover, issues not raised in the previous proceedings cannot be raised for the first time at a late
stage.

In this case, the Court observes that AICI failed to raise the issue of respondents’ supposed non-
compliance with the dispute settlement provision before the LA, as well as before the NLRC. In fact, AICI
only mentioned this issue for the first time before the CA in its motion for reconsideration. Therefore,
such argument or defense is deemed waived and can no longer be considered on appeal.

Hence, the Court rules that the LA properly took cognizance of this case.

2. Estate of Nelson Dulay, represented by his wife Merridy Jane Dulay vs. Aboitiz Jebsen Maritime, Inc.
and General Charterers, Inc.
G.R. No. 172642 June 13, 2012

DOCTRINE: Supreme Court rules voluntary arbitrators and not NLRC have jurisdiction on claims of
seafarers with CBA

FACTS: The heirs of a seafarer initiated grievance proceedings against the company with the AMOSUP
(seafarer’s union) as they were claiming death benefits under a collective bargaining agreement (CBA).

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No settlement was reached during the grievance proceedings and for which reason; a complaint was
filed by the heirs with the NLRC for death and medical benefits and damages. In the interim, and
pursuant to a provision in the CBA, the company paid the amount of PHP20,000 to the heirs which they
argue is only their liability under the CBA. On the other hand, the heirs insist that based on another
provision of the CBA, they should be entitled to US$90,000 although the amount of PHP20,000 initially
paid may be considered as an advance.

The Labor Arbiter awarded death benefits to the heirs as prayed for which award was affirmed by the
NLRC. Upon petition, the Court of Appeals set aside the decision of the NLRC and instead referred the
matter to the National Conciliation and Mediation Board (NCMB) so that a voluntary arbitrator or panel
of voluntary arbitrators may be designated to resolve the dispute between the parties.

DECISION: Upon further petition, the Supreme Court upheld the Court of Appeals and ruled that it is the
voluntary arbitrator/s which has jurisdiction to hear the dispute of the parties considering that it
involves the interpretation or implementation of the provisions of the CBA. The Supreme Court
reasoned as follows:

1. The Migrant Workers’ Act is the special law that governs overseas Filipino workers. Under said Act,
the Labor Arbiter has jurisdiction to hear and decide claims arising out of an employer-employee
relationship or by virtue of any law or contract involving Filipino workers for overseas deployment
including claims for actual, moral, exemplary and other forms of damages.

However, there is no specific provision in said Migrant Workers’ Act which provides for jurisdiction over
disputes or unresolved grievances regarding the interpretation or implementation of a CBA.

On the other hand, Articles 217(c) and 261 of the Labor Code are very specific in stating that voluntary
arbitrators have jurisdiction over cases arising from the interpretation or implementation of collective
bargaining agreements. Since the dispute clearly involves the interpretation or implementation of the
CBA, the specific or special provisions of the Labor Code govern and the issue must be brought before
the voluntary arbitrators.

2. The CBA is the law or contract between the parties. The CBA entered into by and between
respondent company and AMOSUP, the union to which seafarer belongs, provides as follows:

“The Company and the Union agree that in case of dispute or conflict in the interpretation or application
of any of the provisions of this Agreement, or enforcement of Company policies, the same shall be
settled through negotiation, conciliation or voluntary arbitration. x x x”

From the foregoing, it is clear that the parties, in the first place, really intended to bring to conciliation
or voluntary arbitration any dispute or conflict in the interpretation or application of the provisions of
their CBA. It is settled that when the parties have validly agreed on a procedure for resolving grievances
and to submit a dispute to voluntary arbitration then that procedure should be strictly observed.

3. The provisions of the CBA are in consonance with Rule VII, Section 7 of the present Omnibus Rules
and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, as amended by

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Republic Act No. 10022, which states that “[f]or OFWs with collective bargaining agreements, the case
shall be submitted for voluntary arbitration in accordance with Articles 261 and 262 of the Labor Code.”
The Court notes that the said Omnibus Rules and Regulations were promulgated by the Department of
Labor and Employment (DOLE) and the Department of Foreign Affairs (DFA) and that these departments
were mandated to consult with the Senate Committee on Labor and Employment and the House of
Representatives Committee on Overseas Workers Affairs.

4. In the same manner, Section 29 of the prevailing Standard Terms and Conditions Governing the
Employment of Filipino Seafarers on Board Ocean Going Vessels, promulgated by the Philippine
Overseas Employment Administration (POEA), provides as follows:

“Section 29. Dispute Settlement Procedures. − In cases of claims and disputes arising from this
employment, the parties covered by a collective bargaining agreement shall submit the claim or dispute
to the original and exclusive jurisdiction of the voluntary arbitrator or panel of arbitrators. If the parties
are not covered by a collective bargaining agreement, the parties may at their option submit the claim
or dispute to either the original and exclusive jurisdiction of the National Labor Relations Commission
(NLRC), pursuant to Republic Act (RA) 8042, otherwise known as the Migrant Workers and Overseas
Filipinos Act of 1995 or to the original and exclusive jurisdiction of the voluntary arbitrator or panel of
arbitrators. If there is no provision as to the voluntary arbitrators to be appointed by the parties, the
same shall be appointed from the accredited voluntary arbitrators of the National Conciliation and
Mediation Board of the Department of Labor and Employment.

The Philippine Overseas Employment Administration (POEA) shall exercise original and exclusive
jurisdiction to hear and decide disciplinary action on cases, which are administrative in character,
involving or arising out of violations of recruitment laws, rules and regulations involving employers,
principals, contracting partners and Filipino seafarers.”

5. It is clear that with respect to disputes involving claims of Filipino seafarers wherein the parties are
covered by a collective bargaining agreement, the dispute or claim should be submitted to the
jurisdiction of a voluntary arbitrator or panel of arbitrators. It is only in the absence of a collective
bargaining agreement that parties may opt to submit the dispute to either the NLRC or to voluntary
arbitration.

6. This is also in consonance with the policy of the state to promote voluntary arbitration as a mode of

3. PEOPLE'S BROADCASTING SERVICE (BOMBO RADYO PHILS., INC.), Petitioner, vs. THE SECRETARY OF
THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE REGIONALDIRECTOR, DOLE REGION VII, and
JANDELEON JUEZAN, Respondents

G.R. No. 179652 March 6, 2012

DOCTRINE: If the DOLE finds that there is no employer-employee relationship, the jurisdiction is properly
with the NLRC. If a complaint is filed with the DOLE, and it is accompanied by a claim for reinstatement,

13
the jurisdiction is properly with the Labor Arbiter, under Art. 217(3) of the Labor Code, which provides
that the Labor Arbiter has original and exclusive jurisdiction over those cases involving wages, rates of
pay, hours of work, and other terms and conditions of employment, if accompanied by a claim for
reinstatement. If a complaint is filed with the NLRC, and there is still an existing employer-employee
relationship, the jurisdiction is properly with the DOLE. The findings of the DOLE, however, may still be
questioned through a petition for certiorari under Rule 65 of the Rules of Court.

FACTS: The instant petition for certiorari under Rule 65 assails the decision and the resolution of the
Court of Appeals.

The petition traces its origins to a complaint filed by Jandeleon Juezan (respondent) against People’s
Broadcasting Service, Inc. (Bombo Radyo Phils., Inc) (petitioner) for illegal deduction, non-payment of
service incentive leave, 13th month pay, premium pay for holiday and rest day and illegal diminution of
benefits, delayed payment of wages and non-coverage of SSS, PAG-IBIG and Philhealth (non-diminution
of benefits in the amount allegedly 6K) before the Department of Labor and Employment (DOLE)
Regional Office No. VII, Cebu City.2 On the basis of the complaint, the DOLE conducted a plant level
inspection on 23 September 2003. Labor Inspector wrote under the heading
“Findings/Recommendations” “non-diminution of benefits” and “Note: Respondent deny employer-
employee relationship with the complainant- see Notice of Inspection results.”

PETITIONER’S POSITION: Management representative informed that complainant is a drama talent hired
on a per drama ” participation basis” hence no employer-employeeship [sic] existed between them. As
proof of this, management presented photocopies of cash vouchers, billing statement, employments of
specific undertaking (a contract between the talent director & the complainant), summary of billing of
drama production etc. They (mgt.) has [sic] not control of the talent if he ventures into another contract
w/ other broadcasting industries.

RULING OF DOLE REGIONAL DIRECTOR: respondent is an employee of petitioner, and that the former is
entitled to his money claims amounting toP203,726.30. MR denied; Appeal with the DOLE Secretary,
dismissed the appeal on the ground that petitioner did not post a cash or surety bond and instead
submitted a Deed of Assignment of Bank Deposit.

APPEAL WITH THE CA: claiming that it was denied due process when the DOLE Secretary disregarded the
evidence it presented and failed to give it the opportunity to refute the claims of respondent. Petitioner
maintained that there is no employer-employee relationship had ever existed between it and
respondent because it was the drama directors and producers who paid, supervised and disciplined
respondent. It also added that the case was beyond the jurisdiction of the DOLE and should have been
considered by the labor arbiter because respondent’s claim exceeded P5,000.00. CA denied.

WITH THE SC: petitioner argues that the National Labor Relations Commission (NLRC), and not the DOLE
Secretary, has jurisdiction over respondent’s claim, in view of Articles 217 and 128 of the Labor Code.

RESPONDENT’S POSITION: respondent posits that the Court of Appeals did not abuse its discretion. He
invokes Republic Act No. 7730, which “removes the jurisdiction of the Secretary of Labor and

14
Employment or his duly authorized representatives, from the effects of the restrictive provisions of
Article 129 and 217 of the Labor Code, regarding the confinement of jurisdiction based on the amount of
claims.”; and wrong mode of appeal.

ISSUE: WON the Secretary of Labor have the power to determine the existence of an employer-
employee relationship.

HELD: No. The jurisdiction is properly with the NLRC.

To resolve this pivotal issue, one must look into the extent of the visitorial and enforcement power of
the DOLE found in Article 128 (b) of the Labor Code, as amended by Republic Act 7730.

The provision is quite explicit that the visitorial and enforcement power of the DOLE comes into play
only “in cases when the relationship of employer-employee still exists.” Of course, a person’s
entitlement to labor standard benefits under the labor laws presupposes the existence of employer-
employee relationship in the first place.The clause signifies that the employer-employee relationship
must have existed even before the emergence of the controversy. Necessarily, the DOLE’s power does
not apply in two instances, namely: (a) where the employer-employee relationship has ceased; and (b)
where no such relationship has ever existed.

The first situation is categorically covered by Sec. 3, Rule 11 of the Rules on the Disposition of Labor
Standards Cases15 issued by the DOLE Secretary. It reads:

Rule II MONEY CLAIMS ARISING FROM COMPLAINT/ROUTINE INSPECTION

Sec. 3. Complaints where no employer-employee relationship actually exists. Where employer-

employee relationship no longer exists by reason of the fact that it has already been severed, claims for
payment of monetary benefits fall within the exclusive and original jurisdiction of the labor arbiters.
Accordingly, if on the face of the complaint, it can be ascertained that employer-employee relationship
no longer exists, the case, whether accompanied by an allegation of illegal dismissal, shall immediately
be endorsed by the Regional Director to the appropriate branch of the National Labor Relations
Commission (NLRC).

Clearly the law accords a prerogative to the NLRC over the claim when the employer-employee
relationship has terminated or such relationship has not arisen at all. The reason is obvious. In the
second situation especially, the existence of an employer-employee relationship is a matter which is not
easily determinable from an ordinary inspection, necessarily so, because the elements of such a
relationship are not verifiable from a mere ocular examination. The determination of which should be
comprehensive and intensive and therefore best left to the specialized quasi-judicial body that is the
NLRC.

Without a doubt, petitioner, since the inception of this case had been consistent in maintaining that
respondent is not its employee. Certainly, a preliminary determination, based on the evidence

15
offered, and noted by the Labor Inspector during the inspection as well as submitted during the
proceedings before the Regional Director puts in genuine doubt the existence of employer-employee
relationship. From that point on, the prudent recourse on the part of the DOLE should have been to
refer respondent to the NLRC for the proper dispensation of his claims. Furthermore, as discussed
earlier, even the evidence relied on by the Regional Director in his order are mere self-serving
declarations of respondent, and hence cannot be relied upon as proof of employer-employee
relationship.

4. Rolando L. Cervantes vs. PAL Maritime Corporation and/or Western Shipping Agencies. G.R. No.
175209. January 16, 2013

DOCTRINE: Appeal to the National Labor Relations Commission (NLRC); Requisites for perfection of
appeal; Joint declaration under oath accompanying the surety bond; Substantial compliance with
procedural rules-- Considering that there was substantial compliance with the rules, the same may be
liberally construed. The application of technical rules may be relaxed in labor cases to serve the
demands of substantial justice.

FACTS:
Petitioner Rolando Cervantes (Cervantes) was hired as Master on board the vessel M/V Themistocles by
respondent PAL Maritime Corporation, the manning agent of respondent Western Shipping Agencies,
PTE., LTD., (Western Shipping) for a 10-month period.

The owner of the vessel sent a telex message to Cervantes enumerating several complaints regarding his
poor performance. On the following day, Cervantes replied and imputed ill- motive on the part of the
foreign inspectors who were making false accusations against Filipino crew members. He sent another
telex message stating that: “ANYHOW TO AVOID REPETITION [ON] MORE HARSH REPORTS TO COME.
BETTER ARRANGE MY RELIEVER [AND] C/O BUSTILLO RELIEVER ALSO. UPON ARR NEXT USA LOADING
PORT FOR THEIR SATISFACTION.”

In response to said message, Western Shipping sent a letter informing Cervantes that: “OWNERS HAVE
DECIDED TO RELIEVE YOU UPON PASSING PANAMA CANAL OR NEXT CONVENIENT PORT. WE TRUST THIS
PRE-MATURED ENDING OF CONTRACT IS MUTUALLY AGREED AND FOR THE BENEFITS OF ALL PARTIES
CONCERNED.”

Cervantes replied: “HV NO CHOICE BUT TO ACCEPT YR DECISION. TKS ANYHOW FOR RELIEVING ME IN
NEXT CONVENIENT PORT WILL EASE THE BURDEN THAT I HV FELT ONBOARD. REST ASSURE VSL WILL BE
TURNED OVER PROPERLY TO INCOMING MASTER.”

When Cervantes was repatriated to Manila, he filed a complaint for illegal dismissal before the Labor
Arbiter. The Labor Arbiter ruled that he was illegally dismissed.

16
On appeal, the NLRC reversed the decision of the Labor Arbiter. The Court of Appeals affirmed the
NLRC’s decision.

Hence, this present petition for review.

ISSUE: Whether or not the appeal made by Respondents with the NLRC without the joint declaration
under oath is considered perfected?

HELD: YES. There was substantial compliance with the NLRC Rules of Procedure when the respondents
PAL Maritime Corporation and Western Shipping Agencies, Pte., Ltd. filed, albeit belatedly, the Joint
Declaration Under Oath, which is required when an employer appeals from the Labor Arbiter’s decision
granting a monetary award and posts a surety bond.

Under the NLRC rules, the following requisites are required to perfect the employer’s appeal: (1) it must
be filed within the reglementary period; (2) it must be under oath, with proof of payment of the
required appeal fee and the posting of a cash or surety bond; and (3) it must be accompanied by
typewritten or printed copies of the memorandum of appeal, stating the grounds relied upon, the
supporting arguments, the reliefs prayed for, and a statement of the date of receipt of the appealed
decision, with proof of service on the other party of said appeal. If the employer posts a surety bond, the
NLRC rules further require the submission by the employer, his or her counsel, and the bonding
company of a joint declaration under oath attesting that the surety bond posted is genuine and that it
shall be in effect until the final disposition of the case.

In the case at bar, the respondents posted a surety bond equivalent to the monetary award and filed the
notice of appeal and the appeal memorandum within the reglementary period. When
the NLRC subsequently directed the filing of a Joint Declaration Under Oath, the respondents
immediately complied with the said order. There was only a late submission of the Joint Declaration.
Considering that there was substantial compliance with the rules, the same may be liberally construed.
The application of technical rules may be relaxed in labor cases to serve the demands of substantial
justice.

5. Indophil Textile Mills, Inc. vs. Engr. Salvador Adviento, G.R. No. 171212, Aug. 20, 2014

DOCTRINE: A case of quasi-delict is within the jurisdiction of the regular courts and not with the Labor
Arbiter.  The cause of action herein pertains to the consequence of petitioner’s omission which led to a
work-related disease suffered by respondent, causing harm or damage to his person. Such cause of action
is within the realm of Civil Law, and jurisdiction over the controversy belongs to the regular courts.

FACTS: PETITIONER Indophil Textile Mills, Inc. is a domestic corporation engaged in the business of
manufacturing thread for weaving. Last Aug. 21, 1990, it hired respondent Engr. Salvador Adviento as a
civil engineer to maintain its facilities in Lambakin, Marilao, Bulacan.

On Aug. 7, 2002, respondent consulted a physician due to recurring weakness and dizziness. He was

17
diagnosed with chronic poly sinusitis, and thereafter, with moderate, severe and persistent allergic
rhinitis. Accordingly, respondent was advised by his doctor to totally avoid house dust mite and textile
dust as exposure to these elements would cause him health problems.

Since the respondent’s persistent requests for better health conditions in his office were unheeded by
petitioner, respondent filed a complaint against petitioner with the National Labor Relations
Commission (NLRC) in San Fernando, Pampanga for alleged illegal dismissal and money claims.
Subsequently, he filed another complaint with the Regional Trial Court (RTC) of Aparri, Cagayan, alleging
that he contracted such occupational disease by reason of the gross negligence of petitioner to provide
him with a safe, healthy and workable environment.

In the RTC case, petitioner filed a motion to dismiss, claiming among others, lack of jurisdiction over the
subject matter of the complaint because the same falls under the original and exclusive jurisdiction of
the Labor Arbiter (LA) under Article 217 (a)(4) of the Labor Code.

ISSUE: Does the motion prosper?

Ruling: No.

True, the maintenance of a safe and healthy workplace is ordinarily a subject of labor cases. More, the
acts complained of appear to constitute matters involving employee-employer relations since
respondent used to be the civil engineer of petitioner. However, it should be stressed that respondent’s
claim for damages is specifically grounded on petitioner’s gross negligence to provide a safe, healthy and
workable environment for its employees—a case of quasi-delict. This is easily ascertained from a plain
and cursory reading of the Complaint, which enumerates the acts and/or omissions of petitioner relative
to the conditions in the workplace.

xxx

In the case at bar, respondent alleges that due to the continued and prolonged exposure to textile dust
seriously inimical to his health, he suffered work-contracted disease which is now irreversible and
incurable, and deprived him of job opportunities. Clearly, injury and damages were allegedly suffered by
respondent, an element of quasi-delict. Secondly, the previous contract of employment between
petitioner and respondent cannot be used to counter the element of “no pre-existing contractual
relation” since petitioner’s alleged gross negligence in maintaining a hazardous work environment
cannot be considered a mere breach of such contract of employment, but falls squarely within the
elements of quasi-delict under Article 2176 of the Civil Code since the negligence is direct, substantive
and independent.

xxx

It also bears stressing that respondent is not praying for any relief under the Labor Code of the
Philippines. He neither claims for reinstatement nor backwages or separation pay resulting from an
illegal termination. The cause of action herein pertains to the consequence of petitioner’s omission
which led to a work-related disease suffered by respondent, causing harm or damage to his person. Such
cause of action is within the realm of Civil Law, and jurisdiction over the controversy belongs to the
regular courts.

18
DISMISSAL CASES
1. Imasen Philippine Manufacturing Corp. v. Alcon, G.R. No. 194884, October 22, 2014

DOCTRINE: Sexual intercourse in workplace during work hours as serious misconduct

As regards misconduct, it is defined as an improper or wrongful conduct. It is a transgression of

some established and definite rule of action, a forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere error in judgment. To constitute a valid
cause for the dismissal within the text and meaning of Article 297 (282) of the Labor Code, the
employee’s misconduct must be serious, i.e., of such grave and aggravated character and not
merely trivial or unimportant.

FACTS:

                Petitioner Imasen Philippine Manufacturing Corporation is a

domestic corporation engaged in the manufacture of auto seat-recliners and slide-
adjusters. It hired the respondents as manual welders in 2001.

                On October 5, 2002, the respondents reported for work on the second shift –
from 8:00 pm to 5:00 am of the following day. At around 12:40 am, Cyrus A. Altiche,
Imasen’s security guard on duty, went to patrol and inspect the production plant’s
premises. When Altiche reached Imasen’s Press Area, he heard the sound of a running
industrial fan. Intending to turn the fan off, he followed the sound that led him to the
plant’s “Tool and Die” section.

                At the “Tool and Die” section, Altiche saw the respondents having sexual
intercourse on the floor, using a piece of carton as mattress. Altiche immediately went
19
back to the guard house and relayed what he saw to Danilo S. Ogana, another
security guard on duty.

                Respondent’s defense: they claimed that they were merely sleeping in the “Tool
and Die” section at the time of the incident. They also claimed that other employees
were near the area, making the commission of the act charged impossible.

                Both LA and NLRC held that the dismissal was valid. CA however nullified
NLRC’s decision and held that sexual intercourse inside company premises is not
serious misconduct.

ISSUE:

                Whether the respondents’ infraction – engaging in sexual intercourse inside

company premises during work hours – amounts to serious misconduct justifying their
dismissal.

HELD:

                YES. Sexual acts and intimacies between two consenting adults belong, as a
principled ideal, to the realm of purely private relations. Whether aroused by lust or
inflamed by sincere affection, sexual acts should be carried out at such place, time
and circumstance that, by the generally accepted norms of conduct, will not offend
public decency nor disturb the generally held or accepted social morals. Under these
parameters, sexual acts between two consenting adults do not have a place in the work
environment.

                Indisputably, the respondents engaged in sexual intercourse inside company

premises and during work hours. These circumstances, by themselves, are already
punishable misconduct. Added to these considerations, however, is the implication that
the respondents did not only disregard company rules but flaunted their disregard in a
manner that could reflect adversely on the status of ethics and morality in the company.

                Additionally, the respondents engaged in sexual intercourse in an area where

co-employees or other company personnel have ready and available access. The
respondents likewise committed their act at a time when the employees were expected
to be and had, in fact, been at their respective posts, and when they themselves were
supposed to be, as all other employees had in fact been, working.

                The Court also considered the respondents’ misconduct to be of grave and

aggravated character so that the company was justified in imposing the highest penalty
available ― dismissal.

                Their infraction transgressed the bounds of socially and morally accepted

human public behavior, and at the same time showed brazen disregard for the respect

20
that their employer expected of them as employees. By their misconduct, the
respondents, in effect, issued an open invitation for others to commit the same
infraction, with like disregard for their employer’s rules, for the respect owed to their
employer, and for their co-employees’ sensitivities.

2. RICARDO G. SY v. NEAT, GR No. 213748, 2017-11-27

DOCTRINE: On the other hand, gross negligence implies two (2) concurring factors: the
neglect of duties must not only be gross but habitual as well. Gross negligence means an
absence of that diligence that a reasonably prudent man would use in his own affairs,
and connotes want of care in the performance of one’s duties. Habitual neglect implies
repeated failure to perform one’s duties for a period of time, depending upon the
circumstances (Sy and Alix vs. Neat, Inc., Banana Peel and Ng, G.R. No. 213748,
November 27, 2017).

Facts:
Respondent Neat, Inc. is a corporation existing by virtue of Philippine laws, and the
owner/distributor of rubber slippers known as "Banana Peel," while respondent Paul Vincent
Ng is its President and Chief Executive Officer. Petitioner Ricardo Sy was hired on May 5,
2008 as company driver and was dismissed from work on August 4, 2011. Petitioner Henry
Alix was hired on November 30, 2005 as a delivery helper/utility and was dismissed from
work on May 31, 2011.
petitioner Sy alleged that on July 28, 2011, his co-worker Jeffrey Enconado blocked his way
to the daily time record of the company, which annoyed him as he was going to be late for
work. When he learned from the delivery schedule that Enconado would be his partner, Sy
requested the company assistant operations manager, Cesca Abuan, to assign him another
"pahinante" or delivery utility, but the request was not acted upon. In order to avoid
confrontation with Enconado, Sy assigned to himself a new delivery utility.
, Sy was informed that he would be suspended due to insubordination for three (3) days...
anager Anabel Tetan informed Sy that his services will be terminated effective August 4,
2011 due to poor performance. Sy disagreed, claiming that for the 3 years that he worked
with the company, he received bonuses for excellent performance.
verred that sometime in February 2011, he was ordered to assist a newly-hired clerk. After
helping his co-worker, Alix sat down for a while. Respondent Ng saw Alix, and thought that
he was doing nothing during working hours. On May 19, 2011, Alix was assigned to clean at
the company warehouse. After working, Ng saw Alix resting again. Alix was suspended for
3 days, and was thereafter dismissed... etitioners Sy and Alix filed a Complaint[3] for illegal
dismissal and payment of money claims.

21
Respondents contended that because of petitioners' continued and repeated commission of
various offenses and violations of company rules and regulations, they were terminated for
a just cause.
A found that petitioners Sy and Alix were dismissed due to serious misconduct, gross
neglect of duty and insubordination.
LA ruled that the evidence on record shows that respondents gave petitioners opportunity to
defend themselves, and have thus complied with the procedural due process required by
the Labor Code... petitioners filed an appeal before the National Labor Relations
Commission (NLRC).
NLRC reversed the LA's Decision, finding that the records failed to support the grounds of
serious misconduct, gross neglect of duty and insubordination cited by respondents as
bases in terminating petitioners' employment.
Respondents filed a motion for reconsideration,... espondents filed before the Court of
Appeals (CA)
CA held that the dismissal of petitioners was justified under Article 282 (a) and (b) of the
Labor Code, as amended, on the grounds of serious misconduct or willful disobedience of
the lawful order of the employer or representative in connection with the employee's work,
and gross and habitual neglect of the employee's dutie
CA stressed that his repeated violations of the company's rules and regulation, as reflected
in the several warnings found on record, amounted to just cause for termination, and that
his act of insubordination alone when he changed his "pahinante" in direct contravention of
the orders of his superior, amounts to serious misconduct or willful disobedience.
Alix, the CA said that aside from his frequent tardiness, the six (6) warnings issued to him
provide a just cause for his dismissal.
A ruled that failure to comply with the procedural requirements of notice... which entitles
them to an award of nominal damages in the amount of P30,000.00 each
Issues:
ETITIONERS' ALLEGED PAST INFRACTIONS IS DETERMINATIVE IN IMPOSING THE
PENALTY FOR THEIR SUPPOSED RECENT INFRACTION.
HETHER RESPONDENTS ILLEGALLY DISMISSED PETITIONERS.
WHETHER PETITIONERS ARE ENTITLED TO MORAL AND EXEMPLARY DAMAGES
AND ATTORNEY'S FEES.
WHETHER PETITIONERS ARE ENTITLED TO MORAL AND EXEMPLARY DAMAGES
AND ATTORNEY'S FEES.[10]... the infractions of Sy for wearing of improper uniform are
not related to his latest infractions of insubordination and purported poor performance
evaluation. Previous offenses may be used as valid justification for dismissal only if they are
related to the subsequent offense upon which the basis of termination is decreed,[23] or if
they have a bearing on the proximate offense warranting dismissal.[24]
Ruling:

22
ourt rules that the CA erred in finding that respondents were able to prove that the totality of
Sy's violations of company rules and regulations constitute a just cause for termination of
employment.
A closer look into the entirety of the violations imputed against Sy shows that respondents
failed to prove with substantial evidence that the totality of infractions committed by him
constitutes as a just cause for his dismissal under the Labor Code. In fact, even by its own
standards, respondents' dismissal of Sy fails to measure up to Neat, Inc.'s Guide to the
Administration of Code of Conduct,[15] which states that the "termination of employment of
the employee by the Company is usually imposed when the employee's record over the
period of time shows clearly that the amount of warnings and other disciplinary actions has
not made the employee understand the error of his ways and/or for the first offense which is
such a serious error that cannot be ignored."[16]
Contrary to respondents' contention, however, the past 3 infractions in 2009 for wearing of
improper uniform can no longer be taken against Sy, because he was already warned and
penalized for them, and he has, in fact, reformed his errors in that regard.
Where an employee had already suffered the corresponding penalties for his infraction, to
consider the same offenses as justification for his dismissal would be penalizing the
employee twice for the same offense.[2
Previous offenses may be used as valid justification for dismissal only if they are related to
the subsequent offense upon which the basis of termination is decreed,[23] or if they have a
bearing on the proximate offense warranting dismissal.[... ight of the totality of petitioner
Alix's infractions against the company rules and regulations, the Court cannot extend the
same magnanimity it has accorded to Sy. Respondents have proven with substantial
evidence said infractions through 7 written warning
Specifically prayed for by petitioner Sy,[49] the NLRC correctly awarded separation pay,
which is proper when reinstatement is no longer viable due to the antagonism and strained
relationship between the employer and the employee as a consequence of the litigation, not
to mention the considerable length of time that the latter has been out of the former's
employ. Nevertheless, the Court limits the award of separation pay, backwages and other
benefits, because Sy is not entirely faultles
Court holds that Sy is entitled to the award of (1) separation pay equivalent to 1 month
salary for every year of service computed from
Court likewise upholds the award of nominal damages awarded in favor of petitioners Sy
and Alix. Nominal damages are "adjudicated in order that a right of the plaintiff, which has
been violated or invaded by the defendant, may be vindicated or recognized, and not for the
purpose of indemnifying the plaintiff for any loss suffered by him."[54] Jurisprudence holds
that such indemnity to be imposed should be stiffer to discourage the abhorrent practice of
dismiss now, pay later.[
Considering that petitioners were deprived of their right to notice and hearing prior to their
termination, the Court affirms the CA's award of P30,000.00 as nominal damages.
Principles:

23
It is well settled that in illegal dismissal cases, "the burden of proof is upon the employer to
show that the employee's termination from service is for a just and valid cause.
mployer's case succeeds or fails on the strength of its evidence and not on the weakness of
that adduced by the employee, in keeping with the principle that the scales of justice should
be tilted in favor of the latter in case of doubt in the evidence presented by them. Often
described as more than a mere scintilla, the quantum of proof is substantial evidence which
is understood as such relevant evidence as a reasonable mind might accept as adequate to
support a conclusion, even if other equally reasonable minds might conceivably opine
otherwise. Failure of the employer to discharge the foregoing onus would mean that the
dismissal is not justified and therefore illegal."... principle of totality of infractions... tality of
infractions or the number of violations committed during the period of employment shall be
considered in determining the penalty to be imposed upon an erring employee. The
offenses committed by petitioner should not be taken singly and separately. Fitness for
continued employment cannot be compartmentalized into tight little cubicles of aspects of
character, conduct and ability separate and independent of each other.
Indeed, the employer cannot be compelled to retain a misbehaving employee, or one who is
guilty of acts inimical to its interests. It has the right to dismiss such an employee if only as a
measure of self-protection
Previous offenses may be used as valid justification for dismissal only if they are related to
the subsequent offense upon which the basis of termination is decreed,[23] or if they have a
bearing on the proximate offense warranting dismissal
Misconduct is defined as the "transgression of some established and definite rule of action,
a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not
mere error in judgment."[25] In order for serious misconduct to justify dismissal, these
requisites must be present: (a) it must be serious; (b) it must relate to the performance of
the employee's duties, showing that the employee has become unfit to continue working for
the employer, and (c) it must have been performed with wrongful intent.[26] On the other
hand, to be considered as a just cause for terminating an employee's services,
"insubordination" requires that the orders, regulations or instructions of the employer or
representative must be (a) reasonable and lawful; (b) sufficiently known to the employee; (c)
in connection with the duties which the employee has been engaged to discharge; and (d)
the employee's assailed conduct must have been willful or intentional, the willfulness being
characterized by a wrongful and perverse attitude.[27]
Gross negligence means.an absence of that diligence that a reasonably prudent man would
use in his own affairs, and connotes want of care in the performance of one's duties.[28]
Habitual neglect implies repeated failure to perform one's duties for a period of time,
depending upon the circumstances.[29] A single or isolated act of negligence does not
constitute a just cause for the dismissal of the employee. Suffice it to state that by no stretch
of reasoning can the 5 infractions - wearing of improper uniform, insubordination and poor
performance evaluation - imputed against Sy be collectively deemed as gross and habitual
negligence.
Habitual tardiness alone, as aptly noted by the CA, is a just cause for termination of Alix's
employment. Punctuality is a reasonable standard imposed on every employee, whether in
government or private sector, whereas habitual tardiness is a serious offense that may very
well constitute gross or habitual neglect of duty, a just cause to dismiss a regular employee.

24
[39] Habitual tardiness manifests lack of initiative, diligence and discipline that are inimical
to the employer's general productivity and business interest.[
Court likewise upholds the award of nominal damages awarded in favor of petitioners Sy
and Alix. Nominal damages are "adjudicated in order that a right of the plaintiff, which has
been violated or invaded by the defendant, may be vindicated or recognized, and not for the
purpose of indemnifying the plaintiff for any loss suffered by him."[54] Jurisprudence holds
that such indemnity to be imposed should be stiffer to discourage the abhorrent practice of
dismiss now, pay later.
Moral damages are recoverable only where the dismissal or suspension of the employee
was attended by bad faith or fraud, or constituted an act oppressive to labor, or was done in
a manner contrary to morals, good customs or public policy.[57] "The person claiming moral
damages must prove the existence of bad faith by clear and convincing evidence for the law
always presumes good faith... it has been held that a corporation, being a juridical entity,
may act only through its directors, officers and employees, and that obligations incurred by
these officers, acting as such corporate agents, are not theirs but the direct accountability of
the corporation they represent.[61] Solidary liability may at times be incurred, but only under
exceptional circumstances.[... labor cases, corporate directors and officers are solidarily
liable with the corporation for the termination of employment of employees only if such is
done with malice or in bad faith.

3. CMP FEDERAL SECURITY AGENCY, INC. AND/OR MS. CAROLINA MABANTA-

PIAD, PETITIONERS, v. NOEL T. REYES, SR., RESPONDENT. G.R. No.
223082, June 26, 2019

4.

DOCTRINE: 1. Procedural due process in illegal dismissal cases does not require
formal hearing or conference; 2. the Court considered inefficiency as an analogous
just cause for termination of employment under Article 282 of the Labor Code

FACTS:
CMP Federal is a duly licensed security agency with petitioner Carolina Mabanta-Piad as
its President and Chief Executive Officer (collectively, petitioners).

Sometime in August 2010, CMP Federal hired respondent Reyes as Security Guard and
assigned him at the Mariveles Grain Terminal (MG Terminal) in Mariveles, Bataan. He
was twice promoted, first as Shift-in-Charge, and then on September 15, 2015, as
Detachment Commander.

He also claimed that he received via e-mail various complaints from Maningat, as

follows:

i. A complaint in February 2013 for non-observance of the rule on timely

submission of the Daily Situation Reports;

25
 ii. A complaint on April 11, 2013 for failure to comply with the client's instruction
that led to the complaint of Mr. Albert G. Bautista, General Manager of MG
Terminal;

iii. A complaint on April 16, 2013 regarding his direct transaction with Ed and
Racquel Garments for the procurement of uniforms for the MG Terminal
Detachment;

iv. Two (2) complaints on May 9, 2013 for the incomplete data of MG Terminal's
Daily Situation Report for the month of April 2013, and for failure to report to
Maningat the incident pertaining to two (2) CMP Federal security personnel who
were confronted by the personnel of Personajes Trucking; and

v. A complaint on May 23, 2013 for failure to follow Maningat's instruction to

designate Sagun as Shift-in-Charge.8

On June 1, 2013, Reyes formally received Offense Notices 9 pertaining to the complaints
from CMP Federal and was ordered immediately suspended until July 20, 2013. 10 Upon
the expiry of the suspension period, Reyes reported back to work, only to be confronted
by additional complaints against him contained in the Reply by Indorsement dated July
20, 2013, which states:

You are hereby directed to explain in writing within FIVE (5) days upon receipt hereof
why you should not be charged [with] the following:

1. Insubordination: For not: following the instruction of Mr. Arnel Maningat,

Operations Manager[,] to designate SO Robert Sagun as Shift-in-Charge
effective 01 May 2013, and designated him as ordinary guard instead;

2. Negligence (4th Offense): For failure to report to the Operations Manager the

incident pertaining to the two (2) security personnel in the persons of SG
Rommy Ramiterre and SG Jesus Sumalbag who were confronted by the
Personajes Trucking Personnel, wherein as Detachment Commander, [you] are
duty-bound to report to the latter all matters pertaining to the [operations;

3. Violation of Section 1.B.C, Rule X of RA 5487: For providing confidential

information relative to the Cabcaben Vacant Lot takeover, wherein this office has
received a reports [sic] that you allegedly leak [sic] the information to your
subordinates on the drinking session last 02 December 2012 that eventually
reached the knowledge of the [MG Terminal] General Manager.

On July 22, 2013, Reyes timely submitted his explanation, 12 controverting the
accusations against him. Nevertheless, CMP Federal barred Reyes from reporting to
work, and told him instead to await the decision of the management regarding the
complaints.13

Reyes claimed that he kept on reporting for duty until July 30, 2013 14 when he was

26
verbally informed of his termination. Indeed, on this very date (July 30, 2013), he
received a Notice of Termination, that reads: 15

After due investigation, you are hereby found liable for the following:

1. Insubordination - For failure to follow the instruction of the Operations

Manager last 01 May 2013;

2. Negligence (4th Offense) - For failure to report to the Operations Manager the

incident involving two (2) security personnel [who were] confronted by the
personnel of Personajes Tmcking; and

3. Violation of Ethical Standard (Sec.1.B.c, Rule X of RA 5487) - For

revealing confidential information to unauthorized persons relative to takeover of
Cabcaben Vacant Lot.

Such acts are punishable by dismissal under items No. 1.15, 3.24, and 1.2 of the
Agency's Table of Offenses, Administrative Charges & Penalties.

Reyes thereafter lodged a complaint for illegal dismissal, non-payment of service

incentive leave, separation pay, reimbursement of expenditures for supplies and cash
bond, with a prayer for payment of moral and exemplary damages, as well as
attorney's fees.

Petitioners denied the complaint and averred that, starting January 2013, Reyes had
been remiss in the discharge of his duties as Detachment Commander at MG
Terminal;18 that Reyes' dismissal was justified because Reyes was negligent in the
performance of his duties as shown by his repeated disregard of company rules; that
Reyes' position was one of trust and confidence, to which Reyes proved untrustworthy
when he leaked confidential information. This breach, according to the petitioners,
stymied CMP Federal's planned takeover of the vacant Cabcaben property. 19

The petitioners likewise asserted that they observed procedural due process in
dismissing Reyes from service; that through the e-mails and Reply by Indorsement that
he received, Reyes was sufficiently apprised of the specific incidents that led to the
charges against him and was provided ample opportunity to explain himself and
controvert the charges; that an investigation was then conducted wherein, based on
Reyes' own admission and from the statements obtained from his fellow security
guards, Reyes was found guilty of the violations charged. Thus, the Notice of
Termination dated July 30, 2013 was served upon him on even date. 20

Riding of the Labor Arbiter

The Labor Arbiter ratiocinated that the just cause for Reyes' dismissal was adequately
substantiated by the petitioners who also proved that they complied with the due
process requirements for termination of employment. The claim for illegal dismissal and
separation pay, therefore, must necessarily fail, according to the Labor Arbiter.
Nevertheless, the Labor Arbiter held that Reyes was entitled to service incentive leave
pay for the years 2011 and 2012, in the aggregate amount of Php 5,220.00, since the
petitioners failed to establish prior payment thereof.

27
Ruling of the National Labor Relations Commission
Diametrically opposed to the Labor Arbiter's findings, the NLRC held that Reyes
committed no serious misconduct that could have warranted his dismissal. Moreover,
the NLRC held, that in dismissing Reyes,27 the petitioners did not comply with the
detailed steps of procedural due process, as laid down in United Tourist Promotions v.
Kemplin.28

Ruling of the Court of Appeals

The CA sustained the NLRC's findings on the ground that the standards of due process
were not strictly complied with; that, absent proof that an investigation was conducted
by the petitioners or that Reyes was given an opportunity to be heard and present his
countervailing evidence, it would be unfair for the CA to reverse the NLRC's
Decision.35 The appellate court also held that, even if the perceived procedural lapses
were to be brushed aside, the petitioners' recourse would still have been dismissible for
there was no sufficient cause to terminate Reyes on the ground of serious misconduct,
because Reyes committed the alleged infractions without deliberate and wrongful intent
to violate CMP Federal's rules and regulations. 3

ISSUE: Whether or not THE HONORABLE COURT OF APPEALS ERRED in affirming the
Decision of the NLRC, reversing the Decision of the Labor Arbiter Fe Cellan in finding
that the Respondent Reyes was illegally dismissed.

HELD:
Procedural due process in illegal dismissal cases does not require formal
hearing or conference
The 2017 case of Maula v. Ximex Delivery Express, Inc.,40 citing the En Banc ruling
in Perez v. Phil. Telegraph and Telephone Company,41 reiterated the hornbook doctrine
that actual hearing or conference is not a condition sine qua non for procedural due
process in labor cases because the provisions of the Labor Code prevail over its
implementing rules. 

To recall, Reyes received two sets of complaints in this case: the first set he received in
various dates via e-mail, and the second he received on July 20, 2013 after his
suspension had lapsed. At this point, it becomes fairly obvious that the petitioners
afforded Reyes with ample opportunity to be heard regarding the complaints leveled
against him. A formal hearing or conference was not necessary since nowhere in any of
his Written Explanations did Reyes request for one. The Court finds that Reyes was not
denied procedural due process of law. The CA therefore erred in ruling that the NLRC
did not act with grave abuse of discretion when it reversed the Decision of the Labor
Arbiter.

In the case at bar, the explanations proffered by Reyes showed that he was not
animated by any wrongful intent when he committed the infractions complained of.
Moreover, the finding that he was guilty of serious misconduct was incompatible with
the charges for negligence which, by definition, requires lack of wrongful intent.
Nevertheless, the Court rules that there was still just cause for Reyes' termination -
gross inefficiency.

28
The NLRC and the CA should not have fixated itself with the designation of the offense
as serious misconduct when it is clear from the complaints and Reply by Indorsement
that Reyes was actually being made to answer for his violation of company policies and
standards.

29