laborlaw

Lozada vs Magtanggol (G.R. No. 196134, October 12, 2016)

Lozada vs Magtanggol
G.R. No. 196134, October 12, 2016

Facts: On October 13, 1997, the Magtanggol Mendoza was employed as a technician by VSL Service Center, a single proprietorship owned and managed by Valentin Lozada. Sometime in August 2003, the VSL Service Center was incorporated and changed its business name to LB&C Services Corporation. Subsequently, Magtanggol was asked by respondent Lozada to sign a new employment contract. The petitioner did not accede because the respondent company did not consider the number of years of service that he had rendered to VSL Service Center. From then on, the his work schedule was reduced to one to three days a week. In December 2003, He was given his regular working schedule by the company. However, on January 12, 2004, Magtanggol was advised by the respondent company’s Executive Officer, Angeline Aguilar, not to report for work and just wait for a call from the respondent company regarding his work schedule. Due to the continued failure of respondent company to give work schedule to Magtanggol, the latter filed a complaint against the respondent company on January 21, 2004 for illegal dismissal with a prayer for the payment of his 13th month pay, service incentive leave pay, holiday pay and separation pay and with a claim for moral and exemplary damages, and attorney’s fees. The case was docketed as NLRC NCR Case No. 00-01-00968-2004. On February 23, 2005, the Labor Arbiter declared the dismissal of the petitioner from employment as illegal. LB&C Services Corporation appealed, but the NLRC dismissed the appeal for non-perfection thereof due to failure to deposit the required cash or surety bond. Thus, the Labor Arbiter’s decision attained finality on August 4, 2006, and the entry of judgment was issued by the NLRC on August 16, 2006. The respondent moved for the issuance of the writ of execution, which the Labor Arbiter granted on November 21, 2006.

Issue: Whether or not the petitioner may be held liable for the monetary awards granted to the respondent despite the absence of a pronouncement of his being solidarily liable with LB&C Services Corporation.

Held: No. A corporation, as a juridical entity, may act only through its directors, officers and employees. Obligations incurred as a result of the acts of the directors and officers as the corporate agents are not their personal liability but the direct responsibility of the corporation they represent. As a general rule, corporate officers are not held solidarily liable with the corporation for separation pay because the corporation is invested by law with a personality separate and distinct from those of the persons composing it as well as from that of any other legal entity to which it may be related. Mere ownership by a single stockholder or by another corporation of all or nearly all of the capital stock of a corporation is not of itself sufficient ground for disregarding the separate corporate personality.

To hold a director or officer personally liable for corporate obligations, two requisites must concur, to wit: (1) the complaint must allege that the director or officer assented to the patently unlawful acts of the corporation, or that the director or officer was guilty of gross negligence or bad faith; and (2) there must be proof that the director or officer acted in bad faith.

Clearly, what can be inferred from the earlier cases is that the doctrine of piercing the corporate veil applies only in three (3) basic areas, namely: 1) defeat of public convenience as when the corporate fiction is used as a vehicle for the evasion of an existing obligation; 2) fraud cases or when the corporate entity is used to justify a wrong, protect fraud, or defend a crime; or 3) alter ego cases, where a corporation is merely a farce since it is a mere alter ego or business conduit of a person, or where the corporation is so organized and controlled and its affairs are so conducted as to make it merely an instrumentality, agency, conduit or adjunct of another corporation. In the absence of malice, bad faith, or a specific provision of law making a corporate officer liable, such corporate officer cannot be made personally liable for corporate liabilities.

The records of this case do not warrant the application of the exception. The rule, which requires malice or bad faith on the part of the directors or officers of the corporation, must still prevail. The petitioner might have acted in behalf of LB&C Services Corporation but the corporation’s failure to operate could not be hastily equated to bad faith on his part. Verily, the closure of a business can be caused by a host of reasons, including mismanagement, bankruptcy, lack of demand, negligence, or lack of business foresight. Unless the closure is clearly demonstrated to be deliberate, malicious and in bad faith, the general rule that a corporation has, by law, a personality separate and distinct from that of its owners should hold sway. In view of the dearth of evidence indicating that the petitioner had acted deliberately, maliciously or in bad faith in handling the affairs of LB&C Services Corporation, and such acts had eventually resulted in the closure of its business, he could not be validly held to be jointly and solidarily liable with LB&C Services Corporation.

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AFP Mutual vs NLRC (GR No. 102199 January 28, 1997)

AFP Mutual Benefit Association Inc vs National Labor Relations Commission
GR No. 102199 January 28, 1997

Facts: Private respondent Eutiquio Bustamente had been an insurance underwriter of petitioner AFP Mutual Benefit Association Inc. since 1975. The sales agreement provided for Bustamente’s duties and obligations, commissions and a statement that there shall be no employer-employee relationship between the parties, the sales agent being hereby deemed an independent contractor. On July 5, 1989, petitioner dismissed private respondent for misrepresentation and for simultaneously selling insurance for another life insurance company in violation of said agreement. On November 23, 1989, private respondent filed a complaint with the office of the insurance commissioner praying for the payment of the correct amount of his commission. Atty. German C. Alejandria, chief of the public assistance and information division, office of the insurance commissioner, advised private respondent that it was the DOLE that had jurisdiction over his complaint. On February 26, 1990, private respondent filed his complaint with the Department of Labor claiming : 1.) Commission for 2 years from termination of employment equivalent to 30% of premiums remitted during employment; 2.) P354,796 as commissioned earned from renewals and old business generated since 1983; 3.) P100,000 as moral damages; and 4.) P100,000 as exemplary damages.

Issue: Whether or not there existed an employer-employee relationship between petitioner and private respondent.

Held: No. Well settled is the doctrine that the existence of an employer-employee relationship is ultimately a question of fact and that the findings thereon by the labor arbiter and the NLRC shall be accorded not only respect but even finality when supported by substantial evidence. The determinative factor in such finality is the presence of substantial evidence to support said finding. Otherwise, such factual findings cannot bind this court.

Time and again, the court has applied the four-fold test in determining the existence of employer-employee relationship. This test considers the following elements: 1.) The power to hire; 2.) The payment of wages; 3.) The power to dismiss; 4.) The power to control, the last being the most important element.

The difficulty lies in correctly assessing if certain factors or elements properly indicate the presence of control. Anent the issue of exclusivity in the case at bar, the fact that private respondent was required to solicit business exclusively for petitioner could hardly be considered as control on labor jurisprudence. Under memo circulars no. 2-81 and 2-85, dated December 17, 1981 and August 7, 1985 respectively issued by the insurance commissioner, insurance agents are barred from serving more than one insurance companies to exercise exclusive supervision over their agents in their solicitation work. Thus, the exclusivity restriction clearly springs from a regulation issued by the insurance commission, and not from an intention by petitioner to establish control over the method and manner by which private respondent shall accomplish his work. This feature is not meant to change the nature of the relationship between the parties, nor does it necessarily imbued such relationship with the quality of control envisioned by law.

To restate, the significant factor in determining the relationship of the parties is the presence or absence of supervisory authority yo control the method and the details of performance of the service being rendered, and the degree to which the principal may intervene to exercise such control. The presence of such power of control is indicative of an employment relationship, while absence thereof is indicative of independent contractorship. In other words, the test to determine claiming to be independent contractor has contracted to do the work according to his own methods and without being the subject to the control of the employer except only as to the result of his work. Such is exactly the nature of the relationship between petitioner and private respondent.

Such lack of jurisdiction of a court or tribunal may be raised at any stage of the proceedings, even on appeal. The doctrine of estoppel cannot be properly invoked by respondent commission to cure this fatal defect as it cannot confer jurisdiction upon a tribunal that to begin with, was bereft of jurisdiction over a cause of action. Moreover, in the proceedings below, the petitioner consistently challenged the jurisdiction of the labor arbiter and respondent commission.

Insular Life vs NLRC (GR No. 119930 March 12, 1998)

Insular Life Assurance Co. Ltd. vs National Labor Relations Commission (Delos Reyes)
GR No. 119930 March 12, 1998

Facts: On August 21, 1992 petitioner entered into an agency contract with respondent Pantaleon Delos Reyes authorizing the latter to solicit within the Philippines applications for life insurance and annuities for which he would be paid compensation in the form of commitment. The contract was prepared by petitioner in its entirety and Delos Reyes merely signed his confirmity thereto. It contained the stipulation that no employer-employee relationship shall be created between the parties and that the agent shall be free to exercise his own judgement as to time, place and means of soliciting insurance. Delos Reyes however was prohibited by petitioner from working for any other life insurance company, and violation of this stipulation was sufficient ground for termination of the contract. Aside from soliciting insurance for the petitioner, private respondent was required to submit to the former all completed applications for insurance within 90 consecutive days, deliver policies, receive and collect initial premiums and balances of first year premiums, renewal premiums, deposits on applications and payments on policy loans. Private respondent was also bound to turn over to the company immediately any and all sums of money collected by him. In a written communication by petitioner to respondent Delos Reyes, the latter was urged to register with the Social Security System (SSS) as a self-employed individual as provided under PD 1636. On March 1, 1993, petitioner and private respondent entered into another contract where the latter was appointed as acting, unit manager under its office — the Cebu DSO vs Private respondent concurrently as agent and acting unit manager until he was notified by petitioner on November 18, 1993 that his services were terminated effective December 18, 1993. On November 7, 1994 he filed a complaint before the labor arbiter on the ground that he was illegally dismissed and that he was not paid his salaries and separation pay.

Issue: Whether or not there is an employer-employee relationship between the parties to entitle jurisdiction of the case before the labor arbiter.

Held: Yes. It is axiomatic that existence of an employer-employee relationship cannot be negated by expressly repudiating it in the management contract and providing therein that the employee is an independent contractor when the terms of the agreement clearly shows otherwise. For, the employment status of a person is defined and prescribed by law and not by what the parties say it should be. In determining the status of the management contract, the “four-fold test” on employment earlier mentioned has to be applied.

Unlike Basiao, herein respondent Delos Reyes was appointed acting unit manager, not agency manager. There is no evidence that to implement his obligations under the management contract, Delos Reyes had organized an office. Petitioner in fact has admitted that it provided Delos Reyes a place and a table at its office where he reported for and worked whenever he was not out in the field. Placed under petitioner’s Cebu District Service Office, the unit was given a name by petitioner – Delos Reyes and Associates — and assigned code no. 11753 and recruitment no. 109398. Under the managership contract, Delos Reyes was obliged to work exclusively for petitioner in life insurance solicitation and was imposed premium production quotas. Of course, the acting unit manager could not underwrite other lines of insurance because his permanent certificate of authority was for life insurance only and for no other. He was proscribed from accepting a managerial or supervisory position. In any other office including the government without the written consent of petitioner. Delos Reyes could only be promoted to permanent unit manager if he met certain requirements and his promotion was recommended by the petitioner’s district manager and regional manager and approved by its division manager. As acting unit manager, Delos Reyes performed functions beyond mere solicitation of insurance business for petitioner. As found by the NLRC, he exercised administrative functions which were necessary and beneficial to the business of insular life.

Exclusivity of service, control of assignment and removal of agents under private respondent’s unit, collection of premiums, furnishing company facilities and materials as well as capital described as unit development fund are but hallmarks of the management system in which herein private respondent worked. This obtaining, there is no escaping the conclusion that private respondent Pantaleon Delos Reyes was an employee of herein petitioner.

Insular Life vs NLRC (GR No. 84484 November 15, 1989)

Insular Life Assurance Co. Ltd vs National Labor Relations Commission
GR No. 84484 November 15, 1989

Facts: On July 2, 1968, Insular Life Assurance Co. Ltd and Melecio T. Basiao entered into a contract by which:

  1. Basiao was “authorized to solicit within the Philippines applications for insurance policies and annuities in accordance with the existing rules and regulations” of the company;
  2. He would receive “compensation, in the form of commissions.. as provided in the schedule of commissions” of the contract to “constitute a part of the consideration of (said) agreement,” and;
  3. The “rules in (the company) rate book and its agent’s manual as well as all circulars and those which may from time to time be promulgated by it,” were made part of said contract.

Some four years later, in April 1972, the parties entered into another contract – An agency manager’s contract – and to implement his end of it Basiao organized an agency or office to which he gave the name M Basiao and Associates, while concurrently fulfilling this commitments under the first contract with the company.

In May 1979, the company terminated the Agency Manager’s contract. After seeking a reconsideration, Basiao sued the company in a civil action and this was later to claim, prompted the latter to terminate also his engagement under the first contract and to stop payment of his commission starting April 1, 1980.

Issue: Whether or not the Labor Arbiter have jurisdiction by virtue of the contract between the company and Basiao.

Held: No. In determining the existence of employer-employee relationship, the following elements are generally considered namely: 

  1. The selection and engagement of the employee;
  2. The payment of wages;
  3. The power of dismissal; and
  4. The power to control the employee’s conduct

— although the latter is the most important element.

Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired result without dictating the means or methods to be employed in attaining it, and those that control or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim only to promote the result, create no employer-employee relationship unlike the second, which address both the result and the means used to achieve it. The distinction acquires particular relevance in the case of an enterprise affected with public interest, as is the business of insurance and is on that account subject to regulation by the state with respect, not only to the internal affairs of the insurance company. Rules and Regulations governing the conduct of the business are provided for in the insurance code and enforced by the insurance commissioner. It is, therefore, usual and expected for an insurance company to promulgate a set of rules to guide its commission agents in selling its policies that they may not run afoul of the law and what it requires or prohibits. Of such a character are the rules which prescribes the qualifications of persons who may be insured, subject insurance applications to processing and approval by the company and also reserve to the company the determination of the premiums to be paid and the schedules of payment. None of these really invades the agents contractual prerogative to adopt his own selling methods or to sell insurance at his own time and convenience, hence cannot justifiably be said to establish on employer-employee relationship between him and the company.

The labor arbiter’s decision makes reference to Basiao’s claim of having been connected with the company for 25 years whatever this is meant to imply, the obvious reply would be that what is germane here is Basiao’s status under the contract of July 2, 1968, not the length of his relationship with the company.

The court, therefore, rules that under the contract invoked by him, Basiao was not an employee of the petitioner, but a commission agent, an independent contractor whose claim for unpaid commissions should have been litigated in an ordinary civil action. The labor arbiter erred in taking cognizance of and adjudicating, said claim, being without jurisdiction to do so, as did the respondent NLRC in affirming the arbiter’s decision. This conclusion renders it unnecessary and premature to consider Basiao’s claim for commission on its merits.

Manila Jockey vs Trajano (G.R. No. 160982 June 26, 2013)

Manila Jockey Club Inc vs Trajano
G.R. No. 160982 June 26, 2013

Facts: MJCI had employed Trajano as a selling teller of betting tickets since November 1989. On April 25, 1998, she reported for work. At around 7:15 p.m., two regular bettors gave her their respective lists of bets (rota) and money for the bets for Race 14. Although the bettors suddenly left her, she entered their bets in the selling machine and segregated the tickets for pick up by the two bettors upon their return. Before closing time, one of the bettors (requesting bettor) returned and asked her to cancel one of his bets worth P2,000.00. Since she was also operating the negative machine on that day, she obliged and immediately cancelled the bet as requested. She gave the remaining tickets and the P2,000.00 to the requesting bettor, the money pertaining to the canceled bet. When Race 14 was completed, she counted the bets received and the sold tickets. She found that the bets and the tickets balanced. But then she saw in her drawer the receipt for the canceled ticket, but the canceled ticket was not inside the drawer. Thinking she could have given the canceled ticket to the requesting bettor, she immediately looked for him but could not find him. It was only then that she remembered that there were two bettors who had earlier left their bets with her. Thus, she went to look for the other bettor (second bettor) to ask if the canceled ticket was with him. When she located the second bettor, she showed him the receipt of the canceled ticket to counter-check the serial number with his tickets. Thereafter, the second bettor returned to Trajano and told her that it was one of his bets that had been canceled, instead of that of the requesting bettor. To complicate things, it was also the same bet that had won Race 14. Considering that the bet was for a daily double, the second bettor only needed to win Race 15 in order to claim dividends. At that point, she realized her mistake, and explained to the second bettor that the cancellation of his ticket had not been intentional, but the result of an honest mistake on her part. She offered to personally pay the dividends should the second bettor win Race 15, which the latter accepted. When Race 15 was completed, the second bettor lost. She was thus relieved of the obligation to pay any winnings to the second bettor. To her surprise, the reliever-supervisor later approached Trajano and told her to submit a written explanation about the ticket cancellation incident. The next day (April 26, 1998), she submitted the handwritten explanation to Atty. Joey R. Galit, Assistant Racing Supervisor. She then resumed her work as a selling teller, until later that day, when she received an inter-office correspondence signed by Atty. Galit informing her that she was being placed under preventive suspension effective April 28, 1998, for an unstated period of time. At the end of thirty days of her suspension, Trajano reported for work. But she was no longer admitted. She then learned that she had been dismissed when she read a copy of an interoffice correspondence about her termination posted in a selling station of MJCI.

Issue: Whether or not Trajano is validly dismissed.

Held: No. The valid termination of an employee may either be for just causes under Article 282 or for authorized causes under Article 283 and Article 284, all of the Labor Code.

Specifically, loss of the employer’s trust and confidence is a just cause under Article 282 (c), a provision that ideally applies only to cases involving an employee occupying a position of trust and confidence, or to a situation where the employee has been routinely charged with the care and custody of the employer’s money or property. But the loss of trust and confidence, to be a valid ground for dismissal, must be based on a willful breach of trust and confidence founded on clearly established facts. “A breach is willful,” according to AMA Computer College, Inc. v. Garay, “if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and not on the employer’s arbitrariness, whims, caprices or suspicion; otherwise, the employee would eternally remain at the mercy of the employer.” An ordinary breach is not enough.

Moreover, the loss of trust and confidence must be related to the employee’s performance of duties.  As held in Gonzales v. National Labor Relations Commission:

Loss of confidence, as a just cause for termination of employment, is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence. He must be invested with confidence on delicate matters such as the custody, handling, care and protection of the employer’s property and/or funds. But in order to constitute a just cause for dismissal, the act complained of must be “work-related” such as would show the employee concerned to be unfit to continue working for the employer.

As a selling teller, Trajano held a position of trust and confidence. The nature of her employment required her to handle and keep in custody the tickets issued and the bets made in her assigned selling station. The bets were funds belonging to her employer. Although the act complained of – the unauthorized cancellation of the ticket (i.e., unauthorized because it was done without the consent of the bettor) – was related to her work as a selling teller, MJCI did not establish that the cancellation of the ticket was intentional, knowing and purposeful on her part in order for her to have breached the trust and confidence reposed in her by MJCI, instead of being only out of an honest mistake.

The procedure to be followed in the termination of employment based on just causes is laid down in Section 2 (d), Rule I of the Implementing Rules of Book VI of the Labor Code, to wit:

Section 2. Security of Tenure. —
x x x x

(d) In all cases of termination of employment, the following standards of due process shall be substantially observed:

For termination of employment based on just causes as defined in Article 282 of the Labor Code:

(i) A written notice served on the employee specifying the ground or grounds for termination, and giving said employee reasonable opportunity within which to explain his side.
(ii) A hearing or conference during which the employee concerned, with the assistance of counsel if he so desires is given opportunity to respond to the charge, present his evidence, or rebut the evidence presented against him.
(iii) A written notice of termination served on the employee, indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination.

In case of termination, the foregoing notices shall be served on the employee’s last known address.

A review of the records warrants a finding that MJCI did not comply with the prescribed procedure.

There is no question that an illegally dismissed employee is entitled to her reinstatement without loss of seniority rights and other privileges, and to full back wages, inclusive of allowances and other benefits or their monetary equivalent.

In case the reinstatement is no longer possible, however, an award of separation pay, in lieu of reinstatement, will be justified. The Court has ruled that reinstatement is no longer possible: (a) when the former position of the illegally dismissed employee no longer exists; or (b) when the employer’s business has closed down; or (c) when the employer-employee relationship has already been strained as to render the reinstatement impossible. The Court likewise considered reinstatement to be non-feasible because a “considerable time” has lapsed between the dismissal and the resolution of the case. In that regard, a lag of eight years or ten years is sufficient to justify an award of separation pay in lieu of reinstatement.

Philippine Journalist vs Journal Employees Union (G.R. No. 192601 June 3, 2013)

Philippine Journalist, Inc vs Journal Employees Union
G.R. No. 192601 June 3, 2013

Facts: The second complainant Michael L. Alfante alleged that he started to work with respondents as computer technician at Management Information System under manager Neri Torrecampo on 16 May 2000; that on 15 July 2001, he was regularized receiving a monthly salary of P9,070.00 plus other monetary benefits; that sometime in 2001, Rico Pagkalinawan replaced Torrecampo, which was opposed by complainant and three other co-employees; that Pagkalinawan took offense of their objection; that on 22 October 2002, complainant Alfante received a memorandum from Pagkalinawan regarding his excessive tardiness; that on 10 June 2003, complainant Alfante received a memorandum from Executive Vice-President Arnold Banares, requiring him to explain his side on the evaluation of his performance submitted by manager Pagkalinawan; that one week after complainant submitted his explanation, he was handed his notice of dismissal on the ground of “poor performance”; and that complainant was dismissed effective 28 July 2003. Complainant Alfante submitted that he was dismissed without just cause. With respect to the alleged non-adjustment of longevity pay and burial aid, respondent PJI pointed out that it complies with the provisions of the CBA and that both complainants have not claimed for the burial aid.

Issue: Whether or not petitioner’s denial of respondents’ claims for funeral and bereavement aid granted under Section 4, Article XIII of their CBA constituted a diminution of benefits in violation of Article 100 of the Labor Code.

Held: Yes. A collective bargaining agreement (or CBA) refers to the negotiated contract between a legitimate labor organization and the employer concerning wages, hours of work and all other terms and conditions of employment in a bargaining unit. As in all contracts, the parties in a CBA may establish such stipulations, clauses, terms and conditions as they may deem convenient provided these are not contrary to law, morals, good customs, public order or public policy. Thus, where the CBA is clear and unambiguous, it becomes the law between the parties and compliance therewith is mandated by the express policy of the law.

Accordingly, the stipulations, clauses, terms and conditions of the CBA, being the law between the parties, must be complied with by them. The literal meaning of the stipulations of the CBA, as with every other contract, control if they are clear and leave no doubt upon the intention of the contracting parties.

It is further worthy to note that petitioner granted claims for funeral and bereavement aid as early as 1999, then issued a memorandum in 2000 to correct its erroneous interpretation of legal dependent under Section 4, Article XIII of the CBA. This notwithstanding, the 2001-2004 CBA35 still contained the same provision granting funeral or bereavement aid in case of the death of a legal dependent of a regular employee without differentiating the legal dependents according to the employee’s civil status as married or single. The continuity in the grant of the funeral and bereavement aid to regular employees for the death of their legal dependents has undoubtedly ripened into a company policy. With that, the denial of Alfante’s qualified claim for such benefit pursuant to Section 4, Article XIII of the CBA violated the law prohibiting the diminution of benefits.

Bordomeo vs CA (G.R. No. 161596 February 20, 2013)

Bordomeo etal vs Court of Appeals
G.R. No. 161596 February 20, 2013

Facts: In 1989, the IPI Employees Union-Associated Labor Union (Union), representing the workers, had a bargaining deadlock with the IPI management. This deadlock resulted in the Union staging a strike and IPI ordering a lockout. On December 26, 1990, after assuming jurisdiction over the dispute, DOLE Secretary Ruben D. Torres rendered hid decision reinstating the illegally dismissed employees with full backwages reckoning from December 8, 1989 and declaring the IPI Employees Union-ALU as the exclusive bargaining agent further directing the parties to enter into a new CBA. A motion for writ of execution was filed. Motion for partial reconsideration was filed by herein petitioners for amendatory/clarifications on the assailed order by DOLE Secretary Torres. Ultimately, on July 4, 2001, DOLE Secretary Patricia Sto. Tomas issued her Order37 affirming the order issued on March 27, 1998, and declaring that the full execution of the order of March 27, 1998 “completely CLOSED and TERMINATED this case.” Only herein petitioners Roberto Bordomeo, Anecito Cupta, Jaime Sarmiento and Virgilio Saragena assailed the July 4, 2001 order of Secretary Sto. Tomas by petition for certiorari in the CA.

Issues: Whether or not the the special civil action of certiorari is the proper remedy for the petitioners.

Whether or not the petitioners are entitled to separation pay and backwages.

Held: No. Even so, Rule 65 of the Rules of Court still requires the petition for certiorari to comply with the following requisites, namely:  (1) the writ of certiorari is directed against a tribunal, a board, or an officer exercising judicial or quasi-judicial functions; (2) such tribunal, board, or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law.

Jurisprudence recognizes certain situations when the extraordinary remedy of certiorari may be deemed proper, such as: (a) when it is necessary to prevent irreparable damages and injury to a party; (b) where the trial judge capriciously and whimsically exercised his judgment; (c) where there may be danger of a failure of justice; (d) where an appeal would be slow, inadequate, and insufficient; (e) where the issue raised is one purely of law; (f) where public interest is involved; and (g) in case of urgency. Yet, a reading of the petition for certiorari and its annexes reveals that the petition does not come under any of the situations. Specifically, the petitioners have not shown that the grant of the writ of certiorari will be necessary to prevent a substantial wrong or to do substantial justice to them.

In a special civil action for certiorari brought against a court with jurisdiction over a case, the petitioner carries the burden to prove that the respondent tribunal committed not a merely reversible error but a grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the impugned order. Showing mere abuse of discretion is not enough, for the abuse must be shown to be grave.  Grave abuse of discretion means either that the judicial or quasi-judicial power was exercised in an arbitrary or despotic manner by reason of passion or personal hostility, or that the respondent judge, tribunal or board evaded a positive duty, or virtually refused to perform the duty enjoined or to act in contemplation of law, such as when such judge, tribunal or board exercising judicial or quasi-judicial powers acted in a capricious or whimsical manner as to be equivalent to lack of jurisdiction. Under the circumstances, the CA committed no abuse of discretion, least of all grave, because its justifications were supported by the history of the dispute and borne out by the applicable laws and jurisprudence.

Yes. Under the circumstances, the employment of the 15 employees or the possibility of their reinstatement terminated by March 15, 1995. Thereafter, their claim for separation pay and backwages beyond March 15, 1995 would be unwarranted. The computation of separation pay and backwages due to illegally dismissed employees should not go beyond the date when they were deemed to have been actually separated from their employment, or beyond the date when their reinstatement was rendered impossible. Anent this, the Court has observed in Golden Ace Builders v. Talde:

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

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

Visayan Stevedore vs Workmen’s Compensation (GR No. L-26657 September 12, 1974)

Visayan Stevedore and Transportation Company vs Workmen’s Compensation Commission
GR No. L-26657 September 12, 1974

Facts: The deceased, employed as engineer by Visayan Stevedore and Transportation Company with a monthly salary of P235 was part of a 3-man over of the tugboat M/TDILIS. His main duty consisted in his starting the engine and seeing to it that it functioned properly during the voyage, with the actual navigation of the tugboat being the responsibility of his 2 other companions the “patron” who controlled the wheel and a helper who operated the rudder. According to Federico Sespene “Patron” of the tugboat when the deceased died, from February 10-17, 1964, they were given to tow barges to the ship and load it with cargoes. They also had to shift or bring barges to dry dock at the company’s compound in Iloilo. Aside from that, their work was to bring the barges from Jordan to Iloilo City, from terminal to the middle of Guimaras and back. As a consequence of this work, they were compelled to stay in the tugboat. On that fatal day of February 17, 1964, they had received various orders and at about 4am of the same day, they were towing barges from the shell wharf to Tabangao, and while they were navigating, Eduardo Libiyo, visibly tired and in active duty asked for permission to take a rest. When the tugboat reach Tabangao, witness Sespene was ordered by Orleans to start towing the barge but when Sespene called Libiyo to start the engine, there was no answer from Libiyo. The quartermaster was the one who responded instead and was the one who ordered to wake up Libiyo, who at the time was already dead. It was about 6:30am of February 17, 1964. A subsequent autopsy report of the deceased’s remains conducted by Dr. Raymund L. Torres, the assistant medico-legal officer of the Iloilo City police department, traced the cause of death of Eduardo as “bangungot.”

Issue: Whether or not the death of Eduardo Libiyo is compensable and is supported by the autopsy report.

Held: Yes. We do not think that the main point pressed by petitioner, namely that death caused by bangungot is not compensable, is at all decisive in the case at bar, what is not denied, and this is crucial in so far as the compensability of Eduardo Libiyo’s death is concerned, is that when death came to the deceased he was in active duty, of as an engineer-employee of the petitioner. This being the case, the need to pinpoint the cause of his death as work-connected in order to render it compensable assumes very little importance. It is to be presumed, under section 44 of the Workmen’s Compensation Act, as amended that the employee’s death, supervening at the time of his employment, either arose out of, or was at least aggravated by said employment. With this legal presumption, the burden of proof shifts to the employer, and the employee is relieved of the burden to show causation. The mere opinion of doctors presented by petitioner as evidence cannot prevail over the presumption established by law.

ITEMCOP vs Flonzo (GR No. L-21969 August 31, 1966)

Industrial Textile Manufacturing Company of the Philippines vs Flonzo
GR No. L-21969 August 31, 1966

Facts: Respondent Sofia Reyes Flonzo is the mother of the deceased Ricardo Flonzo, an employee of petitioner ITEMCOP for a little less than four years up to March 20, 1950 when he died after becoming paralyzed at the age of 25. His job was to replace empty loom beams attached to a weaving machines with fully loaded ones. An empty beam weighs from 15-30 kilos. During an 8-hour period, about 20 t0 30 beams are substituted on a total of 406 machines. Ricardo worked 8 hours a day, 6 days a week. Ricardo fell ill and was diagnosed by the ITEMCOP’s physician, Dr. Alfonso Ayesa  to be thrombocytopenic purpura, idipathic which was later on discovered as cerebral hemorrhage, secondary to blood deporia. When he died, his autopsy findings by Dr. Pedro Solis was anemia, severe, secondary to hemorrhagic gastric ulcer. A claim for Ricardo’s benefits was filed by his mother, Sofia at the Worker’s Compensation Commission.

Issue: Whether or not the death of Ricardo is compensable.

Held: Yes. Flonzo suffered bleeding in the stomach. Dr. Pedro Solis explained that even if the stomach is not empty, the frequent stress brought about by lifting heavy objects might produce an ulcer in the stomach, and this is known in medicine as “stress ulcer.” Further, the effect of continuous work on a person with stomach ulcer, Dr. Solis added is that will aggravate the deceased condition of the stomach, and most likely, it may produce hemorrhage which could be uncontrollable or controllable. There is then reason to believe, as the commission observes, that the continuous exertion of carrying beams during his employment gradually, if imperceptibly, resulted to his illness causing paralyzation of half of his body and ultimately his death.

Agabon vs NLRC (GR No. 158693 November 17, 2004)

Agabon vs National Labor Relations Commission
GR No. 158693 November 17, 2004

Facts: Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling and installing ornamental and construction materials. It employed petitioners Virgilio Agabon and Jenny Agabon as gypsum board and cornice installers on January 2, 1992 until February 23, 1999 when they were dismissed for abandonment of work. Petitioners then filed a complaint for illegal dismissal and payment of money claims and on December 28, 1999, the Labor Arbiter rendered a decision declaring the dismissals illegal and ordered private respondent to pay the monetary claims. It was found out from the investigations that the abandonment from work by the petitioners was because they subcontracted with another company to which they have been remanded before when they  committed the same initially. The petitioners alleged that due process has not been observed.

Issues: Whether or not petitioners dismissal are illegal.

Whether or not they are entitled to pay.

Held: No. To dismiss an employee, the law requires not only the existence of a just and valid cause but also enjoins the employer to give the employee the opportunity to be heard and to defend himself. Article 282 of the Labor Code enumerates the just causes for termination by the employer:

(a) serious misconduct or willful disobedience by the employee of the lawful orders of his employer or the latters representative in connection with the employees work;
(b) gross and habitual neglect by the employee of his duties;
(c) fraud or willful breach by the employee of the trust reposed in him by his employer or his duly authorized representative;
(d) commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and
(e) other causes analogous to the foregoing.

Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. It is a form of neglect of duty, hence, a just cause for termination of employment by the employer. For a valid finding of abandonment, these two factors should be present:

(1) the failure to report for work or absence without valid or justifiable reason; and
(2) a clear intention to sever employer-employee relationship, with the second as the more determinative factor which is manifested by overt acts from which it may be deduced that the employees has no more intention to work.

The intent to discontinue the employment must be shown by clear proof that it was deliberate and unjustified.

Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer must give the employee two written notices and a hearing or opportunity to be heard if requested by the employee before terminating the employment: a notice specifying the grounds for which dismissal is sought a hearing or an opportunity to be heard and after hearing or opportunity to be heard, a notice of the decision to dismiss; and (2) if the dismissal is based on authorized causes under Articles 283 and 284, the employer must give the employee and the Department of Labor and Employment written notices 30 days prior to the effectivity of his separation.

The dismissal should be upheld. While the procedural infirmity cannot be cured, it should not invalidate the dismissal. However, the employer should be held liable for non-compliance with the procedural requirements of due process.

Yes. The rule thus evolved: where the employer had a valid reason to dismiss an employee but did not follow the due process requirement, the dismissal may be upheld but the employer will be penalized to pay an indemnity to the employee. This became known as the Wenphil or Belated Due Process Rule.

An employer is liable to pay indemnity in the form of nominal damages to an employee who has been dismissed if, in effecting such dismissal, the employer fails to comply with the requirements of due process.

The violation of the petitioners right to statutory due process by the private respondent warrants the payment of indemnity in the form of nominal damages. The amount of such damages is addressed to the sound discretion of the court, taking into account the relevant circumstances. Considering the prevailing circumstances in the case at bar, we deem it proper to fix it at P30,000.00. We believe this form of damages would serve to deter employers from future violations of the statutory due process rights of employees. At the very least, it provides a vindication or recognition of this fundamental right granted to the latter under the Labor Code and its Implementing Rules.