7. GLOBE MACKAY CABLE AND RADIO CORPORATION VS.

NATIONAL
LABOR RELATIONS COMMISSION (NLRC)

Facts:

On May 1982, Imelda Salazar was employed by GMCR as general systems analyst. Also
employed by petitioner as manager for technical operations support was Delfin Saldivar with whom
private respondent was allegedly very close. In 1984, GMCR, after being prompted by reports that
company equipment and spare parts worth thousands of dollars under the custody of Saldivar, GMCR
caused the investigation of the latter's activities. According to the report prepared by Mr. Agustin
Maramara, the companys internal auditor, Saldivar had entered into a partnership styled Concave
Commercial and Industrial Company with Richard A. Yambao, owner and manager of Elecon
Engineering Services (Elecon), a supplier of petitioner often recommended by Saldivar. OThe report also
disclosed that Saldivar had taken petitioner's missing Fedders airconditioning unit for his own personal
use without authorization and also connived with Yambao to defraud petitioner of its property.
Maramaras report then stated that Salazar violated company regulations by involving herself in
transactions conflicting with the company's interests. It also appeared that she had full knowledge of the
loss and whereabouts of the Fedders airconditioner but failed to inform her employer. On October 8, 1894
GMCR placed Salazar under preventive suspension for one (1) month, effective October 9, 1984, thus
giving her thirty (30) days within which to explain her side. On October 12- Instead of submitting an
explanation, filed a complaint against petitioner for illegal suspension which she subsequently amended to
include illegal dismissal, vacation and sick leave benefits, 13th month pay and damages.

Issue:

Whether or not she was illegally dismissed.

Held:

She was illegally dismissed. The Court pointed out Art 279 of the Labor Code, which talks about the
Security of tenure for regular employees which states that: xxx An employee who is unjustly dismissed
from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to
his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent xxx

8. PLDT vs NLRC

Facts:

Marilyn Abucay, a traffic operator of the Philippine Long Distance Telephone Company, was accused by
two complainants of having demanded and received from them the total amount of P3,800.00 in
consideration of her promise to facilitate approval of their applications for telephone installation.
Investigated and heard, she was found guilty as charged and accordingly separated from the service. She
went to the Ministry of Labor and Employment claiming she had been illegally removed. Despite of her
being dismissed for cause, (as contended by PLDT) the labor arbiter (from NLRC) in his decision ruled
that the complainant (herein private respondent) must be given one month pay for every year of service as
financial assistance. The labor arbiter finds the same as equitable, taking into consideration her long years
of service to the company whereby she had undoubtedly contributed to the success of the company.
NOTE: Marilyn Abucay had served in the company for 10 years. Thus, she must be awarded 10 months
separation pay for every year of her service.

Issue:

Whether or not the award of separation pay for the private respondent is just

Held:

No. The rule embodied in the Labor Code is that a person dismissed for cause as defined therein is not
entitled to separation pay. The separation pay, when it was considered warranted, was required regardless
of the nature or degree of the ground proved, be it mere inefficiency or something graver like immorality
or dishonesty. Separation pay shall be allowed as a measure of social justice only in those instances where
the employee is validly dismissed for causes other than serious misconduct or those reflecting on his
moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an
offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer
may not be required to give the dismissed employee separation pay, or financial assistance, or whatever
other name it is called, on the ground of social justice. If the employee who steals from the company is
granted separation pay even as he is validly dismissed, it is not unlikely that he will commit a similar
offense in his next employment because he thinks he can expect a like leniency if he is again found out.
This kind of misplaced compassion is not going to do labor in general any good as it will encourage the
infiltration of its ranks by those who do not deserve the protection and concern of the Constitution. Those
who invoke social justice may do so only if their hands are clean and their motives blameless and not
simply because they happen to be poor. We hold that the grant of separation pay in the case at bar is
unjustified. The private respondent has been dismissed for dishonesty, as found by the labor arbiter and
affirmed by the NLRC and as she herself has impliedly admitted. The fact that she has worked with the
PLDT for more than a decade, if it is to be considered at all, should be taken against her as it reflects a
regrettable lack of loyalty that she should have strengthened instead of betraying during all of her 10
years of service with the company. If regarded as a justification for moderating the penalty of dismissal, it
will actually become a prize for disloyalty, perverting the meaning of social justice and undermining the
efforts of labor to cleanse its ranks of all undesirables.

9. Bustamante vs NLRC

FACTS:

Respondent company is engaged in the business of producing high grade bananas in its plantation in
Davao del Norte. Petitioners Paulino Bantayan, Fernando Bustamante, Mario Sumonod and Osmalik
Bustamante were employed as laborers and harvesters while petitioner Sabu Lamaran was employed as a
laborer and sprayer in respondent companys plantation. All the petitioners signed contracts of
employment for a period of six (6) months from 2 January 1990 to 2 July 1990, but they had started
working sometime in September 1989. Previously, they were hired to do the same work for periods
lasting a month or more, from 1985 to 1989. Before the contracts of employment expired on 2 July 1990,
petitioners employments were terminated on 25 June 1990 on the ground of poor performance on
account of age, as not one of them was allegedly below forty (40) years old. Petitioners filed a complaint
for illegal dismissal.

ISSUE:

Whether or not private respondent exercises its power to terminate in good faith so as to make the award
of backwages improper in this case.

RULING:

We do not sustain public respondents theory that private respondent should not be made to compensate
petitioners for backwages because its termination of their employment was not made in bad faith. The act
of hiring and re-hiring the petitioners over a period of time without considering them as regular
employees evidences bad faith on the part of private respondent. The public respondent made a finding to
this effect when it stated that the subsequent rehiring of petitioners on a probationary status clearly
appears to be a convenient subterfuge on the part of management to prevent complainants (petitioners)
from becoming regular employees.

In the case at bar, there is no valid cause for dismissal. The employees (petitioners) have not performed
any act to warrant termination of their employment. Consequently, petitioners are entitled to their
full backwages and other benefits from the time their compensation was withheld from them up to the
time of their actual reinstatement.

10. Rowell Industrial Corp vs CA ( regular employee)

FACTS:
RIC is a corporation engaged in manufacturing tin cans for use in packaging of consumer
products, e.g., foods, paints, among other things. Respondent Taripe was employed by petitioner RIC on
8 November 1999 as a rectangular power press machine operator with a salary of P223.50 per day, until
he was allegedly dismissed from his employment by the petitioner on 6 April 2000.

On 17 February 2000, respondent Taripe filed a complaint against petitioner RIC for regularization and
payment of holiday pay, as well as indemnity for severed finger, which was amended on 7 April 2000 to
include illegal dismissal. Respondent Taripe alleges that RIC employed him starting 8 November 1999 as
power press machine operator, such position of which was occupied by RICs regular employees and the
functions of which were necessary to the latters business. Respondent Taripe adds that upon
employment, he was made to sign a document, which was not explained to him but which was made a
condition for him to be taken in and for which he was not furnished a copy. Respondent Taripe states that
he was not extended full benefits granted under the law and the CBA and that on 6 April 2000, while the
case for regularization was pending, he was summarily dismissed from his job although he never violated
any of the RICs company rules and regulations.

Petitioner RIC, for its part, claims that Taripe was a contractual employee, whose services were required
due to the increase in the demand in packaging requirement of its clients for Christmas season and to
build up stock levels during the early part of the following year; that on 6 March 2000, Taripes
employment contract expired.
Petitioner RIC emphasizes that while an employees status of employment is vested by law pursuant to
Article 280 of the Labor Code, as amended, said provision of law admits of two exceptions, to wit: (1)
those employments which have been fixed for a specific project or undertaking, the completion or
termination of which has been determined at the time of the engagement of the employment; and (2)
when the work or services to be performed are seasonal; hence, the employment is for the duration of the
season. Thus, there are certain forms of employment which entail the performance of usual and desirable
functions and which exceed one year but do not necessarily qualify as regular employment under Article
280 of the Labor Code, as amended.
ISSUE: Whether respondent was a regular employee of petitioner company.

HELD: The SC held that Article 280 of the Labor Code, as amended, classifies employees into three
categories, namely: (1) regular employees or those whose work is necessary or desirable to the usual
business of the employer; (2) project employees or those whose employment has been fixed for a specific
project or undertaking, the completion or termination of which has been determined at the time of the
engagement of the employee or where the work or services to be performed is seasonal in nature and the
employment is for the duration of the season; and (3) casual employees or those who are neither regular
nor project employees.

Regular employees are further classified into: (1) regular employees by nature of work; and (2) regular
employees by years of service. The former refers to those employees who perform a particular activity
which is necessary or desirable in the usual business or trade of the employer, regardless of their length of
service; while the latter refers to those employees who have been performing the job, regardless of the
nature thereof, for at least a year.

The aforesaid Article 280 of the Labor Code, as amended, however, does not proscribe or prohibit an
employment contract with a fixed period. It does not necessarily follow that where the duties of the
employee consist of activities usually necessary or desirable in the usual business of the employer, the
parties are forbidden from agreeing on a period of time for the performance of such activities. There is
nothing essentially contradictory between a definite period of employment and the nature of the
employees duties. What Article 280 of the Labor Code, as amended, seeks to prevent is the practice of
some unscrupulous and covetous employers who wish to circumvent the law that protects lowly workers
from capricious dismissal from their employment. The aforesaid provision, however, should not be
interpreted in such a way as to deprive employers of the right and prerogative to choose their own
workers if they have sufficient basis to refuse an employee a regular status. Management has rights which
should also be protected.

In the case at bar, respondent Taripe signed a contract of employment prior to his admission into the
petitioners company. Based on the said contract, respondent Taripes employment with the petitioner is
good only for a period of five months unless the said contract is renewed by mutual consent. And as
claimed by petitioner RIC, respondent Taripe, along with its other contractual employees, was hired only
to meet the increase in demand for packaging materials during the Christmas season and also to build up
stock levels during the early part of the year.

Although Article 280 of the Labor Code, as amended, does not forbid fixed term employment, it must,
nevertheless, meet any of the following guidelines in order that it cannot be said to circumvent security of
tenure: (1) that the fixed period of employment was knowingly and voluntarily agreed upon by the
parties, without any force, duress or improper pressure being brought to bear upon the employee and
absent any other circumstances vitiating his consent; or (2) it satisfactorily appears that the employer and
employee dealt with each other on more or less equal terms with no moral dominance whatever being
exercised by the former on the latter.
In the present case, it cannot be denied that the employment contract signed by respondent Taripe did not
mention that he was hired only for a specific undertaking, the completion of which had been determined
at the time of his engagement. The said employment contract neither mentioned that respondent Taripes
services were seasonal in nature and that his employment was only for the duration of the Christmas
season as purposely claimed by petitioner RIC. What was stipulated in the said contract was that
respondent Taripes employment was contractual for the period of five months.

Likewise, other than the bare allegations of petitioner RIC that respondent Taripe was hired only because
of the increase in the demand for packaging materials during the Christmas season, petitioner RIC failed
to substantiate such claim with any other evidence. Petitioner RIC did not present any evidence which
might prove that respondent Taripe was employed for a fixed or specific project or that his services were
seasonal in nature.

Also, petitioner RIC failed to controvert the claim of respondent Taripe that he was made to sign the
contract of employment, prepared by petitioner RIC, as a condition for his hiring. Such contract in which
the terms are prepared by only one party and the other party merely affixes his signature signifying his
adhesion thereto is called contract of adhesion. It is an agreement in which the parties bargaining are not
on equal footing, the weaker partys participation being reduced to the alternative to take it or leave it.
In the present case, respondent Taripe, in need of a job, was compelled to agree to the contract, including
the five-month period of employment, just so he could be hired. Hence, it cannot be argued that
respondent Taripe signed the employment contract with a fixed term of five months willingly and with
full knowledge of the impact thereof.

With regard to the second guideline, petitioner RIC and respondent Taripe cannot be said to have dealt
with each other on more or less equal terms with no moral dominance exercised by the former over the
latter. As a power press operator, a rank and file employee, he can hardly be on equal terms with
petitioner RIC. As the Court of Appeals said, almost always, employees agree to any terms of an
employment contract just to get employed considering that it is difficult to find work given their ordinary
qualifications.

Therefore, for failure of petitioner RIC to comply with the necessary guidelines for a valid fixed term
employment contract, it can be safely stated that the aforesaid contract signed by respondent Taripe for a
period of five months was a mere subterfuge to deny to the latter a regular status of employment.

Settled is the rule that the primary standard of determining regular employment is the reasonable
connection between the particular activity performed by the employee in relation to the casual business or
trade of the employer. The connection can be determined by considering the nature of the work performed
and its relation to the scheme of the particular business or trade in its entirety.

Given the foregoing, indeed, respondent Taripe, as a rectangular power press machine operator, in charge
of manufacturing covers for four liters rectangular tin cans, was holding a position which is necessary
and desirable in the usual business or trade of petitioner RIC, which was the manufacture of tin cans.
Therefore, respondent Taripe was a regular employee of petitioner RIC by the nature of work he
performed in the company.

Respondent Taripe does not fall under the exceptions mentioned in Article 280 of the Labor Code, as
amended, because it was not proven by petitioner RIC that he was employed only for a specific project or
undertaking or his employment was merely seasonal. Similarly, the position and function of power press
operator cannot be said to be merely seasonal. Such position cannot be considered as only needed for a
specific project or undertaking because of the very nature of the business of petitioner RIC. Indeed,
respondent Taripe is a regular employee of petitioner RIC and as such, he cannot be dismissed from his
employment unless there is just or authorized cause for his dismissal.

Well-established is the rule that regular employees enjoy security of tenure and they can only be
dismissed for just cause and with due process, notice and hearing. And in case of employees dismissal,
the burden is on the employer to prove that the dismissal was legal. Thus, respondent Taripes summary
dismissal, not being based on any of the just or authorized causes enumerated under Articles 282, 283,
and 284 of the Labor Code, as amended, is illegal.

11. Lambo vs NLRC ( regular employee)

FACTS:

Lambo and Belocura were employed as tailors by J.C. Tailor Shop and/or Johnny Co in 1985. As in the
case of the other 100 employees of private respondents, petitioners were paid on a piece-work basis,
according to the style of suits they made. In 1989, petitioners filed a complaint against private
respondents for illegal dismissal and sought recovery of overtime pay, holiday pay, premium pay on
holiday and rest day, SIL pay, separation pay, 13th month pay, and attorneys fees. After hearing, LA
Gutierrez found private respondents guilty of illegal dismissal and accordingly ordered them to pay
petitioners claims.On appeal, the NLRC reversed the decision of the LA. It found that petitioners had
not been dismissed from employment but merely threatened with a closure of the business if they insisted
on their demand for a straight payment of their minimum wage, after petitioners, in 1989, walked out of
a meeting with private respondents and other employees. According to the NLRC, during that meeting,
the employees voted to maintain the company policy of paying them according to the volume of work
finished. Only petitioners allegedly insisted that they be paid the minimum wage and other benefits. The
NLRC held petitioners guilty of abandonment of work and accordingly dismissed their claims except
that for 13th month pay. Petitioners deny that they abandoned their work.

ISSUE: W/N Lambo and Belocura regular employees?

HELD:

YES. There is no dispute that petitioners were employees of private respondents although they were paid
not on the basis of time spent on the job but according to the quantity and the quality of work produced by
them. There are two categories of employees paid by results:

(A) those whose time and performance are supervised by the employer.

(Here, there is an element of control and supervision over the manner as to how the work is to be
performed. A piece-rate worker belongs to this category especially if he performs his work in the
company premises.); and

(B) those whose time and performance are unsupervised.

(Here, the employers control is over the RESULT of the work. Workers on pakyao and takay basis
belong to this group.)
Both classes of workers are paid per unit accomplished. Piece-rate payment is generally practiced in
garment factories where work is done in the company premises, while payment on pakyao and takay basis
is commonly observed in the agricultural industry, such as in sugar plantations where the work is
performed in bulk or in volumes difficult to quantify. Petitioners belong to the first category, i.e.,
supervised employees.

In this case, private respondents exercised control over the work of petitioners. As tailors, petitioners
worked in the companys premises from 8:00 a.m. to 7:00 p.m. daily, including Sundays and holidays.
The mere fact that they were paid on a piece-rate basis does not negate their status as regular employees
of private respondents. Payment by the piece is just a method of compensation and does not define the
essence of the relations. Nor does the fact that petitioners are not covered by the SSS affect the employer-
employee relationship.

Indeed, the following factors show that petitioners, although piece-rate workers, were regular employees
of private respondents:

(1) within the contemplation of Art. 280 of the Labor Code, their work as tailors was necessary or
desirable in the usual business of private respondents, which is engaged in the tailoring business;

(2) petitioners worked for private respondents throughout the year, their employment not being dependent
on a specific project or season; and,

(3) petitioners worked for private respondents for more than one year

12. San Miguel Corp vs NLRC ( project employee)

Facts:

November 1990, private respondent was hired by petitioner as helper/bricklayer for a specific
project, the repair and upgrading of furnace C at its Manila Glass Plant. His contract of employment
provided that said temporary employment was for a specific period of approximately four (4) months.
On April 30, 1991, private respondent was able to complete the repair and upgrading fo furnace C. Thus,
his services were terminated on that same day as there was no more work to be done. His employment
contract also ended that day.
On May 10, 1991, private respondent was again hired for a specific job or undertaking, which involved
the draining/cooling down of fuenace F and the emergency repair of furnace E. This project was for a
specific period of approximately three (3) months.
After the complesion of this task, namely the draining/cooling down of furnace F and the emergency
repair of furnace E, at the end of July 1991, private respondent's services were terminated.
On August 1, 1991, complainant saw his name in a Memorandum posted at the Company's Bulletin Board
as among those who were considered dismissed. On August 12, 1994, or after the lapse of more than
three (3) years from the completion of the last undertaking for which private respondent wa hired, private
respondent filed a complaint for illegal dismissal against petitioner.

Issue:
w/n respondent is project employee
Held:
 Yes. Clearly, private respondent was hired for a specific project that was not within the regular
business of the corporation. For petitioner is not engaged in the business of repairing furnaces. Although
the activity was necessary to enable petitioner to continue manufacturing glass, the necessity therefore
arose only when a particular furnace reached the end of its life or operating cycle. Or, as on the second
undertaking, when a particular furnace required an emergency repair. In other words, the undertakings
where private respondent was hired primarily as helper/bricklayer have specified goals and purpose which
are fulfilled once the designated work was completed. Moreover, such undertakings were also identifiably
separate and distinct from the usual, ordinary or regular business operations of petitioner, which is glass
manufacturing. These undertakings, the duration and scope of which had been determined and made
known to private respondent at the time of his employment clearly indicated the nature of his employment
as a project employee. Thus, his services were terminated legally after the completion of the project.

13. Cartagenas vs romago electric company ( project employee)

Facts:
Respondent Romago is a general contractor engaged in contracting and sub-contracting of specific
building construction projects or undertaking such as electrical, mechanical and civil engineering aspects
in the repair of buildings and from other kindred services. Individual complainants are employed by the
respondent in connection with particular construction projects. Effective July 12,1986, individual
complainants and Lawrence Deguit were temporarily laid-off by virtue of a memorandum issued by the
respondent. In said memorandum they were also informed that a meeting regarding the resumption of
operation will be held on July 16, 1986 and that they will be notified as to when they will resume work.

On July 28, 1986, complainants filed the instant case for illegal dismissal but before the
respondent could receive a copy of the complaint and the notification and summons issued by the NLRC
National Capital Region, individual complainants re-applied with the respondent and were assigned to
work with its project at Robinson-EDSA. Respondent introduced documentary exhibits that the
complainant have invariably been issued appointment from project to projects and were issued notice of
temporary lay-off when the PNB Finance Center project was suspended due to lack of funds and that
when work was available particularly respondent's project at Robinson-EDSA they were rehired and
assigned to this project

Issue:
W/N petitioners are project employees
Held:
Yes. As an electrical contractor, the private respondent depends for its business on the contracts it
is able to obtain from real estate developers and builders of buildings. Since its work depends on the
availability of such contracts or "projects," necessarily the duration of the employment of its work force is
not permanent but co-terminus with the projects to which they are assigned and from whose payrolls they
are paid. It would be extremely burdensome for their employer who, like them, depends on the
availability of projects, if it would have to carry them as permanent employees and pay them wages even
if there are no projects for them to work on. We hold, therefore, that the NLRC did not abuse its
discretion in finding, based on substantial evidence in the records, that the petitioners are only project
workers of the private respondent.

14. Mercado vs NLRC (seasonal employees)

Facts:
Petitioners were agricultural workers of the private respondent's sugar land who were dismissed.
They had worked in all agriculture phases for several years in the said sugar land. The respondent denied
that petitioners were regular employees alleging that their services were engaged through 'mandarols' or
supply workers to do a particular phase of the agricultural work.

As a result, the petitioners filed a complaint for illegal dismissal. The Labor Arbiter held that the
petitioners were not regular employees and the NLRC affirmed this ruling.

Issue: W/N the petitioners are regular and permanent farm workers

RULING: No, they are project/seasonal employees. A project employee is one whose employment has
been fixed for a specific project or undertaking, the completion has been determined at the time of
engagement, or where work or service is seasonal in nature and employment is for the duration of the
season.

As such, the termination of employment cannot be considered as illegal dismissal. The petitioners are free
to contract their services to work for other farm owners.

15. Brent School vs Zamora ( employment with fixed period)

FACTS:

Private respondent Doroteo R. Alegre was engaged as athletic director by petitioner Brent School, Inc. at
a yearly compensation of P20,000.00. The contract fixed a specific term for its existence, five (5) years,
i.e., from July 18, 1971, the date of execution of the agreement, to July 17, 1976. Subsequent subsidiary
agreements dated March 15, 1973, August 28, 1973, and September 14, 1974 reiterated the same terms
and conditions, including the expiry date, as those contained in the original contract of July 18, 1971.

On April 20,1976, Alegre was given a copy of the report filed by Brent School with the Department of
Labor advising of the termination of his services effective on July 16, 1976. The stated ground for the
termination was "completion of contract, expiration of the definite period of employment." Although
protesting the announced termination stating that his services were necessary and desirable in the usual
business of his employer, and his employment lasted for 5 years - therefore he had acquired the status of
regular employee - Alegre accepted the amount of P3,177.71, and signed a receipt therefor containing the
phrase, "in full payment of services for the period May 16, to July 17, 1976 as full payment of contract."

The Regional Director considered Brent School's report as an application for clearance to terminate
employment (not a report of termination), and accepting the recommendation of the Labor Conciliator,
refused to give such clearance and instead required the reinstatement of Alegre, as a "permanent
employee," to his former position without loss of seniority rights and with full back wages.

ISSUE:

Whether or not the provisions of the Labor Code, as amended, have anathematized "fixed period
employment" or employment for a term.

RULING:

Respondent Alegre's contract of employment with Brent School having lawfully terminated with and by
reason of the expiration of the agreed term of period thereof, he is declared not entitled to reinstatement.

The employment contract between Brent School and Alegre was executed on July 18, 1971, at a time
when the Labor Code of the Philippines (P.D. 442) had not yet been promulgated. At that time, the
validity of term employment was impliedly recognized by the Termination Pay Law, R.A. 1052, as
amended by R.A. 1787. Prior, thereto, it was the Code of Commerce (Article 302) which governed
employment without a fixed period, and also implicitly acknowledged the propriety of employment with a
fixed period. The Civil Code of the Philippines, which was approved on June 18, 1949 and became
effective on August 30,1950, itself deals with obligations with a period. No prohibition against term-or
fixed-period employment is contained in any of its articles or is otherwise deducible therefrom.

It is plain then that when the employment contract was signed between Brent School and Alegre, it was
perfectly legitimate for them to include in it a stipulation fixing the duration thereof Stipulations for a
term were explicitly recognized as valid by this Court.

The status of legitimacy continued to be enjoyed by fixed-period employment contracts under the Labor
Code (PD 442), which went into effect on November 1, 1974. The Code contained explicit references to
fixed period employment, or employment with a fixed or definite period. Nevertheless, obscuration of the
principle of licitness of term employment began to take place at about this time.

Article 320 originally stated that the "termination of employment of probationary employees and those
employed WITH A FIXED PERIOD shall be subject to such regulations as the Secretary of Labor may
prescribe." Article 321 prescribed the just causes for which an employer could terminate "an employment
without a definite period." And Article 319 undertook to define "employment without a fixed period" in
the following manner: where the employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer, except where the employment has
been fixed for a specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or service to be performed
is seasonal in nature and the employment is for the duration of the season.

Subsequently, the foregoing articles regarding employment with "a definite period" and "regular"
employment were amended by Presidential Decree No. 850, effective December 16, 1975.

Article 320, dealing with "Probationary and fixed period employment," was altered by eliminating the
reference to persons "employed with a fixed period," and was renumbered (becoming Article 271).

As it is evident that Article 280 of the Labor Code, under a narrow and literal interpretation, not only fails
to exhaust the gamut of employment contracts to which the lack of a fixed period would be an anomaly,
but would also appear to restrict, without reasonable distinctions, the right of an employee to freely
stipulate with his employer the duration of his engagement, it logically follows that such a literal
interpretation should be eschewed or avoided. The law must be given a reasonable interpretation, to
preclude absurdity in its application. Outlawing the whole concept of term employment and subverting to
boot the principle of freedom of contract to remedy the evil of employer's using it as a means to prevent
their employees from obtaining security of tenure is like cutting off the nose to spite the face or, more
relevantly, curing a headache by lopping off the head.

Such interpretation puts the seal on Bibiso upon the effect of the expiry of an agreed period of
employment as still good rulea rule reaffirmed in the recent case of Escudero vs. Office of the President
where, in the fairly analogous case of a teacher being served by her school a notice of termination
following the expiration of the last of three successive fixed-term employment contracts, the Court held:
Reyes (the teacher's) argument is not persuasive. It loses sight of the fact that her employment was
probationary, contractual in nature, and one with a definitive period. At the expiration of the period
stipulated in the contract, her appointment was deemed terminated and the letter informing her of the non-
renewal of her contract is not a condition sine qua non before Reyes may be deemed to have ceased in the
employ of petitioner UST. The notice is a mere reminder that Reyes' contract of employment was due to
expire and that the contract would no longer be renewed. It is not a letter of termination.
Paraphrasing Escudero, respondent Alegre's employment was terminated upon the
expiration of his last contract with Brent School on July 16, 1976 without the necessity of any notice. The
advance written advice given the Department of Labor with copy to said petitioner was a mere reminder
of the impending expiration of his contract, not a letter of termination, nor an application for clearance to
terminate which needed the approval of the Department of Labor to make the termination of his services
effective. In any case, such clearance should properly have been given, not denied.

16. Philippine Village Hotel vs NLRC (employment with fixed period)

Facts:
Private respondents were employees of petitioner Philippine Village Hotel. However, on May 19,
1986, petitioner had to close and totally discontinue its operations due to serious financial and business
reverses resulting in the termination of the services of its employees.
Thereafter, the Philippine Village Hotel Employees and Workers Union filed against petitioner a
complaint for separation pay, unfair labor practice and illegal lock-out.
On May 27, 1987, the Labor Arbiter issued and Order finding the losses suffered by petitioner to be
actual, genuine and of such magnitude as to validly terminate the services of private respondents but
directed petitioner "to give priority to the complainants (herein private respondents) in [the] hiring of
personnel should they resume their business operations in the future. On appeal, the NLRC affirmed the
validity of the closure of petitioner but ordered petitioner to pay private respondent separation pay at the
rate of 1/2 month pay every year of service. However, there is nothing in the records to show that private
respondents received their separation pay as the decision of the NLRC remained unenforced as of this
date. On February 1, 1989, petitioner decided to have a one (1) month dry-run operation to ascertain the
feasibility of resuming its business operations. In order to carry out its dry-run operation, petitioner hired
casual workers, including private respondents, for a one (1) month period, or from February 1, 1989 to
March 1, 1989, as evidenced by the latter's Contract of Employment. After evaluating the individual
performance of all the employees and upon the lapse of the contractual one-month period or on March 2,
1989, petitioner terminated the services of private respondents. On April 6, 1989, private respondents and
Tupas Local Chapter No. 1362 filed a complaint against petitioner for illegal dismissal and unfair labor
practice.

Issue:
W/N respondents are validly terminated.

Ruling:
Yes. Private respondents were validly terminated by the petitioner when the latter had to close its
business due to financial losses. Following the directives of the NLRC to give priority in hiring private
respondents should it resume its business, petitioner hired private respondents during their one (1) month
dry-run operation. However, this does not mean that private respondents were deemed to have continued
their regular employment status, which they had enjoyed before their aforementioned termination due to
petitioner's financial losses. Inasmuch as private respondents' contracts of employment categorically
provided a fixed period and their termination had already been agreed upon at the time of their
engagement, private respondents' employment was one with a specific period or day certain agreed upon
by the parties
18. Agabon vs NLRC ( existence of just cause)
FACTS:

Petitioners were employed by Riviera Home as gypsum board and cornice installers from January 1992 to
February 23, 1999 when they were dismissed for abandonment of work. Petitioners filed a complaint for
illegal dismissal and was decided in their favor by the Labor Arbiter. Riviera appealed to the NLRC
contending just cause for the dismissal because of petitioners abandonment of work. NLRC ruled there
was just cause and petitioners were not entitled to backwages and separation pay. The CA in turn ruled
that the dismissal was not illegal because they have abandoned their work but ordered the payment of
money claims.

ISSUE:
Whether or not petitioners were illegally dismissed.

RULING:

To dismiss an employee, the law required not only the existence of a just and valid cause but also enjoins
the employer to give the employee the right to be heard and to defend himself. Abandonment is the
deliberate and unjustified refusal of an employee to resume his employment. For a valid finding or
abandonment, two factors are considered: failure to report for work without a valid reason; and, 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.

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 Doctrine of the Belated Due process Rule.

19. JAKA Food processing vs Pacot ( absence)

FACTS:
Respondents were hired by JAKA until their termination on August 29, 1997 because the Corporation
was in dire financial straits. It was not disputed that they were terminated without complying with the
requirement under Art. 283 of the Labor Code regarding the service of notice upon the employees and
DOLE at least one month before the intended date of termination.
ISSUE:
Whether or not full backwages and separation pay be awarded to respondents when employers effected
termination without complying with the twin notice rule.

RULING:
The dismissal of the respondents was for an authorized cause under Article 283. A dismissal for
authorized cause does not necessarily imply delinquency or culpability on the part of the employee.
Instead, the dismissal process is initiated by the employers exercise of his management prerogative, i.e.
when the employer opts to install labor-saving devices, when he decides to cease business operations or
when he undertakes to implement a retrenchment program.

Accordingly, it is wise to hold that:

1) if the dismissal is based on a just cause but the employer failed to comply with the notice requirement,
the sanction to be imposed upon him should be tempered because the dismissal was initiate by an act
imputable to the employee.
2) if the dismissal is based on an authorized cause but the employer fails to comply with the notice
requirement, the sanction should be stiffer because the dismissal process was initiated by the employers
exercise of his management prerogative. Thus, dismissal was upheld but ordered JAKA to pay each of the
respondents the amount of PhP 50,000.00 representing nominal damages for non-compliance with
statutory due process.

20. Hacienda Fatima vs National Federation ( seasonal workers)

Facts:
The petitioner disfavored the fact that the private respondent employees have formed a union. When the
union became the collective bargaining representative in the certification election, the petitioner refused
to sit down to negotiate a CBA. Moreover, the respondents were not given work for a month amounting
to unjustified dismissal. As a result, the complainants staged a strike to protest but was settled through a
memorandum of agreement which contained a list of those considered as regular employees for the
payroll.

The NLRC held that there was illegal dismissal and this was affirmed by the Court of Appeals.

Issue: W/N the employees are regular workers

RULING: Yes, they are regular and not seasonal employees. For them to be excluded as regulars, it is
not enough that they perform work that is seasonal in nature but they also are employed for the duration
of one season. The evidence only proved the first but not the second requirement.

The ruling in Mercado v. NLRC is not applicable since in that case, the workers were merely required to
perform phases of agricultural work for a definite period of time, after which, their services are available
to other employers. The management's sudden change of assignment reeks of bad faith, it is likewise
guilty of ULP.

21. Abasolo v. NLRC (seasonal workers)

Facts:
1. The private respondent La Union Tobacco (Lutorco), owned by See Lun Chan is engaged in
buying/processing of tobacco and its by-products. The petitioners worked in respondent company but
work was interrupted when Tabacalera took over the Lutorco operations due to alleged losses. Aggrieved,
the petitioners filed a complaint for separation pay and dismissal. The respondent contended that it is
exempt from payment of separation pay and denied that there was termination of employees' services.

2. The Labor Arbiter dismissed the complaint and held that the petitioners are not entitled to separation
benefits since Lutorco ceased operations due to serious business losses. The NLRC affirmed said ruling.

Issue: W/N the petitioners are seasonal workers

RULING: No, the petitioners are considered regular and seasonal employees. They performed services
necessary and indispensable to Lutorco's business. The nature of one's employment does not depend
solely on the will or word of the employer nor on the procedure of hiring and manner of designating the
employee but on the nature of the activity to be performed considering the employer's nature of business
and the duration and scope of work to be done.
As held in previous decisions, seasonal workers are those who are called to work from time to time and
are temporarily laid off during off-season are not separated from service in said period but merely
considered on-leave until re-employed.

22. UST vs NLRC (seasonal worker)

Facts:
UST terminated the employment of 16 union officers and directors of UST Faculty Union for grave
misconduct, serious disrespect to a superior and conduct unbecoming a faculty member on the ground that
"in publishing or causing to be published in Strike Bulletin No. 5 the libelous and defamatory attacks
against the Father Rector. Some faculty members staged mass leaves of absence disrupting classes in all
levels at the University. The faculty union filed a complaint for illegal dismissal and unfair labor practice
with the DOLE. The labor arbiter, on a prima facie showing that the termination was causing a serious
labor dispute, certified the matter to the Secretary of DOLE for a possible suspension of the effects of
termination. Secretary Franklin Drilon issued an order to accept the 16 terminated employess back to
work under the same terms and conditions prevailing prior to their dismissal in the interest of industrial
peace. Secretary Drilon issued another order which certifies the labor dispute to the NLRC for
compulsory arbitration. NLRC issued a resolution directing UST to comply and faithfully abide with the
Orders of the Secretary Drilon by immediately reinstating or readmitting the 16 faculty members under
the same terms and conditions prevailing prior to the present dispute or merely reinstate them in the
payroll. UST states that it has already actually reinstated 6 of the dismissed faculty members; As to 2
professors whose teaching assignments were partially taken over by new faculty members, they were
given back their remaining teaching loads (not taken by new faculty members) but were given
substantially equivalent academic assignments corresponding to their teachings loads already taken over
by new faculty members; The remaining 7 faculty members were given substantially equivalent academic
assignments in lieu of actual teaching loads because all of their teaching loads originally assigned to them
at the start of the first semester were already taken over by new faculty members; 1 dismissed faculty had
been "absent without official leave" or AWOL. SC issued a TRO enjoining NLRC from enforcing or
executing the NLRC resolution. UST argues that actual reinstatement of the dismissed faculty members
whose teaching assignments were previously taken over by new faculty members is not feasible nor
practicable since this would compel UST to violate and terminate its contracts with the faculty members
who were assigned to and had actually taken over the courses. UST claims that to change the faculty
member when the semester is about to end would seriously impair and prejudice the welfare and interest
of the students because dislocation, confusion and loss in momentum, if not demoralization will surely
ensue. UST contended that it has the sole and exclusive right and prerogative to determine the nature and
kind of work of its employees and to control and manage its own operations.

Issue:
May UST comply with the NLRC readmission order by granting substantially equivalent academic
assignments, in lieu of actual reinstatement, to dismissed faculty members?

Ruling:
The grant of substantially equivalent academic assignments would evidently alter the existing status quo
since the temporarily reinstated teachers will not be given their usual teaching loads. pending adjudication
of the controversy. To the extent that Art. The giving of substantially equivalent academic assignments.
The contracts of new professors cannot prevail over the right to reinstatement of the dismissed personnel.
. As the implementing body. Pursuant to Article 263 (g).No. firing. demotion and promotion of
employees are traditionally identified as management prerogatives. transfer. of the Labor Code. a
collective bargaining agreement. cannot be considered a reinstatement under the same terms and
conditions prevailing before the strike. these are not absolute prerogatives. The actual reinstatement of the
non-reinstated faculty members may take effect at the start of the second semester. 263(g) calls for the
admission of all workers under the same terms and conditions prevailing before the strike. The hiring.
Such error is merely an error of judgment which is not correctible by a special civil action for certiorari.
The first semester is about to end and to change the faculty members around the time of final
examinations would adversely affect and prejudice the students whose welfare and interest we consider to
be of primordial importance and for whom both the University and the faculty union must subordinate
their claims and desires. It therefore erred in granting the alternative remedy of payroll reinstatement.
They are subject to limitations found in law. The order of NLRC did not amount to grave abuse of
discretion. 1st paragraph. However. the NLRC should have directed the actual reinstatement of the
concerned faculty members. without actual teaching loads. Article 263(g) was devised to maintain the
status quo between the workers and management in a labor dispute causing or likely to cause a strike or
lockout in an industry indispensable to the national interest. as amended by Section 27 of RA 6715. UST
is restricted from exercising its generally unbounded right to transfer or reassign its employees. Article
263(g) is one such limitation provided by law. The NLRC was only trying its best to work out a
satisfactory ad hoc solution to a festering and serious problem. or general principles of fair play and
justice. its authority did not include the power to amend the Secretary's order. Since the Secretary's order
specifically provided that the dismissed faculty members shall be readmitted under the same terms and
conditions prevailing prior to the present dispute. the NLRC was charged with the task of implementing a
valid return-to-work order of the Secretary of Labor. The phrase "under the same terms and conditions"
contemplates actual reinstatement or the return of actual teaching loads to the dismissed faculty members.
Petition is denied. The grant of substantially equivalent academic assignments cannot be sustained.

23. Cadiz vs Brent Hospital

Facts:
Cadiz was the Human Resource Officer of respondent Brent Hospital and Colleges, Inc. (Brent) at the
time of her indefinite suspension from employment in 2006. The cause of suspension was Cadiz's
Unprofessionalism and Unethical Behavior Resulting to Unwed Pregnancy. It appears that Cadiz became
pregnant out of wedlock, and Brent imposed the suspension until such time that she marries her boyfriend
in accordance with law. Cadiz then filed with the Labor Arbiter (LA) a complaint for Unfair Labor
Practice, Constructive Dismissal, Non-Payment of Wages and Damages with prayer for Reinstatement

Issue:
W/N immorality is just cause for termination.

Ruling:
No. Statutory law is replete with legislation protecting labor and promoting equal opportunity in
employment. No less than the 1987 Constitution mandates that the "State shall afford full protection to
labor, local and overseas, organized and unorganized, and promote full employment and equality of
employment opportunities for all. With particular regard to women, Republic Act No. 9710 or the Magna
Carta of Women protects women against discrimination in all matters relating to marriage and family
relations, including the right to choose freely a spouse and to enter into marriage only with their free
and full consent. Weighed against these safeguards, it becomes apparent that Brent's condition is
coercive, oppressive and discriminatory. There is no rhyme or reason for it. It forces Cadiz to marry for
economic reasons and deprives her of the freedom to choose her status, which is a privilege that inheres in
her as an intangible and inalienable right.53 While a marriage or no-marriage qualification may be
justified as a "bona fide occupational qualification," Brent must prove two factors necessitating its
imposition, viz: (1) that the employment qualification is reasonably related to the essential operation of
the job involved; and (2) that there is a factual basis for believing that all or substantially all persons
meeting the qualification would be unable to properly perform the duties of the job.54 Brent has not
shown the presence of neither of these factors. Perforce, the Court cannot uphold the validity of said
condition.
Given the foregoing, Cadiz, therefore, is entitled to reinstatement without loss of seniority rights, and
payment of backwages computed from the time compensation was withheld up to the date of actual
reinstatement. Where reinstatement is no longer viable as an option, separation pay should be awarded as
an alternative and as a form of financial assistance

24. INTERNATIONAL RICE RESEARCH INSTITUTE vs Nlrc

Facts:
On February 6, 1967, Micosa stabbed to death one Reynaldo Ortega inside a beer house in Los Baos,
Laguna.
On September 15, 1987, Micosa was accused of the crime of homicide. During the pendency of the
criminal case, Micosa voluntarily applied for inclusion in IRRI's Special Separation Program. However,
on January 9, 1990, IRRI's Director General, Klaus L. Lampe expressed deep regret that he had to
disapprove Micosa's application for separation because of IRRI's desire to retain the skills and talents that
persons like him possess. 2
On January 23, 1990, the trial court rendered a decision fending Micosa guilty of homicide, but
appreciating, however, in his favor the presence of the mitigating circumstances of (a) incomplete self-
defense and (b) voluntary surrender, plus the total absence of any aggravating circumstance.
Subsequently, Micosa applied for suspension of his sentence under the Probation Law.
On February 8, 1990, IRRI's Director General personally wrote Micosa that his appointment as laborer
was confirmed, making him a regular core employee whose appointment was for an indefinite period and
who "may not be terminated except for justifiable causes as defined by the pertinent provisions of the
Philippine Labor Code. On March 30, 1990, IRRI's Human Resource Development Head, J.K. Pascual
wrote Micosa urging him to resign from employment in view of his conviction in the case for homicide.
On April 4, 1990, the Laguna Parole and Probation Office No. II wrote IRRI informing the latter that said
office found Micosa's application for probation meritorious as he was evaluated "to possess desirable
social antecedents in his life." On April 6, 1990, Micosa informed J.K. Pascual that he had no intention of
resigning from his job at IRRI. On April 22, 1990, J. K. Pascual replied to Micosa's letter insisting that
the crime for which he was convicted involves moral turpitude and informing him that he is thereby
charged of violating Section I-AA, Par VII, C-2 of the Institute's Personnel Manual. On April 27, 1990,
Micosa explained to J.K. Pascual that the slaying of Reynaldo Ortega on February 6, 1987 arose out of his
act of defending himself from unlawful aggression; that his conviction did not involve moral turpitude
and that he opted not to appeal his conviction so that he could avail of the benefits of probation, which the
trial court granted to him. On May 7, 1990, Micosa sought the assistance of IRRI's Grievance Committee
who recommended to the Director General, his continued employment. However, on May 21, 1990, J.K.
Pascual issued a notice to Micosa that the latter's employment was to terminate effective May 25, 1990.
On May 29, 1990, Micosa filed a case for illegal dismissal.

Issue:
W/N conviction of a crime involving moral turpitude is just cause for termination.

Ruling:
No. In the case at bar, the commission of the crime of homicide was outside the perimeter of the IRRI
complex, having been committed in a restaurant after office hours and against a non-IRRI employee.
Thus, the conviction of Micosa for homicide was not work-related, his misdeed having no relation to his
position as laborer and was not directed or committed against IRRI or its authorized agent. Besides, IRRI
failed to show how the dismissal of Micosa would be in consideration of the safety and welfare of its
employees, its reputation and standing in the community and its special obligations to its host country. It
did not present evidence to show that Micosa possessed a tendency to kill without provocation or that he
posed a clear and present danger to the company and its personnel. On the contrary, the records reveal
that Micosa's service record is unblemished. There is no record whatsoever that he was involved in any
incident similar to that which transpired on that fateful night of February 6, 1987. In fact, even after his
conviction, the IRRI's Director General expressed his confidence in him when he disapproved his
application for special separation in a letter dated January 8, 1990 and when he conveyed to him IRRI's
decision to promote him to the status of a regular core employee, with the commensurate increases in
benefits in a letter dated February 1990

25. Guerrero vs NLRC

FACTS:
This is an original action for certiorari under Rule 65 of the Revised Rules of Court to annul the Decision
of respondent National Labor Relations Commission (NLRC)[1] dismissing petitioners' complaints for
illegal dismissal against R.O.H. Auto Products Phils., Inc. and its president, Goeff Kemp.
The petitioners are former employees of respondent R.O.H. Auto Products Phils., Inc., a corporation
engaged in the manufacture of automotive steel wheels.
On March 24, 1992, members of the union in respondent company went on strike. The petitioners,
however, did not participate in the strike.
Respondent company allegedly sustained huge losses as the strike virtually paralyzed its operations. To
prevent further losses, respondent proposed on April 22, 1992 to the non-striking employees a "financial
assistance" in exchange for their resignation. Respondent company, nevertheless, assured them priority in
hiring when positions of equal stature and compensation become available.
On April 24, 1992, the petitioners availed of respondent company's offer. They signed individual Quit
Claim and Release deeds upon receipt of their separation pay.
On May 3, 1992, the strike ended. The operations in respondent company resumed and all the striking
employees returned to their posts. The petitioners offered to re-assume their former positions but
respondent company refused to admit them. They filed separate complaints for illegal dismissal.

Issue:
W/N petitioners were illegally dismissed.

Ruling:
Yes. The respondent company did not satisfy the legal requirements for valid retrenchment.
First, respondent company did not present sufficient evidence to prove the extent of its losses. To justify
the employees' termination of service, the losses must be serious, actual and real, and they must be
supported by sufficient and convincing evidence.[5] The burden of proof rests on the employer.[6]
Respondent company alleged that the strike paralyzed its operations and resulted in the withdrawal of its
clients' orders. Respondent company, however, failed to prove its claim with competent evidence which
would show that it was indeed suffering from business losses so serious as would necessitate
retrenchment or reduction of personnel. Lastly but certainly not the least important, alleged losses if
already realized, and the expected imminent losses sought to be forestalled, must be proved by sufficient
and convincing evidence. The reason for requiring this quantum of proof is readily apparent: any
less exacting standard of proof would render too easy the abuse of this ground for termination of
services of employees.

26. MAC ADAMS METAL ENGINEERING WORKERS UNION-INDEPENDENT vs. MAC

ADAMS METAL ENGINEERING

Facts:
The present controversy stemmed from two separate complaints: the first complaint, filed on
November 9, 1993 by petitioner MAMEWU and its president, petitioner Mario A. Garcia, for and in
behalf of 29 other petitioners, charged private respondents MAME and GBS with unfair labor practices
(ULP) committed through union busting and illegal closure, and illegal dismissal. The second complaint,
filed on November 9, 1993 by the last eight petitioners led by Halim Roldan, alleged that aside from ULP
and illegal dismissal, private respondents were likewise liable for non-payment of premium pay for
holidays and rest days, night differential pay and 13th month pay.
Insisting that the closure of MAME and GBS was illegal as it was calculated to bust their union,
petitioners claimed that MAME and GBS continued doing business under new business names, i.e., MBS
Machine and Industrial Supply (MBS) and MVS Heavy Equipment Rental and Builders (MVS). Thus,
MBS and MVS were impleaded as respondents in the complaint for allegedly being run-away shops of
MAME and GBS.
In both complaints, petitioners prayed for alternative reliefs for reinstatement with backwages and/or
separation pay.
In their answer, private respondent spouses Geronimo and Lydia V. Sison, proprietors of GBS and
MAME respectively, denied petitioners allegations. Explaining the closure of MAME and GBS, private
respondents narrated that respondent Lydia V. Sison decided to retire from business when she became
sickly in 1988. Her health did not improve despite proper medical attention. In the general meeting of the
workers held sometime in July 1992, she announced her plan to close shop effective early 1993. The
announcement in advance was intended to give the workers ample time to look for alternative
employment. Accordingly, she declined to accept new projects and proceeded with the winding up of her
business. Private respondent Dominic Sison, son of private respondent spouses Geronimo and Lydia V.
Sison, claimed that he was the sole proprietor of MVS. He denied that MVS was a run-away shop of his
parents. On the contrary, MVS was a legitimate business outfit engaged in leasing out heavy equipment.
With an initial capital of P 1M, MVS used to rent from respondent MAME some of its heavy equipment
which MVS, in turn, offered for lease to others. Sometime in May 1994, respondent Dominic Sison
obtained an P 8M loan from the PNB and, with the fresh capital, he branched out into the construction
business. Hence, MVS was an entirely separate and distinct business entity with a capital of its own,
completely different personnel complement, equipment, machineries and implements, and whose clients
were different from those of MAME and GBS.

Issue:
W/N petitioners were illegally dismissed

Ruling:

No. Explicit from the above provision is that closure or cessation of business operations is allowed even
if the business is not undergoing economic losses. The owner, for any bona fide reason, can lawfully close
shop at anytime. Just as no law forces anyone to go into business, no law can compel anybody to continue
in it. It would indeed be stretching the intent and spirit of the law if we were to unjustly interfere with the
managements prerogative to close or cease its business operations just because said business operation or
undertaking is not suffering from any loss[5] or simply to provide the workers continued employment.
The employer need only comply with the following requirements for a valid cessation of business
operations. (a) service of a written notice to the employees and to the DOLE at least one month before the
intended date thereof; (b) the cessation of or withdrawal from business operations must be bona fide in
character and (c) payment of termination pay equivalent to at least one-half month pay for each year of
service, or one month pay, whichever is higher.
The records reveal that private respondents complied with the aforecited requirements. MAMEs
employees were adequately informed of the intended business closure and a written notice to the Regional
Director of the Department of Labor and Employment (DOLE) was filed by private respondents,
informing the DOLE that except for winding-up operations, MAME will be closed effective March 8,
1993. Similar notices were served by Lydia V. Sison to the Social Security System (SSS), Bureau of
Internal Revenue (BIR), Department of Trade and Industry (DTI) and the Municipal Licensing Division
of Antipolo, Rizal. Thus, the licenses and registration of respondent MAME with the SSS, the
Municipality of Antipolo, Rizal and the DTI were subsequently canceled and/or withdrawn.
In the case of respondent GBS, the employees were likewise sufficiently informed and formal notices
were served on the appropriate government offices, namely, DOLE, DTI, BIR, SSS, and the Municipality
of Antipolo Rizal at least one month prior to March 8, 1993.

27. North Davao Mining vs NLRC

North Davao Mining Corporation was incorporated in 1974 as a 100% privately-owned company. As of
December 31, 1990 the national government held 81.8% of the common stock and 100% of the preferred
stock of said company.

In May 1992, North Davao completely ceased operations due to serious business reverses. When it
ceased operations, its remaining employees were separated and given the equivalent of 12.5 days pay
for every year of service, computed on their basic monthly pay.

However, it appears that, during the life of the petitioner corporation, from the beginning of its operations
in 1981 until its closure in 1992, it had been giving separation pay equivalent to 30 days pay for every
year of service.

Subsequently, a complaint was filed with respondent LA by respondent Guillema and 271 other seperated
employees for additional separation pay of 17.5 days for every year of service, among others.

ISSUE: Is a company which is forced by huge business losses to close its business, legally required to
pay separation benefits to its employees at the time of its closure in an amount equivalent to the
separation pay paid to those who were separated when the company was still a going concern?

HELD:

NO. Art. 283. Closure of establishment and reduction of personnel. The employer may also terminate
the employment of any employee due to the installation of labor saving devices, redundancy,
retrenchment to prevent losses or the closing or cessation of operation of the establishment or under-
taking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a
written notice on the workers and the Ministry of Labor and Employment at least 1 month before the
intended date thereof. In case of termination due to the installation of labor saving devices or redundancy,
the worker affected thereby shall be entitled to a separation pay equivalent to at least his 1 month pay or
to at least 1 month pay for every year of service, whichever is higher. In case of retrenchment to prevent
losses and in cases of closures or cessation of operations of establishment or undertaking not due to
serious business losses or financial reverses, the separation pay shall be equivalent to 1 month pay or at
least month pay for every year of service, whichever is higher. A fraction of at least 6 months shall be
considered whole year.
The underscored portion of Art. 283 governs the grant of sepAration benefits in case of closures or
cessation of operation of business establishments NOT due to serious business losses or financial
reverses x x x. Where, however, the closure was due to business losses as in the instant case, in which
the aggregate losses amounted to over P20 billion the Labor Code does not impose any obligation upon
the employer to pay separation benefits, for obvious reasons.

In the instant case, the companys practice of giving one months pay for every year of service could no
longer be continued precisely because the company could not afford it anymore. It was forced to close
down on account of accumulated losses of over P20 billion. North Davao gave 30-days separation pay to
its employees when it was still a going concern even if it was already losing heavily. As a going concern,
its cash flow could still have sustained the payment of such separation benefits. But when a business
enterprise completely ceases operations, i.e., upon its death as a going business concern, its vital lifeblood
-its cashflow literally dries up. Therefore, the fact that less separation benefits were granted when the
company finally met its business death cannot be characterized as discrimination. Such action was
dictated not by a discriminatory management option but by its complete inability to continue its business
life due to accumulated losses. Indeed, one cannot squeeze blood out of a dry stone. Nor water out of
parched land.

28. NFL vs NLRC

FACTS: Petitioners are bona fide members of the National Federation of Labor (NFL), a legitimate labor
organization duly registered with the Department of Labor and Employment. They were employed by
private respondents Charlie Reith and Susie Galle Reith, general manager and owner, respectively, of the
354-hectare Patalon Coconut Estate located at Patalon, Zamboanga City. Patalon Coconut Estate was
engaged in growing agricultural products and in raising livestock.

In 1988, Congress enacted into law Republic Act (R.A.) No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL), which mandated the compulsory acquisition of all
covered agricultural lands for distribution to qualified farmer beneficiaries under the so-called
Comprehensive Agrarian Reform Programme (CARP).

Pursuant to R.A. No. 6657, the Patalon Coconut Estate was awarded to the Patalon Estate Agrarian
Reform Association (PEARA), a cooperative accredited by the Department of Agrarian Reform (DAR),
of which petitioners are members and co-owners.

As a result of this acquisition, private respondents shut down the operation of the Patalon Coconut
Estate and the employment of the petitioners was severed on July 31, 1994. Petitioners did not
receive any separation pay.

Subsequently, the cooperative took over the estate. Being beneficiaries of the Patalon Coconut Estate
pursuant to the CARP, the petitioners became part-owners of the land.

Petitioners, thereafter, filed individual complaints before the Regional Arbitration Branch (RAB) of the
National Labor Relations Commission (NLRC) in Zamboanga City, praying for their reinstatement with
full backwages on the ground that they were illegally dismissed.

RAB dismissed the complaints for lack of merit. However, ordered respondents thru [sic] its owner-
manager or its duly authorized representative to pay complainants separation pay in view of the latters
cessation of operations or forced sale, and for 13th month differential pay.
NLRC on appeal, set aside the decision of RAB ordering respondents to pay separation pay and 13th
month differentials stating that, the severance of employer-employee relationship between the parties
came about INVOLUNTARILY, as a result of an act of the State. MR Denied. Hence, this petition.

ISSUE: whether or not an employer that was compelled to cease its operation because of the compulsory
acquisition by the government of its land for purposes of agrarian reform, is liable to pay separation pay
to its affected employees

HELD:

NO.Petitioners contend that they are entitled to separation pay citing Article 283 of the Labor Code (see
codal) It is clear that Article 283 of the Labor Code applies in cases of closures of establishment and
reduction of personnel.1wphi1 The peculiar circumstances in the case at bar, however, involves
neither the closure of an establishment nor a reduction of personnel as contemplated under the
aforesaid article. When the Patalon Coconut Estate was closed because a large portion of the estate was
acquired by DAR pursuant to CARP, the ownership of that large portion of the estate was precisely
transferred to PEARA and ultimately to the petitioners as members thereof and as agrarian lot
beneficiaries. Hence, Article 283 of the Labor Code is not applicable to the case at bench. In other words,
Article 283 of the Labor Code does not contemplate a situation where the closure of the business
establishment is forced upon the employer and ultimately for the benefit of the employees.Capital
and management sectors must also be protected under a regime of justice and the rule of law.

29. CHIANG KAI SHEK COLLEGE vs CA

Facts:

Private respondent Belo was employed as a permanent teacher by petitioner CKSC for 15 years.
Belo had to take a leave of absence for the S.Y. 1992 1993 due to personal reasons. Petitioner informed
her that they could not guarantee her a teaching load when she would return and that only teachers in
service may enjoy the privilege and benefits provided by the school. When she signified her intention to
return to teach for the S.Y. 1993 1994, petitioner reasoned that it already hired non permanent
teachers to take her load. The Labor Arbiter reasoned that she was not dismissed but there was simply no
available teaching load for her. The NLRC reversed the LAs decision and ordered her reinstatement with
full back wages. The Court of Appeals declared that Belo was constructively dismissed; the dismissal,
illegal, for being violative of her security of tenure.

Issue:

W/N private respondent was constructively dismissed and therefore entitled to reinstatement and back
wages.

Ruling:

Yes. It must be noted at the outset that Ms. Belo had been a full-time teacher in petitioner CKSC
continuously for fifteen years or since 1977 until she took a leave of absence for the school year
19921993. Under the Manual of Regulations for Private Schools, for a private school teacher to acquire a
permanent status of employment and, therefore, be entitled to a security of tenure, the following requisites
must concur: (a) the teacher is a full-time teacher; (b) the teacher must have rendered three consecutive
years of service; and (c) such service must have been satisfactory. Since Ms. Belo has measured up to
these standards, she therefore enjoys security of tenure. The fundamental guarantees of security of tenure
and due process dictate that no worker shall be dismissed except for just and authorized cause provided
by law and after due notice and hearing. Case law defines constructive dismissal as a cessation from work
because continued employment is rendered impossible, unreasonable, or unlikely; when there is a
demotion in rank or a diminution in pay or both; or when a clear discrimination, insensibility, or disdain
by an employer becomes unbearable to the employee. It, therefore, blows our mind why the petitioners
would require Ms. Belo, a permanent teacher since 1977 with a satisfactory service record, to signify her
intention to teach in March 1993. Plainly, the petitioners violated their avowed policies. Since Ms. Belo
was not retiring, resigning or filing another leave of absence after the school year 1992-1993, the
petitioners should have considered her as consenting to teach for the incoming school year 1993-1994. In
fact, they should not have required her to re-apply to teach. In accordance with the written statement of
policies dated 12 March 1993, only probationary teachers are required by the petitioners to re-apply in
March. Failure of probationary teachers to re-apply in March is an indication of their lack of interest to
teach again at the school. Petitioners invocation of the third policy that of giving teaching assignments
to probationary teachers in April to justify their refusal to provide Ms. Belo a teaching load is, therefore,
a lame excuse that rings of untruth and dishonesty. Patently clear is the illegal manner by which the
petitioners eased out Ms. Belo from the teaching corps.

30. Superstar Security Agency vs NLRC

Facts:

On June 24, 1981, Filomena Hermosa (Hermosa, for short) was hired by petitioner Superstar Security
Agency (Agency, for short) as a Security Guard with a daily salary of P37.00 and an emergency cost of
living allowance of P510.00 per month. She was assigned to different detachments in premises owned by
the Agency's clients such as the Supergarment Malugay Yakal (SMY) or Rustan Commercial Corporation
Warehouse, Rustan Group of Companies consisting of Rustan Commercial Corporation (Cubao and
Makati Detachments), Tourist Duty Free Shop (FTI Detachment, Hyatt, Hilton and Sheraton
Detachments), and Rustan Supermarket Warehouse (Rockefeller Detachment). On February 1, 1985, the
Agency placed Hermosa on a temporary "off-detail." On March 5, 1985, Hermosa filed a complaint for
illegal dismissal. She claimed that she was unceremoniously dismissed on suspicion that she was the
author of an anonymous report about the irregularities committed by her fellow lady security guards; that
it was this precise reason why she was called to the headquarters by the Agency's Personnel Supervisor,
Rafael Fermo; that, thereafter, Fermo threatened and directed her to keep any information regarding the
matter to herself; that she was instructed not to report for duty at SMY effective February 1, 1985 as she
would be given a new assignment; that she did as she was told but no new assignment came despite
repeated follow-ups; and that instead, the Agency informed her that the cause of her temporary "off-
detail" was the cost-cutting program of the Rustan Group of Companies and the refusal of Agency's
clients to accept her allegedly due to poor performance, and lack of elementary courtesy and tact. Finally,
Hermosa averted that she was denied due process in that she was neither informed of the alleged
complaints against her nor afforded the opportunity to explain her side.

Petitioners, on the other hand, claimed that Hermosa was relieved of her SMY post due to the cost-cutting program
of its clients; that while she was on temporary "off-detail" since February 1, 1985, the Agency continued to look for
an available assignment for her with the other detachments; that, however, the respective Security Directors of the
said detachments signified their unwillingness to accept her because of her poor performance and undesirable
conduct and behavior.

Issue:

W/N petitioners were guilty of illegal dismissal

Ruling:

The charge of illegal dismissal was prematurely filed. The records show that a month after
Hermosa was placed on a temporary "off-detail," she readily filed a complaint against the petitioners on
the 79 presumption that her services were already terminated. Temporary "off-detail" is not equivalent to
dismissal. In security parlance, it means waiting to be posted. It is a recognized fact that security guards
employed in a security agency may be temporarily sidelined as their assignments primarily depend on the
contracts entered into by the agency with third parties. However, it must be emphasized that such
temporary inactivity should continue only for six months. Otherwise the security agency concerned could
be liable for constructive dismissal. Hermosa maintains that her temporary "off-detail" is a mere cover-up
since petitioners failed to present evidence to support their clients' cost-cutting program. We do not think
so. Petitioners are neither involved in their clients' businesses nor do they exercise control over the latter's
business operations. They only provide security to their clients' establishments. Consequently, the Agency
has no right at all to demand the reasons for their clients' action. Faced with its clients' negative reaction
to Hermosa's detail, petitioners are practically powerless to disregard the position of its clients. To do
otherwise would mean an end to petitioners' business relationship with them. Considering that it was only
Hermosa among petitioners' employees who was affected by the clients' memoranda, it would be sheer
foolishness for petitioners to press for Hermosa's detail to the detriment of its business. Justice, fairness
and due process demand that an employer should not be penalized for situations where it had no
participation or control

31. SOLIMAN SECURITY SERVICES, INC vs CA

Facts:

Respondent Eduardo Valenzuela, a security guard, was a regular employee of petitioner Soliman Security
Services assigned at the BPI-Family Bank, Pasay City. On 09 March 1995, he received a memorandum
from petitioners relieving him from his post at the bank, said to be upon the latters request, and requiring
him to report to the security agency for reassignment. The following month, or on 07 April 1995,
respondent filed a complaint for illegal dismissal on the ground that his services were terminated without
a valid cause and that, during his tenure at the bank, he was not paid his overtime pay, 13th month pay,
and premium pay for services rendered during holidays and rest days. He averred that, after receiving the
memorandum of 09 March 1995, he kept on reporting to the office of petitioners for reassignment but,
except for a brief stint in another post lasting for no more than a week, he was put on a floating status.
Petitioners contended that the relief of respondent from his post, made upon request of the client, was
merely temporary and that respondent had been offered a new post but the latter refused to accept it.
Petitioners argued that respondents floating status for barely 29 days did not constitute constructive
dismissal.

Issue:
W/N private respondent should be deemed constructively dismissed by petitioner for having been placed
on floating status.

Ruling:
The question posed is not new. In the case of Superstar Security Agency, Inc., vs. NLRC,[8] this Court,
addressing a similar issue, has said:
x x x The charge of illegal dismissal was prematurely filed. The records show that a month after Hermosa
was placed on a temporary off-detail, she readily filed a complaint against the petitioners on the
presumption that her services were already terminated. Temporary off-detail is not equivalent to
dismissal. In security parlance, it means waiting to be posted. It is a recognized fact that security guards
employed in a security agency may be temporarily sidelined as their assignments primarily depend on the
contracts entered into by the agency with third parties.However, it must be emphasized that such
temporary inactivity should continue only for six months. Otherwise, the security agency concerned could
be liable for constructive dismissal.
Constructive dismissal exists when an act of clear discrimination, insensibility or disdain, on the part of
an employer has become so unbearable as to leave an employee with no choice but to forego continued
employment. The temporary off-detail of respondent Valenzuela is not such a case.

32. ESCO HALE SHOE COMPANY, INC. vs NLRC

Facts:
It appears that private respondent had been employed by the petitioner for forty nine (49) years
commencing in 1937 as a shoe box maker until 1986 as a heel pad attacher.
In 1982, having reached the age of sixty five (65), private respondent applied for retirement with the
Social Security Commission and she received retirement benefits therefrom. Although she had already
retired, private respondent continued working for the petitioner until November 1, 1986 when she was
excluded by the petitioner from the regular work schedule. Private respondent, thereafter, demanded that
she be retired from employment and/or be paid separation pay, but the petitioner refused despite repeated
demands. Thus, on February 12, 1987, private respondent filed a complaint against the petitioner for
violation of PD 851 and for payment of retirement benefits and/or separation pay and other claims.
As defense, the petitioner argued that the only reason for the filing of the complaint is private
respondent's baseless demand to be retired anew; that the petitioner has no separate retirement nor private
benefit plan and all its employees, including the private respondent, are reported to the SSS for coverage;
that private respondent had effectively retired from the petitioner in 1982 when she received retirement
benefits from the SSS; and that all the other claims of private respondent, except vacation leave pay for
the years 1985 and 1986 in the amount of P1,008.00, had been paid by the petitioner to her.

Issue:
W/N petitioner contention is tenable

Ruling:
No. In case of retirement, the employee shall be entitled to receive such retirement benefits as he may
have earned under existing laws and any collective bargaining or other agreement. (Section 287, Labor
Code, as amended)
However, since private respondent had worked with the petitioner for such a long time, We deem it just
and equitable to grant her separation pay as she is retiring from the service of the petitioner ten (10) years
beyond the statutory age of sixty 60).

33. Callanta vs Carnation

Facts:
Upon clearance approved by the MOLE Regional Office, respondent dismissed the petitioner in June
1979. On July 1982, petitioner filed an illegal dismissal case with claim for reinstatement with the Labor
Arbiter, who granted it. On appeal, the NLRC reversed the judgment based on the contention that the
action by the petitioner has already prescribed, since Art. 291 & 292 of the Labor Code is expressed that
offenses penalized under the Code and all money claims arising from employer-employee relationships
shall be filed within 3 years from when such cause of action arises, otherwise it will be barred.

ISSUE: Is ruling of the NLRC correct?

HELD: No. It is a principle well recognized in this jurisdiction, that one's employment, profession, trade
or calling is a property right, and the wrongful interference therewith is an actionable wrong. The right is
considered to be property within the protection of the Constitutional guarantee of due process of law.

Verily, the dismissal without just cause of an employee from his employment constitutes a violation of
the Labor Code and its implementing rules and regulations. Such violation, however, does not amount to
an "offense" as understood under Article 291 of the Labor Code. In its broad sense, an offense is an
illegal act which does not amount to a crime as defined in the penal law, but which by statute carries with
it a penalty similar to those imposed by law for the punishment of a crime. The confusion arises over the
use of the term "illegal dismissal" which creates the impression that termination of an employment
without just cause constitutes an offense. It must be noted, however that unlike in cases of commission of
any of the prohibited activities during strikes or lockouts under Article 265, unfair labor practices under
Article 248, 249 and 250 and illegal recruitment activities under Article 38, among others, which the
Code itself declares to be unlawful, termination of an employment without just or valid cause is not
categorized as an unlawful practice.