September 2009 Philippine Supreme Court Decisions on Labor Law

Here are selected September 2009 Philippine Supreme Court decisions on labor law:

Dismissal;  abandonment.  Abandonment is a form of neglect of duty, one of the just causes for an employer to terminate an employee. It is a hornbook precept that in illegal dismissal cases, the employer bears the burden of proof. For a valid termination of employment on the ground of abandonment, Lucinario must prove, by substantial evidence, the concurrence of petitioner’s failure to report for work for no valid reason and his categorical intention to discontinue employment.

Lucinario, however, failed to establish any overt act on the part of petitioner to show his intention to abandon employment. Petitioner, after being informed of his alleged shortages in collections and despite his relegation to that of company custodian, still reported for work. He later applied for a 4-day leave of absence. On his return, he discovered that his name was erased from the logbook, was refused entry into the company premises, and learned that his application for a 4-day leave was not approved. He thereupon exerted efforts to communicate with Lucinario on the status of his employment, but to no avail. These circumstances do not indicate abandonment.

That petitioner immediately filed the illegal dismissal complaint with prayer for reinstatement should dissipate any doubts that he wanted to return to work.

What thus surfaces is that petitioner was constructively dismissed. No actual dismissal might have occurred in the sense that petitioner was not served with a notice of termination, but there was constructive dismissal, petitioner having been placed in a position where continued employment was rendered impossible and unreasonable by the circumstances indicated above. Odilon L. Martinez vs. B&B Fish Broker and/or Norberto M. Lucinario, G.R. No. 179985, September 18, 2009.

Dismissal;  burden of proof.  While the employer bears the burden in illegal dismissal cases to prove that the termination was for valid or authorized cause, the employee must first establish by substantial evidence the fact of dismissal from service. This petitioner failed to discharge. He, in fact, failed to refute respondent’s claim that it sent him a Violation Memorandum, which was duly received by him on April 15, 2003, and a subsequent Memorandum via registered mail, requiring him to explain his habitual tardiness on the therein indicated dates but that he failed to comply therewith.

Constructive dismissal contemplates, among other things, quitting because continued employment is rendered impossible, unreasonable or unlikely, or a demotion in rank or a diminution of pay. It clearly exists when an act of clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee, leaving him with no option but to forego his continued employment. Not any of these circumstances exists to call for a ruling that petitioner was constructively dismissed.  Romero Montederamos vs. Tri-Union International Corporation, G.R. No. 1767000, September 4, 2009.

Dismissal;  burden of proof. It is well-settled that in termination cases, the burden of proof rests upon the employer to show that the dismissal was for a just and valid cause and failure to discharge the same would mean that the dismissal is not justified and therefore illegal. Hence, in arguing that Sabulao abandoned his work, it is incumbent upon the petitioners to prove: (1) that the employee failed to report for work or had been absent without valid or justifiable reason; and (2) that there must have been a clear intention to sever the employer-employee relationship as manifested by some overt acts. Clearly, jurisprudence dictates that the burden of proof to show that there was unjustified refusal to go back to work rests on the employer.

The NLRC, as affirmed by the Court of Appeals, correctly found that petitioners failed to substantiate its claim that Sabulao abandoned his work. No evidence was presented to prove that Sabulao clearly intended to sever the employer-employee relationship as manifested by some overt acts. As regards petitioners’ allegation that Sabulao is a field personnel and therefore not entitled to the money claims awarded by the NLRC, suffice it to state that the issue was raised only before the Court of Appeals in contravention to the rule that questions not raised before the tribunals a quo cannot be raised for the first time on appeal. As such, it deserves no consideration by this Court. Tacloban Far East Marketing Corporation, et al. vs. The Court of Appeals, et al., G.R. No. 182320, September 11, 2009.

Dismissal;  due process.  The essence of due process is simply an opportunity to be heard or, as applied to administrative proceedings, an opportunity to explain one’s side or an opportunity to seek a reconsideration of the action or ruling complained of. What the law prohibits is absolute absence of the opportunity to be heard, hence, a party cannot feign denial of due process where he had been afforded the opportunity to present his side. A formal or trial type hearing is not at all times and in all instances essential to due process, the requirements of which are satisfied where the parties are afforded fair and reasonable opportunity to explain their side of the controversy.

In the present case, petitioners were, among other things, given several written invitations to submit themselves to PLDT’s Investigation Unit to explain their side, but they failed to heed them. A hearing, which petitioners attended along with their union MKP representatives, was conducted on June 25, 2001 during which the principal witnesses to the incident were presented. Petitioners were thus afforded the opportunity to confront those witnesses and present evidence in their behalf, but they failed to do so. Rolando Placido and Edgardo Caragay vs. National Labor Relations Commission and Philippine Long Distance Telephone Company, Incorporated, G.R. No. 180888, September 18, 2009.

Dismissal; misconduct. By sleeping on the job and leaving his work area without prior authorization, Tomada did not merely disregard company rules. Tomada, in effect, issued an open invitation for others to violate those same company rules. Indeed, considering the presence of trainees in the building and Tomada’s acts, Tomada failed to live up to his company’s reasonable expectations. Tomada’s offenses cannot be excused upon a plea of being a “first offense,” or have not resulted in prejudice to the company in any way. No employer may rationally be expected to continue in employment a person whose lack of morals, respect and loyalty to his employer, regard for his employer’s rules, and appreciation of the dignity and responsibility of his office, has so plainly and completely been bared.

Misconduct is improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error of judgment. The misconduct to be serious must be of grave and aggravated character and not merely trivial or unimportant. Such misconduct, however serious, must nevertheless be in connection with the employee’s work to constitute just cause for his separation. Thus, for misconduct or improper behavior to be a just cause for dismissal, (1) it must be serious; (2) it must relate to the performance of the employee’s duties; and (3) it must show that the employee has become unfit to continue working for the employer. Indeed, an employer may not be compelled to continue to employ such person whose continuance in the service would be patently inimical to his employer’s interest.  Eduardo M. Tomada, Sr. vs. RFM Corporation-Bakery Flour Division, et al., G.R. No. 163270, September 11, 2009.

Dismissal;  redundancy.  The separation of the petitioner by reason of redundancy was supported by the evidence on record. She was separated from the service after the respondent’s reorganization where her position as Administrator was declared redundant. She was served notice within the statutory period of thirty (30) days and so was the DOLE-NCR. The petitioner was assured of all the benefits under the law.

The petitioner imputes bad faith and malice on the respondent in declaring her position as Administrator redundant, but failed to present convincing proof that the respondent abused its prerogative in terminating her employment or that it was motivated by ill-will in doing so. It was a business decision arrived at in the face of financial losses being suffered by the company at the time. Miriam B. Elleccion vda. De Lecciones vs. National Labor Relations Commission, et al., G.R. No. 184735, September 17, 2009.

Dismissal; retrenchment. The burden of proving the validity of retrenchment is on the petitioner. Evidence does not sufficiently establish that petitioner had incurred losses that would justify retrenchment to prevent further losses. The Comparative Income Statement for the year 1996 and for the months of February to June 1997 which petitioner submitted did not conclusively show that petitioner had suffered financial losses. In fact, records show that from January to July 1997, petitioner hired a total of 114 new employees assigned in the petitioner’s stores located in the different places of the country. Emcor, Incorporated vs. Ma. Lourdes D. Sienes, G.R. No. 152101, September 8, 2009.

Dismissal;  retrenchment.   Retrenchment to avoid or minimize business losses is a justified ground to dismiss employees under Article 283 of the Labor Code. The employer, however, bears the burden to prove such ground with clear and satisfactory evidence, failing which the dismissal on such ground is unjustified.  Bio Quest Marketing Inc. and/or Jose L. Co vs. Edmund Rey, G.R. No. 181503, September 18, 2009.

Employee benefits;  retirement. It is settled that entitlement of employees to retirement benefits must specifically be granted under existing laws, a collective bargaining agreement or employment contract, or an established employer policy. No law or collective bargaining agreement or other applicable contract, or an established company policy was existing during respondents’ employment entitling them to the P200,000 lump-sum retirement pay. Petitioner was not thus obliged to grant them such pay. Kimberly-Clark Philippines, Inc. vs. Nora Dimayuga, et al. G.R. No. 177705, September 18, 2009.

Employee benefits; suicide. The general rule is that the employer is liable to pay the heirs of the deceased seafarer for death benefits once it is established that he died during the effectivity of his employment contract. However, the employer may be exempted from liability if he can successfully prove that the seafarer’s death was caused by an injury directly attributable to his deliberate or willful act. In sum, respondents’ entitlement to any death benefits depends on whether the evidence of the petitioners suffices to prove that the deceased committed suicide; the burden of proof rests on his employer. Great Southern Maritime Services Corp., et al. vs. Leonila Surigao, et al., G.R. No. 183646, September 18, 2009.

Employer-employee relationship;  existence. The Contract between the Cooperative and DFI, far from being a job contracting arrangement, is in essence a business partnership that partakes of the nature of a joint venture. The rules on job contracting are, therefore, inapposite. The Court may not alter the intention of the contracting parties as gleaned from their stipulations without violating the autonomy of contracts principle under Article 1306 of the Civil Code which gives the contracting parties the utmost liberality and freedom to establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good custom, public order or public policy.

Petitioners’ claim of employment relationship with the Cooperative’s herein co-respondents must be assessed on the basis of four standards, viz: (a) the manner of their selection and engagement; (b) the mode of payment of their wages; (c) the presence or absence of the power of dismissal; and (d) the presence or absence of control over their conduct. Most determinative among these factors is the so-called “control test.”

There is nothing in the records which indicates the presence of any of the foregoing elements of an employer-employee relationship.

There being no employer-employee relationship between petitioners and the Cooperative’s co-respondents, the latter are not solidarily liable with the Cooperative for petitioners’ illegal dismissal and money claims.  Oldarico S. Traveño, et al. vs. Bobongon Banana Growers Multi-Purpose Cooperative, et al., G.R. No. 164205, September 3, 2009.

Resignation. Resignation as “the voluntary act of employees who are compelled by personal reasons to disassociate themselves from their employment. It must be done with the intention of relinquishing an office, accompanied by the act of abandonment.” In this case, the evidence on record suggests that respondent did not voluntarily resign. The more logical conclusion, based on the evidence, is that respondent was then being forced or pressured to resign, which is tantamount to illegal dismissal. Casa Cebuana Incoporada, et al. vs. Ireneo P. Leuterio, G.R. No. 176040, September 4, 2009.

Retirement. The line between voluntary and involuntary retirement is thin but it is one which this Court has drawn. Voluntary retirement cuts employment ties leaving no residual employer liability; involuntary retirement amounts to a discharge, rendering the employer liable for termination without cause. The employee’s intent is the focal point of analysis. In determining such intent, the fairness of the process governing the retirement decision, the payment of stipulated benefits, and the absence of badges of intimidation or coercion are relevant parameters.

Nothing in the records offends any of these criteria. Arsenio F. Quevedo, et al. vs. Benguet Electric Cooperative Incorporated, et al., G.R. No. 168927, September 11, 2009.

Waiver;  binding effect. Petitioners bound themselves, in individually signed contracts, to “forever release, waive and quitclaim all causes of action or claims arising from or as a consequence” of their early retirement. Petitioners concede that this blanket stipulation bars this suit. However, they seek to avoid compliance by again pleading vitiated consent. Although contracts executed in the context of employment are imbued with public interest, triggering closer scrutiny, they remain contracts binding the parties to their terms.

To excuse petitioners from complying with the terms of their waivers, they must locate their case within any of three narrow grounds: (1) the employer used fraud or deceit in obtaining the waivers; (2) the consideration the employer paid is incredible and unreasonable; or (3) the terms of the waiver are contrary to law, public order, public policy, morals or good customs or prejudicial to a third person with a right recognized by law. The preceding discussion on the voluntariness of petitioners’ retirement from service effectively removes these grounds beyond petitioners’ argumentative reach. Accordingly, petitioners, by the terms of their waivers, are barred from filing this suit.  Arsenio F. Quevedo, et al. vs. Benguet Electric Cooperative Incorporated, et al., G.R. No. 168927, September 11, 2009.

Waiver;  binding effect. While quitclaims executed by employees are commonly frowned upon as being contrary to public policy and are ineffective to bar claims for the full measure of their legal rights, where the person making the waiver has done so voluntarily, with a full understanding thereof, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as being a valid and binding undertaking. In the case at bar, Nora and Rosemarie are Accounting graduates. They have not alleged having been compelled to sign the quitclaims, nor that the considerations thereof (P1,024,113.73 for Nora and P682,721.24 for Rosemarie) are unconscionable.   Kimberly-Clark Philippines, Inc. vs. Nora Dimayuga, et al. G.R. No. 177705, September 18, 2009

Waiver;  union members.  Going now to the question of whether respondent’s members’ individual acceptance of the award and the resulting payments made by petitioner operate as a ratification of the DOLE Secretary’s award which renders CA-G.R. SP No. 72965 moot, we find that such do not operate as a ratification of the DOLE Secretary’s award; nor a waiver of their right to receive further benefits, or what they may be entitled to under the law. The appellate court correctly ruled that the respondent’s members were merely constrained to accept payment at the time. Christmas was then just around the corner, and the union members were in no position to resist the temptation to accept much-needed cash for use during the most auspicious occasion of the year. Time and again, we have held that necessitous men are not, truly speaking, free men; but to answer a present emergency, will submit to any terms that the crafty may impose upon them.

Besides, as individual components of a union possessed of a distinct and separate corporate personality, respondent’s members should realize that in joining the organization, they have surrendered a portion of their individual freedom for the benefit of all the other members; they submit to the will of the majority of the members in order that they may derive the advantages to be gained from the concerted action of all. Since the will of the members is personified by its board of directors or trustees, the decisions it makes should accordingly bind them. Precisely, a labor union exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment. What the individual employee may not do alone, as for example obtain more favorable terms and conditions of work, the labor organization, through persuasive and coercive power gained as a group, can accomplish better. Univeristy of Santo Tomas vs. Samahang Manggagawa ng UST (SM-UST), G.R. No. 169940, September 18, 2009.

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