March 2012 Philippine Supreme Court Decisions on Labor Law and Procedure

Here are select March 2012 rulings of the Supreme Court of the Philippines on labor law and procedure.

Dismissal; constructive dismissal. Constructive dismissal exists where there is cessation of work because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in pay. Constructive dismissal is a dismissal in disguise or an act amounting to dismissal but made to appear as if it were not. In constructive dismissal cases, the employer is, concededly, charged with the burden of proving that its conduct and action or the transfer of an employee are for valid and legitimate grounds such as genuine business necessity. In the instant case, the overt act relied upon by petitioner is not only a doubtful occurrence but is, if it did transpire, even consistent with the dismissal from employment posited by the respondent. The factual appraisal of the Court of Appeals is correct. Petitioner was displeased after incurring expenses for respondent’s medical check-up and, it is credible that, thereafter, respondent was prevented entry into the work premises. This is tantamount to constructive dismissal. The Supreme Court agreed with the Court of Appeals that the incredibility of petitioner’s submission about abandonment of work renders credible the position of respondent that she was prevented from entering the property. This was even corroborated by the affidavits of Siarot and Mendoza which were made part of the records of this case. Ma. Melissa A. Galang vs. Julia Malasuqui, G.R. No. 174173. March 7, 2012.

Dismissal; loss of trust and confidence. The rule is long and well settled that, in illegal dismissal cases like the one at bench, the burden of proof is upon the employer to show that the employee’s termination from service is for a just and valid cause. The employer’s case succeeds or fails on the strength of its evidence and not on the weakness of that adduced by the employee, in keeping with the principle that the scales of justice should be tilted in favor of the latter in case of doubt in the evidence presented by them. Often described as more than a mere scintilla, the quantum of proof is substantial evidence which is understood as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other equally reasonable minds might conceivably opine otherwise. Failure of the employer to discharge the foregoing onus would mean that the dismissal is not justified and therefore illegal.

February 2012 Philippine Supreme Court Decisions on Labor Law and Procedure

Here are select February 2012 rulings of the Supreme Court on labor law and procedure:

Appeal; factual finding of NLRC. Findings of fact of administrative agencies and quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect but finality when affirmed by the Court of Appeals. Factual findings of quasi-judicial bodies like the NLRC, if supported by substantial evidence, are accorded respect and even finality by the Supreme Court, more so when they coincide with those of the Labor Arbiter. Such factual findings are given more weight when the same are affirmed by the Court of Appeals. In the present case, the Supreme Court found no reason to depart from these principles since the Labor Arbiter found that there was substantial evidence to conclude that Oasay had breached the trust and confidence of Palacio Del Gobernador Condominium Corporation, which finding the NLRC had likewise upheld. Sebastian F. Oasay, Jr. vs. Palacio del Gobernador Condominium Corporation and Omar T. Cruz, G.R. No. 194306, February 6, 2012.

Civil Service; Clark Development Corporation. Clark Development Corporation (CDC) owes its existence to Executive Order No. 80 issued by then President Fidel V. Ramos. It was meant to be the implementing and operating arm of the Bases Conversion and Development Authority tasked to manage the Clark Special Economic Zone. Expressly, CDC was formed in accordance with Philippine corporation laws and existing rules and regulations promulgated by the Securities and Exchange Commission pursuant to Section 16 of Republic Act 7227. CDC, a government owned or controlled corporation without an original charter, was incorporated under the Corporation Code. Pursuant to Article IX-B, Sec. 2(1) of the Constitution, the civil service embraces only those government owned or controlled corporations with original charter. As such, CDC and its employees are covered by the Labor Code and not by the Civil Service Law. Antonio B. Salenga, et al. vs. Court of Appeals, et al., G.R. No. 174941, February 1, 2012.

January 2012 Philippine Supreme Court Decisions on Labor Law and Procedure

Here are selected January 2012 rulings of the Supreme Court of the Philippines on labor law and procedure:

Certiorari; effect of receipt of award. The prevailing party’s receipt of the full amount of the judgment award pursuant to a writ of execution issued by the labor arbiter does not close or terminate the case if such receipt is qualified as without prejudice to the outcome of the petition for certiorari pending with the Court of Appeals. Timoteo H. Sarona vs. National Labor Relations Commission, Royale Security Agency, et al., G.R. No. 185280, January 18, 2011.

Constructive dismissal; change in position. Constructive dismissal exists where there is cessation of work because “continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay” and other benefits. Aptly called a dismissal in disguise of an act amounting to dismissal but made to appear as if it were not,constructive dismissal may, likewise, exist if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued employment.In cases of a transfer of an employee, the rule is settled that the employer is charged with the burden of proving that its conduct and action are for valid and legitimate grounds such as genuine business necessity and that the transfer is not unreasonable, inconvenient or prejudicial to the employee. If the employer cannot overcome this burden of proof, the employee’s transfer shall be tantamount to unlawful constructive dismissal. Jonathan V. Morales vs. Harbour Centre Port Terminal, Inc., G.R. No. 174208, January 25, 2011. 

November 2011 Philippine Supreme Court Decisions on Labor Law and Procedure

Here are selected November 2011 rulings of the Supreme Court of the Philippines on labor law and procedure:

Award of attorney’s fees; concepts.  There are two commonly accepted concepts of attorney’s fees – the ordinary and extraordinary.  In its ordinary concept, an attorney’s fee is the reasonable compensation paid to a lawyer by his client for the legal services the former renders; compensation is paid for the cost and/or results of legal services per agreement or as may be assessed.  In its extraordinary concept, attorney’s fees are deemed indemnity for damages ordered by the court to be paid by the losing party to the winning party.  This is payable not to the lawyer but to the client, unless the client and his lawyer have agreed that the award shall accrue to the lawyer as additional or part of his compensation.  Article 111 of the Labor Code, as amended, contemplates the extraordinary concept of attorney’s fees.  Although an express finding of facts and law is still necessary to prove the merit of the award, there need not be any showing that the employer acted maliciously or in bad faith when it withheld the wages.  Thus the SC concluded that the CA erred in ruling that a finding of the employer’s malice or bad faith in withholding wages must precede an award of attorney’s fees under Article 111 of the Labor Code.  To reiterate, a plain showing that the lawful wages were not paid without justification is sufficient.  Kaisahan at Kapatiran ng mga Manggagawa at Kawani sa MWC-East Zone Union and Eduardo Borela, etc. vs. Manila Water Company, Inc., G.R. No. 174179. November 16, 2011.

Award of attorney’s fees; Article 111.  One of the issues of this case involved the effect of the Memorandum of Agreement provision that attorney’s fees shall be deducted from the amelioration allowance (AA) and CBA receivables.  In this regard, the CA held that the additional grant of 10% attorney’s fees by the NLRC violates Article 111 of the Labor Code, considering that the MOA between the parties already ensured the payment of 10% attorney’s fees deductible from the AA and CBA receivables of the Union’s members.  In the present case, the Union bound itself to pay 10% attorney’s fees to its counsel under the MOA and also gave up the attorney’s fees awarded to the Union’s members in favor of their counsel.  The award by the NLRC cannot be taken to mean an additional grant of attorney’s fees, in violation of the ten percent (10%) limit under Article 111 of the Labor Code since it rests on an entirely different legal obligation than the one contracted under the MOA.  Simply stated, the attorney’s fees contracted under the MOA do not refer to the amount of attorney’s fees awarded by the NLRC; the MOA provision on attorney’s fees does not have any bearing at all to the attorney’s fees awarded by the NLRC under Article 111 of the Labor Code.  Based on these considerations, it is clear that the CA erred in ruling that the LA’s award of attorney’s fees violated the maximum limit of ten percent (10%) fixed by Article 111 of the Labor Code.  Kaisahan at Kapatiran ng mga Manggagawa at Kawani sa MWC-East Zone Union and Eduardo Borela, etc. vs. Manila Water Company, Inc., G.R. No. 174179. November 16, 2011.

October 2011 Philippine Supreme Court Decisions on Labor Law and Procedure

Here are selected October 2011 rulings of the Supreme Court of the Philippines on labor law and procedure:

Labor Law

Dismissal; constructive dismissal.  For a transfer not to be considered a constructive dismissal, the employer must be able to show that the transfer is for a valid reason, entails no diminution in the terms and conditions of employment, and must not be unreasonably inconvenient or prejudicial to the employee.  If the employer fails to meet these standards, the employee’s transfer shall amount, at the very least, to constructive dismissal.  In this case, the Supreme Court found that the real reason Menese was transferred from being the agency’s payroll and billing clerk of the PGH detachment to being a lady guard in the agency’s main office, was because of the request of Dapula, the new chief of the UP-PGH Security Division.  The latter’s request was based on the fact that she had committed the previous position of Menese to a certain Amy Claro, a protégée of Dapula.  Thus, the Supreme Court found justification for Menese’s refusal to be transferred.  Not only was the transfer arbitrary and done in bad faith, it would also result in a demotion in rank and a diminution in pay:  (1) she would hold the position of lady guard and (2) she would be paid in accordance with the statutory minimum wage, or from P11,720.00 to P7,500.00.  Clearly, there was a demotion in rank and salary undertaken in bad faith amounting to constructive dismissal.  Emirate Security and Maintenance Systems, Inc. and Roberto Yan vs. Glenda M. Menese, G.R. No. 182848. October 5, 2011.

Dismissal; illegal.  Resignation is defined 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 suggested that petitioner did not resign; he was orally dismissed by Sy.  The crucial factor is the verbal order directly given by Sy, the company president, for petitioner to immediately turn over his accountabilities.  It is this lack of clear, valid and legal cause, not to mention due process that made his dismissal illegal, warranting reinstatement and the award of backwages.  Moreover, the filing of a complaint for illegal dismissal just three weeks later is difficult to reconcile with voluntary resignation.  Had petitioner intended to voluntarily relinquish his employment after being unceremoniously dismissed by no less than the company president, he would not have sought redress from the NLRC and vigorously pursued this case against the respondents.  Jhorizaldy Uy vs. Centro Ceramica Corporation, et al., G.R. No. 174631. October 19, 2011. 

September 2011 Philippine Supreme Court Decisions on Labor Law and Procedure

Here are selected September 2011 rulings of the Supreme Court of the Philippines on labor law and procedure:

Employee; probationary employee.  Employment on probationary status of teaching personnel is not only governed by the Labor Code but also by the Manual of Regulations for Private Schools.  Section 91 of the Manual of Regulations for Private Schools, states that: “Every contract of employment shall specify the designation, qualification, salary rate, the period and nature of service and its date of effectivity, and such other terms and condition of employment as may be consistent with laws and rules, regulations and standards of the school.”  Thus, it is important that the contract of probationary employment specify the period or term of its effectivity.  In this case, therefore, the letters sent by petitioner College Dean Sr. Racadio, which were devoid of specifics, cannot be considered as contracts.  The closest they can resemble to are that of informal correspondence among the said individuals.  As such, petitioner school has the right not to renew the contracts of the respondents, the old ones having expired at the end of their terms. Assuming, arguendo, that the employment contracts between the petitioner school and the respondent spouses were renewed, the SC found that there was a valid and just cause for their dismissal since petitioners have repeatedly violated several departmental and instructional policies, such as the late submission of final grades, failure to submit final test questions to the Program Coordinator, the giving of tests in essay form instead of the multiple choice format as mandated by the school and the high number of students with failing grades in the classes that he handled. St. Paul College Quezon City, et al. vs. Remigio Michael A. Ancheta II and Cynthia A. Ancheta, G.R. No. 169905. September 7, 2011.

Employee; existence of employer-employee relationship.  To determine the existence of an employer-employee relationship, case law has consistently applied the four-fold test.  Respondents argue that the element of control is lacking in this case, making petitioner-referee an independent contractor and not an employee of respondents.  The Supreme Court agreed as it found that there was no control over the means and methods by which petitioner performs his work as a referee officiating a PBA basketball game. The contractual stipulations in the retainer contracts do not pertain to, much less dictate, how and when petitioner will blow the whistle and make calls. On the contrary, they merely serve as rules of conduct or guidelines in order to maintain the integrity of the professional basketball league.  Moreover, the following circumstances indicate that petitioner is an independent contractor: (1) the referees are required to report for work only when PBA games are scheduled, which is three times a week spread over an average of only 105 playing days a year, and they officiate games at an average of two hours per game; and (2) the only deductions from the fees received by the referees are withholding taxes. There are no deductions for contributions to the Social Security System, Philhealth or Pag-Ibig, which are the usual deductions from employees’ salaries. These undisputed circumstances buttress the fact that petitioner is an independent contractor, and not an employee of respondents.  Jose Mel Bernante vs. Philippine Basketball Association, et al., G.R. No. 192084. September 14, 2011.