December 2009 Philippine Supreme Court Decisions on Labor Law and Procedure

Here are selected December 2009 rulings of the Supreme Court of the Philippines on labor law and procedure:

Labor Law

Attorney’s fees;  actions for indemnity under employer liability laws. The claim for attorney’s fees is granted following Article 2208 of the New Civil Code which allows its recovery in actions for recovery of wages of laborers and actions for indemnity under the employer’s liability laws. The same fees are also recoverable when the defendant’s act or omission has compelled the plaintiff to incur expenses to protect his interest as in the present case following the refusal by the employer to settle the employee’s claims. Pursuant to prevailing jurisprudence, petitioner is entitled to attorney’s fees of ten percent (10%) of the monetary award. Leopoldo Abante vs. KJGS Fleet Management Manila and/or Guy Domingo A. Macapayag, Kristian Gerhard Jebsens Skipsrenderi A/S, G.R. No. 182430, December 4, 2009.

Compensability of death; requirements. To be entitled to compensation, a claimant must show that the sickness is either: (1) a result of an occupational disease listed under Annex “A” of the Amended Rules on Employees’ Compensation under the conditions Annex “A” sets forth; or (2) if not so listed, that the risk of contracting the disease is increased by the working conditions.

Based on Francisco’s death certificate, the immediate cause of his death was cardiac arrest; the antecedent cause was acute massive hemorrhage, and the underlying cause was bleeding peptic ulcer disease.

In determining the compensability of an illness, the worker’s employment need not be the sole factor in the growth, development, or acceleration of a claimant’s illness to entitle him to the benefits provided for. It is enough that his employment contributed, even if only in a small degree, to the development of the disease.

P.D. 626 is a social legislation whose primordial purpose is to provide meaningful protection to the working class against the hazards of disability, illness, and other contingencies resulting in loss of income. In employee compensation, persons charged by law to carry out the Constitution’s social justice objectives should adopt a liberal attitude in deciding compensability claims and should not hesitate to grant compensability where a reasonable measure of work-connection can be inferred. Only this kind of interpretation can give meaning and substance to the law’s compassionate spirit as expressed in Article 4 of the Labor Code – that all doubts in the implementation and interpretation of the provisions of the Labor Code, including their implementing rules and regulations, should be resolved in favor of labor. Government Service Insurance System vs. Jean E. Raoet, G.R. No. 157038, December 23, 2009.

Compensable injury; requirement. Section 20(B) of the POEA Standard Employment Contract provides for the liabilities of the employer only when the seafarer suffers from a work-related injury or illness during the term of his employment.

Petitioner claims to have reported his illness to an officer once on board the vessel during the course of his employment. The records are bereft, however, of any documentary proof that he had indeed referred his illness to a nurse or doctor in order to avail of proper treatment. It thus becomes apparent that he was repatriated to the Philippines, not on account of any illness or injury, but in view of the completion of his contract.

But even assuming that petitioner was repatriated for medical reasons, he failed to submit himself to the company-designated doctor in accordance with the post-employment medical examination requirement under the above-quoted paragraph 3 of Section 20(B) of the POEA Standard Employment Contract. Failure to comply with this requirement which is a sine qua non bars the filing of a claim for disability benefits. Dionisio M. Musnit vs. Sea Star Shipping Corporation and Sea Star Shipping Corporation, Ltd., G.R. No. 182623, December 4, 2009.

Compensable injury; loss of earning capacity. The Court has applied the Labor Code concept of permanent total disability to Filipino seafarers in keeping with the avowed policy of the State to give maximum aid and full protection to labor, it holding that the notion of disability is intimately related to the worker’s capacity to earn, what is compensated being not his injury or illness but his inability to work resulting in the impairment of his earning capacity, hence, disability should be understood less on its medical significance but more on the loss of earning capacity. Joelson O. Iloreta vs. Philippine Transmarine Carriers, Inc. and Norbulk Shipping U.K. Ltd., G.R. No. 183908, December 4, 2009.

Dismissal; constructive dismissal. Case law defines constructive dismissal as a cessation of work because continued employment has been rendered impossible, unreasonable, or unlikely, as when there is a demotion in rank or diminution in pay or both or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee.

The test of constructive dismissal is whether a reasonable person in the employee’s position would have felt compelled to give up his position under the circumstances. It is an act amounting to dismissal but is made to appear as if it were not. In fact, the employee who is constructively dismissed might have been allowed to keep coming to work. Constructive dismissal is therefore a dismissal in disguise. The law recognizes and resolves this situation in favor of employees in order to protect their rights and interests from the coercive acts of the employer.

In the present case, the employer ceased verbally communicating with the employee and giving him work assignment after suspecting that he had forged purchase receipts. In this situation, the employee was forced to leave the employer’s compound with his family and to transfer to a nearby place. The employee’s act of leaving his employer’s premises was in reality not his choice but a situation created by the employer. CRC Agricultural Trading and Rolando B. Catindig vs. National Labor Relations Commission and Roberto Obias, G.R. No. 177664, December 23, 2009.

Dismissal;  constructive dismissal. Constructive dismissal exists when an act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego with his continued employment.

In this case, the employee, while still employed with the company, was compelled to resign and forced to go on leave. He was not allowed to participate in the activities of the company. His salary was no longer remitted to him. His subordinates were directed not to report to him and the company directed one of its district managers to take over his position and do his functions without prior notice to him.

These discriminatory acts were calculated to make the employee feel that he is no longer welcome nor needed in the company short of sending him an actual notice of termination. The Court held that the employer constructively dismissed the employee from service. Ramon B. Formantes vs. Duncan Pharmaceuticals, Phils., Inc., G.R. No. 170661, December 4, 2009.

Dismissal; corporate officer; jurisdiction. From the documents submitted by the company, petitioner was a director and officer of Slimmers World. The charges of illegal suspension, illegal dismissal, unpaid commissions, reinstatement and back wages imputed by petitioner against the company fall squarely within the ambit of intra-corporate disputes. In a number of cases, the Court has held that a corporate officer’s dismissal is always a corporate act, or an intra-corporate controversy which arises between a stockholder and a corporation. The question of remuneration involving a stockholder and officer, not a mere employee, is not a simple labor problem but a matter that comes within the area of corporate affairs and management and is a corporate controversy in contemplation of the Corporation Code.

It is a settled rule that jurisdiction over the subject matter is conferred by law. The determination of the rights of a director and corporate officer dismissed from his employment as well as the corresponding liability of a corporation, if any, is an intra-corporate dispute subject to the jurisdiction of the regular courts. Thus, the appellate court correctly ruled that it is not the NLRC but the regular courts which have jurisdiction over the present case. Leslie Okol vs. Slimmers World International, et al., G.R. No. 160146, December 11, 2009.

Dismissal; due process; opportunity to be heard. Although the employee, during some parts of the trial proceedings before the Labor Arbiter was not represented by a member of the bar, he was given reasonable opportunity to be heard and submit evidence to support his arguments, through the medium of pleadings filed in the labor tribunals. He was also able to present his version of the Magat incident during his direct examination conducted by his lawyer Atty. Jannette Inez. Thus, he cannot claim that he was denied due process. Ramon B. Formantes vs. Duncan Pharmaceuticals, Phils., Inc., G.R. No. 170661, December 4, 2009.

Dismissal; just cause; separation pay. The liberality of the law can never be extended to the unworthy and undeserving. In several instances, the policy of social justice has compelled this Court to accord financial assistance in the form of separation pay to a legally terminated employee. This liberality, however, is not without limitations. Thus, when the manner and circumstances by which the employee committed the act constituting the ground for his dismissal show his perversity or depravity, no sympathy or mercy of the law can be invoked.

We have examined the records which indeed show that the employee’s unauthorized absences as well as tardiness are habitual despite having been penalized for past infractions. In Gustilo v. Wyeth Philippines, Inc. [483 Phil. 69, 78 (2004)], we held that a series of irregularities when put together may constitute serious misconduct. We also held that gross neglect of duty becomes serious in character due to frequency of instances. Serious misconduct is said to be a transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and indicative of wrongful intent and not mere error of judgment. Oddly, the employee never advanced any valid reason to justify his absences. The employee’s intentional and willful violation of company rules shows his utter disregard of his work and his employer’s interest. Indeed, there can be no good faith in intentionally and habitually incurring inexcusable absences. Hence, he is not entitled to severance pay. Arsenio S. Quiambao vs. Manila Electric Company, G.R. No. 171023, December 18, 2009.

Dismissal; just cause; sexual abuse. As a manager, the employee enjoyed the full trust and confidence of the company and his subordinates. By committing sexual abuse against his subordinate, he clearly demonstrated his lack of fitness to continue working as a managerial employee and deserves the punishment of dismissal from the service. Ramon B. Formantes vs. Duncan Pharmaceuticals, Phils., Inc., G.R. No. 170661, December 4, 2009.

Dismissal; separation pay in lieu of reinstatement. Under Article 279 of the Labor Code, the illegally dismissed employee is entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances and other benefits or their monetary equivalent, computed from the time his compensation was withheld from him up to the time of his actual reinstatement. Thus, an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. Where reinstatement is no longer viable as an option, backwages shall be computed from the time of the illegal termination up to the finality of the decision. Separation pay equivalent to one month salary for every year of service should likewise be awarded as an alternative in case reinstatement in not possible.

In the present case, reinstatement is no longer feasible because of the strained relations between the employee and the employer. Time and again, the Court has recognized that strained relations between the employer and employee is an exception to the rule requiring actual reinstatement for illegally dismissed employees for the practical reason that the already existing antagonism will only fester and deteriorate, and will only worsen with possible adverse effects on the parties, if we shall compel reinstatement; thus, the use of a viable substitute that protects the interests of both parties while ensuring that the law is respected.

The payment of separation pay is the better alternative as it liberates the employee from what could be a highly hostile work environment, while releasing the employer from the grossly unpalatable obligation of maintaining in their employ a worker they could no longer trust. CRC Agricultural Trading and Rolando B. Catindig vs. National Labor Relations Commission and Roberto Obias, G.R. No. 177664, December 23, 2009.

Dismissal; twin requirements. Well settled is the dictum that the twin requirements of notice and hearing constitute the essential elements of due process in the dismissal of employees. It is a cardinal rule in our jurisdiction that the employer must furnish the employee with two written notices before the termination of employment can be affected: (a) the first apprises the employee of the particular acts or omissions for which his dismissal is sought; and (b) the second informs the employee of the employer’s decision to dismiss him.

The barrage of letters sent to petitioner, starting from a letter dated April 22, 1994 until his termination on May 19, 1994, was belatedly made and apparently done in an effort to show that petitioner was accorded the notices required by law in dismissing an employee. As observed by the Labor Arbiter in her decision, prior to those letters, the employee was already constructively dismissed.

Since the dismissal, although for a valid cause, was done without due process of law, the employer should indemnify the employee with nominal damages in the amount of P30,000.00.Ramon B. Formantes vs. Duncan Pharmaceuticals, Phils., Inc., G.R. No. 170661, December 4, 2009.

Dismissal; two-notice requirement. To justify the dismissal of an employee for a just cause, the employer must furnish the worker with two written notices. The first is the notice to apprise the employee of the particular acts or omissions for which his dismissal is sought. This may be loosely considered as the charge against the employee. The second is the notice informing the employee of the employer’s decision to dismiss him. This decision, however, must come only after the employee is given a reasonable period from receipt of the first notice within which to answer the charge, and ample opportunity to be heard and defend himself with the assistance of his representative, if he so desires. The requirement of notice is not a mere technicality, but a requirement of due process to which every employee is entitled.

The employer clearly failed to comply with the two-notice requirement. Nothing in the records shows that the company ever sent the employee a written notice informing him of the ground for which his dismissal was sought. It does not also appear that the company held a hearing where the employee was given the opportunity to answer the charges of abandonment. Neither did the company send a written notice to the employee informing him that his service had been terminated and the reasons for the termination of his employment. Under these facts, the respondent’s dismissal was illegal. CRC Agricultural Trading and Rolando B. Catindig vs. National Labor Relations Commission and Roberto Obias, G.R. No. 177664, December 23, 2009.

Drug testing for employees; employer’s duty. It was Plantation Bay’s responsibility to ensure that the drug tests would be properly administered, the results thereof being the bases in terminating the employees’ services.

The employer failed to indubitably prove that the employees were guilty of drug use in contravention of its drug-free workplace policy amounting to serious misconduct. The employees are therefore deemed to have been illegally dismissed. Plantation Bay Resort & Spa and Efren Belarmino vs. Romel S. Dubrico, et al., G.R. No. 182216, December 4, 2009.

Employee disability benefits. Permanent disability refers to the inability of a worker to perform his job for more than 120 days, regardless of whether he loses the use of any part of his body. What determines the employee’s entitlement to permanent disability benefits is his inability to work for more than 120 days. In the case at bar, it was only on February 20, 2001 that the Certificate of Fitness for Work was issued by Dr. Lim, more than 6 months from the time he was initially evaluated by the doctor on July 24, 2000 and after he underwent operation on August 18, 2000.

It is gathered from the documents emanating from the Office of Dr. Lim that the employee was seen by him from July 24, 2000 up to February 20, 2001 or a total of 13 times; and except for the medical reports dated February 5, 2001 and February 20, 2001 (when the doctor finally pronounced petitioner fit to work), Dr. Lim consistently recommended that the employee continue his physical rehabilitation/therapy and revisit clinic on specific dates for re-evaluation, thereby implying that the employee was not yet fit to work.

Given a seafarer’s entitlement to permanent disability benefits when he is unable to work for more than 120 days, the failure of the company-designated physician to pronounce the employee fit to work within the 120-day period entitles him to permanent total disability benefit in the amount of US$60,000.00. Leopoldo Abante vs. KJGS Fleet Management Manila and/or Guy Domingo A. Macapayag, Kristian Gerhard Jebsens Skipsrenderi A/S, G.R. No. 182430, December 4, 2009.

Existence of employer-employee relationship. The elements to determine the existence of an employment relationship are: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employer’s power to control the employee’s conduct. The most important element is the employer’s control of the employee’s conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish it. All the four elements are present in this case.

First, the company engaged the services of the worker in 1995. Second, the company paid the worker a daily wage of P175.00, with allowances ranging from P140.00 to P200.00 per day.  The fact that the worker was paid under a “no work no pay” scheme, assuming this claim to be true, is not significant. The “no work no pay” scheme is merely a method of computing compensation, not a basis for determining the existence or absence of employer-employee relationship. Third, the company’s power to dismiss the worker was inherent in the fact that it engaged the services of the worker as a driver. Finally, a careful review of the record shows that the worker performed his work as driver under the petitioners’ supervision and control. The company determined how, where, and when the worker performed his task. They, in fact, requested the worker to live inside their compound so he (the worker) could be readily available when the company needed his services. Undoubtedly, the company exercised control over the means and methods by which the worker accomplished his work as a driver. CRC Agricultural Trading and Rolando B. Catindig vs. National Labor Relations Commission and Roberto Obias, G.R. No. 177664, December 23, 2009.

Labor-only contracting. The contract between the principal and the contractor is not the final word on how the contracted workers relate to the principal and the purported contractor; the relationships must be tested on the basis of how they actually operate.

The legitimate job contractor must have the capitalization and equipment to undertake the sale and distribution of the manufacturer’s products, and must do it on its own using its own means and selling methods.

Even before going into the realities of workplace operations, the Court of Appeals found that the service contracts themselves provide ample leads into the relationship between the company, on the one hand, and Peerless and Excellent, on the other. The Court of Appeals noted that both the Peerless and the Excellent contracts show that their obligation was solely to provide the company with “the services of contractual employees,” and nothing more. These contracted services were for the handling and delivery of the company’s products and allied services. Following D.O. 18-02 and the contracts that spoke purely of the supply of labor, the Court of Appeals concluded that Peerless and Excellent were labor-only contractors unless they could prove that they had the required capitalization and the right of control over their contracted workers.

The contractors were not independently selling and distributing company products, using their own equipment, means and methods of selling and distribution; they only supplied the manpower that helped the company in the handing of products for sale and distribution. In the context of D.O. 18-02, the contracting for sale and distribution as an independent and self-contained operation is a legitimate contract, but the pure supply of manpower with the task of assisting in sales and distribution controlled by a principal falls within prohibited labor-only contracting.  Coca Cola Bottlers Philippines, Inc. vs. Ricky E. Dela Cruz, et al., G.R. No. 184977, December 7, 2009.

Outsourcing. The employer was within its right in entering the forwarding agreements with the forwarders as an exercise of its management prerogative. The employer’s declared objective for the arrangement is to achieve greater economy and efficiency in its operations – a universally accepted business objective and standard that the union has never questioned. In Meralco v. Quisumbing,[G.R. No. 127598, January 27, 1999] the Court joined this universal recognition of outsourcing as a legitimate activity when it held that a company can determine in its best judgment whether it should contract out a part of its work for as long as the employer is motivated by good faith; the contracting is not for purposes of circumventing the law; and does not involve or be the result of malicious or arbitrary action. Temic Automotive Philippines, Inc. vs. Temic Automotive Philippines, Inc. Employees Union-FFW, G.R. No. 186965, December 23, 2009.

Regulations; retroactivity of POEA Circular. Respecting the appellate court’s ruling that it is POEA Memo Circular No. 55, series of 1996 which is applicable and not Memo Circular No. 9, series of 2000, apropos is the ruling in Seagull Maritime Corporation v. Dee [G.R. No. 165156, April 2, 2007] involving employment contract entered into in 1999, before the promulgation of POEA Memo Circular No. 9, series of 2000 or the use of the new POEA Standard Employment Contract, like that involved in the present case. In said case, the Court applied the 2000 Circular in holding that while it is the company-designated physician who must declare that the seaman suffered permanent disability during employment, it does not deprive the seafarer of his right to seek a second opinion which can then be used by the labor tribunals in awarding disability claims. Leopoldo Abante vs. KJGS Fleet Management Manila and/or Guy Domingo A. Macapayag, Kristian Gerhard Jebsens Skipsrenderi A/S, G.R. No. 182430, December 4, 2009.

Termination;  abandonment. Abandonment of work, or the deliberate and unjustified refusal of an employee to resume his employment, is a just cause for employment termination under paragraph (b) of Article 282 of the Labor Code, since it constitutes neglect of duty. The jurisprudential rule is that abandonment is a matter of intention that cannot be lightly presumed from equivocal acts. To constitute abandonment, two elements must concur: (1) the failure to report for work or absence without valid or justifiable reason, and (2) a clear intent, manifested through overt acts, to sever the employer-employee relationship. The employer bears the burden of showing a deliberate and unjustified refusal by the employee to resume his employment without any intention of returning.

In the present case, the employer did not adduce any proof to show that the employee clearly and unequivocally intended to abandon his job or to sever the employer-employee relationship. Moreover, the filing of the complaint for illegal dismissal on June 22, 2004 strongly speaks against the employer’s charge of abandonment; it is illogical for an employee to abandon his employment and, thereafter, file a complaint for illegal dismissal. CRC Agricultural Trading and Rolando B. Catindig vs. National Labor Relations Commission and Roberto Obias, G.R. No. 177664, December 23, 2009.

Termination;  reorganization. Absent explicit statutory authority, the Court cannot sustain the grant of separation pay and retirement benefits from one single act of involuntary separation from the service, lest there be duplication of purpose and depletion of government resources. Within the context of government reorganization, separation pay and retirement benefits arising from the same cause, are in consideration of the same services and granted for the same purpose. Whether denominated as separation pay or retirement benefits, these financial benefits reward government service and provide monetary assistance to employees involuntarily separated due to bona fide reorganization. Efren M. Herrera, et al. vs. National Power Corporation, et al., G.R. No. 166570, December 18, 2009.

Termination;  reorganization. The grant of retirement benefits to the employees in addition to the separation pay they have already received effectively amounts to additional compensation for the same services. Unless specifically authorized by law, such additional compensation is not allowed under Section 8, Article IX-B of the Constitution.

There is only one act of exit from the service and only one service to exit from. Employees who chose separation from the service under the NPC’s restructuring plan never really exercised the right to optionally retire; the earlier termination of their employment denied them the opportunity to optionally retire. Consequently, no retirement pay ever accrued in their favor.

This means, in concrete terms, that the employees who opted to be separated from the service under the NPC restructuring plan and who have received separation pay under RA 9136, cannot also be considered to have separately exited from the same service through optional retirement under CA 186, entitling them to separate retirement benefits under this law. RA 9136 provides for separation benefits in the alternative and does not offer both.

Optional retirement clearly is a mere expectancy until availed of by those who are qualified to exercise the option to retire. If not taken because the employee chose the separation package under RA 9136, then optional retirement under CA 186 simply remained an expectancy that never materialized and is now forever lost. To put it differently, given one and the same exit from the one and the same service for which only one separation benefit is provided, there can be no actual retirement under CA 186 after exit via the RA 9136 route has been taken; optional retirement under CA 186 has then become the road not taken. Efren M. Herrera, et al. vs. National Power Corporation, et al., Separate Concurring Opinion of J. Brion, G.R. No. 166570, December 18, 2009.

Termination;  retrenchment. Retrenchment is the termination of employment initiated by the employer through no fault of and without prejudice to the employees, it is resorted to during periods of business recession, industrial depression, or seasonal fluctuations or during lulls occasioned by lack of orders, shortage of materials, conversion of the plant for a new production program or the introduction of new methods or more efficient machinery or of automation. It is a management prerogative resorted to, to avoid or minimize business losses.

To effect a valid retrenchment, the following elements must be present: (1) the retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious, and real, or only if expected, are reasonably imminent as perceived objectively and in good faith by the employer; (2) the employer serves written notice both to the employee/s concerned and the Department of Labor and Employment at least a month before the intended date of retrenchment; (3) the employer pays the retrenched employee separation pay in an amount prescribed by the Code; (4) the employer exercises its prerogative to retrench in good faith; and (5) the employer uses fair and reasonable criteria in ascertaining who would be retrenched or retained.

The losses must be supported by sufficient and convincing evidence. The normal method of discharging this burden of proof is the submission of financial statements duly audited by independent external auditors. For failure of Asiakonstrukt to clearly and satisfactorily substantiate its financial losses, the dismissal of the employee on account of retrenchment is unjustified. Virgilio G. Anabe vs. Asian Construction (ASIAKONSTRUKT), et al., G.R. No. 183233, December 23, 2009.

Union; cancellation of union registration; grounds. For the purpose of de-certifying a union, it must be shown that there was misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto; the minutes of ratification; or, in connection with the election of officers, the minutes of the election of officers, the list of voters, or failure to submit these documents together with the list of the newly elected-appointed officers and their postal addresses to the Bureau of Labor Relations.

The bare fact that two signatures appeared twice on the list of those who participated in the organizational meeting would not provide a valid reason to cancel the union’s certificate of registration. The cancellation of a union’s registration doubtless has an impairing dimension on the right of labor to self-organization. For fraud and misrepresentation to be grounds for cancellation of union registration under the Labor Code, the nature of the fraud and misrepresentation must be grave and compelling enough to vitiate the consent of a majority of union members. Mariwasa Siam Ceramics, Inc. vs. The Secretary of the Department of Labor and Employment, et al., G.R. No. 183317, December 21, 2009.

Union; membership requirement. While it is true that the withdrawal of support may be considered as a resignation from the union, the fact remains that at the time of the union’s application for registration, the affiants were members of the union and they comprised more than the required 20% membership for purposes of registration as a labor union. Article 234 of the Labor Code merely requires a 20% minimum membership during the application for union registration. It does not mandate that a union must maintain the 20% minimum membership requirement all throughout its existence. Mariwasa Siam Ceramics, Inc. vs. The Secretary of the Department of Labor and Employment, et al., G.R. No. 183317, December 21, 2009.


Labor Procedure

Appeal; appeal bond a jurisdictional requirement. The Court has always stressed that Article 223, which prescribes the appeal bond requirement, is a rule of jurisdiction and not of procedure. There is little leeway for condoning a liberal interpretation thereof, and certainly none premised on the ground that its requirements are mere technicalities. It must be emphasized that there is no inherent right to an appeal in a labor case, as it arises solely from grant of statute, namely, the Labor Code.

For the same reason, the Court has repeatedly emphasized that the requirement for posting the surety bond is not merely procedural but jurisdictional and cannot be trifled with. Non-compliance with such legal requirements is fatal and has the effect of rendering the judgment final and executory. Hilario S. Ramirez vs. Hon. Court of Appeals, et al., G.R. No. 182626, December 4, 2009.

Appeal; appeal bond reduction. It is daylight-clear from the foregoing that while the bond may be reduced upon motion by the employer, this is subject to the conditions that (1) the motion to reduce the bond shall be based on meritorious grounds; and (2) a reasonable amount in relation to the monetary award is posted by the appellant; otherwise, the filing of the motion to reduce bond shall not stop the running of the period to perfect an appeal. The qualification effectively requires that unless the NLRC grants the reduction of the cash bond within the 10-day reglementary period, the employer is still expected to post the cash or surety bond securing the full amount within the said 10-day period. Hilario S. Ramirez vs. Hon. Court of Appeals, et al., G.R. No. 182626, December 4, 2009.

Appeal;  issues raised first time on appeal; exceptions. While it is a well-settled rule, also applicable in labor cases, that issues not raised in proceedings below cannot be raised for the first time on appeal, there are exceptions thereto, among which are, for reasons of public policy or interest.

The NLRC did not err in considering the issue of the veracity of the confirmatory tests even if the same was raised only in the employee’s Motion for Reconsideration of the NLRC Decision, it being crucial in determining the validity of the employee’s dismissal from service.

Technical rules of procedure are not strictly adhered to in labor cases. In the interest of substantial justice, new or additional evidence may be introduced on appeal before the NLRC. Such move is proper, provided due process is observed, as was the case here, by giving the opposing party sufficient opportunity to meet and rebut the new or additional evidence introduced.

The Constitution no less directs the State to afford full protection to labor. To achieve this goal, technical rules of procedure shall be liberally construed in favor of the working class in accordance with the demands of substantial justice. Plantation Bay Resort & Spa and Efren Belarmino vs. Romel S. Dubrico, et al., G.R. No. 182216, December 4, 2009.

Appeal; perfection. Under the Rules, appeals involving monetary awards are perfected only upon compliance with the following mandatory requisites, namely: (1) payment of the appeal fees; (2) filing of the memorandum of appeal; and (3) payment of the required cash or surety bond.

The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the decision of the Labor Arbiter. The intention of the lawmakers to make the bond a mandatory requisite for the perfection of an appeal by the employer is clearly expressed in the provision that an appeal by the employer may be perfected “only upon the posting of a cash or surety bond.” The word “only” in Articles 223 of the Labor Code makes it unmistakably plain that the lawmakers intended the posting of a cash or surety bond by the employer to be the essential and exclusive means by which an employer’s appeal may be perfected. The word “may” refers to the perfection of an appeal as optional on the part of the defeated party, but not to the compulsory posting of an appeal bond, if he desires to appeal. The meaning and the intention of the legislature in enacting a statute must be determined from the language employed; and where there is no ambiguity in the words used, then there is no room for construction.

Clearly, the filing of the bond is not only mandatory but also a jurisdictional requirement that must be complied with in order to confer jurisdiction upon the NLRC. Non-compliance with the requirement renders the decision of the Labor Arbiter final and executory. This requirement is intended to assure the workers that if they prevail in the case, they will receive the money judgment in their favor upon the dismissal of the employer’s appeal. Hilario S. Ramirez vs. Hon. Court of Appeals, et al., G.R. No. 182626, December 4, 2009.

Illegal dismissal and rehabilitation proceedings. The term “claim,” as contemplated in Section 6 (c), refers to debts or demands of a pecuniary nature. It is the assertion of rights for the payment of money. Here, petitioners have pecuniary claims—the payment of separation pay and moral and exemplary damages.

In Rubberworld (Phils.), Inc. v. NLRC [365 Phil. 273 (1999)], we held that a labor claim is a “claim” within the contemplation of PD 902-A, as amended. This is consistent with the Interim Rules of Procedure on Corporate Rehabilitation which came out in 2000. Thus, labor claims are included among the actions suspended upon the placing under rehabilitation of employer-corporations.

The suspensive effect of the stay order is not time-bound. As we held in Rubberworld, it continues to be in effect as long as reasonably necessary to accomplish its purpose. Gina M. Tiangco and Salvacion Jenny Manego vs. Uniwide Sales Warehouse Club, Inc. and Jimmy Gow, G.R. No. 168697, December 14, 2009.

NCMB appeal. Rule 43 of the Rules of Court under which petitioners filed their petition before the Court of Appeals applies to awards, judgments, final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions. Given NCMB’s functions, it cannot be considered a quasi-judicial agency. Hence, its decisions or that of its authorized officer cannot be appealed either through a petition for review under Rule 43 or under Rule 65 of the Revised Rules of Court. Juanito Tabigue, et al. vs. International Copra Export Corporation (INTERCO), G.R. No. 183335, December 23, 2009.

Strikes and lockouts; assumption and certification order; mandatory ands immediately executory. Articles 263 (g) and 264 of the Labor Code have been enacted pursuant to the police power of the State. The grant of plenary powers to the Secretary of Labor makes it incumbent upon him to bring about soonest, a fair and just solution to the differences between theramiemployer and the employees, so that the damage such labor dispute might cause upon the national interest may be minimized as much as possible, if not totally averted, by avoiding stoppage of work or any lag in the activities of the industry or the possibility of those contingencies that might cause detriment to the national interest.

In order to effectively achieve such end, the assumption or certification order shall have the effect of automatically enjoining the intended or impending strike or lockout. Moreover, if one has already taken place, all striking workers shall immediately return to work, and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout.

Assumption and certification orders are executory in character and are to be strictly complied with by the parties, even during the pendency of any petition questioning their validity. Regardless therefore of its motives, or of the validity of its claims, YSS Laboratories must readmit all striking employees and give them back their respective jobs. Accepting back the workers in this case is not a matter of option, but of obligation mandated by law for YSS Laboratories to faithfully comply with. Its compulsory character is mandated, not to cater to a narrow segment of society, or to favor labor at the expense of management, but to serve the greater interest of society by maintaining the economic equilibrium.

Certainly, the determination of who among the strikers could be admitted back to work cannot be made to depend upon the discretion of employer, lest the certification or assumption-of-jurisdiction orders are stripped of their coercive power that is necessary for attaining their laudable objective. The return-to-work order does not interfere with the management’s prerogative, but merely regulates it when, in the exercise of such right, national interests will be affected. The rights granted by the Constitution are not absolute. They are still subject to control and limitation to ensure that they are not exercised arbitrarily. The interests of both the employers and employees are intended to be protected and not one of them is given undue preference. YSS Employees Union-Philippine Transport and General Organization vs. YSS Laboratories, Inc., G.R. No. 155125, December 4, 2009.


(Leslie thanks Joyce Melcar Tan for assisting in the preparation of this post.)

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