February 2010 Philippine Supreme Court Decisions on Labor Law and Procedure

Here are selected February 2010 rulings of the Supreme Court of the Philippines on labor law and procedure:

Labor Law

Agency; principle of apparent authority. There is ample evidence that the hospital held out to the patient that the doctor was its agent. The two factors that determined apparent authority in this case were: first, the hospital’s implied manifestation to the patient which led the latter to conclude that the doctor was the hospital’s agent; and second, the patient’s reliance upon the conduct of the hospital and the doctor, consistent with ordinary care and prudence.

It is of record that the hospital required a “consent for hospital care” to be signed preparatory to the surgery of the patient. The form reads: “Permission is hereby given to the medical, nursing and laboratory staff of the Medical City General Hospital to perform such diagnostic procedures and to administer such medications and treatments as may be deemed necessary or advisable by the physicians of this hospital for and during the confinement of xxx.

By such statement, the hospital virtually reinforced the public impression that the doctor was a physician of its hospital, rather than one independently practicing in it; that the medications and treatments he prescribed were necessary and desirable; and that the hospital staff was prepared to carry them out. Professional Services, Inc. vs. The Court of Appeals, et al./Natividad (substituted by her children Marcelino Agana III, Enrique Agana, Jr. Emma Agana-Andaya, Jesus Agana and Raymund Agana and Errique Agana) vs. The Court of Appeals and Juan Fuentes Miguel Ampil vs. Natividad and Enrique Agana, G.R. Nos. 126297/G.R. No. 126467/G.R. No. 127590, February 2, 2010.

Compensable illness. Since cholecystolithiasis or gallstone has been excluded as a compensable illness under the applicable standard contract for Filipino seafarers that binds the seafarer and the vessel’s foreign owner, it was an error for the CA to treat such  illness as “work-related” and, therefore, compensable.  The standard contract precisely did not consider gallstone as compensable illness because the parties agreed, presumably based on medical science, that such affliction is not caused by working on board ocean-going vessels.

Nor is there any evidence to prove that the nature of the seafarer’s work on board a ship aggravated his illness.  No one knows if he had gallstone at the time he boarded the vessel.  By the nature of this illness, it is highly probable that he already had it when he boarded his assigned ship although it went undiagnosed because he had yet to experience its symptoms. Bandila Shipping, Inc. et al. vs. Marcos C. Abalos, G.R. No. 177100, February 22, 2010.

Compensable illness; work related. Melanoma is not listed as an occupational disease under Annex “A” of the Rules on Employees Compensation.  Hence, respondent has the burden of proving, by substantial evidence, the causal relationship between her illness and her working conditions. Substantial evidence means such relevant evidence as a reasonable mind might accept to support a conclusion.

The Court in this case agreed with the petitioner and the ECC that respondent was not able to positively prove that her ailment was caused by her employment and that the risk of contracting the disease was increased by her working conditions. While the law requires only a reasonable work-connection and not a direct causal relation, respondent still failed to show that her illness was really brought about by the wound she sustained during the supervised gardening activity in school. The CA accepted the allegation that the mole appeared right on the spot where respondent sustained the injury without any further proof that the mole appeared because of the injury.  The CA further ruled that “the risk of acquiring the said ailment increased by the nature of [respondent’s] work in going to school and in returning to her residence during school days x x x.”  However, the CA failed to consider that in a tropical country like the Philippines, exposure to sunlight is common.  Unlike farmers, fishermen or lifeguards, it was not shown that respondent had chronic long-term exposure to the sun considered necessary for the development of melanoma. Thus, the Court did not find the risk of contracting the disease to have been heightened by respondent’s exposure to sunlight in going to work and returning to her residence. Government Service Insurance System vs. Rosalinda A. Bernadas, G.R. No. 164731, February 11, 2010

Dismissal; due process. The essence of due process is the opportunity to be heard; it is the denial of this opportunity that constitutes violation of due process of law. The employee was given the opportunity to be heard when a proper notice of investigation was sent to him, although the notice did not reach him for reasons outside the employer’s control.  The employee was not also totally unheard on the matter as he was able to explain his side through the two (2) explanation letters he submitted. These letters are clear indications that he intimately knew of the matter for which he was being investigated.  If he was denied due process at all, the denial was with respect to the charges of extortion, tardiness and absenteeism, which are grounds invoked separately from loss of trust and confidence. These grounds were not serious considerations in the dismissal that followed, and therefore, were not considered by the Court as material to the present case. Bibiana Farms and Mills, Inc. vs. Arturo Lado, G.R. No. 157861, February 2, 2010.

Dismissal; due process. In an unlawful dismissal case, the employer has the burden of proving the lawful cause sustaining the dismissal of the employee. The employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause. The employee’s behavior constituted just cause. However, the company cannot deny that it failed to observe due process. The law requires that the employer must furnish the worker sought to be dismissed with two written notices before termination of employment can be legally effected: (1) notice which apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the subsequent notice which informs the employee of the employer’s decision to dismiss him.  Violation of the employee’s right to statutory due process, even if the dismissal was for a just cause, warrants the payment of indemnity in the form of nominal damages.  This indemnity is not intended to penalize the employer but to vindicate or recognize the employee’s right to statutory due process, which was violated by the employer in the present case. Hilton Heavy Equipment Corporation and Peter Lim vs. Ananias Dy, G.R. No. 164860, February 2, 2010.

Dismissal; due process. Failure to observe due process in the termination of employment for a just cause does not invalidate the dismissal but makes the company liable for non-compliance with the procedural requirements of due process. The violation of the employee’s right to statutory due process warrants the payment of nominal damages, the amount of which is addressed to the sound discretion of the court, taking into account the relevant circumstances. In the instant case, considering that the company already suffered financially because of poor sales performance under the employee’s watch, it is proper to reduce the amount of nominal damages awarded to petitioner to Thirty Thousand Pesos (P30,000.00). The amount of nominal damages awarded is not intended to enrich the employee, but to deter employers from future violations of the statutory due process rights of employees. Rolando P. Ancheta vs. Destiny Financial Plans, Inc. and Arsenio Bartolome, G.R. No. 179702, February 16, 2010

Dismissal; due process. In the dismissal of employees, it has been consistently held that the twin requirements of notice and hearing are essential elements of due process.  The employer must furnish the worker with two written notices before termination of employment can be legally effected: (1) a notice apprising the employee of the particular acts or omissions for which his dismissal is sought, and (2) a subsequent notice informing the employee of the employer’s decision to dismiss him.  With regard to the requirement of a hearing, the essence of due process lies simply in an opportunity to be heard, and not that an actual hearing should always and indispensably be held.

Likewise, there is no requirement that the notices of dismissal themselves be couched in the form and language of judicial or quasi-judicial decisions.  What is required is for the employer to conduct a formal investigation process, with notices duly served on the employees informing them of the fact of investigation, and subsequently, if warranted, a separate notice of dismissal. Through the formal investigatory process, the employee must be accorded the right to present his or her side, which must be considered and weighed by the employer.  The employee must be sufficiently apprised of the nature of the charge, so as to be able to intelligently defend himself or herself against the charge.  Wilfredo M. Baron, et al. vs. National Labor Relations Commission, et al., G.R. No. 182299, February 22, 2010.

Dismissal; gross neglect of duties. Article 282 (b) imposes a stringent condition before an employer may terminate an employment due to gross and habitual neglect by the employee of his duties.  To sustain a termination of employment based on this provision of law, the negligence must not only be gross but also habitual.

In the present case, the employer asserts that the employees failed to regularly undertake a monthly physical inventory of the outlet’s merchandise.  The Court was not persuaded as it found that inventory preparation and reporting did not fall on the employees’ shoulders since they were to “assist the [stock] clerk” only. Kulas Ideas & Creations, et al. vs. Juliet Alcoseba, et al., G.R. No. 180123, February 18, 2010.

Dismissal; loss of trust and confidence. In Fungo v. Lourdes School of Mandaluyong, we restated the guidelines for the application of loss of trust and confidence as a just cause for dismissal of an employee from the service, thus: “a) loss of confidence should not be simulated; b) it should not be used as subterfuge for causes which are improper, illegal or unjustified; c) it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and d) it must be genuine, not a mere afterthought to justify earlier action taken in bad faith.” In the present case, the employee, who was a warehouseman, held a position of trust and confidence and was given access to and authority over company property with clear tasks and guidelines laid down very early in his employment. Like any business entity, the company has every right to protect itself from actual threats to the viability of its operations.  The employee, caught red-handed in a scheme to spirit off unpaid company sacks, not only violated his fiduciary duty as custodian of company property resulting in the company’s loss of trust and confidence in him; he had also become a threat to the viability of company operations. To rule that he should be reinstated would be oppressive to the company.  The law, in protecting the rights of the employee, authorizes neither the oppression nor the self-destruction of the employer. Bibiana Farms and Mills, Inc. vs. Arturo Lado, G.R. No. 157861, February 2, 2010.

Dismissal; loss of trust and confidence. The doctrine of loss of confidence requires the concurrence of the following: (1) loss of confidence should not be simulated;  (2) it should not be used as a subterfuge for causes which are improper, illegal, or unjustified; (3) it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; (4) it must be genuine, not a mere afterthought to justify an earlier action taken in bad faith; and (5) the employee involved holds a position of trust and confidence. Loss of confidence, as a just cause for termination of employment, is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence. He must be invested with confidence on delicate matters, such as the custody, handling, care, and protection of the employer’s property and/or funds. In order to constitute a just cause for dismissal, the act complained of must be “work-related” such as would show the employee concerned to be unfit to continue working for the employer.

The subject employee in this case is a managerial employee holding a highly sensitive position. Being the Head of the Marketing Group of the company, he was  in  charge,  among others, of  the over-all production and sales performance of the company. Thus, as aptly pointed out by the CA, his performance was practically the lifeblood of the corporation, because its earnings depended on the sales of the marketing group, which he used to head. The position held by the employee required the highest degree of trust and confidence of his employer in the former’s exercise of managerial discretion insofar as the conduct of the latter’s business was concerned. The employee’s inability to perform the functions of his office to the satisfaction of his employer and the former’s poor judgment as marketing head caused the company huge financial losses. If these were not timely addressed and corrected, the company could have collapsed, to the detriment of its policy holders, stockholders, employees, and the public in general. Rolando P. Ancheta vs. Destiny Financial Plans, Inc. and Arsenio Bartolome, G.R. No. 179702, February 16, 2010

Dismissal; loss of trust and confidence. The Court found convincing evidence that a pattern of concealment and dishonesty marred the purchase of paper materials for the Women’s Journal’s special project, with the employee playing the principal and most active role.  There is no question that the employee failed to make a reasonable canvass of the prices of the paper materials required by a company’s special project, resulting in substantial losses to the company.  That a rush job was involved, is no excuse as canvassing could be done even in a day’s time as shown by the audit department’s canvass.  That the employee was responsible for concealment and omissions also appears clear to us; he failed, under dubious circumstances, to seasonably disclose to his employer material information with financial impact on the purchase transaction.

Thus, the Court cannot but conclude that substantial evidence exists justifying the employee’s dismissal for a just cause – loss of trust and confidence.  For loss of trust and confidence to be a ground for dismissal, the law requires only that there be at least some basis to justify the dismissal. The fact that the employee had been with the company for 25 years cannot change the conclusion that he had become a liability to the company whose interests he miserably failed to protect. Philippine Journalist, Inc. vs. Leozar Dela Cruz y Balobal, G.R. No. 187120, February 16, 2010.

Dismissal; requirements. Under the Labor Code, the requirements for the lawful dismissal of an employee are two-fold, consisting of substantive and procedural aspects.  Not only must the dismissal be for a just or authorized cause; the basic requirements of procedural due process – notice and hearing – must likewise be observed before an employee may be dismissed. The burden of proof rests on the employer to show that the employee’s dismissal has met these due process requirements. The case of the employer must stand or fall on its own merits and not on the weakness of the employee’s defense. Bibiana Farms and Mills, Inc. vs. Arturo Lado, G.R. No. 157861, February 2, 2010.

Dismissal; separation pay. Under Article 279 of the Labor Code, an illegally dismissed employee “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 computed from the time his compensation was withheld from him up to the time of his actual reinstatement.”  In addition to full backwages, the Court has also repeatedly ruled that in cases where reinstatement is no longer feasible due to strained relations, then separation pay may be awarded instead of reinstatement. In Mt. Carmel College v. Resuena, the Court reiterated that the separation pay, as an alternative to reinstatement, should be equivalent to one (1) month salary for every year of service. Sargasso Construction and Development Corporation vs. National Labor Relations Commission (4th Division) and Gorgonio Mongcal, G.R. No. 164118, February 9, 2010.

Dismissal; serious misconduct. Misconduct has been defined as 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 such grave and aggravated character and not merely trivial and unimportant.  Such misconduct, however serious, must nevertheless be in connection with the employee’s work to constitute just cause for his separation.

In the present case, the Court found substantial evidence to prove that a serious misconduct has been committed to justify termination from employment.  The Certified Public Accountant and Corporate Finance Manager of the company submitted a report dated February 19, 2000 stating that in spite of management’s memorandum, the keys to the office and filing cabinets were not surrendered.  It was likewise stated in the report that petitioner Wilfredo Baron pulled out some records without allowing a representative from the internal audit team to inspect them.  He noticed Wilfredo Baron deleting some files from the computer, which could no longer be retrieved.  Moreover, a member of the audit team saw Cynthia Junatas (another petitioner) carrying some documents, including a Daily Collection Report.  When asked to present the documents for inspection, Junatas refused and tore the document.

In addition, the audit team discovered that MSI incurred an inventory shortage of One Million Thirty Thousand Two Hundred Fifty-Eight Pesos and Twenty-One Centavos (P1,030,258.21).  It found that Wilfredo Baron, the operations manager, in conspiracy with the other petitioners, orchestrated massive irregularities and grand scale fraud, which could no longer be documented because of theft of company documents and deletion of computer files.  Unmistakably, the unauthorized taking of company documents and files, failure to pay unremitted collections, failure to surrender keys to the filing cabinets despite earlier instructions, concealment of shortages, and failure to record inventory transactions pursuant to a fraudulent scheme are acts of grave misconduct, which are sufficient causes for dismissal from employment. Wilfredo M. Baron, et al. vs. National Labor Relations Commission, et al., G.R. No. 182299, February 22, 2010.

Dismissal; theft; degree of evidence. The long-standing rule is that the existence of a conspiracy must be proved by clear, direct and convincing evidence. In Fernandez v. National Labor Relations Commission, The Court expounded on the degree of evidence required to establish the existence of a conspiracy in this wise: “While it is true that in conspiracy, direct proof is not essential, it must however, be shown that it exists as clearly as the commission of the offense itself.  There must at least be adequate proof that the malefactors had come to an agreement concerning the commission of a felony and decided to commit it. x  x  x  For conspiracy to exist, it is essential that there must be conscious design to commit an offense.  Conspiracy is not the product of negligence but of intentionality on the part of the cohorts.”

Verily, there was a dearth of evidence directly linking the employee to the commission of the crime of theft, as his mere act of loading the dump truck with aggregates did not show that he knew of the other person’s plan to deliver the load to a place other than the company’s construction site.  The only conclusion, therefore, is that the company had illegally dismissed the employee in the present case. Sargasso Construction and Development Corporation vs. National Labor Relations Commission (4th Division) and Gorgonio Mongcal, G.R. No. 164118, February 9, 2010.

Employee; recovery of personal contributions. May a government employee, dismissed from the service for cause, be allowed to recover the personal contributions he paid to the Government Service Insurance System (GSIS)? The answer is yes.

Section 11(d) of Commonwealth Act No. 186, as amended, provides: “Upon dismissal for cause or on voluntary separation, he shall be entitled only to his own premiums and voluntary deposits, if any, plus interest of three per centum per annum, compounded monthly.” This provision continues to govern cases of employees dismissed for cause and their claims for the return of their personal contributions.

Also, it should be remembered that the GSIS laws are in the nature of social legislation, to be liberally construed in favor of the government employees. The money, subject of the employee’s request, consists of personal contributions made by him, premiums paid in anticipation of benefits expected upon retirement. The occurrence of a contingency, i.e., his dismissal from the service prior to reaching retirement age, should not deprive him of the money that belongs to him from the outset. To allow forfeiture of these personal contributions in favor of the GSIS would condone undue enrichment. Carmelita Lledo vs. Atty. Cesar V. Lledo, Branch Clerk of Court, Regional Trial Court, Branch 94, Quezon City, A.M. No. P-95-1167, February 9, 2010.

Employee expenses; in-service training. In the present case, Article XXI, Section 6 of the CBA provides that “All expenses of security guards in securing /renewing their licenses shall be for their personal account.” A reading of the provision would reveal that it encompasses all possible expenses a security guard would pay or incur in order to secure or renew his license. In-service training being a requirement for the renewal of a security guard’s license, expenses incurred therefore are claimed to be for the security guard’s personal account. However, the 1994 Revised Rules and Regulations Implementing the Private Security Agency Law (Republic Act No. 5487) provides that it shall be the primary responsibility of the operators  of private security agency and company security forces to maintain and upgrade the standards of efficiency, discipline, performance and competence of their personnel. It further provides that “[T]o maintain and/or upgrade the standard  of efficiency, discipline and competence of security guards and detectives, company security force and private security agencies upon prior authority shall conduct-in-service training … The cost of training shall be pro-rated among the participating agencies/private companies.”

Since it is the primary responsibility of operators of company security forces to maintain and upgrade the standards of efficiency, discipline, performance and competence of their personnel, it follows that the expenses to be incurred therein shall be for the account of the company. Further, the intent of the law to impose upon the employer the obligation to pay for the cost of its employees’ training is manifested in the aforementioned provision of law. While the law mandates pro-rating of expenses because it would be impracticable and unfair to impose the burden of expenses suffered by all participants on only one participating agency or company, if there is no centralization, there can be no pro-rating, and therefore, the company that has its own security forces must shoulder the entire cost for such training.  If the intent of the law were to impose upon individual employees the cost of training, the provision on the pro-rating of expenses would not have found print in the law.  Prior to the signing of the CBA, it was the company providing for the in-service training of the guards. Thus, implicit from the company’s actuations was its acknowledgment of its legally mandated responsibility to shoulder the expenses for in-service training. PNCC Skyway Traffic Management and Security Division Workers Organization (PSTMSWDO), represented by its President, Rene Soriano vs. PNCC Skyway Corporation), G.R. No. 171231, February 17, 2010

Employer-employee relationship; control test. This Court still employs the “control test” to determine the existence of an employer-employee relationship between hospital and doctor. In Calamba Medical Center, Inc. v. National Labor Relations Commission, et al., the Court held that: “Under the “control test”, an employment relationship exists between a physician and a hospital if the hospital controls both the means and the details of the process by which the physician is to accomplish his task. x x x That petitioner exercised control over respondents gains light from the undisputed fact that in the emergency room, the operating room, or any department or ward for that matter, the doctor’s work is monitored through the hospital’s nursing supervisors, charge nurses and orderlies. Without the approval or consent of the hospital or its medical director, no operations can be undertaken in those areas. For the control test to apply, it is not essential for the employer to actually supervise the performance by the employee of his duties, it being enough that it has the right to wield the power.” Professional Services, Inc. vs. The Court of Appeals, et al./Natividad (substituted by her children Marcelino Agana III, Enrique Agana, Jr. Emma Agana-Andaya, Jesus Agana and Raymund Agana and Errique Agana) vs. The Court of Appeals and Juan Fuentes Miguel Ampil vs. Natividad and Enrique Agana, G.R. Nos. 126297/G.R. No. 126467/G.R. No. 127590, February 2, 2010.

Management prerogatives; contract of perpetual employment. The Court cannot countenance the employee’s claim that a contract of perpetual employment was ever constituted. While the Constitution recognizes the primacy of labor, it also recognizes the critical role of private enterprise in nation-building and the prerogatives of management. A contract of perpetual employment deprives management of its prerogative to decide whom to hire, fire and promote, and renders inutile the basic precepts of labor relations. While management may validly waive it prerogatives, such waiver should not be contrary to law, public order, public policy, morals or good customs. An absolute and unqualified employment for life in the mold of petitioner’s concept of perpetual employment is contrary to public policy and good customs, as it unjustly forbids the employer from terminating the services of an employee despite the existence of a just or valid cause. It likewise compels the employer to retain an employee despite the attainment of the statutory retirement age, even if the employee has became a “non-performing asset” or, worse, a liability to the employer. Ronilo Sorreda vs. Cambridge Electronics Corporation, G.R. No. 172927, February 11, 2010.

Suspension; leave without prior authority. While it is true that the union and its members have been granted union leave privileges under the CBA, the grant cannot be considered separately from the other provisions of the CBA, particularly the provision on management prerogatives where the CBA reserved for the company the full and complete authority in managing and running its business. The Court, in the present case, saw nothing in the language of the union leave provision that removes from the company the right to prescribe reasonable rules and regulations to govern the manner of availing of union leaves, particularly the prerogative to require its prior approval.  In fact, prior notice is expressly required under the CBA so that the company can appropriately respond to the request for leave.  In this sense, the rule requiring prior approval only made express what is implied from the terms of the CBA.

Despite management’s disapproval of his requested leave, the employee still went on leave, in open disregard of his superior’s orders. This rendered the employee open to the charge of insubordination, separately from his absence without official leave. Malayan Employees Association-FFW and Rodolfo Mangalino vs. Malayan Insurance Company, Inc., G.R. No. 181357, February 2, 2010.

Quitclaim; elements. It is true that the law looks with disfavor on quitclaims and releases by employees who have been inveigled or pressured into signing them by unscrupulous employers seeking to evade their legal responsibilities and frustrate just claims of employees. In certain cases, however, the Court has given effect to quitclaims executed by employees if the employer is able to prove the following requisites, to wit: (1) the employee executes a deed of quitclaim voluntarily; (2) there is no fraud or deceit on the part of any of the parties; (3) the consideration of the quitclaim is credible and reasonable; and (4) the contract is not contrary to law, public order, public policy, morals or good customs, or prejudicial to a third person with a right recognized by law. Goodrich Manufacturing Corporation & Mr. Nilo Chua Goy vs. Emerlina Ativo, et al., G.R. No. 188002, February 1, 2010.

Quitclaim; validity. In the case at bar, both the Labor Arbiter and the NLRC ruled that the employees executed their quitclaims without any coercion from the company following their voluntary resignation from the company. The contents of the quitclaim documents are simple, clear and unequivocal. The records of the case are bereft of any substantial evidence to show that the employees did not know that they were relinquishing their right short of what they had expected to receive and contrary to what they have so declared. Put differently, at the time they were signing their quitclaims, respondents honestly believed that the amounts received by them were fair and reasonable settlements of the amounts, which they would have received had they refused to voluntarily resign from the said company. Goodrich Manufacturing Corporation & Mr. Nilo Chua Goy vs. Emerlina Ativo, et al., G.R. No. 188002, February 1, 2010.

Vacation leave; scheduling. Although the preferred vacation leave schedule of employees should be given priority, they cannot demand, as a matter of right, for their request to be automatically granted by the company. If the employees were given the exclusive right to schedule their vacation leave then said right should have been incorporated in the CBA. In the absence of such right and in view of the mandatory provision in the CBA giving the company the right to schedule the vacation leave of its employees, the CBA prevails.

In the grant of vacation leave privileges to an employee, the employer is given the leeway to impose conditions on the entitlement to and commutation of the same, as the grant of vacation leave is not a standard of law, but a prerogative of management. It is a mere concession or act of grace of the employer and not a matter of right on the part of the employee.  It is, therefore, well within the power and authority of an employer to impose certain conditions, as it deems fit, on the grant of vacation leaves, such as having the option to schedule the same. PNCC Skyway Traffic Management and Security Division Workers Organization (PSTMSWDO), represented by its President, Rene Soriano vs. PNCC Skyway Corporation), G.R. No. 171231, February 17, 2010

Labor Procedure

Appeal; question of fact. While as a rule, a petition for review on certiorari shall raise only questions of law, we deem it appropriate to examine the facts in this review, given the conflicting factual findings between the Labor Arbiter, on the one hand and, the NLRC and the CA, on the other. The Labor Arbiter sustained Rivera’s dismissal with the finding that he committed acts of dishonesty or fraud against his employer.  The NLRC and the CA held that no substantial evidence existed to support Rivera’s dismissal. Philippine Journalist, Inc. vs. Leozar Dela Cruz y Balobal, G.R. No. 187120, February 16, 2010.

Execution of judgments; separation pay/backwages; computation. In concrete terms, the question is whether a re-computation in the course of execution, of the labor arbiter’s original computation of the awards made pegged as of the time the decision was rendered and confirmed with modification by a final CA decision, is legally proper.

The Court held that under the terms of the decision under execution, no essential change is made by a re-computation as this step is a necessary consequence that flows from the nature of the illegality of dismissal declared in that decision. A re-computation (or an original computation, if no previous computation has been made) is a part of the law – specifically, Article 279 of the Labor Code and the established jurisprudence on this provision – that is read into the decision.  By the nature of an illegal dismissal case, the reliefs continue to add on until full satisfaction, as expressed under Article 279 of the Labor Code.  The re-computation of the consequences of illegal dismissal upon execution of the decision does not constitute an alteration or amendment of the final decision being implemented. The illegal dismissal ruling stands; only the computation of the monetary consequences of this dismissal is affected and this is not a violation of the principle of immutability of final judgments. Session Delights Ice Cream and Fast Foods vs. The Hon. Court of Appeals (Sixth Division), Hon. National Labor Relations Commission (Second Division) and Adonis Armenio M. Flora, G.R. No. 172149, February 8, 2010.

Jurisdiction; absence of employer-employee relationship. Jurisdiction over the subject matter of a complaint is determined by the allegations of the complaint. In Pioneer Concrete Philippines, Inc. v. Todaro, the Court reiterated that where no employer-employee relationship exists between the parties, and the Labor Code or any labor statute or collective bargaining agreement is not needed to resolve any issue raised by them, it is the Regional Trial Court which has jurisdiction. Thus it has been consistently held that the determination of the existence of a contract as well as the payment of damages is inherently civil in nature. A labor arbiter may only take cognizance of a case and award damages where the claim for such damages arises out of an employer-employee relationship.

In the present case, the employee, from the period May 8, 1999 to October 8, 1999, was clearly a project employee of the company. There is, therefore, an employer-employee relationship. Consequently, questions or disputes arising out of this relationship fell under the jurisdiction of the labor arbiter. However, based on petitioner’s allegations in his position paper, his cause of action was based on an alleged second contract of employment separate and distinct from his project employment contract. While there existed an employer-employee relationship between the parties while the project contract of employment existed, the present dispute is neither rooted in the aforestated contract nor is it one inherently linked to it. Petitioner insists on a right to be employed again in respondent company and seeks a determination of the existence of a new and separate contract that established that right. As such, his case is within the jurisdiction, not of the labor arbiter, but of the regular courts.  The NLRC and the CA were therefore correct in ruling that the labor arbiter erroneously took cognizance of the case. Ronilo Sorreda vs. Cambridge Electronics Corporation, G.R. No. 172927, February 11, 2010.

Jurisdiction;  void judgment. The company admits that it failed to appeal the January 29, 2003 Order within the period prescribed by law.  It likewise admits that the case was already in the execution process when it resorted to a belated appeal to the DOLE Secretary. The company sought to excuse itself from the effects of the finality of the Order by arguing that it was allegedly issued without jurisdiction. As such, it may be assailed at any time.

While it is true that orders issued without jurisdiction are considered null and void and, as a general rule, may be assailed at any time, the fact of the matter is that, in this case, it was well within the jurisdiction of Director Manalo to issue the Order.  Under Article 128(b) of the Labor Code, as amended by Republic Act (RA) No. 7730, the DOLE Secretary and her representatives, the regional directors, have jurisdiction over labor standards violations based on findings made in the course of inspection of an employer’s premises.  The said jurisdiction is not affected by the amount of claim involved, as RA 7730 had effectively removed the jurisdictional limitations found in Articles 129 and 217 of the Labor Code insofar as inspection cases, pursuant to the visitorial and enforcement powers of the DOLE Secretary, are concerned. The last sentence of Article 128(b) of the Labor Code recognizes an exception to the jurisdiction of the DOLE Secretary and her representatives, but such exception is neither an issue nor applicable here. Tiger Construction and Development Corporation vs. Reynaldo, et al., G.R. No. 164141, February 26, 2010.

Labor Appeal; cash bond. Article 223 of the Labor Code provides that an appeal by the employer to the NLRC from a judgment of a labor arbiter which involves a monetary award may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the NLRC, in an amount equivalent to the monetary award in the judgment appealed from.  “Cash,” means a sum of money; cash bail (the sense in which the term “cash bond” is used) is a sum of money posted by a criminal defendant to ensure his presence in court, used in place of a surety bond and real estate.

To comply with the appeal bond requirement, the company deposited the amount of P71,909.77 with the United Coconut Planters Bank and surrendered to the NLRC the passbook covering the deposit, along with a Deed of Assignment it executed assigning the proceeds of the deposit in favor of the employee and authorizing the NLRC to release the same in the event that the Labor Arbiter’s Decision  becomes final and executory. Such Deed of Assignment, as well as the passbook, is neither a cash bond nor a surety bond.   The company’s appeal to the NLRC was thus not duly perfected, thereby rendering the Labor Arbiter’s Decision final and executory. Mindanao Times Corporation vs. Mitchel R. Confesor, G.R. No. 183417, February 5, 2010.

(Leslie thanks Nastasja Karina J. Lopez for assisting in the preparation of this post.)