November 2010 Philippine Supreme Court Decisions on Labor Law and Procedure

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

Appeal; determination of date of filing. Under Section 3, Rule 13 of the Rules of Court, where the filing of pleadings, appearances, motions, notices, orders, judgments, and all other papers with the court/tribunal is made by registered mail, the date of mailing, as shown by the post office stamp on the envelope or the registry receipt, shall be considered as the date of filing. Thus, the date of filing is determinable from two sources:  from the post office stamp on the envelope or from the registry receipt, either of which may suffice to prove the timeliness of the filing of the pleadings. If the date stamped on one is earlier than the other, the former may be accepted as the date of filing. In this case, to prove that it mailed the notice of appeal and appeal memorandum on October 27, 1997, instead of October 28, 1997, as shown by the stamped date on the envelope, petitioner presented Registry Receipt No. 34581 bearing the earlier date. Government Service Insurance System vs. National Labor Relations Commission (NLRC), Dionisio Banlasan, et al., G.R. No. 180045, November 17, 2010.

Appeal; filed out of time; exceptional cases. An appeal must be perfected within the statutory or reglementary period.  This is not only mandatory, but also jurisdictional.  Failure to perfect the appeal on time renders the assailed decision final and executory and deprives the appellate court or body of the legal authority to alter the final judgment, much less entertain the appeal. However, in exceptional cases, a belated appeal may be given due course if greater injustice will be visited upon the party should the appeal be denied. This is to serve the greater principles of substantial justice and equity. Technical rules are not binding in labor cases and are not to be applied strictly if the result would be detrimental to the working man. In the instant case, even if the appeal was filed one day late, the same should have been entertained by the NLRC. Government Service Insurance System vs. National Labor Relations Commission (NLRC), Dionisio Banlasan, et al., G.R. No. 180045, November 17, 2010.

Compensable illness; work-relatedness.  Granting arguendo that petitioner’s illness was not pre-existing, he still had to show that his illness not only occurred during the term of his contract but also that it resulted from a work-related injury or illness, or at the very least aggravated by the conditions of the work for which he was contracted for.  Petitioner failed to discharge this burden, however. That the exact and definite cause of petitioner’s illness is unknown cannot be used to justify grant of disability benefits, absent proof that there is any reasonable connection between work actually performed by petitioner and his illness.  Jerry M. Francisco, vs. Bahia Shipping Services, Inc. and/or Cynthia C. Mendoza, and Fred Olsen Cruise Lines, Ltd., G.R. No. 190545,  November 22, 2010.

Dismissal; illegal strike; distinction between union officers and mere members. The liabilities of individuals who participate in an illegal strike must be determined under Article 264 (a) of the Labor Code which makes a distinction between union officers and mere members.  The law grants the employer the option of declaring a union officer who knowingly participated in an illegal strike as having lost his employment. However, a worker merely participating in an illegal strike may not be terminated from employment if he does not commit illegal acts during a strike. Hence, with respect to respondents who are union officers, their termination by petitioners is valid.  Being fully aware that the proceedings before the Secretary of Labor were still pending as in fact they filed a motion for reconsideration, they cannot invoke good faith as a defense. For the rest of the individual respondents who are union members, they cannot be terminated for mere participation in the illegal strike.  Solid Bank Corp. Ernesto U. Gamier, et al. and Solid Bank Corp., et al. vs. Solid Bank Union and its Dismissed Officers and Members, et al. G.R. No. 159460 and G.R. No. 159461, November 15, 2010.

Dismissal; misconduct; substantial evidence.  The general rule is that where the findings of the administrative body are amply supported by substantial evidence, such findings are accorded not only respect but also finality, and are binding on the Court. The standard of substantial evidence is satisfied when there is reasonable ground to believe that a person is responsible for the misconduct complained of, even if such evidence might not be overwhelming or even preponderant. In the present case, the testimonies of the witnesses, the statements during the preliminary investigation, and the findings of the PNP Crime Lab on its examination of the signatures, amounted to substantial evidence that adequately supported the conclusion that petitioner Nacu was guilty of the acts complained of.  Nacu was rightfully found guilty of grave misconduct, dishonesty, and conduct prejudicial to the best interest of the service, and penalized with dismissal. Irene K. Nacu, Substituted By Benjamin M. Nacu, Ervin K. Nacu, and Nejie N. De Sagun vs. Civil Service Commission and Philippine Economic Zone Authority, G.R. No. 187752, November 23, 2010.

Employer-employee relationship.  Generally, in a business establishment, IDs are issued to identify the holder as a bona fide employee of the issuing entity. While petitioner Teng alleged that it was the maestros who hired the respondent workers, it was his company that issued to the respondent workers IDs bearing their names as employees and Teng’s signature as the employer. For the 13 years that the respondent workers worked for Teng, they received wages on a regular basis, in addition to their shares in the fish caught. More importantly, the element of control – which we have ruled in a number of cases to be a strong indicator of the existence of an employer-employee relationship – is present in this case. Teng not only owned the tools and equipment, he directed how the respondent workers were to perform their job as checkers. Albert Teng vs. Alfredo S. Pahagac, et al., G.R. No. 169704, November 17, 2010.

Forum shopping; elements. By forum shopping, a party initiates two or more actions in separate tribunals, grounded on the same cause, hoping that one or the other tribunal would favorably dispose of the matter.  The elements of forum shopping are: (1) identity of parties, or at least such parties as would represent the same interest in both actions; (2) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (3) identity of the two preceding particulars such that any judgment rendered in the other action will, regardless of which party is successful, amount to res judicata in the action under consideration.  In the instant case, petitioner CABEU-NFL merely raised the fact of the pendency of two cases without demonstrating any similarity in the causes of action between the said cases and the present case.  In the absence of such evidence to show that the issues involved in these cases are the same, the Court cannot give credence to petitioner’s claim of forum shopping. Central Azucarera De Bais Employees Union-NFL, represented by its President, Pablito Saguran vs. Central Azucarera De Bais, Inc., represented by its President, Antonio Steven L. Chan, G.R. No. 186605, November 17, 2010.

Illegal strike.  Under Article 264 (a) of the Labor Code, as amended, a strike that is undertaken despite the issuance by the Secretary of Labor of an assumption order and/or certification is illegal. So is a declaration of a strike during the pendency of cases involving the same grounds for the strike.  In the present case, there is no dispute that when respondents conducted their mass actions on April 3 to 6, 2000, the proceedings before the Secretary of Labor were still pending as both parties filed motions for reconsideration of the March 24, 2000 Order.  Clearly, respondents knowingly violated the aforesaid provision by holding a strike in the guise of mass demonstration.  Solid Bank Corp. Ernesto U. Gamier, et al. and Solid Bank Corp., et al. vs. Solid Bank Union and its Dismissed Officers and Members, et al. G.R. No. 159460 and G.R. No. 159461, November 15, 2010.

Illegal strike; proof of illegal acts. To justify termination of a union member who participated in an illegal strike, there must be proof that he or she committed illegal acts during a strike. Substantial evidence available under the attendant circumstances, which may justify the imposition of the penalty of dismissal, may suffice. Petitioners have not adduced evidence on such illegal acts committed by each of the individual respondents who are union members.  The dismissal of respondent-union members are therefore unjustified in the absence of a clear showing that they committed specific illegal acts during the mass actions and concerted work boycott. Solid Bank Corp. Ernesto U. Gamier, et al. and Solid Bank Corp., et al. vs. Solid Bank Union and its Dismissed Officers and Members, et al. G.R. No. 159460 and G.R. No. 159461, November 15, 2010.

Illegal dismissal; backwages. The award of backwages is a legal consequence of a finding of illegal dismissal.  However, assuming that respondent-union members have indeed reported back to work at the end of the concerted mass actions but were soon terminated by petitioners who found their explanation unsatisfactory, they are not entitled to backwages in view of the illegality of the said strike. Under the circumstances, respondents’ reinstatement without backwages suffices for the appropriate relief. Solid Bank Corp. Ernesto U. Gamier, et al. and Solid Bank Corp., et al. vs. Solid Bank Union and its Dismissed Officers and Members, et al. G.R. No. 159460 and G.R. No. 159461, November 15, 2010.

Illegal dismissal; lack of substantive due process.  The dismissal of an employee, which the employer must validate, has a two-fold requirement:  one is substantive, the other is procedural. Not only must the dismissal be for a just or an authorized cause, as provided by law; the rudimentary requirements of due process – the opportunity to be heard and to defend oneself – must be observed as well. The employer has the burden of proving that the dismissal was for a just cause; failure to show this, as in the present case, would necessarily mean that the dismissal was unjustified and, therefore, illegal. The respondent worker’s allegation that Teng summarily dismissed them on suspicion that they were not reporting to him the correct volume of the fish caught in each fishing voyage was never denied by Teng. Unsubstantiated suspicion is not a just cause to terminate one’s employment under Article 282 of the Labor Code. Albert Teng vs. Alfredo S. Pahagac, et al., G.R. No. 169704, November 17, 2010.

Illegal dismissal; separation pay in lieu of reinstatement. Since reinstatement is no longer possible given the lapse of considerable time from the occurrence of the strike, not to mention the fact that Solidbank had long ceased its banking operations, the award of separation pay of one (1) month salary for each year of service, in lieu of reinstatement, is in order. Solid Bank Corp. Ernesto U. Gamier, et al. and Solid Bank Corp., et al. vs. Solid Bank Union and its Dismissed Officers and Members, et al. G.R. No. 159460 and G.R. No. 159461, November 15, 2010.

Illness; when deemed pre-existing and not compensable.  Petitioner’s illness already existed when he commenced his fourth contract of employment with respondents, hence, not compensable. Given that the employment of a seafarer is governed by the contract he signs every time he is rehired and his employment is terminated when his contract expires, petitioner’s illness during his previous contract with respondents is deemed pre-existing during his subsequent contract. That petitioner was subsequently rehired by respondents despite knowledge of his seizure attacks does not make the latter a guarantor of his health.   Jerry M. Francisco, vs. Bahia Shipping Services, Inc. and/or Cynthia C. Mendoza, and Fred Olsen Cruise Lines, Ltd., G.R. No. 190545, November 22, 2010.

Indirect employer; solidary liability. The fact that there is no actual and direct employer-employee relationship between petitioner and respondents does not absolve the former from liability for the latter’s monetary claims. When petitioner contracted   DNL Security’s services, petitioner became an indirect employer of respondent security guards, pursuant to Article 107 of the Labor Code.  Thus, after the contractor DNL Security failed to pay respondents the correct wages and other monetary benefits, petitioner, as principal, became jointly and severally liable, as provided in Articles 106 and 109 of the Labor Code. It should be understood, though, that the solidary liability of petitioner does not preclude the application of Article 1217 of the Civil Code on the right of reimbursement from its co-debtor. Government Service Insurance System vs. National Labor Relations Commission (NLRC), Dionisio Banlasan, et al., G.R. No. 180045, November 17, 2010.

Indirect employer; solidary liability; coverage. Petitioner’s liability as indirect employer covers the payment of respondents’ salary differential and 13th month pay during the time they worked for petitioner. Petitioner’s liability, however, cannot extend to the payment of separation pay. An order to pay separation pay is invested with a punitive character, such that an indirect employer should not be made liable without a finding that it had conspired in the illegal dismissal of the employees. Government Service Insurance System vs. National Labor Relations Commission (NLRC), Dionisio Banlasan, et al., G.R. No. 180045, November 17, 2010.

Inefficiency of employee; condonation by employer. While it is acknowledged that petitioner Gregorio’s service record shows that his performance as a security guard was below par, respondent Gulf Pacific never issued any memo citing him for the alleged repeated errors, inefficiency, and poor performance while on duty, and instead continued to assign him to various posts.  This amounts to condonation by Gulf Pacific of whatever infractions Gregorio may have committed.  Even assuming the reasons for relieving Gregorio of his position were true, it was incumbent upon Gulf Pacific to be vigilant in its compliance with labor laws. Bebina G. Salvaloza vs. National Labor Relations Commission, Gulf Pacific Security Agency, Inc., and Angel Quizon, G.R. No. 182086, November 24, 2010.

Jurisdiction; Secretary of Labor.  It is well-settled that the Secretary of Labor, in the exercise of his power to assume jurisdiction over a labor dispute under Art. 263 (g) [11] of the Labor Code, may resolve all issues involved in the controversy including the award of wage increases and benefits. In the instant case, the fact that the award was higher than that which was purportedly agreed upon in the MOA between management and the labor union is of no moment because the Secretary, in resolving the CBA deadlock, is not limited to considering the MOA as basis in computing the wage increases. He could, as he did, consider the financial documents submitted by respondent as well as the parties’ bargaining history and respondent’s financial outlook and improvements as stated in its website. Cirtek Employees Labor Union-Federation of Free Workers vs. Cirtek Electronics, Inc., G.R. No. 190515, November 15, 2010.

Jurisdiction; divestment. It bears noting that the filing and submission of the MOA did not have the effect of divesting the Secretary of his jurisdiction, or of automatically disposing the controversy. Thus, neither should the provisions of the MOA restrict the Secretary’s leeway in deciding the matters before him. Cirtek Employees Labor Union-Federation of Free Workers vs. Cirtek Electronics, Inc., G.R. No. 190515, November 15, 2010.

Labor-only contracting. Section 5 of the DO No. 18-02, which implements Article 106 of the Labor Code, provides that, ”… labor-only contracting shall refer to an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal, and any of the following elements are present: (i)The contractor or subcontractor does not have substantial capital or investment which relates to the job, work or service to be performed and the employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal; or (ii)The contractor does not exercise the right to control over the performance of the work of the contractual employee. In the present case, Teng admitted that he solely provided the capital and equipment, while the maestros supplied the workers. Also, the power of control over the respondent workers was lodged not with the maestros but with Teng. Moreover, they performed tasks that were necessary and desirable in Teng’s fishing business. Taken together, these incidents confirm the existence of a labor-only contracting which is prohibited in our jurisdiction. Accordingly, a finding that the maestros are labor-only contractors is equivalent to a finding that an employer-employee relationship exists between Teng and the respondent workers. Albert Teng vs. Alfredo S. Pahagac, et al., G.R. No. 169704, November 17, 2010

Mootness; amicable settlement as final satisfaction of judgment award. The “conditional” settlement of the judgment award insofar as it operates as a final satisfaction thereof renders the case moot and academic.  In the case at bar, the settlement grants the petitioner the luxury of having other remedies available to it such as its petition for certiorari pending before the appellate court, and an eventual appeal to the Court. On the other hand, respondent employee could no longer pursue other claims, including interests that may accrue during the pendency of the case. The Labor Arbiter and the appellate court may not thus be faulted for interpreting petitioner’s “conditional settlement” to be tantamount to an amicable settlement of the case resulting in the mootness of the petition for certiorari. Career Philippines Ship Management, Inc., vs. Geronimo Madjus, G.R. No. 186158, November 22, 2010.

Motion for reconsideration. As amended, Article 263 is now Article 262-A in which the word “unappealable” from Article 263 has been deleted. Thus, although Art. 262-A makes the voluntary arbitration award final and executory after ten calendar days from receipt of the copy of the award or decision by the parties, the decision may still be reconsidered by the Voluntary Arbitrator on the basis of a motion for reconsideration duly filed during that period.  The absence of a categorical language in Article 262-A does not preclude the filing of a motion for reconsideration of the VA’s decision within the 10-day period. Therefore, petitioners’ allegation that the VA’s decision had become final and executory by the time the respondent workers filed an appeal with the CA fails. It is consequently ruled that the respondent workers seasonably filed a motion for reconsideration of the VA’s judgment, and the VA erred in denying the motion. Albert Teng vs. Alfredo S. Pahagac, et al., G.R. No. 169704, November 17, 2010.

Off-detail or Floating status. Temporary “off-detail” or “floating status” is the period of time when security guards are in between assignments or when they are made to wait after being relieved from a previous post.  It takes place when the security agency’s clients decide not to renew their contracts with the agency. It also happens in instances where contracts for security services stipulate that the client may request the agency for the replacement of the guards assigned to it, such that the replaced security guard may be placed on temporary “off-detail” if there are no available posts under the agency’s existing contracts.  It does not constitute a dismissal, as the assignments primarily depend on the contracts entered into by the security agencies with third parties, so long as such status does not continue beyond a reasonable time period.  Bebina G. Salvaloza vs. National Labor Relations Commission, Gulf Pacific Security Agency, Inc., and Angel Quizon, G.R. No. 182086, November 24, 2010.

Off-detail or Floating status; when deemed constructive dismissal. When a “floating status” lasts for more than six (6) months, the employee may be considered to have been constructively dismissed. In the present case, of the three instances when petitioner Gregorio was temporarily “off-detailed,” the last two already ripened into constructive dismissal.  Although it could have been difficult for respondent Gulf Pacific to post Gregorio given his age and his service record, still the agency should not have allowed him to wait indefinitely for an assignment if its clients were in truth less likely to accept him.  If, indeed, Gregorio was undesirable as an employee, Gulf Pacific could have dismissed him for cause.  The unreasonable length of time that Gregorio was not posted inevitably resulted in his being constructively dismissed from employment. Bebina G. Salvaloza vs. National Labor Relations Commission, Gulf Pacific Security Agency, Inc., and Angel Quizon, G.R. No. 182086, November 24, 2010.

Parol evidence; application in labor cases.  The appellate court’s brushing aside of the “Paliwanag” and the minutes of the meeting because they were not verified and notarized, thus violating, so the appellate court reasoned, the rules on parol evidence, does not lie.  Like any other rule on evidence, parol evidence should not be strictly applied in labor cases.   Cirtek Employees Labor Union-Federation of Free Workers vs. Cirtek Electronics, Inc., G.R. No. 190515, November 15, 2010.

Petition; service on counsel. Section 1, Rule 65 in relation to Section 3, Rule 46 of the Rules of Court, clearly provides that in a petition filed originally in the CA, the petitioner is required to serve a copy of the petition on the adverse party before its filing. If the adverse party appears by counsel, service shall be made on such counsel pursuant to Section 2, Rule 13. Thus, in the instant case, petitioner CABEU-NFL’s insistence that service of the copy of the CA petition should have been made to it, rather than to its counsel, is unavailing. Central Azucarera De Bais Employees Union-NFL, represented by its President, Pablito Saguran vs. Central Azucarera De Bais, Inc., represented by its President, Antonio Steven L. Chan, G.R. No. 186605, November 17, 2010.

Reinstatement; when not granted. Petitioner Gregorio’s position paper did not pray for reinstatement, but only sought payment of money claims.  Likewise, the strained relations between the parties make reinstatement impracticable.  What is more, even during the time of the LA’s decision, reinstatement was no longer legally feasible since Gregorio was past the age qualification for a security guard license. Section 5[33] of R.A. 5487, enumerating the qualifications for a security guard, provides that the person should not be less than 21 nor over 50 years of age.  And as previously mentioned, as early as June 13, 2002, Gregorio was no longer in possession of a valid license.  Thus, separation pay should be paid in lieu of reinstatement. Bebina G. Salvaloza vs. National Labor Relations Commission, Gulf Pacific Security Agency, Inc., and Angel Quizon, G.R. No. 182086, November 24, 2010.

Retirement laws; liberal construction.  Retirement laws are liberally construed in favor of the retiree because their objective is to provide for the retiree’s sustenance and, hopefully, even comfort, when he no longer has the capability to earn a livelihood. The liberal approach aims to achieve the humanitarian purposes of the law in order that efficiency, security, and well-being of government employees may be enhanced. Indeed, retirement laws are administered in favor of the persons intended to be benefited, and all doubts are resolved in their favor.  In this case, as adverted to above, respondent was able to establish that he has a clear legal right to the reinstatement of his retirement benefits. Government Service Insurance System vs. Fernando P. De Leon, G.R. No. 186560, November 17, 2010.

Retirement benefit; entitlement. Respondent’s disqualification from receiving retirement benefits under R.A. No. 910 does not mean that he is disqualified from receiving any retirement benefit under any other existing retirement law.  Prior to R.A. No. 8291, retiring government employees who were not entitled to the benefits under R.A. No. 910 had the option to retire under either of two laws: Commonwealth Act No. 186, as amended, or P.D. No. 1146. In his Comment, respondent implicitly indicated his preference to retire under P.D. No. 1146, since this law provides for higher benefits. Because respondent had complied with the requirements under the said law at the time of his retirement, a fact which GSIS does not dispute, he is entitled to receive the benefits provided under the same law. Government Service Insurance System vs. Fernando P. De Leon, G.R. No. 186560, November 17, 2010.

Strike; definition. Article 212 of the Labor Code, as amended, defines strike as any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute. A labor dispute includes any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether or not the disputants stand in the proximate relation of employers and employees.  The term “strike” shall also include slowdowns, mass leaves, sitdowns, attempts to damage, destroy or sabotage plant equipment and facilities and similar activities. In the instant case, about 712 employees absented themselves from work in a concerted fashion for three continuous days. Considering that these mass actions stemmed from a bargaining deadlock and an order of assumption of jurisdiction had already been issued by the Secretary of Labor to avert an impending strike, all the elements of strike are evident in the Union-instigated mass actions. Solid Bank Corp. Ernesto U. Gamier, et al. and Solid Bank Corp., et al. vs. Solid Bank Union and its Dismissed Officers and Members, et al. G.R. No. 159460 and G.R. No. 159461, November 15, 2010.

Unfair labor practice. For a charge of unfair labor practice to prosper, it must be shown that respondent CAB’s suspension of negotiation with CABEU-NFL and its act of concluding a CBA with CABELA, another union in the bargaining unit, were motivated by ill will, “bad faith, or fraud, or was oppressive to labor, or done in a manner contrary to morals, good customs, or public policy…” However, the facts show that CAB believed that CABEU-NFL was no longer the representative of the workers.  It just wanted to foster industrial peace by bowing to the wishes of the overwhelming majority of its rank and file workers and by negotiating and concluding in good faith a CBA with CABELA.” Such actions of CAB are nowhere tantamount to anti-unionism, the evil sought to be punished in cases of unfair labor practices. Central Azucarera De Bais Employees Union-NFL, represented by its President, Pablito Saguran vs. Central Azucarera De Bais, Inc., represented by its President, Antonio Steven L. Chan, G.R. No. 186605, November 17, 2010.

Unfair labor practice; burden of proof. Basic is the principle that good faith is presumed and he who alleges bad faith has the duty to prove the same. By imputing bad faith to the actuations of CAB, CABEU-NFL has the burden to present substantial evidence to prove the allegation of unfair labor practice.  Apparently, CABEU-NFL refers only to the execution of the supposed CBA between CAB and CABELA and the request to suspend the negotiations, to conclude that bad faith attended CAB’s actions.  The Court is of the view that CABEU-NFL, in simply relying on the said circumstances, failed to substantiate its claim of unfair labor practice to rebut the presumption of good faith. Central Azucarera De Bais Employees Union-NFL, represented by its President, Pablito Saguran vs. Central Azucarera De Bais, Inc., represented by its President, Antonio Steven L. Chan, G.R. No. 186605, November 17, 2010.

(Note:  This post will be updated after the other November 2010 cases become available.)

(Leslie thanks Junefe G. Payot for assisting in the preparation of this post.)

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