August 2011 Philippine Supreme Court Decisions on Labor Law and Procedure

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

Labor relations; appropriate bargaining unit.  An appropriate bargaining unit is defined as “a group of employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective interest of all the employees, consistent with equity to the employer, indicate to be best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law”.  The test of grouping is community or mutuality of interest.  In this case, there should be only one bargaining unit for the employees in the Cabuyao, San Fernando, and Otis plants of the Magnolia Poultry Products involved in “dressed” chicken processing and Magnolia Poultry Farms engaged in “live” chicken operations.  Certain factors, such as specific line of work, working conditions, location of work, mode of compensation, and other relevant conditions do not affect or impede their commonality of interest.  Although they seem separate and distinct from each other, the specific tasks of each division are actually interrelated and there exists mutuality of interests which warrants the formation of a single bargaining unit.  San Miguel Foods, Inc. vs. San Miguel Corp. Supervisors and Exempt Union, G.R. No. 146206. August 1, 2011.

Labor organization; confidential employees.  Confidential employees are defined as those who (1) assist or act in a confidential capacity, in regard (2) to persons who formulate, determine, and effectuate management policies in the field of labor relations.  The two criteria are cumulative, and both must be met if an employee is to be considered a confidential employee.  Confidential employees, such as accounting personnel, should be excluded from the bargaining unit, as their access to confidential information may become the source of undue advantage.  However, such fact does not apply to the position of Payroll Master (as in this case) and the whole gamut of employees who has access to salary and compensation data.  The CA correctly held that the position of Payroll Master does not involve dealing with confidential labor relations information in the course of the performance of his functions.  In other words, since the nature of his work does not pertain to company rules and regulations and confidential labor relations, it follows that he cannot be excluded from the subject bargaining unit.  San Miguel Foods, Inc. vs. San Miguel Corp. Supervisors and Exempt Union, G.R. No. 146206. August 1, 2011.

Labor organization; ineligibility to join.  Although Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor organization to managerial employees, jurisprudence has extended this prohibition to confidential employees.  In this regard, the CA correctly ruled that the positions of Human Resource Assistant and Personnel Assistant belong to the category of confidential employees and, hence, are excluded from the bargaining unit, considering their respective positions and job descriptions.  As Human Resource Assistant, the scope of one’s work necessarily involves labor relations, recruitment and selection of employees, access to employees’ personal files and compensation package, and human resource management.  As regards a Personnel Assistant, one’s work includes the recording of minutes for management during collective bargaining negotiations, assistance to management during grievance meetings and administrative investigations, and securing legal advice for labor issues from the petitioner’s team of lawyers, and implementation of company programs.  Therefore, in the discharge of their functions, both gain access to vital labor relations information which outrightly disqualifies them from union membership.  San Miguel Foods, Inc. vs. San Miguel Corp. Supervisors and Exempt Union, G.R. No. 146206. August 1, 2011.

Certification election; role of employers.  The general rule is that an employer has no standing to question the process of certification election, since this is the sole concern of the workers.  Law and policy demand that employers take a strict, hands-off stance in certification elections. The bargaining representative of employees should be chosen free from any extraneous influence of management. The only exception is where the employer itself has to file the petition pursuant to Article 258 of the Labor Code because of a request to bargain collectively.  San Miguel Foods, Inc. vs. San Miguel Corp. Supervisors and Exempt Union, G.R. No. 146206. August 1, 2011.

Appeal of the decision of the labor arbiter; posting of 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.  However, the Supreme Court, considering the substantial merits of the case, has on certain occasions relaxed this rule on, and excused the late posting of, the appeal bond when there are strong and compelling reasons for the liberality.  In this case, the exception applies.  The rule on the posting of an appeal bond cannot defeat the substantive rights of respondents to be free from an unwarranted burden of answering for an illegal dismissal for which they were never responsible since no employer-employee relationship existed between the two.  Marticio Semblante and Dubrick Pilar vs. Court of Appeals, G.R. No. 196426. August 15, 2011

Employer-employee relationship; four-fold test.  Petitioners are not employees of respondents, since their relationship failed to pass the four-fold test of employment: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct, which is the most important element.  As found by both the NLRC and the CA, respondents had no part in petitioners’ selection and management; petitioners’ compensation was paid out of the arriba (which is a percentage deducted from the total bets), not by petitioners; and petitioners performed their functions as masiador and sentenciador free from the direction and control of respondents.  Marticio Semblante and Dubrick Pilar vs. Court of Appeals, G.R. No. 196426. August 15, 2011

Labor; illegal recruitment in large scale.  To prove illegal recruitment, it must be shown that appellant gave complainants the distinct impression that she had the power or ability to send complainants abroad for work such that the latter were convinced to part with their money in order to be employed.  All eight private complainants in this case consistently declared that Ochoa offered and promised them employment overseas.  Moreover, Ochoa can also be convicted for illegal recruitment based on Section 6 of Republic Act No. 8042, which clearly provides that any person, whether or not a licensee or holder of authority may be held liable for illegal recruitment for certain acts as enumerated in paragraphs (a) to (m).  Among such acts is the “failure to reimburse expenses incurred by the worker in connection with his documentation and processing for purposes of deployment, in cases where the deployment does not actually take place without the worker’s fault.”  In this case, Ochoa received placement and medical fees from private complainants and failed to reimburse the private complainants the amounts they had paid when they were not able to leave for Taiwan and Saudi Arabia, through no fault of their own.    People of the Philippines vs. Rosario “Rose” Ochoa, G.R. No. 173792. August 31, 2011.

Illegal recruitment; admissibility of POEA certification.  Section 36, Rule 130 of the Revised Rules on Evidence, states that a witness can testify only to those facts which he knows of or comes from his personal knowledge, that is, which are derived from his perception.  This is known as the hearsay rule. The law, however, provides for specific exceptions to the hearsay rule, and one of the exceptions refers to entries in official records made in the performance of duty by a public officer.  Accordingly, in the case at bar,  although Dir. Mateo was not presented in court or did not testify during the trial to verify the said certification, such certification is considered as prima facie evidence of the facts stated therein and is therefore presumed to be truthful, because Ochoa did not present any plausible proof to rebut its truthfulness.  People of the Philippines vs. Rosario “Rose” Ochoa, G.R. No. 173792. August 31, 2011.

Illegal recruitment and estafa; may be charged separately.  A person may be charged and convicted separately of illegal recruitment under Republic Act No. 8042, in relation to the Labor Code, and estafa under Article 315, paragraph 2(a) of the Revised Penal Code.  The offense of illegal recruitment is malum prohibitum, while estafa is malum in se.  In this case, therefore, Ochoa may also be charged and correspondingly held liable for estafa since all the elements for the crime are present in Criminal Case Nos. 98-77301, 98-77302, and 98-77303. Ochoa’s deceit was evident in her false representation to private complainants Gubat, Cesar, and Agustin that she possessed the authority and capability to send said private complainants to Taiwan/Saudi Arabia for employment as early as one to two weeks from completion of the requirements, among which were the payment of placement fees and submission of a medical examination report.  People of the Philippines vs. Rosario “Rose” Ochoa, G.R. No. 173792. August 31, 2011.

Floating status; validity.  The rule is settled that “off-detailing” is not equivalent to dismissal, so long as such status does not continue beyond a reasonable time and that it is only when such a “floating status” lasts for more than six months that the employee may be considered to have been constructively dismissed. A complaint for illegal dismissal filed prior to the lapse of the six-month period and/or the actual dismissal of the employee is generally considered as prematurely filed.  In this case, the evidence adduced a quo clearly indicates that petitioners were not in bad faith when they placed Leynes under floating status. Disgruntled by NHPI’s countermanding of her decision to bar Engr. Cantuba from the Project, Leynes twice signified her intention to resign from her position on 12 February 2002.  In view of the sensitive nature of Leynes’ position and the critical stage of the Project’s business development, NHPI was constrained to hire Engr. Jose as Leynes’ replacement as a remedial measure.  Nippon Housing Phil. Inc., et al. vs. Maiah Angela Leynes, G.R. No. 177816, August 3, 2011.

Constructive dismissal; burden of proof.  Constructive dismissal exists where there is cessation of work because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in pay.  In constructive dismissal cases, the employer is, concededly, charged with the burden of proving that its conduct and action or the transfer of an employee are for valid and legitimate grounds such as genuine business necessity.  The Supreme Court found that in this case, respondents have more than amply discharged this burden with proof of the circumstances surrounding Engr. Carlos’ employment as Property Manager for the Project and the consequent unavailability of a similar position for Leynes.  Nippon Housing Phil. Inc., et al. vs. Maiah Angela Leynes, G.R. No. 177816, August 3, 2011.

Pleading; verification.  Verification of a pleading is a formal, not jurisdictional, requirement intended to secure the assurance that the matters alleged in a pleading are true and correct. It is deemed substantially complied with when one who has ample knowledge to swear to the truth of the allegations in the complaint or petition signs the verification, and when matters alleged in the petition have been made in good faith or are true and correct.  In this case, the Supreme Court found that the petition’s verification substantially complied with the requirements of the rules. The SPA authorized Bello-Ona to represent Bello in the case from which the present petition with the Supreme Court originated. As the daughter of Bello, Bello-Ona is deemed to have sufficient knowledge to swear to the truth of the allegations in the petition, which are matters of record in the lower tribunals and the appellate court.  Francis Bello, represented herein by his daughter and attorney-in-fact, Geraldine Bello-Ona vs. Bonifacio Security Services, Inc. and Samuel Tomas, G.R. No. 188086, August 3, 2011

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.  In this case, other than his bare and self-serving allegations, Bello has not offered any evidence that he was promoted in a span of four months since his employment as traffic marshal in July 2001 to a detachment commander in November 2001. At most, the BSSI merely changed his assignment or transferred him to the post where his service would be most beneficial to its clients. The management’s prerogative of transferring and reassigning employees from one area of operation to another in order to meet the requirements of the business is generally not constitutive of constructive dismissal.  This was what exactly occurred in this case. Francis Bello, represented herein by his daughter and attorney-in-fact, Geraldine Bello-Ona vs. Bonifacio Security Services, Inc. and Samuel Tomas, G.R. No. 188086, August 3, 2011

Procedural rules; failure to attach duplicate original or certified true copy of the assailed decision.  The refusal of the Court of Appeals to consider the petition was the absence of a duplicate original or certified true copy of the assailed NLRC decision, in violation of Section 3, Rule 46 of the Rules of Court (in relation to Section 1, Rule 65).  The company, however, corrected the procedural lapse by attaching a certified copy of the NLRC decision to its motion for reconsideration.  The Supreme Court found that the CA precipitately denied the petition for certiorari based on an overly rigid application of the rules of procedure. In effect, it sacrificed substance to form in a situation where the petitioners’ recourse was not patently frivolous or meritless.  Thus, the case was remanded to the NLRC for resolution of its appeal.  Jobel Enterprises and/or Mr. Benedict Lim vs. NLRC and Eric Martinez, Sr., G.R. No. 194031, August 8, 2011.

Appeal; decision or resolution of NLRC.  As was enunciated in the case of St. Martin Funeral Home v. NLRC, the special civil action of certiorari under Rule 65 of the Rules of Civil Procedure, which is filed before the CA, is the proper vehicle for judicial review of decisions of the NLRC.  The petition should be initially filed before the Court of Appeals in strict observance of the doctrine on hierarchy of courts as the appropriate forum for the relief desired.  Thus, respondent’s recourse to the CA was the proper remedy to question the resolution of the NLRC.  Atok Big Wedge Company, Inc. vs. Jesus P. Gison, G.R. No. 169510, August 8, 2011

Employer-employee relationship; four-fold test.  To ascertain the existence of an employer-employee relationship jurisprudence has invariably adhered to the four-fold test, to wit: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct, or the so-called “control test.” Applying the aforementioned test, an employer-employee relationship was found to be absent in the case at bar.  Among other things, respondent was not required to report everyday during regular office hours of petitioner.  Respondent’s monthly retainer fees were paid to him either at his residence or a local restaurant.  More importantly, petitioner did not prescribe the manner in which respondent would accomplish any of the tasks in which his expertise as a liaison officer was needed; respondent was left alone and given the freedom to accomplish the tasks using his own means and method.  Verily, the absence of the element of control on the part of the petitioner engenders a conclusion that he is not an employee of the petitioner.  Atok Big Wedge Company, Inc. vs. Jesus P. Gison, G.R. No. 169510, August 8, 2011

Employment; regular employee.  Article 280 of the Labor Code, in which the lower court used to buttress its findings that respondent became a regular employee of the petitioner, is not applicable in the case at bar.  The Supreme Court has ruled that said provision is not the yardstick for determining the existence of an employment relationship because it merely distinguishes between two kinds of employees, i.e., regular employees and casual employees, for purposes of determining the right of an employee to certain benefits, to join or form a union, or to security of tenure; it does not apply where the existence of an employment relationship is in dispute.  It is, therefore, erroneous on the part of the Court of Appeals to rely on Article 280 in determining whether an employer-employee relationship exists between respondent and the petitioner.  Therefore, despite the fact that petitioner made use of the services of respondent as a part-time consultant on retainer basis for eleven years, he still cannot be considered as a regular employee of petitioner using only as basis Article 280 of the Labor Code.  Atok Big Wedge Company, Inc. vs. Jesus P. Gison, G.R. No. 169510, August 8, 2011

Claim of disability benefits and sickness allowance; reporting requirements.  Anent a seafarer’s entitlement to compensation and benefits for injury and illness, Section 20-B (3) of 2000 POEA-SEC provides that in order for the seafarer to claim the said benefits, he must submit himself to a post-employment medical examination by a company-designated physician within three working days upon his return, except when he is physically incapacitated to do so, in which case, a written notice to the agency within the same period is deemed as compliance. Failure of the seafarer to comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits.  In this case, there was no dispute regarding the fact that Esguerra had altogether failed to comply with the mandatory reporting requirement.  Esguerra also did not present any evidence to prove justification for his inability to submit himself to a post-employment medical examination by a company-designated physician.  Self-serving and unsubstantiated declarations are insufficient to establish a case before quasi-judicial bodies where the quantum of evidence required in establishing a fact is substantial evidence.  Coastal Safeway Marine Services vs. Esguerra, G.R. No. 185352, August 10, 2011.

(Leslie thanks Charmaine Rose K. Haw for assisting in the preparation of this post.) 

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