March 2012 Philippine Supreme Court Decisions on Labor Law and Procedure

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

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

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

In  the case at bar, the Supreme Court agreed with the petitioners that mere substantial evidence and not proof beyond reasonable doubt is required to justify the dismissal from service of an employee charged with theft of company property. However, the Court found no error in the CA’s findings that the petitioners had not adequately proven by substantial evidence that Arlene and Joseph indeed participated or cooperated in the commission of theft relative to the six missing intensifying screens so as to justify the latter’s termination from employment on the ground of loss of trust and confidence. Blue Sky Trading Company, Inc. et al. vs. Arlene P. Blas and Joseph D. Silvano, G.R. No. 190559. March 7, 2012.

Dismissal; probationary employees. Gala insists that he cannot be sanctioned for the theft of company property on May 25, 2006. He maintains that he had no direct participation in the incident and that he was not aware that an illegal activity was going on as he was at some distance from the trucks when the alleged theft was being committed. He adds that he did not call the attention of the foremen because he was a mere lineman and he was focused on what he was doing at the time. He argues that in any event, his mere presence in the area was not enough to make him a conspirator in the commission of the pilferage.

Gala misses the point. He forgets that as a probationary employee, his overall job performance and his behavior were being monitored and measured in accordance with the standards (i.e., the terms and conditions) laid down in his probationary employment agreement. Under paragraph 8 of the agreement, he was subject to strict compliance with, and non-violation of the Company Code on Employee Discipline, Safety Code, rules and regulations and existing policies. Par. 10 required him to observe at all times the highest degree of transparency, selflessness and integrity in the performance of his duties and responsibilities, free from any form of conflict or contradicting with his own personal interest. Manila Electric Company vs. Jan Carlo Gala, G.R. No. 191288. March 7, 2012.

Dismissal; relief of illegally dismissed employee. An illegally dismissed employee is entitled to two reliefs: back wages and reinstatement. The two reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement if such is viable, or separation pay if reinstatement is no longer viable, and to back wages. The normal consequences of respondent’s illegal dismissal, then, are reinstatement without loss of seniority rights, and payment of back wages computed from the time compensation was withheld from him up to the date of actual reinstatement. Where reinstatement is no longer viable as an option, separation pay equivalent to one month salary for every year of service should be awarded as an alternative. The payment of separation pay is in addition to payment of back wages.

Petitioners question the CA Resolution dated October 24, 2008, arguing that it modified its March 31, 2008 Decision which has already attained finality insofar as respondent is concerned. Such contention is misplaced. The CA merely clarified the period of payment of back wages and separation pay up to the finality of its decision (March 31, 2008) modifying the Labor Arbiter’s decision. In view of the modification of monetary awards in the Labor Arbiter’s decision, the time frame for the payment of back wages and separation pay is accordingly modified to the finality of the CA decision. Norkis Distribution, Inc., et al. vs. Delfin S. Descallar, G.R. No. 185255. March 14, 2012

Employees; project vs. regular employees. The principal test for determining whether particular employees are properly characterized as “project employees” as distinguished from “regular employees” is whether or not the project employees were assigned to carry out a “specific project or undertaking,” the duration and scope of which were specified at the time the employees were engaged for that project.

In a number of cases, the Court has held that the length of service or the re-hiring of construction workers on a project-to-project basis does not confer upon them regular employment status, since their re-hiring is only a natural consequence of the fact that experienced construction workers are preferred. Employees who are hired for carrying out a separate job, distinct from the other undertakings of the company, the scope and duration of which has been determined and made known to the employees at the time of the employment are properly treated as project employees and their services may be lawfully terminated upon the completion of a project. Should the terms of their employment fail to comply with this standard, they cannot be considered project employees.

Applying the above disquisition, the Court agreed with the findings of the CA that petitioners were project employees.  It is not disputed that petitioners were hired for the construction of the Cordova Reef Village Resort in Cordova, Cebu.  By the nature of the contract alone, it is clear that petitioners’ employment was to carry out a specific project. Wilfredo Aro, Ronilo Tirol, et al.  vs. NLRC, Fourth Division, et al., G.R. No. 174792. March 7, 2012.

Jurisdiction; power of the DOLE to determine the existence of employer-employee relationship. If a complaint is filed with the DOLE, and it is accompanied by a claim for reinstatement, the jurisdiction is properly with the Labor Arbiter, under Art. 217(3) of the Labor Code, which provides that the Labor Arbiter has original and exclusive jurisdiction over those cases involving wages, rates of pay, hours of work, and other terms and conditions of employment, if accompanied by a claim for reinstatement.

In the present case, the finding of the DOLE Regional Director that there was an employer-employee relationship has been subjected to review by the Supreme Court, with the finding being that there was no employer-employee relationship between petitioner and private respondent, based on the evidence presented. The DOLE had no jurisdiction over the case, as there was no employer-employee relationship present. Thus, the dismissal of the complaint against petitioner is proper. People’s Broadcasting Service (Bombo Rado Phils., Inc.) vs. The Secretary of the Dept. of Labor & Employment, et al. G.R. No. 179652. March 6, 2012.

Management prerogative; resignation of employees running for public office. The Supreme Court has consistently held that so long as a company’s management prerogatives are exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, the Court will uphold them. In the instant case, ABS-CBN validly justified the implementation of Policy No. HR-ER-016. It is well within its rights to ensure that it maintains its objectivity and credibility and freeing itself from any appearance of impartiality so that the confidence of the viewing and listening public in it will not be in any way eroded. Even as the law is solicitous of the welfare of the employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied. Ernesto Ymbong vs. ABS-CBN Broadcasting Corporation, Veranda Sy & Dante Luzon, G.R. No. 184885. March 7, 2012.

Separation pay; payment to those who participated in illegal strikes. Separation pay may be given as a form of financial assistance when a worker is dismissed in cases such as the installation of labor-saving devices, redundancy, retrenchment to prevent losses, closing or cessation of operation of the establishment, or in case the employee was found to have been suffering from a disease such that his continued employment is prohibited by law. It is a statutory right defined as the amount that an employee receives at the time of his severance from the service and is designed to provide the employee with the wherewithal during the period that he is looking for another employment. It is oriented towards the immediate future, the transitional period the dismissed employee must undergo before locating a replacement job. As a general rule, when just causes for terminating the services of an employee exist, the employee is not entitled to separation pay because lawbreakers should not benefit from their illegal acts. The rule, however, is subject to exceptions.

Here, not only did the Court declare the strike illegal, rather, it also found the Union officers to have knowingly participated in the illegal strike. Worse, the Union members committed prohibited acts during the strike. Thus, as the Court has concluded in other cases it has previously decided, such Union officers are not entitled to the award of separation pay in the form of financial assistance. C. Alcantara & Sons, Inc. vs. Court of Appeals, et al./Nagkahiusang Mamumuo sa Alsons-SPFL, et al. vs. C. Alcantara & Sons, Inc., et al./Nagkahiusang Mamumuo sa Alsons-SPFL, et al. vs. C. Alcantara & Sons, Inc., et al. G.R. No. 155109/G.R. No. 155135/G.R. No. 179220. March 14, 2012.

(Leslie thanks Rommel Lumagui for his assistance in the preparation of this post.)