June 2012 Philippine Supreme Court Decisions on Labor Law and Procedure

Here are select June 2012 rulings of the Supreme Court of the Philippine on labor law and procedure:

Appeal; issue of employer-employee relationship raised for the first time on appeal. It is a fundamental rule of procedure that higher courts are precluded from entertaining matters neither alleged in the pleadings nor raised during the proceedings below, but ventilated for the first time only in a motion for reconsideration or on appeal. The alleged absence of employer-employee relationship cannot be raised for the first time on appeal. The resolution of this issue requires the admission and calibration of evidence and the LA and the NLRC did not pass upon it in their decisions. Petitioner is bound by its submissions that respondent is its employee and it should not be permitted to change its theory. Such change of theory cannot be tolerated on appeal, not on account of the strict application of procedural rules, but as a matter of fairness. Duty Free Philippines Services, Inc. vs. Manolito Q. Tria. G.R. No. 174809. June 27, 2012.

Dismissal; abandonment. Abandonment cannot be inferred from the actuations of respondent. When he discovered that his time card was off the rack, he immediately inquired from his supervisor.  He later sought the assistance of his counsel, who wrote a letter addressed to Polyfoam requesting that he be re-admitted to work.  When said request was not acted upon, he filed the instant illegal dismissal case.  These circumstances clearly negate the intention to abandon his work. Polyfoam-RGC International, Corporation and Precilla A. Gramaje vs. Edgardo Concepcion. G.R. No. 172349, June 13, 2012.

Dismissal; due process. To meet the requirements of due process in the dismissal of an employee, an employer must furnish the worker with two written notices: (1) a written notice specifying the grounds for termination and giving to said employee a reasonable opportunity to explain his side and (2) another written notice indicating that, upon due consideration of all circumstances, grounds have been established to justify the employer’s decision to dismiss the employee. The law does not require that an intention to terminate one’s employment should be included in the first notice. It is enough that employees are properly apprised of the charges brought against them so they can properly prepare their defenses. It is only during the second notice that the intention to terminate one’s employment should be explicitly stated.

The guiding principles in connection with the hearing requirement in dismissal cases are the following:

  1. “Ample opportunity to be heard” means any meaningful opportunity (verbal or written) given to the employee to answer the charges against him and submit evidence in support of his defense, whether in a hearing, conference or some other fair, just and reasonable way.
  2. A formal hearing or conference becomes mandatory only when requested by the employee in writing or substantial evidentiary disputes exist or a company rule or practice requires it, or when similar circumstances justify it.
  3. The “ample opportunity to be heard” standard in the Labor Code prevails over the “hearing or conference” requirement in the implementing rules and regulations.

The existence of an actual, formal “trial-type” hearing, although preferred, is not absolutely necessary to satisfy the employee’s right to be heard. Esguerra was able to present her defenses; and only upon proper consideration of it did Valle Verde send the second memorandum terminating her employment. Since Valle Verde complied with the two-notice requirement, no procedural defect exists in Esguerra’s termination. Dolores T. Esguerra vs. Valle Verde Country Club, Inc. and Ernesto Villaluna. G.R. No. 173012, June 13, 2012.

Dismissal; loss of trust and confidence. There are two (2) classes of positions of trust. The first class consists of managerial employees, or those vested with the power to lay down management policies; and the second class consists of cashiers, auditors, property custodians or those who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property. Esguerra held the position of Cost Control Supervisor and had the duty to remit to the accounting department the cash sales proceeds from every transaction she was assigned to. This is not a routine task that a regular employee may perform; it is related to the handling of business expenditures or finances. For this reason, Esguerra occupies a position of trust and confidence – a position enumerated in the second class of positions of trust. Any breach of the trust imposed upon her can be a valid cause for dismissal.

Loss of confidence as a just cause for termination of employment can be invoked when an employee holds a position of responsibility, trust and confidence. In order to constitute a just cause for dismissal, the act complained of must be related to the performance of the duties of the dismissed employee and must show that he or she is unfit to continue working for the employer for violation of the trust reposed in him or her. It was Esguerra’s responsibility to account for the cash proceeds; in case of problems, she should have promptly reported it, regardless of who was at fault. Instead, she settled the unaccounted amount only after the accounting department informed her about the discrepancy, almost one month following the incident. Esguerra’s failure to make the proper report reflects her irresponsibility in the custody of cash for which she was accountable. Dolores T. Esguerra vs. Valle Verde Country Club, Inc. and Ernesto Villaluna. G.R. No. 173012, June 13, 2012.

Dismissal; serious misconduct and loss of trust and confidence. Dejan is liable for violation of Section 7, paragraphs 4 and 11 of the Company Code of Employee Discipline, constituting serious misconduct, fraud and willful breach of trust of the employer, which are just causes for termination of employment under the law. There is no dispute about the release of the meter sockets. Also, the persons involved were clearly identified – Dejan; Gozarin, a private electrician who received the meter sockets; Reyes, the owner of the jeep where the meter sockets were loaded by Gozarin; Duenas, a Meralco field representative; and Depante, another private electrician who purportedly owned the meter sockets. The release by Dejan of the meter sockets to Gozarin without the written authority or SPA from the customer or customers who applied for electric connection (as a matter of company policy) served as a key element in proving the private contracting activity for electric service connection being undertaken by Dejan and Duenas.

Moreover, it was bad enough that Dejan failed to ask for a written authorization from the customers for the release of the meter sockets as required by company policy, but the elaborate scheme pursued by Dejan  in concert with Duenas, were all undertaken to defraud Meralco. Hence, Meralco had valid reasons for losing its trust and confidence in Dejan.  He is no ordinary employee.  As branch representative, he was principally charged with the function and responsibility to accept payment of fees required for the installation of electric service and facilitate issuance of meter sockets. The duties of his position require him to always act with the highest degree of honesty, integrity and sincerity, as the company puts it.  In light of his fraudulent act, Meralco, an enterprise imbued with public interest, cannot be compelled to continue Dejan’s employment, as it would be inimical to its interest. Manila Electric Company (Meralco) vs. Herminigildo H. Dejan. G.R. No. 194106, June 18, 2012.

Employee benefit; attorney’s fees. Lazaro must establish a legal basis – either by law, contract or other sources of obligations – to merit the receipt of the additional 10% attorney’s fees collected in the various foreclosure procedures he settled as the bank’s legal officer. Lazaro has not produced any contract or provision of law that would warrant the payment of the additional attorney’s fees. He is only entitled to his salaries as the bank’s legal officer, because the services he rendered in the foreclosure proceedings were part of his official tasks. Banco Filipino Savings and Mortgage Bank vs. Miguelito M. Lazaro/Miguelito M. Lazaro vs. Banco Filipino Savings and Mortgage Bank, et al. G.R. No. 185346 & G.R. No. 185442. June 27, 2012.

Employee benefit; retirement pay. Banco Filipino maintains that the seven-year period when it was under liquidation should not be credited in computing Lazaro’s retirement pay because, during that period, the bank was considered closed. The Supreme Court held that banks under liquidation retain their legal personality. In fact, even if they are prohibited from conducting regular banking business, it is necessary that debts owed to them be collected. Lazaro performed the duty of foreclosing debts in favor of Banco Filipino. It cannot rightfully disclaim Lazaro’s work that benefitted it.

As found in the Implementing Rules of the Retirement Pay Law and in jurisprudence, only in the absence of an applicable retirement agreement shall Article 287 of the Labor Code apply. There is a proviso however, that an employee’s retirement benefits under any agreement shall not be less than those provided in the said article. The Rules of the Banco Filipino Retirement Fund do not provide for benefits lower than those in the Labor Code. In fact, the bank offers a retirement pay equivalent to one andone-half month salary for every year of service, a rate over and above the one-half month salary threshold provided by the law. Although the Rules of the Banco Filipino Retirement Fund do not grant a rounding off scheme, they nonetheless provide that prorated credit shall be given for incomplete years, regardless of the fraction of months in the retiree’s length of service. Notwithstanding the lack of a rounding-up provision, still, the higher retirement pay, together with the prorated crediting, cannot be deemed to be less favorable than that provided for by the law. Ultimately, the more important threshold to be considered in construing whether the retirement agreement provides less benefits, compared to those provided by the Retirement Pay Law, is that the retirement benefits in the said agreement should at least amount to one-half of the employee’s monthly salary. Banco Filipino Savings and Mortgage Bank vs. Miguelito M. Lazaro/Miguelito M. Lazaro vs. Banco Filipino Savings and Mortgage Bank, et al. G.R. No. 185346 & G.R. No. 185442. June 27, 2012

Employee dismissal. When the floating status of employees lasts for more than six (6) months, they may be considered to have been illegally dismissed from the service. “Floating status” means an indefinite period of time when one does not receive any salary or financial benefit provided by law. In this case, petitioners were actually reassigned to new posts, albeit in a different location from where they resided. Thus, there can be no floating status or indefinite period to speak of. Instead, petitioners were the ones who refused to report for work in their new assignment.

In cases involving security guards, a relief and transfer order in itself does not sever the employment relationship between the security guards and their agency. Employees have the right to security of tenure, but this does not give them such a vested right to their positions as would deprive the company of its prerogative to change their assignment or transfer them where their services, as security guards, will be most beneficial to the client. An employer has the right to transfer or assign its employees from one office or area of operation to another in pursuit of its legitimate business interest, provided there is no demotion in rank or diminution of salary, benefits, and other privileges; and the transfer is not motivated by discrimination or bad faith, or effected as a form of punishment or demotion without sufficient cause. While petitioners may claim that their transfer to Manila will cause added expenses and inconvenience, absent any showing of bad faith or ill motive on the part of the employer, the transfer remains valid. Salvador O. Mojar, et al. vs. Agro Commercial Security Service Agency, et al. G.R. No. 187188, June 27, 2012.

Employee dismissal; burden of proof. Under the law, the burden of proving that the termination of employment was for a valid or authorized cause rests on the employer. Failure to discharge this burden would result in an unjust or illegal dismissal. The company’s evidence on the respondents’ alleged infractions do not substantially show that they violated company rules and regulations to warrant their dismissal. It is obvious that the company overstepped the bounds of its management prerogative in the dismissal of Mauricio and Camacho. It lost sight of the principle that management prerogative must be exercised in good faith and with due regard to the rights of the workers in the spirit of fairness and with justice in mind. Philbag Industrial Manufacturing Corp. vs. Philbag Workers Union-Lakas at Gabay ng Manggagawang Nagkakaisa. G.R. No. 182486, June 20, 2012.

Employee dismissal; due process. Retrenchment is subject to faithful compliance with the substantive and procedural requirements laid down by law and jurisprudence. For a valid retrenchment, the following elements must be present:

  1. That retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as perceived objectively and in good faith by the employer;
  2. That the employer served written notice both to the employees and to the Department of Labor and Employment at least one month prior to the intended date of retrenchment;
  3. That the employer pays the retrenched employees separation pay equivalent to one (1) month pay or at least ½ month pay for every year of service, whichever is higher;
  4. That the employer exercises its prerogative to retrench employees in good faith for the advancement of its interest and not to defeat or circumvent the employees’ right to security of tenure; and
  5. That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status, efficiency, seniority, physical fitness, age, and financial hardship for certain workers.

All these elements were successfully proven by petitioner. First, the huge losses suffered by the Club for the past two years had forced petitioner to close it down to avert further losses which would eventually affect the operations of petitioner. Second, all 45 employees working in the Club were served with notice of termination. The corresponding notice was likewise served to the DOLE one month prior to retrenchment. Third, the employees were offered separation pay, most of whom have accepted and opted not to join in this complaint. Fourth, the cessation of or withdrawal from business operations was bona fide in character and not impelled by a motive to defeat or circumvent the tenurial rights of employees. Waterfront Cebu City Hotel vs. Ma. Melanie P. Jimenez, et al. G.R. No. 174214, June 13, 2012.

Employee dismissal; due process. The following are the guiding principles in connection with the hearing requirement in dismissal cases:

  1. “Ample opportunity to be heard” means any meaningful opportunity (verbal or written) given to the employee to answer the charges against him and submit evidence in support of his defense, whether in a hearing, conference or some other fair, just and reasonable way.
  2. A formal hearing or conference becomes mandatory only when requested by the employee in writing or substantial evidentiary disputes exist or a company rule or practice requires it, or when similar circumstances justify it.
  3. The “ample opportunity to be heard” standard in the Labor Code prevails over the “hearing or conference” requirement in the implementing rules and regulations.

Given that the petitioners expressly requested a conference or a convening of a grievance committee, such formal hearing became mandatory. After PGAI failed to affirmatively respond to such request, it follows that the hearing requirement was not complied with and, therefore, Vallota was denied his right to procedural due process. Prudential Guarantee and Assurance Employee Labor Union and Sandy T. Vallota vs. NLRC, Prudential Guarantee and Assurance Inc., and/or Jocelyn Retizos. G.R. No. 185335, June 13, 2012.

Employee dismissal; just cause. Article 282(e) of the Labor Code talks of other analogous causes or those which are susceptible of comparison to another in general or in specific detail as a cause for termination of employment. A cause analogous to serious misconduct is a voluntary and/or willful act or omission attesting to an employee’s moral depravity. Theft committed by an employee against a person other than his employer, if proven by substantial evidence, is a cause analogous to serious misconduct. Previous infractions may be cited as justification for dismissing an employee only if they are related to the subsequent offense. However, it must be noted that such a discussion was unnecessary since the theft, taken in isolation from Fermin’s other violations, was in itself a valid cause for the termination of his employment. Cosmos Bottling Corp. vs. Wilson Fermin/Wilson Fermin vs. Cosmos Bottling Corp. and Cecilia Bautista. G.R. No. 193676 & G.R. No. 194303. June 20, 2012.

Employee dismissal; loss of trust and confidence. The Labor Code recognizes that an employer, for just cause, may validly terminate the services of an employee for serious misconduct or willful disobedience of the lawful orders of the employer or representative in connection with the employee’s work. Fraud or willful breach by the employee of the trust reposed by the employer in the former, or simply loss of confidence, also justifies an employee’s dismissal from employment. Willful breach of trust or loss of confidence requires that the employee (1) occupied a position of trust or (2) was routinely charged with the care of the employer’s property. To warrant dismissal based on loss of confidence, there must be some basis for the loss of trust or the employer must have reasonable grounds to believe that the employee is responsible for the misconduct that renders the latter unworthy of the trust and confidence demanded by his or her position. For more than a month, the petitioners did not even inform PLDT of the whereabouts of the plant materials. Instead, he stocked these materials at his residence even if they were needed in the daily operations of the company. In keeping with the honesty and integrity demanded by his position, he should have turned over these materials to the plant’s warehouse. Thus, PLDT reasonably suspected petitioner of stealing the company’s property. At that juncture, the employer may already dismiss the employee since it had reasonable grounds to believe or to entertain the moral conviction that the latter was responsible for the misconduct, and the nature of his participation therein rendered him absolutely unworthy of the trust and confidence demanded by his position. Romeo E. Paulino vs. NLRC, Philippine Long Distance Co., Inc. G.R. No. 176184, June 13, 2012.

Employee dismissal; loss of trust and confidence. Loss of confidence as a just cause for dismissal was never intended to provide employers with a blank check for terminating their employees. It should ideally apply only to cases involving employees occupying positions of trust and confidence or to those situations where the employee is routinely charged with the care and custody of the employer’s money or property. To the first class belong managerial employees, i.e., those vested with the powers or prerogatives to lay down management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions; and to the second class belong cashiers, auditors, property custodians, etc., or those who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property.

The first requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned must be one holding a position of trust and confidence. The second requisite is that there must be an act that would justify the loss of trust and confidence. Vallota’s position as Junior Programmer is analogous to the second class of positions of trust and confidence. Though he did not physically handle money or property, he became privy to confidential data or information by the nature of his functions. At a time when the most sensitive of information is found not printed on paper but stored on hard drives and servers, an employee who handles or has access to data in electronic form naturally becomes the unwilling recipient of confidential information. There was no other evidence presented to prove fraud in the manner of securing or obtaining the files found in Vallota’s computer. The presence of the files would merely merit the development of some suspicion on the part of the employer, but should not amount to a loss of trust and confidence such as to justify the termination of his employment. Such act is not of the same class, degree or gravity as the acts that have been held to be of such character. Prudential Guarantee and Assurance Employee Labor Union and Sandy T. Vallota vs. NLRC, Prudential Guarantee and Assurance Inc., and/or Jocelyn Retizos. G.R. No. 185335, June 13, 2012.

Employee dismissal; loss of trust and confidence. To validly dismiss an employee on the ground of loss of trust and confidence under Article 282 (c) of the Labor Code of the Philippines, the following guidelines must be observed: 1) loss of confidence should not be simulated; 2) it should not be used as 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; and 4) it must be genuine, not a mere afterthought to justify earlier action taken in bad faith. More importantly, it must be based on a willful breach of trust and founded on clearly established facts. The testimony of Lobitaña constitutes substantial evidence to prove that respondent, as the then Power Plant Manager, accepted commissions and/or “kickbacks” from suppliers, which is a clear violation of Section 2.04 of petitioner’s Company Rules and Regulations. Jurisprudence consistently holds that for managerial employees, the mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal. Respondent’s termination was for a just and valid cause. Apo Cement Corporation Vs. Zaldy E. Baptisma. G.R. No. 176671. June 20, 2012.

Employee dismissal; order of reinstatement. Article 223 of the Labor Code provides that in case there is an order of reinstatement, the employer must admit the dismissed employee under the same terms and conditions, or merely reinstate the employee in the payroll. The order shall be immediately executory. Thus, 3rd Alert cannot escape liability by simply invoking that Navia did not report for work. The law states that the employer must still reinstate the employee in the payroll. Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year of service could be awarded as an alternative. 3rd Alert Security and Detective Services, Inc. vs. Romualdo Navia. G.R. No. 200653, June 13, 2012.

Employee dismissal; retrenchment. Retrenchment is the termination of employment initiated by the employer through no fault of and without prejudice to the employees. It is resorted to during periods of business recession, industrial depression, or seasonal fluctuations or during lulls occasioned by lack of orders, shortage of materials, conversion of the plant for a new production program or the introduction of new methods or more efficient machinery or of automation. It is an act of the employer of dismissing employees because of losses in the operation of a business, lack of work, and considerable reduction on the volume of his business. In this case, the closure of a department or division of a company constitutes retrenchment by, and not closure of, the company itself. Petitioner has not totally ceased its business operations.  It merely ceased operations of a department. Waterfront Cebu City Hotel vs. Ma. Melanie P. Jimenez, et al. G.R. No. 174214, June 13, 2012.

Employee dismissal; willful breach of trust. The loss of trust and confidence must be based on willful breach of the trust reposed in the employee by his employer.  Such breach is willful if it is done intentionally, knowingly, and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently.  Moreover, it must be based on substantial evidence and not on the employer’s whims or caprices or suspicions otherwise, the employee would eternally remain at the mercy of the employer.  The Supreme Court has laid down the guidelines for the application of the loss of trust and confidence doctrine: (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; and (4) it must be genuine, not a mere afterthought, to justify an earlier action taken in bad faith. Villanueva worked for Meralco as a Branch Representative whose tasks included the issuance of Contracts for Electric Service after receipt of the amount due for service connection from customers.  Obviously, he was entrusted not only with the responsibility of handling company funds but also to cater to customers who intended to avail of Meralco’s services.  This is nothing but an indication that trust and confidence were reposed in him by the company, although his position was not strictly managerial by nature.  Meralco’s loss of trust and confidence arising out of Villanueva’s act of misappropriation of company funds in the course of processing customer applications has been proven by substantial evidence, thus, justified.  Verily, the issuance of additional receipts for excessive payments exacted from customers is a willful breach of the trust reposed in him by the company. Vicente Villanueva, Jr. vs.. The National Labor Relations Commission, Third Division, Manila Electric Company, Manuel Lopez, Chairman and CEO, and Francisco Collantes, Manager. G.R. No. 176893, June 13, 2012.

Employee suit; damages. To obtain moral damages, the claimant must prove the existence of bad faith by clear and convincing evidence, for the law always presumes good faith. It is not even enough that one merely suffered sleepless nights, mental anguish and serious anxiety as the result of the actuations of the other party. In this case, Lazaro did not state any moral anguish that he suffered. Neither did he substantiate his imputations of malice to Banco Filipino. He only made a sweeping declaration, without concrete proof, that the bank in refusing his claim maliciously damaged his property rights and interest. Accordingly, neither moral damages nor exemplary damage can be awarded to him.

With respect to attorney’s fees, an award is proper only if that person was forced to litigate and incur expenses to protect one’s rights and interest by reason of an unjustified act or omission of the party for whom it is sought. Banco Filipino had a prima facie legitimate defense that, because it underwent liquidation proceedings, it cannot be compelled to credit that period in the computation of the employee’s the retirement pay and profit shares. Considering that Banco Filipino’s refusal cannot be accurately characterized as unjustified, Lazaro cannot claim an award of attorney’s fees. Banco Filipino Savings and Mortgage Bank vs. Miguelito M. Lazaro/Miguelito M. Lazaro vs. Banco Filipino Savings and Mortgage Bank, et al. G.R. No. 185346 & G.R. No. 185442. June 27, 2012.

Independent contractor; tests. Permissible job contracting or subcontracting refers to an arrangement whereby a principal agrees to put out or farm out to a contractor or subcontractor the performance or completion of a specific job, work or service within a definite or predetermined period, regardless of whether such job, work or service is to be performed or completed within or outside the premises of the principal.  A person is considered engaged in legitimate job contracting or subcontracting if the following conditions concur:

(a)    The contractor or subcontractor carries on a distinct and independent business and undertakes to perform the job, work or service on its own account and under its own responsibility according to its own manner and method, and free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof;

(b)   The contractor or subcontractor has substantial capital or investment; and

(c)    The agreement between the principal and contractor or subcontractor assures the contractual employees entitlement to all labor and occupational safety and health standards, free exercise of the right to self-organization, security of tenure, and social welfare benefits.

In contrast, labor-only contracting, a prohibited act, is an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal.  In labor-only contracting, the following elements are present:

(a)    The contractor or subcontractor does not have substantial capital or investment to actually perform the job, work or service under its own account and responsibility; and

(b)   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.

The test of independent contractorship is whether one claiming to be an independent contractor has contracted to do the work according to his own methods and without being subject to the control of the employer, except only as to the results of the work.

Gramaje is not an independent job contractor, but a “labor-only” contractor. First, Gramaje has no substantial capital or investment.  The presumption is that a contractor is a labor-only contractor unless he overcomes the burden of proving that it has substantial capital, investment, tools, and the like. Neither Gramaje nor Polyfoam presented evidence showing Gramaje’s ownership of the equipment and machineries used in the performance of the alleged contracted job.

Second, Gramaje did not carry on an independent business or undertake the performance of its service contract according to its own manner and method, free from the control and supervision of its principal, Polyfoam, its apparent role having been merely to recruit persons to work for Polyfoam. It is undisputed that respondent had performed his task of packing Polyfoam’s foam products in Polyfoam’s premises. As to the recruitment of respondent, petitioners were able to establish only that respondent’s application was referred to Gramaje, but that is all.  Prior to his termination, respondent had been performing the same job in Polyfoam’s business for almost six (6) years.  He was even furnished a copy of Polyfoam’s “Mga Alituntunin at Karampatang Parusa,” which embodied Polyfoam’s rules on attendance, the manner of performing the employee’s duties, ethical standards, cleanliness, health, safety, peace and order.  These rules carried with them the corresponding penalties in case of violation. While it is true that petitioners submitted the Affidavit of Polyfoam’s supervisor, claiming that the latter did not exercise supervision over respondent because the latter was not Polyfoam’s but Gramaje’s employee, said Affidavit is insufficient to prove such claim.  Petitioners should have presented the person who they claim to have exercised supervision over respondent and their alleged other employees assigned to Polyfoam.  It was never established that Gramaje took entire charge, control and supervision of the work and service agreed upon. Polyfoam-RGC International, Corporation and Precilla A. Gramaje vs. Edgardo Concepcion. G.R. No. 172349, June 13, 2012.

NLRC; jurisdiction over interpretation or implementation of the CBA. R.A. 8042 is a special law governing overseas Filipino workers. However, there is no specific provision thereunder which provides for jurisdiction over disputes or unresolved grievances regarding the interpretation or implementation of a CBA.  Section 10 of R.A. 8042 simply speaks, in general, of “claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages.” On the other hand, Articles 217(c) and 261 of the Labor Code are very specific in stating that voluntary arbitrators have jurisdiction over cases arising from the interpretation or implementation of collective bargaining agreements. In the present case, the basic issue raised by Merridy Jane in her complaint filed with the NLRC is: which provision of the subject CBA applies insofar as death benefits due to the heirs of Nelson are concerned.  This issue clearly involves the interpretation or implementation of the said CBA. Thus, the specific or special provisions of the Labor Code govern.

CBA is the law or contract between the parties. Article 13.1 of the CBA entered into by and between respondent GCI and AMOSUP provides that the Company and the Union agree that in case of dispute or conflict in the interpretation or application of any of the provisions of this Agreement, or enforcement of Company policies, the same shall be settled through negotiation, conciliation or voluntary arbitration. The provisions of the CBA are in consonance with Rule VII, Section 7 of the present Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, as amended by Republic Act No. 10022, which states that for OFWs with collective bargaining agreements, the case shall be submitted for voluntary arbitration in accordance with Articles 261 and 262 of the Labor Code. With respect to disputes involving claims of Filipino seafarers wherein the parties are covered by a collective bargaining agreement, the dispute or claim should be submitted to the jurisdiction of a voluntary arbitrator or panel of arbitrators. It is only in the absence of a collective bargaining agreement that parties may opt to submit the dispute to either the NLRC or to voluntary arbitration. Estate of Nelson R. Dulay, represented by his wife Meddiry Jane P. Dulay vs. Aboitiz Jebsen Maritime, Inc. and General Charterers, Inc. G.R. No. 172642, June 13, 2012.

Service; proof of service. Petitioners allege that no affidavit of service was attached to the CA Petition. However, the Supreme Court noted that in the CA Resolution, the appellate court stated that their records revealed that Atty. Espinas, petitioners’ counsel of record at the time, was duly served a copy of the following: CA Resolution granting respondent’s Motion for Extension of Time to file the CA Petition; CA Resolution requiring petitioners to file their Comment on the CA Petition; and CA Resolution, submitting the case for resolution, as no comment was filed. Such service to Atty. Espinas was valid despite the fact he was already deceased at the time. If a party to a case has appeared by counsel, service of pleadings and judgments shall be made upon his counsel or one of them, unless service upon the party is specifically ordered by the court. It is not the duty of the courts to inquire, during the progress of a case, whether the law firm or partnership representing one of the litigants continues to exist lawfully, whether the partners are still alive, or whether its associates are still connected with the firm. Salvador O. Mojar, et al. vs. Agro Commercial Security Service Agency, et al. G.R. No. 187188, June 27, 2012.

(Leslie thanks Leanne Herschel C. Que for assisting in the preparation of this post.)

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