July 2012 Philippine Supreme Court Decisions on Labor Law and Procedure

Here are select July 2012 rulings of the Supreme Court of the Philippines on labor law and procedure:

Dismissal; due process.  Due process requirement is met when there is simply an opportunity to be heard and to explain one’s side even if no hearing is conducted. An employee may be afforded ample opportunity to be heard by means of any method, verbal or written, whether in a hearing, conference or some other fair, just and reasonable way. After receiving the first notice apprising him of the charges against him, the employee may submit a written explanation (which may be in the form of a letter, memorandum, affidavit or position paper) and offer evidence in support thereof, like relevant company records and the sworn statements of his witnesses. For this purpose, he may prepare his explanation personally or with the assistance of a representative or counsel. He may also ask the employer to provide him copy of records material to his defense. His written explanation may also include a request that a formal hearing or conference be held. In such a case, the conduct of a formal hearing or conference becomes mandatory, just as it is where there exist substantial evidentiary disputes or where company rules or practice requires an actual hearing as part of employment pre-termination procedure.

May 2011 Philippine Supreme Court Decisions on Labor Law and Procedure

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

Section 10, Republic Act No. 8042; unconstitutional.  Petitioner Yap was employed as an electrician for respondent’s vessel under a 12-month contract. He was found to be illegally terminated with nine months remaining on his contract term. The Court of Appeals (CA) awarded petitioner salaries for three months as provided under Section 10 of Republic Act No. 8042. On certiorari, the Supreme Court reversed the CA and declared that petitioner was entitled to his salaries for the full unexpired portion of his contract. The Court has previously declared in Serrano v. Gallant Maritime Services, Inc. (2009) that the clause “or for three months for every year of the unexpired term, whichever is less” provided in the 5th paragraph of Section 10 of R.A. No. 8042 is unconstitutional for being violative of the rights of Overseas Filipino Workers (OFWs) to equal protection of the laws. The subject clause contains a suspect classification in that, in the computation of the monetary benefits of fixed-term employees who are illegally discharged, it imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more in their contracts, but none on the claims of other OFWs or local workers with fixed-term employment. The subject clause singles out one classification of OFWs and burdens it with a peculiar disadvantage. Moreover, the subject clause does not state or imply any definitive governmental purpose; hence, the same violates not just petitioner’s right to equal protection, but also his right to substantive due process under Section 1, Article III of the Constitution.  Claudio S. Yap vs. Thenamaris Ship’s Management and Intermare Maritime Agencies, Inc., G.R. No. 179532, May 30, 2011

Doctrine of Operative Fact; applied as a matter of equity and fair play. Petitioner Yap was employed on respondent’s vessel under a 12-month contract. Upon finding that he was illegally terminated, the Court of Appeals (CA) awarded petitioner salaries for three months as provided under Section 10 of Republic Act No. 8042 (RA 8042). While the case was pending in the Supreme Court, Section 10 of RA 8042 was declared unconstitutional. In deciding to award petitioner his salaries for the entire unexpired portion of his contract, the Supreme Court rejected the application of the operative fact doctrine.  As an exception to the general rule, the doctrine applies only as a matter of equity and fair play. It recognizes that the existence of a statute prior to a determination of unconstitutionality is an operative fact and may have consequences which cannot always be ignored. The doctrine is applicable when a declaration of unconstitutionality will impose an undue burden on those who have relied on the invalid law. This case should not be included in the aforementioned exception. After all, it was not the fault of petitioner that he lost his job due to an act of illegal dismissal committed by respondents. To rule otherwise would be iniquitous to petitioner and other OFWs, and would, in effect, send a wrong signal that principals/employers and recruitment/manning agencies may violate an OFW’s security of tenure which an employment contract embodies and actually profit from such violation based on an unconstitutional provision of law. Claudio S. Yap vs. Thenamaris Ship’s Management and Intermare Maritime Agencies, Inc., G.R. No. 179532, May 30, 2011.

April 2011 Philippine Supreme Court Decisions on Labor Law and Procedure

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

Dismissal; breach of trust and confidence. Petitioner was employed as Assistant Vice-President of the Jewelry Department in respondent bank. His employment was terminated on the ground of willful breach of trust and confidence. Jurisprudence provides for two requisites for dismissal on the ground of loss of trust and confidence; (1) the employee concerned must be holding a position of trust and confidence, and (2) there must be an act that would justify the loss of trust and confidence. Loss of trust and confidence, to be a valid cause for dismissal, must be based on a willful breach of trust and founded on clearly established facts. The basis for the dismissal must be clearly and convincingly established but proof beyond reasonable doubt is not necessary. Furthermore, the burden of establishing facts as bases for an employer’s loss of confidence is on the employer. The court held that the termination of petitioner was without just cause and therefore illegal.  Although the first requisite was present, the respondent failed to satisfy the second requisite.  Respondent bank was not able to show any concrete proof that petitioner had participated in the approval of the questioned accounts. The invocation by respondent of the loss of trust and confidence as ground for petitioner’s termination has therefore no basis at all. James Ben L. Jerusalem v. Keppel Monte Bank, et al., G.R. No. 169564. April 6, 2011.

Breach of Trust and Confidence; duties of employee. Petitioner was employed as Assistant Vice-President in respondent bank. His employment was terminated on the ground of willful breach of trust and confidence for endorsing VISA card applicants who later turned out to be impostors resulting in financial losses to respondent bank. The court held that petitioner was illegally dismissed. As provided in Article 282 of the Labor Code, an employer may terminate an employee’s employment for fraud or willful breach of trust reposed in him. However, in order to constitute a just cause for dismissal, the act complained of must be ‘work-related’ such as would show the employee concerned to be unfit to continue working for the employer. The act of betrayal of trust, if any, must have been committed by the employee in connection with the performance of his function or position. The court found that the element of ‘work-connection’ was not present in this case since petitioner was assigned under the Jewelry department, and therefore had nothing to do with the approval of VISA Cards, which was under a different department altogether. James Ben L. Jerusalem v. Keppel Monte Bank, et al., G.R. No. 169564. April 6, 2011.

February 2011 Philippine Supreme Court Decisions on Labor Law and Procedure

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

Abandonment; elements. Respondents filed an illegal dismissal case against the petitioner-corporation. For its defense, petitioner-corporation alleged that the respondents abandoned their work and were not dismissed, and that it sent letters advising respondents to report for work, but they refused. The Court held that for abandonment to exist, it is essential (a) that the employee must have failed to report for work or must have been absent without valid or justifiable reason; and (b) that there must have been a clear intention to sever the employer-employee relationship manifested by some overt acts. The employer has the burden of proof to show the employee’s deliberate and unjustified refusal to resume his employment without any intention of returning. Mere absence is not sufficient. There must be an unequivocal intent on the part of the employee to discontinue his employment. Based on the evidence presented, the reason why respondents failed to report for work was because petitioner-corporation barred them from entering its construction sites. It is a settled rule that failure to report for work after a notice to return to work has been served does not necessarily constitute abandonment. The intent to discontinue the employment must be shown by clear proof that it was deliberate and unjustified. Petitioner-corporation failed to show overt acts committed by respondents from which it may be deduced that they had no more intention to work.  Respondents’ filing of the case for illegal dismissal barely four (4) days from their alleged abandonment is totally inconsistent with the known concept of what constitutes abandonment. E.G. & I. Construction Corporation and Edsel Galeos v. Ananias P. Sato, et al., G.R. No. 182070, February 16, 2011.

Certification election; petition for cancellation of union registration. Respondent union filed a petition for certification election. Petitioner moved to dismiss the petition for certification election alleging the pendency of a petition for cancellation of the union’s registration. The DOLE Secretary ruled in favor of the legitimacy of the respondent as a labor organization and ordered the immediate conduct of a certification election. Pending appeal in the Court of Appeals, the petition for cancellation was granted and became final and executory. Petitioner argued that the cancellation of the union’s certificate of registration should retroact to the time of its issuance. Thus, it claimed that the union’s petition for certification election and its demand to enter into collective bargaining agreement with the petitioner should be dismissed due to respondent’s lack of legal personality. The Court ruled that the pendency of a petition for cancellation of union registration does not preclude collective bargaining, and that an order to hold a certification election is proper despite the pendency of the petition for cancellation of the union’s registration because at the time the respondent union filed its petition, it still had the legal personality to perform such act absent an order cancelling its registration.  Legend International Resorts Limited v. Kilusang Manggagawa ng Legenda, G.R. No. 169754, February 23, 2011.

January 2011 Philippine Supreme Court Decisions on Labor Law and Procedure

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

Apprenticeship agreement; validity. The apprenticeship agreements did not indicate the trade or occupation in which the apprentice would be trained; neither was the apprenticeship program approved by the Technical Education and Skills Development Authority (TESDA). These were defective as they were executed in violation of the law and the rules. Moreover, with the expiration of the first agreement and the retention of the employees, the employer, to all intents and purposes, recognized the completion of their training and their acquisition of a regular employee status. To foist upon them the second apprenticeship agreement for a second skill which was not even mentioned in the agreement itself, is a violation of the Labor Code’s implementing rules and is an act manifestly unfair to the employees. Atlanta Industries, Inc. and/or Robert Chan vs.  Aprilito R. Sebolino, et al., G.R. No. 187320, January 26, 2011.

Complaint; reinstatement. Petitioners question the order to reinstate respondents to their former positions, considering that the issue of reinstatement was never brought up before the Court of Appeals and respondents never questioned the award of separation pay to them. Section 2 (c), Rule 7 of the Rules of Court provides that a pleading shall specify the relief sought, but may add a general prayer for such further or other reliefs as may be deemed just and equitable. Under this rule, a court can grant the relief warranted by the allegation and the evidence even if it is not specifically sought by the injured party; the inclusion of a general prayer may justify the grant of a remedy different from or in addition to the specific remedy sought, if the facts alleged in the complaint and the evidence introduced so warrant. The prayer in the complaint for other reliefs equitable and just in the premises justifies the grant of a relief not otherwise specifically prayed for. Therefore, the court may grant relief warranted by the allegations and the proof even if no such relief is prayed for. In the instant case, aside from their specific prayer for reinstatement, respondents, in their separate complaints, prayed for such reliefs which are deemed just and equitable. Prince Transport, Inc. and Mr. Renato Claros vs. Diosdado Garcia, et al., G.R. No. 167291, January 12, 2011.

December 2010 Philippine Supreme Court Decisions on Labor Law and Procedure

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

Dismissal; due process;  trial-type hearing is not essential. The essence of due process is an opportunity to be heard or, as applied to administrative proceedings, an opportunity to explain one’s side. Records show that Aboc was duly notified through a letter asking him to explain why his services should not be terminated. In fact, he replied to the same by submitting a written explanation. He was likewise duly afforded ample opportunity to defend himself during a conference conducted.  Aboc’s contention that the conference he attended cannot substitute the hearing mandated by the Labor Code is bereft of merit. A formal trial-type hearing is not at all times and in all instances essential to due process. It is enough that the parties are given a fair and reasonable opportunity to explain their respective sides of the controversy and to present supporting evidence on which a fair decision can be based. Antonio A. Aboc  vs. Metropolitan Bank And Trust Company /  Metropolitan Bank And Trust Company  vs.  Antonio A. Aboc, G.R. Nos.  170542-43  and G.R. No. 176460, December 13, 2010.

Dismissal; due process; trial-type hearing is not essential. In dismissal cases, the essence of due process is a fair and reasonable opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one’s side. A formal or trial type hearing is not at all times and in all instances essential. Neither is it necessary that the witnesses be cross-examined. In the instant case, there was a proceeding where the respondent was apprised of the charges against him as well as of his rights. Thereafter, he was notified of the formal charges against him and was required to explain in writing why he should not be dismissed for serious misconduct.  A formal hearing was conducted and subsequently, respondent received a Notice of Termination informing him that after a careful evaluation, he was found liable as charged and dismissed from the service due to gross misconduct. Clearly, respondent was afforded ample opportunity to air his side and defend himself.  Hence, there was due process.  Philippine Long Distance Telephone Company, vs. Eusebio M. Honrado, G.R. No. 189366, December 8, 2010.

Dismissal; due process. Respondent harps on the fact that his dismissal was preconceived because there was already a decision to terminate him even before he was given the show cause memorandum. Contrary to respondent’s allegations, he was given more than enough opportunity to defend himself.  The audit committee’s conclusion to dismiss respondent from the service was merely recommendatory.  It was not conclusive upon the petitioner company.  This is precisely the reason why the petitioner still conducted further investigations.  To reiterate, respondent was properly informed of the charges and had every opportunity to rebut the accusations and present his version.  Respondent was not denied due process of law for he was adequately heard as the very essence of due process is the opportunity to be heard. Equitable PCI Bank (Now Banco De Oro Unibank, Inc.), vs. Castor A. Dompor, G.R. Nos. 163293 & 163297, December 8, 2010.