April 2012 Philippine Supreme Court Decisions on Labor Law and Procedure

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

Dismissal; due process. When the Labor Code speaks of procedural due process, the reference is usually to the two (2)-written notice rule envisaged in Section 2 (III), Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code. MGG Marine Services, Inc. v. NLRC tersely described the mechanics of what may be considered a two-part due process requirement which includes the two-notice rule, “x x x one, of the intention to dismiss, indicating therein his acts or omissions complained against, and two, notice of the decision to dismiss; and an opportunity to answer and rebut the charges against him, in between such notices.”

Here, the first and second notice requirements have not been properly observed. The adverted memo would have had constituted the “charge sheet,” sufficient to answer for the first notice requirement, but for the fact that there is no proof such letter had been sent to and received by him. Neither was there compliance with the imperatives of a hearing or conference. Suffice it to point out that the record is devoid of any showing of a hearing or conference having been conducted. And the written notice of termination itself did not indicate all the circumstances involving the charge to justify severance of employment. For violating petitioner’s right to due process, the Supreme Court ordered the payment to petitioner of the amount of P30,000 as nominal damages. Armando Ailing vs. Jose B. Feliciano, Manuel F. San Mateo III, et al., G.R. No. 185829. April 25, 2012.

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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.

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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.

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August 2010 Philippine Supreme Court Decisions on Labor Law and Procedure

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

Labor Law

Dismissal; abandonment. Time and again, the Supreme Court has held that abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal, more so if the same is accompanied by a prayer for reinstatement. In the present case, however, petitioner filed his complaint more than one year after his alleged termination from employment. Moreover, petitioner did not ask for reinstatement in the complaint form, which he personally filled up and filed with the NLRC. The prayer for reinstatement is made only in the Position Paper that was later prepared by his counsel. This is an indication that petitioner never had the intention or desire to return to his job. Elpidio Calipay vs. National Labor Relations Commission, et al., G.R. No. 166411, August 3, 2010.

Dismissal; burden of proof. In termination cases, the employer has the burden of proving, by substantial evidence that the dismissal is for just cause. If the employer fails to discharge the burden of proof, the dismissal is deemed illegal. In the present case, BCPI failed to discharge its burden when it failed to present any evidence of the alleged fistfight, aside from a single statement, which was refuted by statements made by other witnesses and was found to be incredible by both the Labor Arbiter and the NLRC. Alex Gurango vs. Best Chemicals and Plastic, Inc., et al., G.R. No. 174593, August 25, 2010.

Dismissal; burden of proof. The law mandates that the burden of proving the validity of the termination of employment rests with the employer. Failure to discharge this evidentiary burden would necessarily mean that the dismissal was not justified and, therefore, illegal. Unsubstantiated suspicions, accusations, and conclusions of employers do not provide for legal justification for dismissing employees. In case of doubt, such cases should be resolved in favor of labor, pursuant to the social justice policy of labor laws and the Constitution. Century Canning Corporation, Ricardo T. Po, Jr., et al. vs. Vicente Randy R. Ramil, G.R. No. 171630, August 8, 2010.

Dismissal; due process. In termination proceedings of employees, procedural due process consists of the twin requirements of notice and hearing. The employer must furnish the employee with two written notices before the termination of employment can be effected: (1) the first apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the second informs the employee of the employer’s decision to dismiss him. The requirement of a hearing is complied with as long as there was an opportunity to be heard, and not necessarily that an actual hearing was conducted. Pharmacia and Upjohn, Inc., et al. vs. Ricardo P. Albayda, Jr., G.R. No. 172724, August 23, 2010.

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March 2010 Philippine Supreme Court Decisions on Labor Law and Procedure

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

Labor law

Cancellation of union registration. Art. 234(c) of the Labor Code requires the mandatory minimum 20% membership of rank-and-file employees in the employees’ union. Twenty percent (20%) of 112 rank-and-file employees in Eagle Ridge would require a union membership of at least 22 employees (112 x 205 = 22.4).  When the EREU filed its application for registration on December 19, 2005, there were clearly 30 union members.  Thus, when the certificate of registration was granted, there is no dispute that the Union complied with the mandatory 20% membership requirement. Accordingly, the retraction of six union members who later severed and withdrew their union membership cannot cause the cancellation of the union’s registration.

Besides, it cannot be argued that the affidavits of retraction retroacted to the time of the application for union registration or even way back to the organizational meeting. Before their withdrawal, the six employees in question were bona fide union members. They never disputed affixing their signatures beside their handwritten names during the organizational meetings.  While they alleged that they did not know what they were signing, their affidavits of retraction were not re-affirmed during the hearings of the instant case rendering them of little, if any, evidentiary value. In any case, even with the withdrawal of six union members, the union would still be compliant with the mandatory membership requirement under Art. 234(c) since the remaining 24 union members constitute more than the 20% membership requirement of 22 employees.  Eagle Ridge Gold & Country Club vs. Court of Appeals, et al., G.R. No. 178989, March 18, 2010.

Cessation of operations; financial assistance.  Based on Article 283, in case of cessation of operations, the employer is only required to pay his employees a separation pay of one month pay or at least one-half month pay for every year of service, whichever is higher. That is all that the law requires.

In the case at bar, petitioner paid respondents the following: (a) separation pay computed at 150% of their gross monthly pay per year of service; and (b) cash equivalent of earned and accrued vacation and sick leaves. Clearly, petitioner had gone over and above the requirements of the law. Despite this, however, the Labor Arbiter ordered petitioner to pay respondents an additional amount, equivalent to one month’s salary, as a form of financial assistance.

The award of financial assistance is bereft of legal basis and serves to penalize petitioner who had complied with the requirements of the law. The Court also point out that petitioner may, as it has done, grant on a voluntary and ex gratia basis, any amount more than what is required by the law, but to insist that more financial assistance be given is certainly something that the Court cannot countenance. Moreover, any award of additional financial assistance to respondents would put them at an advantage and in a better position than the rest of their co-employees who similarly lost their employment because of petitioner’s decision to cease its operations. SolidBank Corporation vs. National Labor Relations Commission, et al., G.R. No. 165951, March 30, 2010.

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July 2009 Philippine Supreme Court Decisions on Commercial, Tax and Labor Laws

Here are selected July 2009 Philippine Supreme Court decisions on commercial, tax and labor laws:

Commercial Law

Board action.  A corporate loan entered into by the President without board approval is binding on the corporation when the President is authorized under the by-laws to enter into loans on behalf of the corporation. Cebu Mactan Members Center, Inc. vs. Masahiro Tsukahara, G.R. No. 159624, July 17, 2009.

Tax Law

Franchise tax.  Jurisprudence suggests that aside from the national franchise tax, the franchisee is still liable to pay the local franchise tax, unless it is expressly and unequivocally exempted from the payment thereof under its legislative franchise. The “in lieu of all taxes” clause in a legislative franchise should categorically state that the exemption applies to both local and national taxes; otherwise, the exemption claimed should be strictly construed against the taxpayer and liberally in favor of the taxing authority.  Smart Communications, Inc., vs. The City of Davao, represented by its Mayor Hon. Rodrigo Duterte and the Sangguniang Panlunsod of Davao City, G.R. No. 155491, July 21, 2009.

Minimum corporate income tax. Under its charter, Philippine Airlines is exempt from the minimum corporate income tax. Commissioner of Internal Revenue vs.. Philippine Airlines, Inc., G.R. No. 180066, July 7, 2009.

Overseas communications tax.  Section 13 of Presidential Decree No. 1590, granting respondent tax exemption, is clearly all-inclusive. The basic corporate income tax or franchise tax paid by respondent shall be “in lieu of all other taxes, duties, royalties, registration, license, and other fees and charges of any kind, nature, or description imposed, levied, established, assessed or collected by any municipal, city, provincial, or national authority or government agency, now or in the future x x x,” except only real property tax.  Even a meticulous examination of Presidential Decree No. 1590 will not reveal any provision therein limiting the tax exemption of respondent to final withholding tax on interest income or excluding from said exemption the overseas communications tax.  Commissioner of Internal Revenue vs. Philippine Airlines, Inc. (PAL), G.R. No. 180043, July 14, 2009.

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