Mindanao State University
MSU College of Law
Iligan Extension
CASE DIGESTS
and
CASE DOCTRINES
In Compliance for the Course Subject on Labor Law Review
Submitted by:
GROUP 10
Jamalmalik Dimalotang Alonto
Jinnan Casanguan Banding
Almerah Dalupang Boloto
Norhaya Ali Lago
Sittie Fat’ma Rizhmeen Arumpac Sinal
Fifth Year
Submitted to:
Labor Arbiter Abdul Azis U. Metmug
September 14, 2019
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CASE #27
CENTURY CANNING CORPORATION vs. COURT OF APPEALS and GLORIA C.
PALAD
G.R. No. 152894 August 17, 2007
FACTS:
On 15 July 1997, Century Canning Corporation (petitioner) hired Gloria C. Palad
(Palad) as "fish cleaner" at petitioner’s tuna and sardines factory. Palad signed on 17
July 1997 an apprenticeship agreement with petitioner. Palad received an apprentice
allowance of ₱138.75 daily. On 25 July 1997, petitioner submitted its apprenticeship
program for approval to the Technical Education and Skills Development Authority
(TESDA) of the Department of Labor and Employment (DOLE). On 26 September 1997,
the TESDA approved petitioner’s apprenticeship program.
According to petitioner, a performance evaluation was conducted on 15
November 1997, where petitioner gave Palad a rating of "needs improvement" since
she scored only 27.75% based on a 100% performance indicator. Furthermore,
according to the performance evaluation, Palad incurred numerous tardiness and
absences. As a consequence, petitioner issued a termination notice dated 22 November
1997 to Palad, informing her of her termination effective at the close of business hours
of 28 November 1997.
Palad then filed a complaint for illegal dismissal, underpayment of wages, and
non-payment of pro-rated 13th month pay for the year 1997. The Labor Arbiter
dismissed the complaint for lack of merit but ordered petitioner to pay Palad her last
salary and her pro-rated 13th month pay. On appeal, the National Labor Relations
Commission (NLRC) affirmed with modification the Labor Arbiter’s decision that, in
addition, petitioner is ordered to pay Palad’s backwages for two (2) months. Upon denial
of Palad’s motion for reconsideration, Palad filed a special civil action for certiorari with
the Court of Appeals which set aside the decision of the NLRC.
ISSUES:
Whether or not Palad is an apprentice?
Whether or not petitioner had adequately proven the existence of a valid cause in
terminating the service of Palad?
RULING:
The Supreme Court has ruled that since the apprenticeship agreement between
petitioner and private respondent has no force and effect in the absence of a valid
Page 3 of 11
apprenticeship program duly approved by the DOLE, Palad should rightly be considered
as a regular employee of petitioner.
The Labor Code defines an apprentice as a worker who is covered by a written
apprenticeship agreement with an employer. In Nitto Enterprises v. National Labor
Relations Commission, the Court cited Article 61 of the Labor Code and held that an
apprenticeship program should first be approved by the DOLE before an apprentice
may be hired, otherwise the person hired will be considered a regular employee.
Republic Act No. 779615 (RA 7796), which created the TESDA, has transferred the
authority over apprenticeship programs from the Bureau of Local Employment of the
DOLE to the TESDA. RA 7796 emphasizes TESDA’s approval of the apprenticeship
program as a pre-requisite for the hiring of apprentices.
In this case, the apprenticeship agreement was enforced even before the TESDA
approved petitioner’s apprenticeship program. Thus, the apprenticeship agreement is
void because it lacked prior approval from the TESDA. 1 Since Palad is not considered
an apprentice because the apprenticeship agreement was enforced before the TESDA’s
approval of petitioner’s apprenticeship program, Palad is deemed a regular employee
performing the job of a "fish cleaner."
The Supreme Court further ruled that petitioner failed to substantiate its claim
that Palad was terminated for valid reasons.
To constitute valid dismissal from employment, two requisites must concur: (1)
the dismissal must be for a just or authorized cause; and (2) the employee must be
afforded an opportunity to be heard and to defend himself. 2
There was no clear and sufficient evidence exists to warrant Palad’s dismissal as
an apprentice during the agreed period. The alleged unauthenticated xerox
performance evaluation was made belatedly, specifically, after the filing of the case and
during the progress thereof in the Arbitral level, as shown that nothing thereon indicates
that complainant was notified of the results. Its authenticity therefor, is a big question
mark, and hence lacks any credibility. As such, complainant is entitled to the payment of
her wages for the remaining two (2) months of her apprenticeship agreement.
Under Article 227 of the Labor Code, the employer has the burden of proving that
the termination was for a valid or authorized cause. 3 Petitioner failed to substantiate its
claim that Palad was terminated for valid reasons. In fact, the NLRC found that
petitioner failed to prove the authenticity of the performance evaluation which petitioner
claims to have conducted on Palad. It was likewise not shown that petitioner ever
apprised Palad of the performance standards set by the company. When the alleged
valid cause for the termination of employment is not clearly proven, as in this case, the
law considers the matter a case of illegal dismissal. 4
1
G.R. No. 114337, September 29, 1995.
2
Skippers United Pacific, Inc. v. Maguad, G.R. No. 166363, 15 August 2006, 498 SCRA 639.
3
Manly Express, Inc. v. Payong, Jr., G.R. No. 167462, 25 October 2005, 474 SCRA 323; Manila Electric Company (MERALCO) v. National Labor
Relations Commission, G.R. No. 153180, 2 September 2005, 469 SCRA 353.
4
Philippine National Bank v. Cabansag, G.R. No. 157010, 21 June 2005, 460 SCRA 514.
Page 4 of 11
Furthermore, Palad was not accorded due process. Palad denies any knowledge
of the performance evaluation conducted and of the result thereof. Petitioner likewise
admits that Palad did not receive the notice of termination because Palad allegedly
stopped reporting for work. The records are bereft of evidence to show that petitioner
ever gave Palad the opportunity to explain and defend herself. Clearly, the two
requisites for a valid dismissal are lacking in this case.
Page 5 of 11
CASE #28
LORENZO T. TANGGA-AN vs. PIDLIPPINE TRANSMARINE CARRIERS, INC.,
UNIVERSE TANKSHIP DELAWARE LLC, and CARLOS C. SALINAS
G.R. No. 180636 March 13, 2013
FACTS:
On Jan. 31, 2002, Lorenzo entered into an overseas employment contract with
Phil.Transmarine for and in behalf of its employer, Universe Tankship. The contract had
the following terms: Lorenzo will be employed as “Chief Engineer” of the S.S. Kure for 6
months, Basic Salary of $5000, with vacation leave pay equivalent to 15 days a
month,which is $2500 and a tonnage bonus of $700/month.
On Feb 11, 2002, Lorenzo was finally deployed. While they were loading at
Cedros, Mexico, Lorenzo noticed that the vessel listed too much at the bow. At that
particular time, the shipmaster and the chiefmate were both on shore leave, which was
prohibited by maritime standards. Lorenzo chose to ignore the improper conduct of the
two senior officers.
On March 13, 2002, after discharging its cargo in Japan, the S.S. Kure sailed to
the USA. On the way there, the shipmaster required Lorenzo and the other Filipino
engineer officers to report to his office. The shipmaster informed them that they would
be repatriated on account of the delay in the discharging of cargo in Japan. This duty,
however, was the responsibility of deck officers. The shipmaster blamed the delay to the
non-readiness of the turbo generator and the in operation of the boom. However, the
turbo generator had already been prepared and synchronized even before the arrival at
Japan. An inspection of the boom also revealed that it was operational. Upon
verification, it was found out that when the Kure docked in Japan, the cargo hold was
not immediately opened (again, a responsibility of the deck officers and not the
engineers) and the stock was not prepared. Moreover, the shipmaster and the chief
mate went on shore leave once again. They theorized that to save face, the shipmaster
shifted the blame to the Engineering Dept.
Despite protests, Lorenzo and the other engineering officers were ordered to
disembark and thereafter, were repatriated. On its part, Phil. Transmarine and Universe
Tankship disputed the allegations, providing an alternative account that sometime on
March 2002; a test of the cargo discharging conveyor system revealed that Lorenzo and
the eng’g officers failed to supply power to the same because they failed to start the
turbo generator, even after 3 hours of trying to start the same. During that same
incident, the shipmaster claims that he called the engine room but Lorenzo hanged up
on him. When the shipmaster went to the engine room, he said that Lorenzo and the
others just pretended to be busy and productive. There was another incident where
Lorenzo was nowhere to be found when the generator system and the conveyor boom
were to be used. Apparently, Lorenzo allegedly went on shore leave during that time
that caused a 2-hour delay. For the second incident, the shipmaster required Lorenzo to
explain in writing about the incident. Lorenzo failed to explain why he did not supervise
Page 6 of 11
the operations and instead blamed the shipmaster in the written explanation. His
explanation was not satisfactory that the company decided to terminate his services.
Thus, a notice of dismissal was issued and he was repatriated.
Lorenzo filed a complaint for illegal dismissal, with prayer for payment of salaries
for the unexpired portion of the contract with leave pay, moral and exemplary damages,
and with attorney’s fees.
According to the Labor Arbiter, Lorenzo was illegally dismissed. The Labor Arbiter
believes that an open investigation should have been conducted as to the incidents,
instead of outright dismissal. Lacking of the said investigation, the dismissal was without
just cause. The dismissal also lacked the twin requirements of notice and hearing. As to
the claim for back salaries, LA found that Lorenzo was entitled not for four (4) months
(the unexpired portion of his contract) but only to three (3) months, along with the
stipulated benefits of vacation leave pay and tonnage bonus. The awarding of damages
was denied for lack of basis but attorney’s fees were granted as Lorenzo was
constrained to litigate.
NLRC upheld the finding of illegal dismissal, as the twin requirements of notice
and hearing were not complied with. Also upheld the inclusion of benefits as they were
part of his employment contract, and in illegal dismissal cases, the employee is entitled
to such. Also affirmed the award of attorney’s fees as there was bad faith on the part of
the company.
The Court of Appeals affirmed the Labor Arbiter and NLRC decision but with
modification. There was illegal dismissal but the Court of Appeals held that Lorenzo is
entitled only to three (3) months worth of back salaries and not the benefits. This is
pursuant to Sec. 10 of RA 8042. Award of attorney’s fees were also deleted as the CA
did not find bad faith present.
The Respondents, Transmarine and Universe, and the Petitioner, Lorenzo, filed a
petition, with petitioners questioning the deletion of the awards of the benefits and
attorney’s fees. On the other hand, respondents supported the CA ruling.
ISSUES:
Whether or not an illegally dismissed overseas employee is only entitled to 3months
back salaries
Whether or not the deletion of the award of attorney’s fees was proper
Page 7 of 11
RULING:
This Court's labor pronouncements must be read and applied with utmost care
and caution, taking to mind that in the very heart of the judicial system, labor cases
occupy a special place. More than the State guarantees of protection of labor and
security of tenure, labor disputes involve the fundamental survival of the employees and
their families, who depend -upon the former for all the basic necessities in life. 5
The court has ruled that in a case involving Section 10 of Republic Act No. 8042,
as in Marsaman Manning Agency, Inc. vs NLRC 6, an illegally dismissed overseas
employees is not entitled to three (3) months salary only. A plain reading of Section 10
clearly reveals that the choice of which amount to award an illegally dismissed overseas
contract worker, ie, whether his salaries for the unexpired portion of his employment
contract or three (3) months salary for every year of the unexpired term, whichever is
less, comes into play only when the employment contract concerned has a term of at
least one (1) year or more. This is evident from the wording “for every year of the
unexpired term” which follows the wording “salaries xxx for three months”. To follow the
thinking that private respondent is entitled to three (3) months salary only simply
because it is the lesser amount is to completely disregard and overlook some words
used in the statute while giving effect to some.
In interpreting a statute, care should be taken that every part or word thereof be
given effect since the lawmaking body is presumed to know the meaning of the words
employed in the statute and to have used them advisedly. Ut res magis valeat quam
pereat.7
Petitioner must be awarded his salaries corresponding to the unexpired portion of
his six month employment contract, or equivalent to four months. This includes all his
corresponding monthly vacation leave pay and tonnage bonuses which are expressly
provided and guaranteed in his employment contract as part of his monthly salary and
benefit package. Thus, the petitioner is entitled to back salaries.
Article 279 of the Labor Code mandates that an employee’s full backwages shall
be inclusive of allowances and other benefits or their monetary equivalent.”8
As we have time and again held, “it is the obligation of the employer to pay an ille
gally dismissed employee or worker the whole amount of the salaries or wages, plus all
other benefits and bonuses and general increases, to which he would have been norma
lly entitled had he not been dismissed and had not stopped working.”9
5
G.R. No. 180636 March 13, 2013.
6
G.R. No. 127195, August 25, 1999.
7
G.R. No. 127195, August 25, 1999.
8
Equitable Banking Corporation (EQUITABLE-PCI BANK) v. Sadac, 523 Phil. 781, 811, (2006).
9
Sarona v. National Labor Relations Commission, G.R. No. 185280, January 18, 2012, 663 SCRA 394, 424, citing St. Louis College of Tuguegarao v.
National Labor Relations Commission, 257 Phil. 1002, 1008 (1989) and East Asiatic Co., Ltd. v. Court of Industrial Relations, 148-B Phil. 401, 429
(1971).
Page 8 of 11
The deletion of attorney’s fees was improper. In this case, attorney’s fees are
applied in their extraordinary concept— an indemnity for damages ordered by the court
to be paid by the losing party to the winning party. Being illegally dismissed, Lorenzo
was constrained to litigate. Hence, he is entitled to receive attorney’s fees, equivalent to
10% of the total award ($3,280).
Article 111 of the Labor Code, as amended, contemplates the extraordinary
concept of attorney’s fees and that Article 111 is an exception to the declared policy of
strict construction in the award of attorney’s fees. Although an express finding of facts
and law is still necessary to prove the merit of the award, there need not be any
showing that the employer acted maliciously or in bad faith when it withheld the
wages.10 Being illegally dismissed, Lorenzo was constrained to litigate. Hence, he is
entitled to receive attorney’s fees, equivalent to 10% of the total award ($3,280).
Settled is the rule that in actions for recovery of wages, or where an employee
was forced to litigate and, thus, incur expenses to protect his rights and interests, a
monetary award by way of attorney's fees is justifiable under Article Ill of the Labor
Code; Section 8, Rule VIII, Book III of its Implementing Rules; and paragraph 7, Article
208 of the Civil Code. The award of attorney's fees is proper, and there need not be any
showing that the employer acted maliciously or in bad faith when it withheld the wages.
There need only be a showing that the lawful wages were not paid accordingly. 11
10
PCL Shipping Philippines, Inc. v. National Labor Relations Commission, G.R. No. 153031, December 14, 2006.
11
RTG Construction, Inc. v. Facto and in Ortiz v. San Miguel Corporation, G.R. No. 85278, August 29, 1989.
Page 9 of 11
CASE #29
TSPIC CORPORATION vs. TSPIC EMPLOYEES UNION (FFW), representing MARIA
FE FLORES, FE CAPISTRANO, AMY DURIAS, CLAIRE EVELYN VELEZ, JANICE
OLAGUIR, JERICO ALIPIT, GLEN BATULA, SER JOHN HERNANDEZ, RACHEL
NOVILLAS, NIMFA ANILAO, ROSE SUBARDIAGA, VALERIE CARBON, OLIVIA
EDROSO, MARICRIS DONAIRE, ANALYN AZARCON, ROSALIE RAMIREZ, JULIETA
ROSETE, JANICE NEBRE, NIA ANDRADE, CATHERINE YABA, DIOMEDISA ERNI,
MARIO SALMORIN, LOIDA COMULLO, MARIE ANN DELOS SANTOS, JUANITA
YANA, and SUZETTE DULAY.
G.R. No. 163419 February 13, 2008
FACTS:
TSPIC is engaged in the business of designing, manufacturing, and marketing
integrated circuits to serve the communication, automotive, data processing, and
aerospace industries. Respondent TSPIC Employees Union (FFW) (Union), on the
other hand, is the registered bargaining agent of the rank-and-file employees of TSPIC.
TSPI Corporation entered into a Collective Bargaining Agreement with the TSPIC
Employees Union for the increase of salary for the latter’s members for the year 2000 to
2002.
Consequently, on January 1, 2000, all the regular rank-and-file employees of
TSPIC received a 10% increase in their salary. The CBA also provided that employees
who acquire regular employment status within the year but after the effectivity of a
particular salary increase shall receive a proportionate part of the increase upon
attainment of their regular status.
Then on October 6, 2000, the Regional Tripartite Wage and Productivity Board,
National Capital Region, issued Wage Order No. NCR-0810 (WO No. 8) which raised
the daily minimum wage from PhP 223.50 to PhP 250 effective November 1, 2000.
On various dates during the last quarter of 2000, 17 employees attained regular
employment and received 25% of 10% of their salaries as granted under the provision
on regularization increase under Article X, Sec. 2 of the CBA.
In January 2001, TSPIC implemented the new wage rates as mandated by the
CBA. As a result, the nine employees (first group), who were senior to the recently
regularized employees, received less wages.
On January 19, 2001, a few weeks after the salary increase for the year 2001
became effective, TSPIC's Human Resources Department notified 24 employees, that
due to an error in the automated payroll system, they were overpaid and the
overpayment would be deducted from their salaries in a staggered basis, starting
Page 10 of 11
February 2001. TSPIC explained that the correction of the erroneous computation was
based on the crediting provision of Sec. 1, Art. X of the CBA.
The Union, on the other hand, asserted that there was no error and the deduction
of the alleged overpayment from employees constituted diminution of pay.
ISSUE:
Does the TSPIC's decision to deduct the alleged overpayment from the salaries
of the affected members of the Union constitute diminution of benefits in violation of the
Labor Code?
RULING:
NO. A Collective Bargaining Agreement is the law between the parties. It is
familiar and fundamental doctrine in labor law that the CBA is the law between the
parties and they are obliged to comply with its provisions. If the terms of a contract, as
in a CBA, are clear and leave no doubt upon the intention of the contracting parties, the
literal meaning of their stipulations shall control. 12
Here, TSPIC wants to credit the increase granted by WO No. 8 to the increase
granted under the CBA. According to TSPIC, it is specifically provided in the CBA that
"the salary/wage increase for the year 2001 shall be deemed inclusive of the mandated
minimum wage increases under future wage orders that may be issued after Wage
Order No. 7."
As a general rule, in the interpretation of a contract, the intention of the parties is
to be pursued. Littera necat spiritus vivificat. An instrument must be interpreted
according to the intention of the parties. 13 Considering that the parties have
unequivocally agreed to substitute the benefits granted under the CBA with those
granted under wage orders, the agreement must prevail and be given full effect.
Thus, it may be reasonably concluded that TSPIC granted the salary increases
under the condition that any wage order that may be subsequently issued shall be
credited against the previously granted increase. The intention of the parties is clear: As
long as an employee is qualified to receive the 12% increase in salary, the employee
shall be granted the increase; and as long as an employee is granted the 12% increase,
the amount shall be credited against any wage order issued after WO No. 7.
12
G.R. No. 163419 February 13, 2008.
13
Marcopper Mining Corporation v. NLRC, G.R. No. 103525, March 29, 1996, 255 SCRA 322, 333; citing Davao Integrated Port Stevedoring Services
v. Abarquez, G.R. No. 102132, March 19, 1993, 220 SCRA 197.
Page 11 of 11
Diminution of benefits is the unilateral withdrawal by the employer of benefits
already enjoyed by the employees. There is diminution of benefits when it is shown that:
(1) the grant or benefit is founded on a policy or has ripened into a practice over a long
period; (2) the practice is consistent and deliberate; (3) the practice is not due to error in
the construction or application of a doubtful or difficult question of law; and (4) the
diminution or discontinuance is done unilaterally by the employer. 14
As correctly pointed out by TSPIC, the overpayment of its employees was a
result of an error. This error was immediately rectified by TSPIC upon its discovery. We
have ruled before that an erroneously granted benefit may be withdrawn without
violating the prohibition against non-diminution of benefits.
Here, no vested right accrued to individual respondents when TSPIC corrected
its error by crediting the salary increase for the year 2001 against the salary increase
granted under WO No. 8, all in accordance with the CBA.
It should be reiterated that though it is the state's responsibility to afford
protection to labor, this policy should not be used as an instrument to oppress
management and capital.15 Social justice does not, however, mandate that every
dispute should be automatically decided in favor of labor. In any case, justice is to be
granted to the deserving and dispensed in the light of the established facts and the
applicable law and doctrine.16
14
C.A. Azucena, The Labor Code with Comments and Cases 222 (2004).
15
Agabon v. NLRC, G.R. No. 158693, November 17, 2004, 442 SCRA 573, 614.
16
Norkis Union v. Norkis Trading, G.R. No. 157098, June 30, 2005, 462 SCRA 485, 497.
