Labor - UST, and ARCO

2. University of Santo Tomas vs.
NLRC, 182 SCRA 371

University of Sto. Tomas v. National Labor Relations Commission, G.R. No. 85519, [February 15, 1990],
261 PHIL 483-496
CASE DOCTRINE:
LABOR AND SOCIAL LEGISLATION; MANUAL OF REGULATIONS FOR
PRIVATE SCHOOLS; ACQUISITION OF REGULAR OR PERMANENT STATUS OF
FACULTY MEMBERS IN AN EDUCATIONAL INSTITUTION, DETERMINED
THEREBY AND NOT BY THE LABOR CODE.
FACTS:
Dr. Basilio Borja(Respondent), was appointed as faculty in the University of Santo Tomas(UST) from 1976-
1979.
On 19 March 1979 the Dean observed that Respondent should not be reappointed due to his sub-standard
and inefficient performance as shown in the evaluation sheet. Nevertheless due to a critical shortage of
staff members the Dean reappointed the Respondent. In all these appointments he was a part-time
instructor.
At the end of the A/Y it appears that Respondent did not improve his performance hence his reappointment
was not recommended.
Respondent then filed a complaint for illegal dismissal before the NLRC against UST. Respondent won the
case against UST. NLRC declared that it is the Manual of Regulations for Private Schools, not the Labor
Code, that determines the acquisition of regular or permanent status of faculty members in an educational
institution.
UST appealed to NLRC. NLRC just affirmed its previous Decision.
Hence this petition before the Supreme Court.

ISSUE:
1. W/N the Manual of Regulations for Private Schools, not the Labor Code, that determines the acquisition
of regular or permanent status of faculty members in an educational institution.
2. W/N The Honorable NLRC committed a serious and grave error in Affirming, Albeit Reducing the award
of damages and grave abuse of its discretion amounting to excess of jurisdiction.
RULING:
1. Yes, appealed decision is correct insofar as it declares that it is the

Manual of Regulations for Private Schools, not the Labor Code, that
determines the acquisition of regular or permanent status of faculty
members in an educational institution,
2. Yes, the Court disagrees with the observation that it is only the completion of three (3) years of service
that is required to acquire such status.
According to Policy Instructions No. 11 issued by the Department of Labor and Employment, "the
probationary employment of professors, instructors and teachers shall be subject to standards established
by the Department of Education and Culture." Said standards are embodied in paragraph 75 of the Manual
of Regulations for Private Schools, to wit: "75. Full time teachers who have rendered three consecutive
years of satisfactory service shall be considered permanent." (Emphasis supplied) The legal requisites,
therefore, for acquisition by a teacher of permanent employment, or security of tenure, are as follows: 1)
the teacher is a full-time teacher; 2) the teacher must have rendered three (3) consecutive years of service;
and 3) such service must have been satisfactory. Now, the Manual of Regulations also states that "a full-
time teacher" is "one whose total working day is devoted to the school, has no other regular remunerative
employment and is paid on a regular monthly basis regardless of the number of teaching hours" (Par. 77);
and that in college, "the normal teaching load of a full-time instructor shall be eighteen hours a week" (par.
78). It follows that a part-time member of the faculty cannot acquire permanence in employment under the
Manual of Regulations in relation to the Labor Code.
2. ARCO Metal Products vs. SAMARM-NAFLU G.R. No. 170734, May 14, 2008
|||(Arco Metal Products, Co., Inc. v. Samahan ng mga Manggagawa sa Arco Metal-NAFLU, G.R. No.
170734, [May 14, 2008], 577 PHIL 1-12)
CASE DOCTRINE:
Article 4 of the Labor Code which states that "all doubts in the implementation and interpretation of this
Code, including its implementing rules and regulations shall be rendered in favor of labor."
FACTS:
Petitioner is a company engaged in the manufacture of metal products, whereas respondent is the labor
union of petitioner’s rank and file employees. Sometime in December 2003, petitioner paid the 13th month
pay, bonus, and leave encashment of three union members in amounts proportional to the service they
actually rendered in a year, which is less than a full twelve (12) months. Respondent protested the prorated
scheme, claiming that on several occasions petitioner did not prorate the payment of the same benefits to
seven (7) employees who had not served for the full 12 months. The payments were made in 1992, 1993,
1994, 1996, 1999, 2003, and 2004. According to respondent, the prorated payment violates the rule against
diminution of benefits under Article 100 of the Labor Code. Thus, they filed a complaint before the National
Conciliation and Mediation Board (NCMB). The parties submitted the case for voluntary arbitration. The
voluntary arbitrator, ruled in favor of the Petitioner.
ISSUE:
W/N full payment of benefits regardless of the length of service to the company does not constitute voluntary
employer practice.
RULING:
Any benefit and supplement being enjoyed by employees cannot be reduced, diminished, discontinued or
eliminated by the employer. The principle of non-diminution of benefits is founded on the Constitutional
mandate to "protect the rights of workers and promote their welfare," and "to afford labor full
protection." Said mandate in turn is the basis of Article 4 of the Labor Code which states that "all doubts in
the implementation and interpretation of this Code, including its implementing rules and regulations shall
be rendered in favor of labor." Jurisprudence is replete with cases which recognize the right of employees
to benefits which were voluntarily given by the employer and which ripened into company practice. Thus in
Davao Fruits Corporation v. Associated Labor Unions, et al. where an employer had freely and
continuously included in the computation of the 13th month pay those items that were expressly excluded
by the law, we held that the act which was favorable to the employees though not conforming to law had
thus ripened into a practice and could not be withdrawn, reduced, diminished, discontinued or eliminated.
In Sevilla Trading Company v. Semana, we ruled that the employer's act of including non-basic benefits in
the computation of the 13th month pay was a voluntary act and had ripened into a company practice which
cannot be peremptorily withdrawn. Meanwhile in Davao Integrated Port Stevedoring Services v.
Abarquez, the Court ordered the payment of the cash equivalent of the unenjoyed sick leave benefits to
its intermittent workers after finding that said workers had received these benefits for almost four years until
the grant was stopped due to a different interpretation of the CBA provisions. We held that the employer
cannot unilaterally withdraw the existing privilege of commutation or conversion to cash given to said
workers, and as also noted that the employer had in fact granted and paid said cash equivalent of the
unenjoyed portion of the sick leave benefits to some intermittent workers.

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2. University of Santo Tomas vs.

NLRC, 182 SCRA 371

UST appealed to NLRC. NLRC just affirmed its previous Decision.

Hence this petition before the Supreme Court.

1. Yes, appealed decision is correct insofar as it declares that it is the

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