USC Warriors' Notes - Labor Law

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MAJOR POINTERS FOR THE 2020/21 By: Atty. Aylward M. Consulta

BAR EXAMINATION IN LABOR LAWS Senior Associate, ACCRA Law Offices
Professor, USC School of Law & Governance
I. GENERAL PRINCIPLES
• Dumapis v. Lepanto Consolidated Mining Company, G.R. No. 204060, 15 September

2020
o The award of backwages and/or separation pay due to illegally dismissed

employees shall include all salary increases and benefits granted under the
law and other government issuances, Collective Bargaining Agreements,
employment contracts, established company policies and practices, and
analogous sources which the employees would have been entitled to had
they not been illegally dismissed. This ruling is consistent with the
Constitutional command that the State shall afford full protection to labor
o However, salary increases and other benefits which are contingent or

dependent on variables such as an employee's merit increase based on
performance or longevity or the company's financial status shall not be
included in the award.
• Aldovino v. Gold and Green Manpower Management and Development Services, Inc.,
G.R. No. 200811, 19 June 2019,
o Both the Constitution and the Labor Code guarantee the security of
tenure. It is not stripped off when Filipinos work in a different jurisdiction,
particularly when employment contracts were executed in the Philippines,.
In this case, Philippine laws govern them.
o Quitclaims do not bar employees from filing labor complaints and

demanding benefits to which they are legally entitled. They are "ineffective
in barring recovery of the full measure of a worker's rights, and the
acceptance of benefits therefrom does not amount to estoppel." The law
does not recognize agreements that result in compensation less than what
is mandated by law. These quitclaims do not prevent employees from
subsequently claiming benefits to which they are legally entitled.
• Herma Shipping and Transport Corporation v. Cordero, G.R. No. 244144, 27 January
2020
o The policy of social justice is not intended to countenance wrongdoing

simply because it is committed by the underprivileged. At best, it may
mitigate the penalty but it certainly will not condone the offense.
Compassion for the poor is an imperative of every humane society but only
when the recipient is not a rascal claiming an undeserved privilege.
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o Those who invoke social justice may do so only if their hands are clean and
their motives blameless and not simply because they happen to be poor.
This great policy of our Constitution is not meant for the protection of those
who have proved they are not worthy of it, like the workers who have
tainted the cause of labor with the blemishes of their own character.
o As a general rule, long years of service might be considered for the award
of separation benefits or some form of financial assistance to mitigate the
effects of termination.
o However, an employee who was terminated for having participated in oil

pilferage or theft of company property entrusted to him may not justly
claim for moderating the penalty of dismissal due to his length of service
for more than twenty years with no negative record. Such claim, if granted,
will actually become a prize for disloyalty, distorting the meaning of social
justice and undermining the efforts of labor to cleanse its ranks of
undesirables.
• BDO v. Nerbes, G.R. No. 208735, 19 July 2017
o The law and jurisprudence consistently echo the commitment to protect the
working class in keeping with the principle of social justice. The Court
struck down employer acts, even at the guise of exercise of management
prerogative, which undermine the worker's right to security of tenure.
Nevertheless, the law, in aiming to protect the rights of workers, does not
thereby authorize the oppression or self-destruction of the employer.
o The bank essentially argues that it validly dismissed Nerbes and Suravilla
from employment because they committed serious misconduct and willful
disobedience when they failed to return to work despite orders for them to
do so. Nerbes and Suravilla counter that as duly-elected officers of the
union they are entitled to be on full-time leave. According to Nerbes and
Suravilla, Department Order No. 09 allows them to immediately assume
their respective positions upon resolution of the election protests of the
losing candidates and that the appeal to the BLR filed by their opponents
could not have stayed the execution of their proclamation as such appeal is
not the appeal contemplated under Department Order No. 09.
o In siding with Nerbes and Suravilla, the LA held that their refusal to return
to work, being anchored on the text of Department Order No. 09, does not
constitute serious misconduct or willful disobedience. The CA, while
finding that the bank's order for Nerbes and Suravilla to return to work was
lawful and reasonable and that they refused to comply with said order,
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nevertheless found that their refusal to do so was not characterized by a

wrongful and perverse attitude to warrant the supreme penalty of
dismissal.
• Agustin v. Alphaland Corporation, G.R. No. 218282, 9 September 2020
o Dismissal of regular employees by the employer requires the observance of

the two-fold due process, namely: (1) substantive due process; and (2)
procedural due process.
o Substantive due process means that the dismissal must be for any of the: (1)
just causes provided under Article 297 of the Labor Code or the company
rules and regulations promulgated by the employer; or (2) authorized
causes under Article 298 and 299 thereof.
o Procedural due process means that the employee must be accorded due
process required under Article 292(b) of the Labor Code, the elements of
which are the twin-notice rule and the employee's opportunity to be heard
and to defend himself.
• Centro Project Manpower Services Corporation v. Naluis, G.R. No. 160123, 17 June 2015
o In the interpretation of their provisions, labor contracts require the

resolution of doubts in favor of the laborer because of their being imbued
with social justice considerations. This rule of interpretation is demanded
by the Labor Code1 and the Civil Code
o Here, doubts in the expiration date of the employment contract was

resolved in favor of labor
• Samahan ng Manggagawa sa Hanjin Shipyard v. BLR, G.R. No. 211145, 14 October 2015
o Right to choose whether to form or join a union or workers' association

belongs to workers themselves.
o Also inherent in the right to self-organization is the right to choose whether

to form a union for purposes of collective bargaining or a workers'
association for purposes of providing mutual aid and protection.
o Here, the Court cannot sanction the opinion of the CA that Samahan should
have formed a union for purposes of collective bargaining instead of a
workers' association because the choice belonged to it. The right to form or
join a labor organization necessarily includes the right to refuse or refrain
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from exercising the said right. It is self-evident that just as no one should be
denied the exercise of a right granted by law, so also, no one should be
compelled to exercise such a conferred right. Also inherent in the right to
self-organization is the right to choose whether to form a union for
purposes of collective bargaining or a workers' association for purposes of
providing mutual aid and protection.
• PBOAP v. DOLE, G.R. No. 202275, 18 Jul 2018
o The relations between capital and labor are not merely contractual. By
statutory declaration, labor contracts are impressed with public interest
and, therefore, must yield to the common good. Labor contracts are subject
to special laws on wages, working conditions, hours of labor, and similar
subjects. In other words, labor contracts are subject to the police power of
the State.
o Department Order No. 118-12 and Memorandum Circular No. 2012- 001 are
reasonable and are valid police power issuances. The pressing need for
Department Order No. 118-12 is obvious considering petitioners' admission
that the payment schemes prior to the Order's promulgation consisted of
the "payment by results," the "commission basis," or the boundary system.
These payment schemes do not guarantee the payment of minimum wages
to bus drivers and conductors. There is also no mention of payment of social
welfare benefits to bus drivers and conductors under these payment
schemes which have allegedly been in effect since "time immemorial."
II. EXISTENCE OF ER-EE RELATIONSHIP; TESTS
• Atok Big Wedge Company, Inc. v. Gison, G.R. No. 169510, 8 August 2011
o the existence of an employer-employee relationship is ultimately a question

of fact and that the findings thereon by the Labor Arbiter and the NLRC
shall be accorded not only respect but even finality when supported by
substantial evidence.
o Here, an employer-employee relationship is apparently absent. Among

other things, respondent was not required to report everyday during
regular office hours of petitioner. Respondent's monthly retainer fees were
paid to him either at his residence or a local restaurant. More importantly,
petitioner did not prescribe the manner in which respondent would
accomplish any of the tasks in which his expertise as a liaison officer was
needed; respondent was left alone and given the freedom to accomplish the
tasks using his own means and method. Respondent was assigned tasks to
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perform, but petitioner did not control the manner and methods by which
respondent performed these tasks. Verily, the absence of the element of
control on the part of the petitioner engenders a conclusion that he is not an
employee of the petitioner.
• Loreche-Amit v. CDMC, G.R. No. 216635, 3 June 2019
o The four-fold test, to wit: 1) the selection and engagement of the employees;
2) the payment of wages; 3) the power of dismissal; and 4) the power to
control the employee's conduct, must be applied to determine the existence
of an employer-employee relationship.
o The power to control the work of the employee is considered the most
significant determinant of the existence of an employer-employee
relationship. This test is premised on whether the person for whom the
services are performed reserves the right to control both the end achieved
and the manner and means used to achieve that end.
o Any memorandum or issuance pertaining to a person’s behavior does not

sufficiently establish the element of control. Here, the Memorandum
merely states that intolerable behavior in the hospital cannot be
countenanced. It is administrative in character which does not, in any way,
pertains to the manner and method of petitioner's work.
o Economic reality test – the benchmark of economic reality in analyzing

possible employment relationships for purposes of applying the Labor
Code ought to be the economic dependence of the worker on his employer.
o The rule is that where a person who works for another performs his job
more or less at his own pleasure, in the manner he sees fit, not subject to
definite hours or conditions of work, and is compensated according to the
result of his efforts and not the amount thereof, no employer-employee
relationship exists.
o Here, the Supreme Court noted the fact that petitioner was not dependent
on CDMC since she continued to work for other hospitals.
• Lu v. Enopia, G.R. No. 197899, 6 March 2017
o No particular form of evidence is required to prove the existence of an

employer-employee relationship. Any competent and relevant evidence to
prove the relationship may be admitted.
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o The control test merely calls for the existence of the right to control, and not
necessarily the exercise thereof. It is not essential that the employer actually
supervises the performance of duties by the employee. It is enough that the
former has a right to wield the power.
• Royale Homes Marketing Corporation v. Alcantara, G.R. No. 195190, 28 July 2014
o Not every form of control is indicative of employer-employee relationship.

A person who performs work for another and is subjected to its rules,
regulations, and code of ethics does not necessarily become an
employee. As long as the level of control does not interfere with the means
and methods of accomplishing the assigned tasks, the rules imposed by the
hiring party on the hired party do not amount to the labor law concept of
control that is indicative of employer-employee relationship.
o While the existence of employer-employee relationship is a matter of law,

the characterization made by the parties in their contract as to the nature of
their juridical relationship cannot be ignored, particularly where the
parties’ written contract unequivocally states their intention at the time they
entered into it.
o The SC agrees with Royale Homes that the rules, regulations, code of ethics,
and periodic evaluation alluded to by Alcantara do not involve control over
the means and methods by which he was to perform his job.
Understandably, Royale Homes has to fix the price, impose requirements
on prospective buyers, and lay down the terms and conditions of the sale,
including the mode of payment, which the independent contractors must
follow. It is also necessary for Royale Homes to allocate its inventories
among its independent contractors, determine who has priority in selling
the same, grant commission or allowance based on predetermined criteria,
and regularly monitor the result of their marketing and sales efforts. These
do not pertain to the means and methods of how Alcantara was to perform
and accomplish his task of soliciting sales. They do not dictate upon him
the details of how he would solicit sales or the manner as to how he would
transact business with prospective clients. In Tongko, this Court held that
guidelines or rules and regulations that do not pertain to the means or
methods to be employed in attaining the result are not indicative of control
as understood in labor law.
• South East International Rattan, Inc. v. Coming, G.R. No. 186621, 12 March 2014
o The fact that a worker was not reported as an employee to the SSS is not
conclusive proof of the absence of employer-employee relationship.
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Otherwise, an employer would be rewarded for his failure or even neglect

to perform his obligation.
o Nor does the fact that respondent’s name does not appear in the payrolls
and pay envelope records submitted by petitioners negate the existence of
employer-employee relationship. For a payroll to be utilized to disprove the
employment of a person, it must contain a true and complete list of the
employee. Here, the evidence offered before the NLRC consisting of copies
of payrolls and pay earnings records covers only 2 years; they do not cover
the entire 18-year period during which respondent supposedly worked for
the company.
• Marsman & Company, Inc. v. Sta. Rita, G.R. No. 194765, 23 April 2018
o In an illegal dismissal case, the onus probandi rests on the employer to prove
that its dismissal of an employee was for a valid cause. However, before a
case for illegal dismissal can prosper, an employer-employee relationship
must first be established. In this instance, it was incumbent upon the
employee as the complainant to prove the employer-employee relationship
by substantial evidence.
III. TERMINATION OF EMPLOYMENT
• Italkarat 18, Inc. v. Gerasmio, G.R. No. 221411, 28 September 2020
o Before the employer must bear the burden of proving that the dismissal was
legal, the employee must first establish by substantial evidence the fact of
his dismissal from service. Bare allegations of constructive dismissal, when
uncorroborated by the evidence on record, cannot be given credence.
o An act, to be considered as amounting to constructive dismissal, must be a

display of utter discrimination or insensibility on the part of the employer
so intense that it becomes unbearable for the employee to continue with his
employment. Here, the circumstances relayed by Gemina were not clear-
cut indications of bad faith or some malicious design on the part of
Bankwise to make his working environment insufferable.
o As regards Gemina's allegation that he was verbally being compelled to go

on leave, enough it is to say that there was no evidence presented to prove
the same. There was not a single letter or document that would corroborate
his claim that he was being forced to quit employment. He even went on
leave in January 2003 and never claimed that it was prompted by the
management's prodding but did so out of his own volition.
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o Without substantial evidence to support his claim, Gemina's claim of

constructive dismissal must fail. It is an inflexible rule that a party alleging
a critical fact must support his allegation with substantial evidence, for any
decision based on unsubstantiated allegation cannot stand without
offending due process.
• Maula v. Ximex G.R. No. 207838, 25 January 2017
o Here, petitioner lost his composure. Exasperated, he refused to receive the

memorandum and thus retorted "Seguro na abnormal na ang utak mo" as
it dawned on him that they were out looking for every means possible to
pin him down.
o General Rule: accusatory and inflammatory language used by an employee

to the employer or superior can be a ground for dismissal or termination.
o Exception: insulting and unbecoming language uttered by employee

committed under an emotionally charged state or on-the-spur-of-the-
moment outburst having reached his breaking point, due to perceived
successive retaliatory and orchestrated actions of employer, is not a
terminable offense. There was only lapse in judgment rather than a
premeditated defiance of authority.
o Not every case of insubordination or willful disobedience by an employee

reasonably deserves the penalty of dismissal because the penalty to be
imposed on an erring employee must be commensurate with the gravity of
his or her offense.
• Demex Rattancraft, Inc. v. Leron, G.R. No. 204288, 8 November 2017
o Abandonment of work, akin to neglect of duty, has been construed as "a

clear and deliberate intent to discontinue one's employment without any
intention of returning back." To justify the dismissal of an employee on this
ground, two (2) elements must concur, namely: "(a) the failure to report for
work or absence without valid or justifiable reason; and, (b) a clear intention
to sever the employer-employee relationship."
o Intent to sever the employer-employee relationship can be proven through

the overt acts of an employee. However, this intent "cannot be lightly
inferred or legally presumed from certain ambivalent acts." The overt acts,
after being considered as a whole, must clearly show the employee's
objective of discontinuing his or her employment.
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o The allegation that employee's absences, non-compliance with the return-

to-work notices, and his alleged act of crumpling the first return-to-work
notice as indicators of abandonment must fail since the employee filed an
illegal dismissal case after his first day of absence. There was no
unequivocal intent to abandon.
• Adamson University Faculty and Employees Union v. Delos Reyes, G.R. No. 227070, 9
March 2020
o Misconduct is not considered serious or grave when it is not performed

with wrongful intent. If the misconduct is only simple, not grave, the
employee cannot be validly dismissed.
o A teacher exclaiming "anak ng puta" after having encountered a student is

an unquestionable act of misconduct. However, whether it is serious
misconduct that warrants the teacher's dismissal will depend on the context
of the phrase's use. "Anak ng puta" is similar to "putang ina" in that it is an
expletive sometimes used as a casual expression of displeasure, rather than
a personal attack or insult.
o The utterance in question, "anak ng puta," was an expression of annoyance

or exasperation. The students were pulling from each side of the door,
prompting the professor to exclaim frustration without any clear intent to
maliciously damage or cause emotional harm upon the complainant. That
they had not personally known each other before the incident, and that
petitioner had no personal vendetta against complainant as to mean those
words to insult her, confirm this conclusion.
o The totality of infractions or the number of violations committed during the

period of employment shall be considered in determining the penalty to be
imposed upon an erring employee. The offenses committed by petitioner
should not be taken singly and separately.
• Hubilla v. HSY Marketing LTD., Co., G.R. No. 207354, 10 January 2018
o Where both parties in a labor case have not presented substantial evidence
to prove their allegations, the evidence is considered to be in equipoise. In
such a case, the scales of justice are tilted in favor of labor. Thus, petitioners
are hereby considered to have been illegally dismissed.
o Respondents have not presented any proof that petitioners intended to

abandon their employment. They merely alleged that petitioners have
already voluntarily terminated their employment due to their continued
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refusal to report for work. However, this is insufficient to prove

abandonment.
• Philippine Span Asia Carriers Corporation v. Pelayo, G.R. No. 212003, 28 February 2018
o Not every inconvenience, disruption, difficulty, or disadvantage that an

employee must endure sustains a finding of constructive dismissal." It is an
employer's right to investigate acts of wrongdoing by employees.
Employees involved in such investigations cannot ipso facto claim that
employers are out to get them. Their involvement in investigations will
naturally entail some inconvenience, stress, and difficulty. However, even
if they might be burdened - and, in some cases, rather heavily so - it does
not necessarily mean that an employer has embarked on their constructive
dismissal.
• King of Kings Transport v. Mamac, G.R. No. 166208, 29 June 2007
o The first written notice to be served on the employees should contain

§ the specific causes or grounds for termination against them;
§ and a directive that the employees are given the opportunity to
submit their written explanation within a reasonable period.
"Reasonable opportunity" means every kind of assistance that
management must accord to the employees to enable them to
prepare adequately for their defense. This should be construed as a
period of at least five (5) calendar days from receipt of the notice to
give the employees an opportunity to study the accusation against
them, consult a union official or lawyer, gather data and evidence,
and decide on the defenses they will raise against the complaint.
§ Moreover, in order to enable the employees to intelligently prepare
their explanation and defenses, the notice should contain a detailed
narration of the facts and circumstances that will serve as basis for
the charge against the employees. A general description of the
charge will not suffice. Lastly, the notice should specifically mention
which company rules, if any, are violated and/or which among the
grounds under Art. 282 is being charged against the employees.
o After determining that termination of employment is justified, the

employers shall serve the employees a written notice of termination
indicating that: (1) all circumstances involving the charge against the
employees have been considered; and (2) grounds have been established to
justify the severance of their employment.
• Perez, et al. v. Phil. Telegraph and Telephone Co., G.R. No. 152048, 7 April 2009
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o 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 circumstances justify it.
• Bravo v. Urios College, G.R. No. 198066, 7 June 2017
o To warrant termination of employment, the misconduct must be serious or

"of such grave and aggravated character." Trivial and unimportant acts are
not contemplated under Article 297(a) of the Labor Code.
o The misconduct must "relate to the performance of the employee's duties"

that would render the employee "unfit to continue working for the
employer."
o Gambling during office hours, sexual intercourse within company

premises, sexual harassment, sleeping while on duty, and contracting
work in competition with the business of one's employer are among those
considered as serious misconduct for which an employee's services may be
terminated.
o The rank-and-file employee's act must have been "performed with

wrongful intent" to warrant dismissal based on serious
misconduct. Dismissal is deemed too harsh a penalty to be imposed on
employees who are not induced by any perverse or wrongful motive
despite having committed some form of misconduct.
o Managerial employees are treated differently than fiduciary rank-and-file

employees in determining whether loss of trust and confidence may validly
be used as a justification in termination case.
§ Rank-and-file personnel - loss of trust and confidence as ground for

valid dismissal requires proof of involvement in the alleged events
in question
§ Managerial Employee - mere existence of a basis for believing that
such employee has breached the trust of his employer would suffice
for his dismissal.
• Claret School of Quezon City v. G.R. No. 226358, 9 October 2019
o Theft is a serious accusation which must be sufficiently supported by

evidence. Here, petitioner failed to act on the allegation by conducting an
investigation and immediately acting on the report. Without any proof, the
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employer’s claim that she was found stealing relief goods from the school
premises, and thus was validly dismissed, lacks merit.
• Villanueva v. Ganco Resort And Recreation, Inc., G.R. No. 227175, 8 January 2020
o Insubordination or willful disobedience requires the concurrence of the

following requisites: (1) the employee's assailed conduct must have been
willful or intentional, the willfulness being characterized by a wrongful and
perverse attitude; and (2) the order violated must have been reasonable,
lawful, made known to the employee and must pertain to the duties which
he had been engaged to discharge.
o Here, employee withheld her signature on the Notice to Transfer because

she was awaiting answers to the questions she raised to the
management via e-mail. She cannot be forced to affix her signature thereon
if she does not really fully understand the reasons behind and the
consequences of her transfer. While her action is willful and intentional, it
is nonetheless far from being "wrongful and perverse." Thus, there is no
basis to dismiss petitioner on the ground of insubordination for her mere
failure to sign the Notice to Transfer.
o As to habitual neglect for petitioner's absences without leave, in order to

constitute a valid cause for dismissal, the neglect of duties must be both
gross and habitual. Gross negligence has been defined as "the want or
absence of or failure to exercise slight care or diligence, or the entire absence
of care. It evinces a thoughtless disregard of consequences without exerting
any effort to avoid them." On the other hand, habitual neglect "imparts
repeated failure to perform one's duties for a period of time, depending on
the circumstances." A single or isolated act of negligence does not constitute
a just cause for the dismissal of the employee.
• Telephilippines, Inc. v. Jacolbe, G.R. No. 233999, 18 February 2019
o Gross inefficiency is analogous to gross and habitual neglect of duty for

both involve specific acts of omission on the part of the employee resulting
in damage to the employer or to his business, and constituting, therefore,
just cause to dismiss an employee.
o Such inefficiency is understood to mean failure to attain work goals or work

quotas, either by failing to complete the same within the allotted reasonable
period, or by producing unsatisfactory results.
o Here, the employee’s repeated and consistent failure to meet the prescribed
Average Handle Time mark over a prolonged period of time falls squarely
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under the concept of gross inefficiency and is analogous to gross and

habitual neglect of duty which justified his dismissal
.
• Paulino v. NLRC, G.R. No. 176184, 13 June 2012
o Notwithstanding petitioner’s acquittal in the criminal case for qualified

theft, PLDT had adequately established the basis for the company’s loss of
confidence as a just cause to terminate petitioner. This is correct, since proof
beyond reasonable doubt of an employee’s misconduct is not required in
dismissing an employee. Rather, as opposed to the proof beyond reasonable
doubt standard of evidence required in criminal cases, labor suits require
only substantial evidence to prove the validity of the dismissal.
• Innodata Knowledge Services, Inc. v. Inting, G.R. No. 211892, 6 December 2017
o An employer may validly put its employees on forced leave or floating

status upon bona fide suspension of the operation of its business for a period
not exceeding six (6) months. In such a case, there is no termination of the
employment of the employees, but only a temporary displacement. When
the suspension of the business operations, however, exceeds six (6) months,
then the employment of the employees would be deemed terminated, and
the employer would be held liable for the same.
• ENLI v. Dela Cruz, G.R. No. 225100, 19 February 19, 2020
o Preventive suspension is not a penalty but a disciplinary measure to protect

life or property of the employer or the co-workers pending investigation of
any alleged infraction committed by the employee. Thus, it is justified only
when the employee's continued employment poses a serious and imminent
threat to the employer's or co-workers' life or property. When justified, the
preventively suspended employee is not entitled to the payment of his
salaries and benefits for the period of suspension
• Omanfil International Manpower Development Corporation v. Mesina, G.R. No. 217169,

4 November 2020
o For a dismissal on the ground of disease to be considered valid, two

requisites must concur: (a) the employee suffers from a disease which
cannot be cured within six months and his/her continued employment is
prohibited by law or prejudicial to his/her health or to the health of his/her
co-employees, and (b) a certification to that effect must be issued by a
competent public health authority.
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o Here, the employee was illegally dismissed as none of his medical records
showed that his ailment was permanent or that he suffered from a disease
which could not be cured within six months and that his continued
employment was prohibited by law or prejudicial to his health or to the
health of his co-employees. This is validated by the absence of the required
Certification from a competent public authority certifying to such a health
condition on his part.
• Yulo v. Concentrix Daksh Services Philippines, Inc., G.R. No. 235873, 21 January 2019
o It is not enough for a company to merely declare that it has become

overmanned. Rather, it must produce adequate proof of such redundancy
to justify the dismissal of the affected employees, such as but not limited to
the new staffing pattern, feasibility studies/proposal, on the viability of the
newly created positions, job description and the approval by the
management of the restructuring.
o Fair and reasonable criteria may include (a) less preferred status (e.g.,
temporary employee); (b) efficiency; and (c) seniority.
• Manggagawa Ng Komunikasyon Sa Pilipinas v. PLDT, G.R. No. 190389, 19 April 2017
o PLDT’s declaration of redundancy was backed by substantial evidence

showing a consistent decline for operator-assisted calls for both local and
international calls because of cheaper alternatives like direct dialing
services, and the growth of wireless communication.
o For either redundancy or retrenchment, the law requires that the employer
give separation pay equivalent to at least one (1) month pay of the affected
employee, or at least one (1) month pay for every year of service, whichever
is higher. The employer must also serve a written notice on both the
employees and the DOLE at least one (1) month before the effective date of
termination due to redundancy or retrenchment.
• G.J.T. Rebuilders Machine Shop v. Ambos, G.R. No. 174184, 28 January 2015
o Employers closing their businesses must pay the affected workers

separation pay equivalent to one-month pay or to at least one-half-month
pay for every year of service, whichever is higher.
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o The only time employers are not compelled to pay separation pay is when
they closed their establishments or undertaking due to serious business
losses or financial reverses.
o Serious business losses are substantial losses, not de minimis. "Losses"

means that the business must have operated at a loss for a period of time
for the employer "to have perceived objectively and in good faith" that the
business’ financial standing is unlikely to improve in the future.
o To prove serious business losses, employers must present in evidence

financial statements showing the net losses suffered by the business within
a sufficient period of time. Generally, it cannot be based on a single financial
statement showing losses. Absent this proof, employers closing their
businesses must pay the dismissed employees separation pay equivalent to
one-month pay or to at least one-half-month pay for every year of service,
whichever is higher.
• Genuino Agro-Industrial Development Corporation v. Romano, G.R. No. 204782,

September 18, 2019
o Petitioner could have easily proved its dire financial state by submitting its
financial statements duly audited by independent external auditors, but it
did not. Its failure to prove these reverses or losses necessarily means that
respondents' dismissal was not justified.
IV. REQUIREMENTS FOR LABOR-ONLY CONTRACTING
• Allied Banking Corporation v. Calumpang, G.R. No. 219435, 17 January 2018
o Permissible job contracting or subcontracting has been distinguished from

labor-only contracting such that 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,
while labor-only contracting, on the other hand, pertains to an arrangement
where the contractor or subcontractor merely recruits, supplies or places
workers to perform a job, work or service for a principal.
o There is job contracting permissible under the Code if the following

conditions are met:
15
§ The contractor carries on an independent business and undertakes

the contract work on his own account under his own responsibility
according to his own manner and method, free from the control and
direction of his employer or principal in all matters connected with
the performance of the work except as to the results thereof; and
§ The contractor has substantial capital or investment in the form of

tools, equipment, machineries, work premises, and other materials
which are necessary in the conduct of his business.
o Labor-only contracting. - (a) Any person who undertakes to supply

workers to an employer shall be deemed to be engaged in labor-only
contracting where such person:
§ Does not have substantial capital or investment in the form of tools,

equipment, machineries, work premises and other materials; and
§ The workers recruited and placed by such person are performing

activities which are directly related to the principal business or
operations of the employer in which workers are habitually
employed.
o As a general rule, a contractor is presumed to be a labor-only contractor,

unless such contractor overcomes the burden of proving that it has the
substantial capital, investment, tools and the like.
o Here, petitioner failed to establish that RCI is a legitimate labor contractor

as contemplated under the Labor Code. Except for the bare allegation of
petitioner that RCI had substantial capitalization, it presented no
supporting evidence to show the same. Petitioner never submitted financial
statements from RCI.
• Daguinod v. Southgate Foods, Inc., G.R. No. 227795, 20 February 2019
o "Substantial capital or investment" refers to capital stocks and subscribed

capitalization in the case of corporations, tools, equipment, implements,
machineries and work premises, actually and directly used by the
contractor or subcontractor in the performance or completion of the job,
work or service contracted out.
16
o The "right to control" shall refer to the right reserved to the person for
whom the services of the contractual workers are performed, to determine
not only the end to be achieved, but also the manner and means to be used
in reaching that end. (Emphasis supplied)
o One of the factors in determining whether there is labor-only contracting is

the nature of the employee's job, i.e., whether the work he performs is
necessary and desirable to the business of the principal.
§ Here, the worker was assigned to perform cash control activities

which entails gathering of orders and assembling food on the tray
for dine-in customers or for take-out. As cashier, he was also tasked
to receive payments and give change. These tasks are undoubtedly
necessary and desirable to the business of a fast food restaurant such
as Jollibee. The service of food to customers is the main line of
business of any restaurant. It is not merely a non-core or peripheral
activity
o The ownership of substantial capital in the form of tools, equipment,

machineries, work premises, and other properties, by the contractor is
another factor in establishing whether it is legitimate.
§ Here, the submission of one ITR for one fiscal year can hardly be
considered substantial evidence to prove that the company has
substantial capital. No credence can be given to the ITR as it does not
appear to have been submitted to the BIR. The company likewise did
not submit any Audited Financial Statements (AFS) to show its
assets, liabilities, and equity. It only submitted the Notes to the
AFS for the year ended 2010 which does not show a complete picture
of its financial standing.
o Registration with DOLE as an independent contractor does not

automatically vest it with the status of a legitimate labor contractor, it is
merely presumptive proof. Here, the totality of circumstances reveals that
the company, despite its DOLE registration, is not a legitimate labor
contractor.
• RNB Garments Philippines, Inc. v. Ramrol Multi-Purpose Cooperative, G.R. No. 236331,
14 September 2020
o Labor-only contracting, a prohibited act, is an arrangement where the

contractor, who does not have substantial capital or investment in the form
of tools, equipment, machineries, work premises, among others, supplies
17
workers to an employer and the workers recruited are performing activities

which are directly related to the principal business of such employer.
o 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.
o The burden to hurdle this test is cast upon the contractor. In cases where
the principal also claims that the contractor is a legitimate contractor, as in
this case, said principal similarly bears the burden of proving that supposed
status.
o Although the AFS was submitted, the same shows that the company does
not have sufficient working capital. Even though its assets reached
P10,316,724.00 in 2007, it drastically decreased in 2008 to P1,446,397.00.
Worse, the company incurred a balance of P9,288,038.92 for the advances as
of 2009 and even had to sell the sewing machines, the tools of its trade, as
partial payment of its debt. While the DOLE may have found that the
capital and/or investments in tools and equipment of RMPC are sufficient
for an independent contractor, this does not mean that such capital and/or
investments are likewise sufficient to maintain an independent contracting
business.
o The drastic and substantial deterioration of the company's assets over a

very short period of time, taken together with its overwhelming
debts/liabilities, militates against its purported substantial capitalization to
further or maintain its contracting business.
o Here, the workers were engaged as sewers, trimmers, reviser, quality

control staff, and sewing mechanic, which, by their nature, are inherently
related to and necessary in its business as a manufacturer of garments. They
were made to work inside the premises of the principal using its fabrics and
sewing accessories, and had to accomplish their tasks within a specific
period of completion, in accordance with the specifications, correct
patterns, and quantity dictated by said principal. These circumstances
undoubtedly show that the principal has the power of control over the
workers in the performance of their work.
V. RIGHTS OF EMPLOYEES AND OF LABOR ORGANIZATION;

MEMBERSHIP IN UNIONS
• Samahan Ng Manggagawa Sa Hanjin Shipyard v. BLR, G.R. No. 211145, 14 October

2015
18
o The right to form a union or association or to self-organization

comprehends two notions, to wit: (a) the liberty or freedom, that is, the
absence of restraint which guarantees that the employee may act for himself
without being prevented by law; and (b) the power, by virtue of which an
employee may, as he pleases, join or refrain from joining an association.
o A labor organization is defined as "any union or association of employees

which exists in whole or in part for the purpose of collective bargaining or
of dealing with employers concerning terms and conditions of
employment."
o A labor organization has two broad rights: (1) to bargain collectively and
(2) to deal with the employer concerning terms and conditions of
employment. To bargain collectively is a right given to a union once it
registers itself with the DOLE. Dealing with the employer, on the other
hand, is a generic description of interaction between employer and
employees concerning grievances, wages, work hours and other terms and
conditions of employment, even if the employees' group is not registered
with the DOLE.
o A union refers to any labor organization in the private sector organized for
collective bargaining and for other legitimate purpose, while a workers'
association is an organization of workers formed for the mutual aid and
protection of its members or for any legitimate purpose other than
collective bargaining.
o The right to form or join a labor organization necessarily includes the right
to refuse or refrain from exercising the said right. It is self-evident that just
as no one should be denied the exercise of a right granted by law, so also,
no one should be compelled to exercise such a conferred right.
o Also inherent in the right to self-organization is the right to choose whether

to form a union for purposes of collective bargaining or a workers'
association for purposes of providing mutual aid and protection.
o The right to self-organization, however, is subject to certain limitations as

provided by law. For instance, the Labor Code specifically disallows
managerial employees from joining, assisting or forming any labor union.
Meanwhile, supervisory employees, while eligible for membership in labor
organizations, are proscribed from joining the collective bargaining unit of
the rank and file employees.
o Misrepresentation, as a ground for the cancellation of registration of a labor

organization, is committed "in connection with the adoption, or ratification
19
of the constitution and by-laws or amendments thereto, the minutes of

ratification, the list of members who took part in the ratification of the
constitution and by-laws or amendments thereto, and those in connection
with the election of officers, minutes of the election of officers, and the list
of voters.
o Misrepresentation, to be a ground for the cancellation of the certificate of

registration, must be done maliciously and deliberately. Further, the
mistakes appearing in the application or attachments must be grave or refer
to significant matters. The details as to how the alleged fraud was
committed must also be indubitably shown.
o Here, no deliberate or malicious intent to commit misrepresentation was

made by union. The use of such words "KAMI, ang mga Manggagawa sa
HANJIN Shipyard" in the preamble of the constitution and by-laws did not
constitute misrepresentation so as to warrant the cancellation of the union's
certificate of registration. The company failed to indicate how this phrase
constitutes a malicious and deliberate misrepresentation. Neither was there
any showing that the alleged misrepresentation was serious in character.
Misrepresentation is a devious charge that cannot simply be entertained by
mere surmises and conjectures.
o Even granting arguendo that the union's members misrepresented

themselves as employees or workers of the company, said
misrepresentation does not relate to the adoption or ratification of its
constitution and by-laws or to the election of its officers.
• Pepsi-Cola Products, Philippines, Inc. v. Honorable Secretary of Labor, G.R. No. 96663,
10 August 1999
o While the Labor Code singles out managerial employee as ineligible to join,
assist or form any labor organization, under the doctrine of necessary
implication, confidential employees are similarly disqualified.
• The Heritage Hotel Manila v. SOLE, G.R. No. 172132, 23 July 2014
o The employer is deemed an intruder as far as the certification election is

concerned. Thus, the employer lacked the legal personality to assail the
proceedings for the certification election, and should stand aside as a mere
bystander who could not oppose the petition, or even appeal the Med-
Arbiter’s orders relative to the conduct of the certification election. The
employer's only right in the proceeding is to be notified or informed
thereof.
20
o The filing of the petition for the cancellation of the union’s registration
should not bar the conduct of the certification election. Only a final order
for the cancellation of the registration would have prevented
NUWHRAINHHMSC from continuing to enjoy all the rights conferred on
it as a legitimate labor union, including the righ tto the petition for the
certification election.
o Mixed membership does not result in the illegitimacy of the registered labor
union unless the same was done through misrepresentation, false statement
or fraud.
• Bank of the Phil Islands vs. BPI Employees Union-Davao Chapter, G.R. No. 164301, 18
August 2010
o The former FEBTC employees that were absorbed by BPI upon the merger
between the two banks should be covered by the Union Shop Clause found
in the existing CBA between BPI and respondent Union. As such they are
required to join the certified bargaining agent existing in BPI, the surviving
corporation. Note however Resolution dated October 19, 2011 where the
Court adopted the theory of automatic assumption espoused by J.Brion and
modified its main decision, holding that BPI is deemed to have assumed the
employment contracts of FEBTC employees upon effectivity of the merger
without break in the continuity of their employment even without express
stipulation in the Articles of Merger.
• NUBE v. PEMA, G.R. No.174287, 12 August 2013
o A local union does not owe its existence to the federation with which it is
affiliated. It is a separate and distinct voluntary association owing its
creation to the will of its members. The mere act of affiliation does not divest
the local union of its own personality, neither does it give the mother
federation the license to act independently of the local union. It only gives
rise to a contract of agency where the former acts in representation of the
latter.
o By PEMA's valid disaffiliation from NUBE, the vinculum that previously

bound the two entities was completely severed. As NUBE was divested of
any and all power to act in representation of PEMA, any act performed by
the former that affects the interests and affairs of the latter, including the
supposed expulsion of Serrana et al., is rendered without force and effect.
• Slord Development Corporation v. Noya, G.R. No. 232687, 4 February 2019
21
o That dismissal from employment due to the enforcement of the union

security clause in the CBA is another just· cause for termination of
employment. Similar to the enumerated just causes in the Labor Code, the
violation of a union security clause amounts to a commission of a wrongful
act or omission out of one's own volition; hence, it can be said that the
dismissal process was initiated not by the employer but by the employee's
indiscretion. Further, a stipulation in the CBA authorizing the dismissal of
employees is of equal import as the statutory provisions on dismissal under
the Labor Code, since a CBA is the law between the company and the union
and compliance therewith is mandated by the express policy to give
protection to labor; thus, there is parallel treatment between just causes and
violation of the union security clause.
• Lee v. Samahang Manggagawa ng Super Lamination, G.R. No. 193816, 21 November

2016
o The veil of corporate fiction should be lifted for the purpose of allowing the
employees of the three agencies to form a single labor union. A settled
formulation of the doctrine of piercing the corporate veil is that when two
business enterprises are owned, conducted, and controlled by the same
parties, both law and equity will, when necessary to protect the rights of
third parties, disregard the legal fiction that these two entities are distinct
and treat them as identical or as one and the same.
o The basic test for determining the appropriate bargaining unit is the
application of a standard whereby a unit is deemed appropriate if it affects
a grouping of employees who have substantial, mutual interests in wages,
hours, working conditions, and other subjects of collective bargaining. The
Supreme Court have ruled that geographical location can be completely
disregarded if the communal or mutual interests of the employees are not
sacrificed.
o Here, there was communal interest among the rank-and-file employees of

the three companies based on the finding that they were constantly rotated
to all three companies, and that they performed the same or similar duties
whenever rotated.
• S.S. Ventures International v. S.S. Ventures Labor Union, G.R. No. 161690, 23 July 2008
o Employees’ withdrawal from a labor union made before the filing of the
petition for certification election is presumed voluntary, while withdrawal
after the filing of such petition is considered to be involuntary and does not
affect the same.
22
March 2020
o The employee’s, which was brought about by his personal acts, does not
constitute unfair labor practice. Dismissing him was not meant to violate
the right of the university employees to self-organize. Neither was it meant
to interfere with the union's activities. Likewise, the employer failed to
prove that the proceedings were done with haste and bias. Finally, he
cannot raise the defense that he was the union's president; this does not
make him immune from liability for his acts of misconduct.
VI. MANAGEMENT PREROGATIVE
March 2020
o It bears emphasis that the employer is free to regulate all aspects of

employment according to his own discretion and judgment. This
prerogative flows from the established rule that labor laws do not authorize
substitution of judgment of the employer in the conduct of his business.
Recall of workers clearly falls within the ambit of management prerogative.
The employer can exercise this prerogative without fear of liability so long
as it is done in good faith for the advancement of his interest and not for the
purpose of defeating or circumventing the rights of the employees under
special laws or valid agreements. It is valid as long as it is not performed in
a malicious, harsh, oppressive, vindictive or wanton manner or out of
malice or spite.
o The right of management to transfer its employees is part of management

prerogative. The managerial prerogative to transfer personnel must be
exercised without grave abuse of discretion, bearing in mind the basic
element of justice and fair play
o Demotion involves a situation in which an employee is relegated to a

subordinate or less important position constituting a reduction to a lower
grade or rank, with a corresponding decrease in duties and responsibilities,
and usually accompanied by a decrease in salary.
o Although respondent's present position bears the appellation "manager,"

the responsibilities he used to discharge as manager in his former position
had been significantly reduced. Although respondent retained the
appellation "manager," his new rank was in fact a demotion from his former
position.
23
• Ruiz v. Wendel Osaka Realty Corp., G.R. No. 189082, 11 July 2012
o Re-assignments made by management pending investigation of

irregularities allegedly committed by an employee fall within the ambit of
management prerogative. The purpose of reassignments is no different
from that of preventive suspension which management could validly
impose as a disciplinary measure for the protection of the company's
property pending investigation of any alleged malfeasance or misfeasance
committed by the employee.
• Del Rosario v. ABS-CBN Broadcasting Corp.,G.R. Nos. 202481, 202495, 202497,

210165, 219125, 222057, 224879, 225101 & 225874, 8 September 2020
o The creation of a work pool is a valid exercise of management prerogative.

It is a privilege inherent in the employer's right to control and manage its
enterprise effectively, and freely conduct its business operations to achieve
its purpose. However, in order to ensure that the work pool
arrangement is not used as a scheme to circumvent the employees'
security of tenure, the employer must prove that (i) a work pool in fact
exists, and (ii) the members therein are free to leave anytime and offer their
services to other employers. These requirements are critical in
defining the precise nature of the workers' employment.
• Eastern Telecommunications Philippines, Inc. v. Eastern Telecoms Employees Union,

G.R. No. 185665, 8 February 2012
o A bonus is a gratuity or act of liberality of the giver which the recipient has
no right to demand as a matter of right. The grant of a bonus is basically a
management prerogative which cannot be forced upon the employer who
may not be obliged to assume the onerous burden of granting bonuses or
other benefits aside from the employee’s basic salaries or wages. A bonus,
however, becomes a demandable or enforceable obligation when it is made
part of the wage or salary or compensation of the employee.
o Whether or not a bonus forms part of wages depends upon the
circumstances and conditions for its payment. If it is additional
compensation which the employer promised and agreed to give without
any conditions imposed for its payment, such as success of business or
greater production or output, then it is part of the wage. But if it is paid only
if profits are realized or if a certain level of productivity is achieved, it
cannot be considered part of the wage. Where it is not payable to all but
only to some employees and only when their labor becomes more efficient
24
or more productive, it is only an inducement for efficiency, a prize

therefore, not a part of the wage.
• Capin-Cadiz v. Brent Hospital and Colleges, Inc., G.R. No. 187417, 24 February 2016
o The doctrine of management prerogative gives an employer the right to

"regulate, according to his own discretion and judgment, all aspects of
employment, including hiring, work assignments, working methods, the
time, place and manner of work, work supervision, transfer of employees,
lay-off of workers, and discipline, dismissal, and recall of employees." In
this case, Brent imposed on Cadiz the condition that she subsequently
contract marriage with her then boyfriend for her to be reinstated.
o Here, the employee became pregnant out of wedlock, and Brent imposed
the suspension until such time that she marries her boyfriend in accordance
with law.
o Brent's condition is coercive, oppressive and discriminatory. There is no

rhyme or reason for it. It forces Cadiz to marry for economic reasons and
deprives her of the freedom to choose her status, which is a privilege that
inheres in her as an intangible and inalienable right.
o While a marriage or no-marriage qualification may be justified as a

"bona fide occupational qualification," Brent must prove two factors
necessitating its imposition, viz.: (1) that the
employment qualification is reasonably related to the essential operation of
the job involved; and (2) that there is a factual basis for believing that all or
substantially all persons meeting the qualification would be unable to
properly perform the duties of the job. Brent has not shown the presence of
neither of these factors. Hence, the Supreme Court struck down the validity
of said condition.
VII. ILLEGAL RECRUITMENT OF OFW
• People v. Rios y Catagbui, G.R. No. 226140, 26 February 2020
o Illegal Recruitment is defined as any act of recruitment undertaken by

unlicensed or unauthorized persons.
o In Illegal Recruitment, a corporate officer or director may be held

personally liable for corporate acts if it is proven that he or she assented to
25
patently unlawful acts of the corporation or that the said officer or director
was guilty of gross negligence and bad faith.
o The lack of official receipts is not fatal to prove the existence of Illegal
Recruitment as long as there is testimony from convincing and credible
witnesses, as in this case. Notably, the duty to issue official receipts is on
the recruitment agency and the recruiter's failure to issue receipts should
not be taken against the applicants or claimants.
• Princess Joy Placement & General Services, Inc. v. Binalla, G.R. No. 197005, 4 June 4,
2014
o Binalla was a victim of contract substitution. He worked under an

employment contract whose terms were inferior to the terms certified by
the POEA. Under the four-year contract he signed and implemented by his
employer, Al Adwani, he was paid only SR1500.00 or US$400 a month;
whereas, under the POEA- certified two-year contract, he was to be paid
$550.00.
o It shall be unlawful for any individual, entity, licensee, or holder of

authority to substitute or alter employment contracts approved and
verified by the DOLE from the time of actual signing thereof by the parties
up to and including the periods of expiration of the same without the
approval of the SOLE. Further, contract substitution constitutes "illegal
recruitment".
• Pp. v. David, G.R. No. 233089, 29 June 2020
o Illegal recruitment is deemed committed by a syndicate if carried out by a

group of three (3) or more persons conspiring or confederating with one
another. It is deemed committed in large scale if committed against three
(3) or more persons individually or as a group.
o Illegal recruitment may be undertaken by either non-license or license

holders. Non-license holders are liable by the simple act of engaging in
recruitment and placement activities, while license holders may also be
held liable for committing the acts prohibited under the law. Thus, the
defense of accused that she still had a license when her transaction, with
private complainants happened is unavailing.
o Further, illegal recruitment is deemed done in large scale and is considered

as an offense involving economic sabotage if it is committed against three
or more persons individually or as a group.
26
o Section 6(l) refers to the failure to actually deploy the worker without valid
reason as determined by the DOLE. This provision requires independent
evidence from DOLE, such as the absence of a proper job order, to establish
the reason for non-deployment.
• Jacob v. First Step Manpower Int'l. Services, Inc., G.R. No. 229984, 8 July 2020
o In Sameer Overseas Placement Agency, Inc. v. Cabiles, the phrase "or for three
(3) months for every year of the unexpired term, whichever is less" in the
above provision of Republic Act No. 10022 was struck down for violating
"constitutional rights to equal protection and due process." Petitioner is
entitled to her salaries for the unexpired portion of her employment
contract.
VIII. REMEDIES (LABOR STANDARDS VIOLATION)
• Maternity Children's Hospital v. Secretary of Labor, G.R. No. 78909, 30 June 1989
o Labor Standards refers to the minimum requirements prescribed by

existing laws, rules and regulations relating to wages, hours of work, cost-
of-living allowance and other monetary and welfare benefits, including
occupational, safety and health standards.
• Ang v. Avila, G.R. No. 222889, 26 February 2020
o The visitorial and enforcement powers empowered the Secretary of Labor

and Employment, or his or her authorized representative, to: (1) access the
employer's records and premises at any time of the day or night, so long as
work is being undertaken; (2) issue compliance orders to give effect to the
labor standards provisions of the Labor Code; and (3) order work stoppage
or suspend an establishment's operations when noncompliance with labor
standards poses grave and imminent danger to the health and safety of
workers.
o The Compliance Order may be appealed to the Office of the Secretary of

Labor and Employment by filing a Memorandum of Appeal, furnishing the
other party with a copy of the same, within ten (10) days from receipt
thereof. No further motion for extension of time shall be entertained.
• People's Broadcasting Service v. Secretary of the Department of Labor and Employment,

G.R. No. 179652, 6 March 2012
27
o The determination of the existence of an employer-employee relationship

by the DOLE must be respected. The expanded visitorial and enforcement
power of the DOLE granted by RA 7730 would be rendered nugatory if the
alleged employer could, by the simple expedient of disputing the
employer-employee relationship, force the referral of the matter to the
NLRC. The Court issued the declaration that at least a prima facie showing
of the absence of an employer-employee relationship be made to oust the
DOLE of jurisdiction. But it is precisely the DOLE that will be faced with
that evidence, and it is the DOLE that will weigh it, to see if the same does
successfully refute the existence of an employer-employee relationship.
o If the DOLE makes a finding that there is an existing employer-employee

relationship, it takes cognizance of the matter, to the exclusion of the NLRC.
The DOLE would have no jurisdiction only if the employer-employee
relationship has already been terminated, or it appears, upon review, that
no employer-employee relationship existed in the first place.
o The Court, in limiting the power of the DOLE, gave the rationale that such
limitation would eliminate the prospect of competing conclusions between
the DOLE and the NLRC. The prospect of competing conclusions could just
as well have been eliminated by according respect to the DOLE findings, to
the exclusion of the NLRC, and this We believe is the more prudent course
of action to take.
o If a complaint is brought before the DOLE to give effect to the labor

standards provisions of the Labor Code or other labor legislation, and there
is a finding by the DOLE that there is an existing employer-employee
relationship, the DOLE exercises jurisdiction to the exclusion of the NLRC.
If the DOLE finds that there is no employer-employee relationship, the
jurisdiction is properly with the NLRC. If a complaint is filed with the
DOLE, and it is accompanied by a claim for reinstatement, the jurisdiction
is properly with the Labor Arbiter, which provides that the Labor Arbiter
has original and exclusive jurisdiction over those cases involving wages,
rates of pay, hours of work, and other terms and conditions of employment,
if accompanied by a claim for reinstatement. If a complaint is filed with the
NLRC, and there is still an existing employer-employee relationship, the
jurisdiction is properly with the DOLE.
• Tumaudos v. San Miguel Yamamura Packaginc Corporation, G.R. No. 241865,

February 19, 2020
o Not all controversies or money claims by an employee against the employer

or vice versa fall within the exclusive jurisdiction of the LA. With regard to
28
money claims and damages, the Labor Code bestows upon the LA original
and exclusive jurisdiction over:
§ cases filed by workers involving wages, among others, if
accompanied by a claim for reinstatement;
§ all claims, except those for Employees Compensation, Social
Security, Medicare and maternity benefits, arising from employer-
employee relations involving an amount exceeding P5,000.00
regardless of whether accompanied with a claim for
reinstatement; and
§ claims for actual, moral, exemplary and other forms of damages
arising from employer-employee relations
o Not every controversy or money claim by an employee against the

employer or vice-versa is within the exclusive jurisdiction of the labor
arbiter. Actions between employees and employer where the employer-
employee relationship is merely incidental and the cause of action precedes
from a different source of obligation is within the exclusive jurisdiction of
the regular court.
o Where the principal relief sought is to be resolved not by reference to the

Labor Code or other labor relations statute or a collective bargaining
agreement but by the general civil law, the jurisdiction over the dispute
belongs to the regular courts of justice and not to the labor arbiter and the
NLRC.
29

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MAJOR POINTERS FOR THE 2020/21 By: Atty. Aylward M. Consulta

• Dumapis v. Lepanto Consolidated Mining Company, G.R. No. 204060, 15 September

o The award of backwages and/or separation pay due to illegally dismissed

o However, salary increases and other benefits which are contingent or

o Quitclaims do not bar employees from filing labor complaints and

o The policy of social justice is not intended to countenance wrongdoing

o However, an employee who was terminated for having participated in oil

• BDO v. Nerbes, G.R. No. 208735, 19 July 2017

nevertheless found that their refusal to do so was not characterized by a

• Agustin v. Alphaland Corporation, G.R. No. 218282, 9 September 2020

o Dismissal of regular employees by the employer requires the observance of

o In the interpretation of their provisions, labor contracts require the

o Here, doubts in the expiration date of the employment contract was

o Right to choose whether to form or join a union or workers' association

o Also inherent in the right to self-organization is the right to choose whether

• PBOAP v. DOLE, G.R. No. 202275, 18 Jul 2018

II. EXISTENCE OF ER-EE RELATIONSHIP; TESTS

o the existence of an employer-employee relationship is ultimately a question

o Here, an employer-employee relationship is apparently absent. Among

• Loreche-Amit v. CDMC, G.R. No. 216635, 3 June 2019

o Any memorandum or issuance pertaining to a person’s behavior does not

o Economic reality test – the benchmark of economic reality in analyzing

• Lu v. Enopia, G.R. No. 197899, 6 March 2017

o No particular form of evidence is required to prove the existence of an

o Not every form of control is indicative of employer-employee relationship.

o While the existence of employer-employee relationship is a matter of law,

Otherwise, an employer would be rewarded for his failure or even neglect

III. TERMINATION OF EMPLOYMENT

• Italkarat 18, Inc. v. Gerasmio, G.R. No. 221411, 28 September 2020

o An act, to be considered as amounting to constructive dismissal, must be a

o As regards Gemina's allegation that he was verbally being compelled to go

o Without substantial evidence to support his claim, Gemina's claim of

• Maula v. Ximex G.R. No. 207838, 25 January 2017

o Here, petitioner lost his composure. Exasperated, he refused to receive the

o General Rule: accusatory and inflammatory language used by an employee

o Exception: insulting and unbecoming language uttered by employee

o Not every case of insubordination or willful disobedience by an employee

• Demex Rattancraft, Inc. v. Leron, G.R. No. 204288, 8 November 2017

o Abandonment of work, akin to neglect of duty, has been construed as "a

o Intent to sever the employer-employee relationship can be proven through

o The allegation that employee's absences, non-compliance with the return-

o Misconduct is not considered serious or grave when it is not performed

o A teacher exclaiming "anak ng puta" after having encountered a student is

o The utterance in question, "anak ng puta," was an expression of annoyance

o The totality of infractions or the number of violations committed during the

o Respondents have not presented any proof that petitioners intended to

refusal to report for work. However, this is insufficient to prove

o Not every inconvenience, disruption, difficulty, or disadvantage that an

• King of Kings Transport v. Mamac, G.R. No. 166208, 29 June 2007

o The first written notice to be served on the employees should contain

o After determining that termination of employment is justified, the

o A formal hearing or conference becomes mandatory only when requested

• Bravo v. Urios College, G.R. No. 198066, 7 June 2017

o To warrant termination of employment, the misconduct must be serious or

o The misconduct must "relate to the performance of the employee's duties"

o Gambling during office hours, sexual intercourse within company

o The rank-and-file employee's act must have been "performed with

o Managerial employees are treated differently than fiduciary rank-and-file

§ Rank-and-file personnel - loss of trust and confidence as ground for