CASE 1: BELYCA CORPORATION vs. DIR. CALLEJA, ET. AL.

G.R. NO. 77395, NOVEMBER 29, 1988, SECOND DIVISION, PARAS, J.

Facts

Private respondent ALU-TUCP filed with RO 10 Ministry of Labor and Employment a

petition for direct certification as the sole and exclusive bargaining agent of all rank and file
employees/workers of Belyca Corporation in its livestock and agro-division for the issuance of
an order authorizing the immediate holding of certification election. But petitioner contends
that the bargaining unit must include all the workers in its integrated business concerns ranging
from piggery, poultry, to supermarts and cinemas so as not to split an otherwise single
bargaining unit into fragmented bargaining units.

The Labor Arbiter granted the certification election sought for by petitioner union,
however respondent Belyca Corporation appealed the order of the Labor Arbiter to BLR in
Manila, which denied the appeal and the motion for reconsideration.

Issues

1. WON the proposed bargaining unit is an appropriate bargaining unit

2. WON the statutory requirement of 30% (now 20%) of the employees in the proposed
bargaining unit, asking for certification election had been strictly complied with.

Ruling

1. The Labor Code does not specifically define what constitutes an appropriate collective
bargaining unit. The Court has already taken cognizance of the crucial issue of
determining the proper constituency of a collective bargaining unit, as held in
Democratic Labor Association v. Cebu Stevedoring Co. Inc., the factors to consider are:
(1) will of the employees (Glove Doctrine); (2) affinity and unity of employee’s interest,
such as substantial similarity of work and duties or similarity of compensation and
working conditions; (3) prior collective bargaining history; and (4) employment status,
such as temporary, seasonal and probationary employees. The basic test of an asserted
bargaining unit’s acceptability is whether or not it is fundamentally the combination
which will best assure to all employees the exercise of their collective bargaining rights.

It is beyond question that the employees of the livestock and agro division of petitioner
corporation perform work entirely different from those performed by employees I the
supermarts and cinema. To lump all the employees of petitioner in its integrated
business concerns cannot result in an efficacious bargaining unit comprised of
constituents enjoying community or mutuality of interest. Undeniably, the rank and file
employees of the livestock-agro division fully constitute a bargaining unit that satisfies
both requirements of classification according to employment status and of the
 substantial similarity of work and duties which will ultimately assure its members the
exercise of their collective bargaining rights.

2. 124 employees out of 205 employees of the Belyca Corporation have expressed their
written consent to the certification election or more than a majority of the rank and file
employees and workers; much more than the required 30% and over and above the
present requirement of 20% by EO No. 111 and applicable only to unorganized
establishments under Art. 257 of Labor Code, to which the Belyca Corporation belong.
Once the required percentage requirement has been reached, the employees’
withdrawal from union membership taking place after the filing of the petition for
certification election will not affect said petition.

CASE 2: NATIONAL CONGRESS F UNIONS IN THE SUGAR INDUSTRY OF THE PHILIPPINES

(NACUSIP) – TUCP VS. HON. FERRER-CALLEJA and NFSW-FGT-KMU

G.R. NO. 89609, JANUARY 27, 1992, FIRST DIVISION, MEDIALDEA, J.

Facts:

Dacongcogon Sugar and Rice Milling Co., Inc. based in Kabankalan, Negros Occidental
employs about 500 workers during milling season and about 300 on off-milling season. Private
respondent NFSW-FGT-KMU and employer Dacongcogon entered into a CBA for a term of 3
years. When the CBA expired, the parties negotiated for its renewal. The CBA was extended for
another 3 years with reservation to negotiate for its amendment, particularly on wage increase,
hours of work, and other terms and conditions of employment. However, a deadlock in
negotiation ensued on the matter of wage increase and optional retirement. In order to obviate
friction and tension, the parties agreed on a suspension to provide a cooling-off period to give
them time to evaluate and further study their positions.

NACUSIP-TUCP filed a petition for direct certification or certification election among the
rank and file workers of Dacongcogon. Private respondent NFSW-FGT-KMU moved to dismiss
the petition on the grounds that the petition was filed out of time and there is a deadlock of
CBA negotiation between forced intervenor and respondent-central. The Med-Arbiter denied
the motion to dismiss filed by NFSW-FGT-KMU and directed the conduct of certification election
among the rank and file workers of Dacongcogon. On a motion for reconsideration and/or
appeal by private respondent, the Director of BLR rendered a resolution reversing the order of
Med-Arbiter.
Issue:

WON a petition for certification election may be filed after the 60-day freedom period.

Ruling:

A careful perusal of Rule V, Section 6, Book V of the Rules Implementing the Labor Code,
as amended by the rule implementing EO 111 provides that:

Sec. 6. Procedure – x x x

In a petition involving an organized establishment or enterprise where the majority

status of the incumbent collective bargaining union is questioned by legitimate labor
organization, the Med-Arbiter shall immediately order the conduct of a certification
election if the petition is filed during the last 60 days of the collective bargaining
agreement. Any petition filed before or after the sixty-day freedom period shall be
dismissed outright.

The sixty-day freedom period based on the original collective bargaining agreement
shall not be affected by any amendment, extension or renewal of the collective
bargaining agreement for purposes of certification election.

Xxx xxx xxx

The clear mandate of the aforequoted section is that the petition for certification
election filed by the petitioner NACUSIP-TUCP should be dismissed outright, having been filed
outside the 60-day freedom period or a period of more than one year after the CBA expired.
This rule simply provides that a petition for certification election or a motion for intervention
can only be entertained within 60 days prior the expiry of the existing CBA. Despite the lapse of
the formal effectivity of the CBA the law still considers the same as continuing in force and
effect until a new CBA shall have been validly executed. Hence, the contract bar rule still
applies.

CASE 3: NOTRE DAME OF GREATER MANILA VS. LAGUESMA, ET. AL

G.R. NO. 149833, JUNE 29, 2004, FIRST DIVISION, PANGANIBAN, J.

Facts
 Notre Dame of Greater Manila Teachers & Employees Union (NDGMTEU) filed with the
Med-Arbitration NCR Branch a petition for direct certification as the sole and exclusive
bargaining agent or certification election among the rank and file employees of petitioner
NDGM, which was granted by the Med-Arbiter. Petitioner NDGM registered a motion to include
probationary and substitute employees on the list of qualified voters, which was denied by
Med-Arbiter by a handwritten notation on the motion itself. After the certification election was
conducted, petitioner fled a written notice of protest against the conduct and results of the
certification election, which was opposed by NDGMTEU. The latter was then certified as the
sole and exclusive bargaining agent of all the rank-and-file employees as per order issued by
Med-Arbiter Falconitin on March 16, 1992.

Petitioner lodged an appeal from the aforementioned order of Med-Arbiter Falconitin

which the Undersecretary Laguesma dismissed for lack of merit. The CA likewise ruled in favor
of the respondents holding that Falconitin’s notation on the petitioner’s “Motion to Include
Probationary and Substitute Employees in the List of Qualified Voters” was not an order that
could be the subject of appeal to Secreatary of Dole. The CA also rules that petitioner had no
standing to question the qualification of the worker who should be included in the list of voters
because, in the process of choosing their collective bargaining representative, the employer
was definitely an intruder.

Issue

WON the holding of the certification election was stayed by petitioner’s appeal of the
med-arbiter’s notation on the Motion to Include the Probationary and Substitute Employees in
the List of Qualified voters.

Ruling:

The intention of the law is to limit the grounds for appeal that may stay the holding of a
certification election. This intent is manifested by the issuance of Department Order No. 40.
Under the new rules, an appeal of a med-arbiter’s order to hold a certification election will not
stay the holding thereof where the employer company is an unorganized establishment, and
where no union has yet been duly recognized or certified as a bargaining representative.
Consequently, the appeal of the med-arbiter’s to handwritten notation – pertaining to the
incidental matter of the list of voters – should not stay the holding of certification election.
More important, unless it filed a petition for a certification election pursuant to Article 258 of
the Labor Code, the employer has no standing to question the election, which is the sole
concern of the workers. The Labor Code states that any party to an election may appeal the
decision of the med-arbiter. Petitioner was not such a party to the proceedings, but a stranger
which had no right to interfere therein. They should not in any way affect, much less stay, the
holding of a certification election by the mere convenience of filing an appeal with the labor
secretary.
 Case 4: CENTRAL NEGROS ELECTRIC COOPERATIVE, INC (CENECO) VS. HON. SECRETARY OF
DOLE AND CENECO UNION OF RATIONAL EMPLOYEES (CURE)

G.R. NO. 94045, SEPTEMBER 13, 1991, SECOND DIVISION, REGALADO, J.

Facts:

CENECO entered into a collective bargaining agreement with CURE, a labor union
representing it rank and file employees, providing for a term of 3 years. Prior the expiration of
CBA, CURE wrote CENECO proposing that regotiations be conducted for a new CBA. CENECO
denied CURE’s request on the ground that, under applicable decision of SC, employees who at
the same time are members of an electric cooperative are not entitled to form or join a union.
CURE members agreed that union members shall withdraw, retract, or recall the union
members’ membership from CENECO in order to avail of the full benefits under the existing
CBA, and the supposed benefits that may be availed of under the renewed CBA.

By reason of CENECO’s refusal to renegotiate a new CBA, CURE filed a petition for direct
recognition or for certification election which was supported by 72% of the employees in the
bargaining unit. CENECO filed a motion to dismiss on the ground that there are legal constrains
to the filing of the certification election, citing jurisprudence that “employees who at the same
time are members of an electric cooperative are not entitled to form or join unions for
purposes of CBA, for certainly an owner cannot bargain with himself or his co-owners. Med-
Arbiter Serapio issued and order granting the petition for certification election, which in effect,
was denial of CENECO’s motion to dismiss.

Issue:

WON the employees of CENECO who withdrew their membership from the cooperative
are entitled to form or join CURE for purposes of the negotiations for a CBA proposed by the
latter.

Ruling

Under Art. 256 of the Labor Code, to have a valid certification election at least a majority
of all eligible voters in the unit must have cast their votes. It is axiomatic that the med-arbiter
should determine the legality of the employees’ membership in the union. In the case at bar, it
obviously becomes necessary to consider first the propriety of the employees’ membership
withdrawal from the cooperative before a certification election can be had.
 It appears that the Articles of Incorporation of CENECO do not provide any ground for
withdrawal from membership which accordingly gives rise to the presumption that the same
may be done at any time and for whatever reason. The right to join an organization necessarily
include the equivalent right not to join the same. The right of employees to self-organization is
a compelling reason why their withdrawal from the cooperative must be allowed. As pointed
out by CURE, the resignation of the member-employees is an expression of their preference for
union membership in the cooperation. The avowed policy of the State to afford full protection
to labor and to promote the primacy of free collective bargaining mandates that the
employee’s right to form and join unions for purposes of CBA be accorded with highest
consideration.

Case 5: ILAW AT BUKLOD NG MANGGAGAWA (IBM) VS. NLRC AND SMC

G.R. NO. 91980, JUNE 27, 1991, FIRST DIVISION, NARVASA, J.

Facts

The Union Ilaw at Buklod ng Mangagawa representing more or less 4,500 employees of
San Miguel Corporation working at various plants, offices, and warehouses located at NCR,
presented to the company a “demand” for the correction of the “significant distortion in . . .
(the workers’) wages” imvoking explicitly Section 4(d) of RA 6727. The company ignored said
demand by offering a measly across-the-board wage increase of P7.00 per day, per employee,
as against the proposed P25.00 of the union. This resulted to workers’ refusal to work beyond 8
hours everyday as a legitimate means of compelling SMC correct the distortion in their wages.
This abandonment of the long-standing schedule of work and the reversion t0 the eight-hour
shift apparently caused substantial losses to SMC.

SMC filed with the Arbitration Branch of the NLRC a complaint against the Union and its
members “to declare the strike or slowdown illegal” and to terminate the employment of the
union officers and shop stewards. SMC filed another complaint against the Union and members
thereof, this time directly with the NLRC, “to enjoin and restrain illegal slowdown and for
damages, with prayer for the issuance of a cease-and-desist and temporary restraining order.”

Issue:

WON the workers’ concerted refusal to adhere to the work schedule in force for the last
several years could be considered as an illegal strike insofar as correcting the wage distortion
complained of by the Union.

Ruling
 In the particular instance of “distortion of the wage structure within an establishment”
resulting from the “application of any prescribed was increase by virtue of a law or wage
order,” Section 3 of RA 6727 prescribes a specific, detailed and comprehensive procedure for
the correction thereof, thereby implicitly excluding strikes or lockouts or other concerted
activities as modes of settlement of the issue. By concealing the real cause of their dispute with
management (alleged failure of correction of wage distortion), and trying to make it appear
that the controversy involved application pf the eight-hour labor law, they obviously hoped to
remove their case for the operations of the rules implementing RA 6727 that “any issue
involving wage distortion shall not be a ground for a strike/lockout.” The stratagem cannot
succeed.

The Court is in substantial agreement with the petitioner’s concept of a slowdown as a

“strike on the installment plan;” as a willful reduction in the rate of work by concerted action of
workers for the purpose of restricting the output of the employer, in relation to a labor dispute;
as an activity by which workers without a complete stoppage of work, retard production or
their performance of duties and functions to compel management to grant their demands. Such
a slowdown is generally condemned as inherently illicit and unjustifiable, because while the
employees “continue to work and remain at their positions and accept the wages paid to
them,” they at the same time “select what part of their allotted tasks they care to perform of
their ow volition or refuse openly or secretly, to the employer’s damage, to do other work;” in
other words, they “work on their own terms.” But whether or not the workers’ activity in
question -- their concerted adoption of a different work schedule than that prescribed by the
management ad adhered for several years – constitute a slowdown need no, as already stated,
be gone into. Suffice it to say that activity is contrary to the law, RA 6727, and the parties’ CBA.

CASE 6: ASSOCIATION OF INDEPENDENT UNIONS IN THE PHILIPPINES (AIUP), ET. AL. VS. NLRC,
ET. AL.

G.R. NO. 120505, MARCH 25, 1999, THIRD DIVISION, PURISIMA

FACTS

Petitioners were casual employees of respondent CENAPRO Chemical Corporations. The

incumbent CBA between the company and CENAPRO Employees Association (CCEA) excluded
casual employees from membership. The casual employees who have rendered at least one to
six years of service sought regularization of their employment. When their demand was denied,
they formed themselves into an organization and affiliated with the AIUP. Thereafter, AIUP filed
a petition for certification election, which the petition was opposed by the respondent
company. The CCEA anchored its opposition on the contract bar rule.
 The union filed a notice of strike with the DOLE citing as grounds therefor the acts of
company constituting unfair labor practice, more specifically coercion of employees and
systematic union busting. The union proceeded to stage a strike, in the course of which, the
union perpetrated illegal acts. Because of such illegal activities, the respondent company filed a
petition for injunction with the NLRC, which granted the TRO, enjoining the strikers from doing
further acts of violence, coercion, or intimidation and from blocking the ingress and egress of
the company premises.

The respondent company filed a complaint for illegal strike. Petitioners likewise file a
complaint for unfair labor practice and illegal lockout against the respondent company. The
Labor Arbiter declared illegal the strike stage by petitioners, and dismissed the charge of illegal
lockout and unfair labor practices, discharging the employment of some union officers and
other members. On appeal, the NLRC affirmed in toto the Labor Arbiter’s decision, dismissed
both the appeal of private respondent and that of petitioner, and reiterated the Order for the
reinstatement of the herein petitioners.

Issue:

WON the petitioners herein can still be reinstated or just be payed with separation pay
lieu of their reinstatement without backwages.

Ruling

The NLRC Resolution of February 21, 1995 does not state any plausible ground or basis
deleting the award of backwages. The mere fact that the petitioners were “not entirely
faultless” is of no moment. Such finding below does not adversely affect their entitlement to
backwages. As opined by the NLRC in its Decision of August 15, 1994, affirming in its entirety
the conclusion arrived at by the Labor Arbiter “the only option left to the appellant-company is
whether to physically reinstate appellant workers or to reinstate them on the payroll.”

The unmeritorious appeal interposed by the respondent company, let alone the failure
to execute with dispatch the award of reinstatement delayed the payroll reinstatement of
petitioners. But their long waiting is not completely in vain, for the court holds that their
(petitioners’) salaries and backwages must be computed from Oct 15, 1993 until full payment of
their separation pay without any deductions. This is consonance with the ruling in the case of
Bustamante vs. NLRC, where a payment of full backwages without deductions was ordered.
Considering, however, that more than 8 years have passed since subject strike was stages, an
award of separation pay equivalent to 1 month pay for every year of service, in lieu of
reinstatement, is deemed more practical and appropriate to all parties concerned.

CASE 7: MASTER IRON LABOR UNION (MILU), ET. AL VS. NLRC AND MASTER IRON WORKS
AND CONSTRUCTION CORPORATION
 G.R. NO. 92009, FEBRUARY 17, 1993, THIRD DIVISION, MELO, J.

Facts

Master Iron Labor Union (MILU) entered into a 3-year CBA with Master Iron Works
Construction Corporation. Right after the signing of the CBA, the Corporation subcontracted
outside workers to do the usual jobs done by its regular workers including those done outside
of the company plant. As a result, the regular workers were scheduled by the management to
work on a rotation basis allegedly to prevent financial losses thereby allowing the workers only
10 working days a month. Thus, MILU requested implementation of grievance procedure which
had also been agreed upon in the CBA but the Corporation ignored the request.

MILU filed a notice of strike, but upon the intervention of the DOLE, the Corporation and
MILU reached an agreement whereby the Corporation acceded to give back the usual work to
its regular employees who are members of MILU. Notwithstanding said agreement, the
Corporation continued the practice of hiring outside worker. MILU filed a notice of strike on
the following grounds: (a) violation of CBA; (b) discrimination; (c) unreasonable suspension of
union officials; and (d) unreasonable refusal to entertain grievance. MILU then staged the
strike, maintaining picket lines on the road leading to the Corporation’s plant entrance and
premises. CAPCOM soldiers came and arrested the picketers, the dispersal of the picketlines by
the CAPCOM also resulted in the temporary lifting of the strike.

The Corporation filed with the NLRC NCR arbitration branch to declare the strike illegal,
which the Labor Arbiter declared illegal and terminated the employment of herein petitioners.
The NLRC affirmed with modifications the decision of the labor arbiter.

Issue

WON the strike staged by union is considered an economic strike and illegal in violation
of the no-strike no-lockout provision of the CBA.

Ruling

Much more than economic issue, the said practice of the Corporation was a blatant
violation of the CBA – and unfair labor practice on the part of the employer under Article 248(i)
of the Labor Code. Although the end result, should the Corporation be required to observe the
CBA, may be economic in nature because the workers would then be given their regular
working hours and therefore their just pay, not one of the said grounds is an economic demand
within the meaning of the law on labor strikes. The demands of the petitioners, being covered
by the CBA, are definitely within the power of the Corporation to grant and therefore the strike
was not an economic strike.

Moreover, petitioners staged the strike only after the Corporation had failed to abide by
the agreement forged between the parties upon the intervention of no less that the DOLE after
the union had complained of the Corporation’s unabated subcontracting of workers who
performed the usual work of the regular workers. The Corporation’s insistence that hiring the
casual employees is a management prerogative betrays its attempt to coat with legality the
illicit curtailment of its employees’ rights to work under the terms of the contact of
employment and to a fair implementation of the CBA. The Corporations refusal to heed
petitioners’ request to undergo the grievance procedure clearly demonstrated its lack of intent
to abide by the term of the CBA.

All told, the strike staged by the petitioners was a legal one even though it may have
been called to offset what the strikers believed in good faith to be unfair labor practices on the
part of the employer. The strike being legal, the NLRC gravely abused its discretion in
terminating the employment of the individual petitioners, who, by operation of law, are
entitled to reinstatement with three years backwages.

CASE 8: PANAY ELECTRIC COMPANY INC. VS. NLRC AND PANAY ELECTRIC COMPANY
EMPLOYEES AND WORKERS ASSOCIATION.

G.R. NO. 102672, OCTOBER 4, 1995, THIRD DIVISION, VITUG, J.

Facts

Panay Electric Company, Inc., posted in its premises a notice announcing the need for a
“Report Clerk” who would assume the responsibility of gathering accounting and computer
data at its power plant. The position was open to any employee, “with Pay Class V,” of
petitioner company. When nobody applied for the position, the EDP/Personnel Manager
recommended Enrique Huyan who was at the time an Administrative Personnel Assistant at the
head office. Huyan was then also a Vice President of respondent union. The recommendation
was approved by the company’s President and General Manager. However, Huyan informed
petitioner that he was not interested in the accepting the new position. The EDP/Personnel
Manager required Huyan to explain within 48 hours why no disciplinary action should be taken
against him for gross insubordination and for failure to follow the General Manager’s approved
directive. Eventually, Huyan was given a “notice of dismissal,” and after an administrative
investigation was conducted, he was ordered dismissed.

Respondent filed a notice of strike on 20 Dec 1990, and went on strike on 22 Jan 1991.
The company filed a petition to declare the strike illegal. Upon receipt of the order form the
Secretary of Labor and Employment certifying the dispute to the NLRC, the union lifted its strike
and, on the following day, the striking employees, including Huyan, reported to work. Petitioner
company, in turn, maintained that Huyan’s inexplicable refusal to assume his new position was
an act of insubordination for which reason he was aptly dismissed; that the company’s directive
was a valid exercise of management prerogative; that in declaring a strike, the Union, including
its officers and members, committed a serious breach of the “no strike, no lock out clause,” of
the CBA; and that during the strike, illegal acts were committed by union officers an members.
The NLRC concluded that the strike conducted by the Union was illegal as it was staged in
violation of the no strike, no lock-out clause of the CBA, and that Huyan and Napiar to have lost
their employment status but shall be entitled to separation benefits, while other union
members are thereby suspended.

Issue

WON Huyan and Napiar are entitled to monetary awards and in not sanctioning the
dismissal of other union officers and members

Ruling

While the conduct of the company cannot be strictly considered an unfair labor practice,
still, the exercise of its management prerogative cannot be sustained. The dismissal of Huyan, is
illegal. Ordinarily, when there is a finding of illegal dismissal, under Art 279 of the Labor Code,
the employee is entitled to reinstatement and the payment of backwages. However, in the case
at bar, we are of the opinion that reinstatement cannot be ordered not only because of the
strained relationship of the parties herein but also because of Huyan’s conduct as a union
officer leaves much to be desired.

The absence of good faith or the honest belief that the company is committing Unfair
Labor Practice, therefor, is what inclines us to rule that the strike conducted by the union from
January 22 to 25, 1991 is illegal for being in violation of the “no strike, no lock-out” provision
and the failure to bring the Union’s grievance procedure in the CBA. In the instant case, the
NLRC found Enrique Huyan and Prescilla Napiar, the “principal leaders” of the strike, not to
have acted in good faith. In case of Huyan, during the period of his illegal dismissal, he should
be entitled to back salaries and benefits plus moral damages.

In the case of other union officers, however, the NLRC, having found no sufficient proof
to hold them guilty of bad faith in taking part in the strike or of perpetrating serious disorders
during the concerted activity, merely decreed suspension. We see no grave abuse of discretion
by the NLRC in this regard and in not thus ordering the dismissal of the said officers.

CASE 9: PHILTREAD TIRE AND RUBBER CORPORATION VS. NLRC AND ALLIANCE OF
DEMOCRATICE FREE LABOR ORGANIZATION (PHILTREAD CHAPTER)

G.R. NO. 102185, FEBRUARY 15, 1993, FIRST DIVISION, GRINO-AQUINO, J.

Facts

Private respondent Alliance of Democratic Free Labor Organization (ADFLO) – Philtread

Chapter, filed a Notice of Strike with the NCMB against petitioner, Philtread, a corporation
engaged in the manufacture and sale of Firestone Tires and Rubber products for alleged
discrimination, union busting, non-granting of merit increases to outstanding employees, and
other acts of unfair labor practice. In response, Philtread filed a Notice of Lockout, charging the
union with acts of unfair labor practice and violation of the CBA. It sought clearance to
terminate the employment of all union officials. The union picketed the companu and a
complaint for illegal dismissal of the union officers was also filed. Later, the company filed
criminal charges for liber against 36 union officers and members who allegedly had distributed
to the public leaflets imputing defects in the company’s products.

After the compulsory arbitration, Philtread partially complied with the Secretary of
Labor’s order that it would accept back all members of the supervising salaried units except the
36 union officers who were facing liber charges. The company filed a manifestation/motion not
to reinstate them pending resolution of the labor dispute. The union, on the other hand, filed
with the NLRC a motion for execution of the Labor Secretary’s return-to-work order. However,
Philtread is intransigent. It refuse to reinstate the 36 employees/union officers. In a conciliation
meeting, the NLRC resolved the dispute by awarding the unreinstated supervisors backwages
and separation pay equivalent to 60 days for every year. Philtread then filed a petition for
certiorari and prohibition with prayer for TRO contending that the award of separation pay was
excessive and that the backwages are unjustified.

Issue

WON the separation benefits and backwages that the NLRC awarded to 36 unreinstated
supervisors are excessive and unjustified.

Ruling

The company should be penalized for its failure to fully comply with the Secretary’s
return-to-work order, by refusing to reinstate the 36 supervisors facing chargers of libel. The
company is liable for their backwage from May 7, 1990, when Philtread called to work all other
striking members of the union up to Sept 19, 1990, when the 36 locked out supervisors chose
to defer execution of the Secretary’s order during the conciliation conferences. The
computation of their backwages from May 7, 1990 conforms with, rather than contravenes, the
NLRC’s finding that the lockout was lawful for it did not order the company to pay backwages
from the commencement of the lockout on April 16, 1990.

Since the return-to-work order was obtained by the workers the right to return-to-work
could be waived by them, as they did in this case when they opted to defer their reinstatement
while negotiating with the company for financial benefits in lieu of reinstatement in view of the
“bad blood” and “severely strained relations” between them and management. The award of
separation pay in lieu of the reinstatement is an equitable recourse that has been sanctioned by
this Court in a number of cases. However, the NLRC’s award for 2 months instead of 1 month
separation pay for every year of the service of 36 supervisors is unprecedented and
unwarranted both in law (Art 283, Labor Code), and jurisprudence and the existing CBA
between the union and the company.

The petitioner correctly argued that this award of 60 days would send signal that
disloyalty, destabilization, and the fomenting of labor unrest is rewarded and given an extra
premium over and above the normal grant of retirement benefits to other more deserving
employees. The separation pay awarded by the NLRC is reduced on one month’s pay for every
year of service.

Case 10: BAGUIO COLLEGES FOUNDATION, ET. AL. VS. NLRC, ET. AL.

G.R. NO. 98043, MAY 26, 1993, SECOND DIVISION, NOCON, J.

Facts

After the issuance of the Labor Secretary’s report to work order, Baguio Colleges
Foundation, through its community newspaper, the “Gold Ore,” directed all the striking
employees to report to the office of Mrs. Corazon Concepcion, on May 14, 1988 between 8:00
o’clock a.m. to 10:00 o’clock a.m. That aside from the published directive, respondent
Concepcion likewise issued written directive to individual union members directing them to
report to her office of the said date and time “to signify their compliance with the order of the
Secretary.” Some of the union members including the complainants who did not read the
notice published in the newspaper and who did not receive the directive of Concepcion, failed
to report to her on the date and time set by her, while who received their notices on time
reported to Concepcion.

That later, the complainants came to know the directive of Conception. They went to
their office with letters signifying their intention to comply with the return to work order of the
Secretary. However, Concepcion told them that she could no longer accommodate them
because they reported only after or beyond the date and time indicated in her directive and
that they violated her written directive. Subsequently, the complainants received their
individual notices dated May 25, 1988, signed by respondent Ray Dean Salvosa.

Claiming that their dismissal were illegal, private respondent filed complaints against
petitioners with the Labor Arbiter, which rendered a decision in favor of private respondents.
On appeal, NLRC issued its decision in favor of private respondents affirming in toto the Labor
Arbiter’s decision.

Issue
 WON the return to work order issued by the Secretary of Labor may be given a varied
tenor by the BCF.

Ruling

The precedent case of Union of Filipino Employees v. Nestle Philippines, Inc leaves no
doubt as to the character of the Secretary of Labor’s Assumption Order (i.e. return-to-work
order) and the compliance required of the parties. Being executory in character, there was
nothing for the parties to do but implement the same. It would have been prudent for
petitioner school to file with the Secretary of Labor a motion for clarification of said assumption
order or inform him of the petitioner school’s peculiar requirement regarding the offering of
subjects based on the availability of teachers which had to be determined way in advance of
actual classes. Not having done so and having dismissed private respondents for not reporting
in the date the petitioner school had unilaterally determined, public respondent NLRC
committed no grave abuse of discretion in ruling that respondents-appelants (petitioner) have
indeed varied the tenor of the Return-to-work order with the obvious effect of restrictively
changing the time frame set in the Order to only one day. Nothing in the Order had authorized
BCF, either indirectly of impliedly, to alter the period within which striking employees should
report at a fixed date and time, much less cloth it with the power of dismissal over the striking
employees who failed to report on the date it set.

The return-to-work order is clear and unambiguous. It admits (of) no further

interpretation such as (what) the BCF would want to be read into it as part of its prerogative,
which it, in turn, invokes to justify the dismissal of herein complainants. The publication of the
directive in the community newspaper and mailing the same to the striking employees would
not give any added significance to an obviously self-serving act.

CASE 11: INTERNATIONAL PHARMACEUTICALS, INC. VS. SECRETARY OF LABOR AND

ALU

G.R. NO. 92981-83, JANUARY 9, 1992, SECOND DIVISION, REGALADO, J.

Facts

Prior to the expiration of the CBA between petitioner International Pharmaceuticals, Inc.
and the Associated Labor Union, the latter submitted to the Company its economic and political
demands. These were not met by the Company, hence a deadlock ensued. The Union filed a
notice of strike with the RO VII of the NCMB, DOLE. After all the conciliation efforts had failed,
the Union went on a strike and the Company’s operation were completely paralyzed.
Considering that the Company belongs to an industry indispensable to national interest, then
Acting Secretary of Labor, Ricardo Castro, invoking Article 263(g) of the Labor Code, issued and
order assuming jurisdiction over the case and directing the parties to return to the status quo
before the work stoppage, and the 3 other labor cases filed in the NLRC involving the same
parties were consolidated herein. Thereafter, the Assistant Regional Director of ROVII, as
directed, assumed jurisdiction over the consolidated cases and set the same for reception of
evidence.

Petitioner Company filed with the SC assailing the aforesaid orders and alleging grave
abuse of discretion on the part of the public respondent in the issuance thereof. Petitioner
insists that there is nothing in Art. 263(g) of the Labor Code which directs the Labor arbiter to
hold in abeyance all proceedings in the NLRC cases and await the instruction of the Secretary.
Respondent, on the other hand, assert that the authority to assume jurisdiction over labor
disputes, vested in the Secretary by Art. 263 (g) of the Labor Code, extends to all questions and
incidents arising therein causing of likely to cause strikes or lockouts. It was also stressed that
the 3 NLRC cases which respondent Secretary ordered consolidated with the labor dispute over
which he had assumed jurisdiction arose from or are directly related to and are incidents of the
said labor dispute.

Issue

Whether or not the Secretary of the Department of Labor and Employment has the
power to assume jurisdiction over a labor dispute and its incidental controversies, including
unfair labor practice case, causing or likely to cause a strike or lockout in an industry
indispensable to the national interest.

Ruling

The Secretary did not gravely abuse his discretion when he issued the questioned
orders. The Secretary was explicitly granted by Art 263(g) of the Labor Code the authority to
assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, and decide the same accordingly. Necessarily,
this authority to assume jurisdiction over the said labor dispute must include and extent to all
questions and controversies arising therefrom, including cases over which the labor arbiter has
exclusive jurisdiction. The issuance of the assailed orders is within the province of the Secretary
as authorized by Art. 263(g) of the Labor Code and Art. 217(a)(1) and (5) of the same Code,
taken jointly and rationally construed to subserve the objective of the jurisdiction vested in the
Secretary.

In the present case, however, by virtue of Art. 263(g) of the Labor Code, the Secretary
has been conferred jurisdiction over cases which would otherwise be under the original and
exclusive jurisdiction of labor arbiters. There was an existing labor dispute as a result of a
deadlock in the negotiation for a collective bargaining agreement and the consequent strike,
over which the Secretary assumed jurisdiction pursuant to Art 263(g) of the Labor Code. The
three NLRC cases were just offshoots of the stalemate in the negotiations and the strike. The
Court, therefore, uphold the Secretary’s order to consolidate the NLRC cases with the labor
dispute pending before him and his subsequent assumption of jurisdiction over the said NLRC
cases for him to be able to competently and efficiently dispose of the dispute in its totality.

By and large, Section 6, Rule V of the Revised Rules of the NLRC is germane to the
objects and purposes of Article 263(g) of the Labor Code, and it is not in contradiction with but
conforms to the standards the latter requires. Thus, the Court upheld that the terms of the
questioned regulation are within the statutory power of the Secretary to promulgate as a
necessary implementing rule or regulation for the enforcement and administration of the Labor
Code, in accordance with Article 5 of the same Code.

CASE 12: DOMINGO BONDOC VS. PEOPLE’S BANK AND TRUST COMPANY, ET. AL.

G.R. NO. L-43835, MARCH 31, 1981, SECOND DIVISION, AQUINO, J.

Facts

Domingo Bondoc joined the People’s Bank and Trust Company upon being
recommended to the bank president. He was then chosen by the bank’s BOD as the first
manager of the bank’s department of economic research and statistics. Bondoc reported in
writing to Manuel Chuidian, a bank director, certain anomalies committed by the officers of the
bank. The Central Bank found that some officers of the bank utilized its found for their own
interests. Because of those anomalies, the Monetary Board suspended Benito Araneta, a
director and vice-president, and reprimanded the other officers involved. The BOD of the
People’s Bank, in the course of its deliberation on the bank’s projected merger with the Bank of
Philippine Islands, resolved to abolish its department of economic research and statistics which
was headed by Bondoc.

Bondoc was advised of the abolition of his department in the later part of September,
1973. People’s Bank applied with the Secretary of Labor for clearance to terminate Bondoc’s
services effective on November 5. He lost no time in filing with the NLRC his opposition to the
termination his services. He alleged in his opposition that he was dismissed without cause.

NLRC arbitrator recommended to the Secretary of Labor the denial of the application to
terminate Bondoc’s employment and ordered the People’s Bank to reinstate him with
backwages and allowances and other benefits guaranteed by law without loss of status and
seniority rights. The NLRC commissioner reverses the decision of the arbitrator, approved the
clearance for Bondoc’s dismissal and ordered the bank to pay him termination pay. Bondoc
appealed to the Secretary of Labor which ordered the People’s Bank to reinstate Bondoc.
Presidential Executive Assistant Jacobo Clave set aside the decisions of the arbitrator and the
Secretary and confirmed in tot the NLRC’s decision.
Issue

Whether or not the respondent Presidential Executive Assistance committed a grave

abuse of discretion amounting to lack of jurisdiction in confirming he abolition of the
petitioner’s position as a department manager in a bank and the payment to him of separation
pay instead of reinstating him with backwages.

Ruling

The termination of Bondoc’s employment was lawful an justified and that no grave
abuse of discretion amounting to lack of jurisdiction was committed by the Presidential
Executive Assistant in affirming the NLRC’s decision sustaining the termination of his
employment.

Bondoc was not employed for a fixed period. He held his position of department
manager at the pleasure of the bank’s board of directors. He occupied a managerial position
and his stay therein depended on his retention of the trust and confidence of the management
and whether there was any need for his services. Under the old Termination Pay Law, it was
held that in the absence of a contract of employment for a specific period the employer has the
right to dismiss his employees at any time with or without just cause. The facts of this case do
not warrant the conclusion that Bondoc’s right to security of tenure was oppressively abridged.
He knew all along that his tenure as a department manager rested in the discretion of the
bank’s board of directors and that at any time his services might be dispensed with or his
position may be abolished.

CASE 13: CITY SERVICE CORP. WORKERS UNION, ET. AL VS. CITY SERVICE CORPORATION, ET.
AL.

G.R. NO. L-59407, MARCH 29, 1985, FIRST DIVISION, PLANA, J.

Facts

City Service Corporation is an entity engaged in the business of providing janitorial and
allied services to various clients. For this purpose, it maintains a pool of janitorial employees.
CSC hires petitioners and assigned them to one of its clients, the Army and Navy Club. CSC
terminated the employment of individual petitioner on the basis of the report of the Army and
Navy Club that they could have been stealing club properties. The termination was done
without previous formal investigation. Nor was it previously cleared by the Secretary of Labor,
as required by the prevailing law.
 An illegal dismissal case was filed by petitioners against CSC. After hearing, the Labor
Arbiter found individual petitioners to have been illegally dismissed and ordered their
reinstatement with backwages. NLRC sustained the finding of illegal dismissal for lack of prior
MOLE clearance. However, instead of ordering individual petitioners to be reinstated with
backwages, the NLRC simply directed their payment of separation ay equivalent to one month’s
salary for every year of service.

Issue

Whether or not individual petitioners are entitled to reinstatement with backwages.

Ruling

The basis of the NLRC award of separation pay in lieu of reinstatement with backwages
is the speculation that “the possibility of reinstatement (of individual petitioners) to their
former position has become remote, and (sic) to say impossible,” considering that their
dismissal took place six years ago. For the record fails to show that the NLRC had verified that
there were no available positions to which individual petitioners could be reinstated. It would
seem that the NLRC simply assumed that individual petitioners could no longer be reemployed
because of the lapse of six years since their dismissal. It appears that CSC is still in business and
continues to provide janitorial services to numerous clients. Considering the nature of the
position (janitor) of individual petitioners, it would not be difficult for CSC to reemploy them.

Under Section 280 of the Labor Code, and employee who has been unjustly dismissed
shall be entitled to reinstatement without loss of seniority rights and backwages from the time
his compensation was withheld up to the time of reinstatement. However, in the compelling
interest of justice and kindred considerations, the Court in a number of illegal dismissal cases
had adopted the policy of granting backwages for a limited period without deduction on
account of interim earnings realized elsewhere by the dismissed employee.

CASE 14: MOISES DE LEON VS. NLRC AND LA TONDENA

G.R. NO. 70705, AUGUST 21, 1989, THIRD DIVISION, FERNAN, C.J.

Facts

Petitioner was employed by private respondent La Tondena at the Maintenance Section

of its Engineering Department in Tondo, Manila. His work consisted mainly of painting company
building and equipment, and other odd jobs relating to maintenance. He was paid on a daily
basis through petty cash vouchers. After a service of more than 1 year, petitioner requested
form the respondent company that he be included in the payroll of regular workers, instead of
being paid through petty cash vouchers. Private respondent’s response to this request was to
dismiss petitioner from his employment. Having been refused reinstatement despite repeated
demands, petitioner filed a complaint for illegal dismissal reinstatement ad payment of
backwages before the office of the Labor Arbiter of the then Ministry now Department of Labor
and Employment.

Labor Arbiter Hernandez rendered a decision finding the complaint meritorious and the
dismissal illegal, and ordering respondent company to reinstate petitioner with full backwages
and other benefits. The decision of the Labor Arbiter was reversed by the First Division of the
NLRC.

Issue

Whether or not the dismissal of petitioner was illegal, and that he could be considered
as regular employee because of the nature of his work.

Ruling

The Court find merit in the petition as it sustain that position of the Solicitor General
that the decision of the Labor Arbiter by the respondent Commission was erroneous.

Art 281 of the Labor Code defines regular and casual employment. The primary
standard, of determining a regular employment is the reasonable connection between the
particular activity performed by the employee in relation to the usual business or trade of the
employer. The test is whether the former is usually necessary of desirable in the usual business
or trade of the employer. The connection can be determined considering the nature of the
work performed and its relation to the scheme of the particular business or trade in its entirety.
Also, if the employee has been performing the job for at least one year, even if the
performance is not continuous or merely intermittent, the law deems the repeated and
continuing need for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. Hence, the employment is also considered
regular, but only with respect to such activity and while such activity exists.

During petitioner’s period of employment, the records reveal that the tasks assigned to
him included not only painting of company buildings, equipment and tools but also cleaning
and oiling machines, even operating a drilling machine, and other odd jobs assigned to him
when he had no painting job. The law demands that the nature and entirety of the activities
performed by the employee be considered. In the case of petitioner, the painting and
maintenance work given him manifest a treatment consistent with a maintenance man and not
just a painter, for if his job was truly only to paint a building there would have been no basis for
giving him other work assignments in between painting activities.

It is of no moment that petitioner was told when he was hired that his employment
would only be casual, that he was paid through cash vouchers, and that he did not comply with
regular employment procedure. Precisely, the law override such conditions which are
prejudicial to the interest of the worker whose weak bargaining position needs the support of
the State. What determines whether a certain employment is regular or casual is not the will
and word of the employer, to which the desperate worker often accedes, much less the
procedure of hiring the employee or the manner of paying his salary. It is the nature of the
activities performed in relation to the particular business or trade considering all circumstances,
and in some cases the length of time of its performance and its continued existence.

CASE 15: MAGSALIN AND CCBPI VS. NATIONAL ORGANIZATION OF WORKING MEN, ET. AL.

G.R. NO. 148492, MAY 9, 2003, FIRST DIVISION, VITUG, J.

Facts

Coca-Cola Bottlers Phils., Inc., herein petitioner, engaged the services of respondent
workers as “sales route helpers” for a limited period of five months. After 5 months,
respondent workers were employed by petitioner company on a day-to-day basis. Respondent
workers were hired to substitute for regular sales route helpers whenever the latter would be
unavailable or when there would be an unexpected shortage of manpower in any of its work
places or an unusually high volume of work. The practice was for the workers to wait every
morning outside the gates of the sales office of petitioner company. If thus hired, the workers
would then be paid their wages at the end of the day.

23 of the temporary workers filed with the NLRC a complaint for the regularization of
their employment with petitioner company. The complaint was amended a number of times to
include other complainants that ultimately totals 58 workers. Claiming that petitioner company
meanwhile terminated their services, respondent workers filed a notice of strike and a
complaint for illegal dismissal and unfair labor practice with the NLRC. The voluntary arbitrator
rendered a decision dismissing the complaint on the thesis that respondents were not regular
employees of petitioner company. The Court of Appeals reversed the decision and set aside the
ruling of the voluntary arbitrator.

Issue

Whether or not the nature of work of respondents in the company is of such nature as
to be deemed necessary and desirable in the usual business or trade of petitioner that could
qualify them to be regular employees.

Ruling

The basic law on the case is Article 280 of the Labor Code. In determining whether an
employment should be considered regular or non-regular, the applicable test is the reasonable
connection between a particular activity performed by the employee in relation to the usual
business or trade of the employer.

The repeated rehiring of respondent workers and the continuing need for their services
clearly attest to the necessity or desirability of their services in the regular conduct of the
business or trade of petitioner company. The CA has found each of respondents to have
worked for at least one year with petitioner company. The pernicious practice of having
employees, workers and laborers, engaged for a fixed period of few months, short of normal
six-month probationary period of employment, and, thereafter, to be hired on a day-to-day
basis, mocks the law. Any obvious circumvention of the law cannot be countenanced. The fact
that respondent workers have agreed to be employed on such basis and forego the protection
given to them on their security of tenure, demonstrate nothing more that the serious problem
of impoverishment of so many of our people and the resulting unevenness between labor and
capital. A contract of employment is impressed with public interest. The provisions of
applicable statutes are deemed written into the contract, and “the parties are not at liberty to
insulate themselves and their relationships from the impact of labor law and regulations by
simply contracting with each other.”

CASE 16: PHILIPPINE GEOTHERMAL, INC. VS. NLRC ET. AL.

G.R. NOS. 82643-67, AUGUST 30, 1990, SECOND DIVISION, PARAS, J.

Facts

Petitioner Philippine Geothermal, Inc is a US corporation engaged in the exploration and

development of geothermal energy resources as an alternative sources of energy. Private
respondents are employees of herein petitioner occupying various positions ranging from
carpenter to Clerk II who had worked with petitioner company under individual contracts,
categorized as contractual employment, for a period ranging from 15 days to 3 months. These
contracts were regularly renewed to the extent that individual private respondents had
rendered service from 3 to 5 years until 1983 and 1984 when petitioner started terminating
their employment by not renewing their individual contracts.

Private respondents organized a separate labor union in view of their exclusion in the
bargaining unit of the regular rank and file employees represented by the Federation of Free
Workers. They filed a petition for certification election with the Ministry of Labor and
Employment. Because of this, herein petitioner allegedly started harassing them and replaced
them with so called “contract workers.’’ Thus, complainant union and herein respondent
employees filed a case for illegal lock-out and unfair labor practice. Labor Arbiter Balitaan
rendered a decision in favor of the respondents. On appeal, the NLRC rendered a decision
dismissing the appeal an affirming the decision the Labor Arbiter.
Issue

Whether or not private respondents may be considered regular and permanent

employees due to their length of service in the company despite the fact that their employment
is on contractual basis.

Ruling

In case of Kimberly Independent Labor Union for Solidarity, Activism, and Nationalism –
Olalia vs. Hon. Franklin Drilon, the Court classified the two kinds of regular employees, as: 1)
thos engaged to perform activities which are usually necessary and desirable in the usual
business or trade of the employer; and 2) those who have rendered at least 1 year of service,
whether continuous or broken with respect to the activity in which they are employed. While
the actual regularization of these employees entails the mechanical act of issuing regular
appointment papers and compliance with such other operating procedures, as may be adopted
by the employer, it is more in keeping with the intent and spirit of the law to rule that the
status of regular employment attaches to the casual employment on the day immediately after
the end of his first year of service.

Assuming therefore, that an employee could properly be regarded as casual (as

distinguished from regular employee) he becomes entitled to be regarded as regular employee
of the employer as soon as he has completed on year of service. Under the circumstances,
employers may not terminate the service of a regular employee except for a just cause or when
authorized under the Labor Code. It is not difficult to see that to uphold the contractual
arrangement between the employer and the employee would in effect be to permit employers
to avoid the necessity of hiring regular or permanent employees indefinitely on a temporary of
casual status, thus to deny them security of tenure in their jobs. Article 106 of the Labor Code is
precisely designed to prevent such result.

CASE 17: ALU-TUCP, ET. AL. VS. NLRC AND NATIONAL STEEL CORPORATION

G.R. NO. 109902, AUGUST 2, 1994, EN BANC, FELICIANO, J.

Facts

Petitioners plead that they had been employed by respondent NSC in connection with it
Five Year Expansion Program (FAYEP I & II) for varying lengths of time when they were
separated from NSC’s service. Petitioners filed separated complaints for unfair labor practice,
regularization and monetary benefit with the NLRC, Sub-Regional Arbitration Branch XII, Iligan
City. The complaints were consolidated and after hearing, the Labor Arbiter declared
petitioners “regular project employees who shall continue their employment as such for as long
as such [project] activity exists,’’ but entitles to the salary of regular employee pursuant to the
provisions in the CBA. Both parties appealed to the NLRC from that decision. Petitioners argued
that they were regular, not project, employees. Private respondent, on the other hand, claimed
that petitioners are project employees as they were employed to undertake a specific project –
FAYEP I & II. NLRC modified the Labor Arbiter’s decision. It affirmed that Labor Arbiter’s holding
that petitioners were project employees since they were hired to perform work in specific
undertaking, however, it set aside the award to petitioners of the same benefits enjoyed by
regular employees for lack of legal and factual basis.

Issue

Whether or not petitioners are properly characterized as “project employee” rather

than “regular employees” of NSC.

Ruling

The principal test for determining whether a particular employees are properly
characterized as “project employees” as distinguished from “regular employees,” is whether or
not the “project employees” were assigned to carry out a “specific project or undertaking,” the
duration (and scope) of which were specified at the time the employees were engaged for that
project. In the realm of business and industry, “project” could refer to one or the other of at
least 2 distinguishable types of activities. Firstly, a project could refer to a particular job or
undertaking that is within the regular or usual business of the employer company, but which is
distinct and separate, and identifiable as such, from the other undertakings of the company.
Such job or undertaking begins and ends at determined or determinable times. Secondly, a
particular job or undertaking that is not within the regular business of the corporation. Such job
or undertaking must also be identifiably separate and distinct from the ordinary or regular
business operations of the employer. He job or undertaking also begins and ends at determined
or determinable times. The case at bar presents what appears as a typical example of this kind
of “project.”

Instead of contracting out to an outside or independent contractor the tasks of

constructing the buildings with related civil and electrical works that would house the new
machinery and equipment, the installation of the newly acquired mill or plant machinery and
equipment and the commissioning of such machinery and equipment, NSC opted to execute and
carry out its Five Year Expansion Projects “in house,” as it were, by administration. The carrying
out of the FAYEP (or more precisely, each of its component projects) constitute a distinct
undertaking identifiable from the ordinary business and activity of NSC. Each component
project, of course, begins and ends at specified time, which had already been determined by the
time petitioners were engaged.

The particular component projects embraced in the FAYEP, to which petitioners were
assigned, were distinguishable from the regular or ordinary business of NSC, which, of course, is
the production or making and marketing of steel products. During the time petitioners
rendered services to NSC, their work was limited to one or another of the specific component
projects which made up the FAYEP I & II. There is nothing in the record to show that petitioners
were hired for, or in fact assigned to, other purposes. The court, therefore, agree with the basic
finding of the NLRC (and the Labor Arbiter) that the petitioners were indeed “project
employees.” The simple fact that the employment of petitioners as project employees had gone
beyond one year, does not detract from, or legally dissolve, their status as project employees.
The second paragraph of Art. 280 of the Labor Code, providing that an employee who has
served for at least one year, shall be considered a regular employee, relates to casual
employees, not to project employees.

CASE 18: ISIDRO QUEBRAL, ET. AL. VS. ANGBUS CONSTRUCTION, INC. AND BUSTAMANTE

G.R. NO. 221897, NOVEMBER 7, 2016, FIRST DIVISION, PERLAS-BERNABE, J.

Facts

Petitioners alleged that Angbus employed them as construction workers on various

dates from 2008 to 2011. They claimed to be regular employees since they were engaged to
perform tasks which are necessary and desirable to the usual business of Angbus, and that they
have rendered services to the latter’s business for several years already. They were, however,
summarily dismissed from work without any just or authorized cause and due process. Thus,
they file consolidated cases for illegal dismissal with prayer for reinstatement and payment of
full backwages and other benefits. Respondents maintained that petitioners were first
employed by Angelfe Management and Consultancy for a one time project only. Two or three
years after the completion of the Angelfe project, they were hires by Angbus, which is a
separate and distinct business entity from the former. Thus, petitioners were hired only for two
employment contracts – one each with Angelfe and Angbus. Respondents further stated that a
long period of time between the first project employment and the other intervened, which
meant that petitioners were not re-hired repeatedly and continuously.

The Labor Arbiter found that petitioners were not illegally dismissed, there was still
sufficient basis to support respondent’s claim that petitioners were hired for specific projects
with specific durations by two different companies. The NLRC reversed the LA’s ruling and
declared that petitioners were regular employees who were illegally dismissed, hence, they are
entitled to reinstatement and full backwages, including other monetary claims. The CA held
that the NLRC gravely abused its discretion when it: (a) gave due course to petitioners’ appeal
even though it was file out of time; and (b) ruled that petitioners were regular employees of
Angbus.

Issue
 Whether or not the CA erred in (a) holding that petitioners’ appeal before the NLRC was
filed out of time and (b) declaring petitioners as project employees of Angbus and
consequently, holding their dismissal to be valid.

Ruling

1 The Court disagrees with the CA that the petition was not timely filed. Section 3,
Rule 13 of the RoC provides that where pleadings are filed by registered mail, the
date of mailing as shown by the post office stamp on the envelope or the registry
receipt shall be considered as the date of filing. Based on this provision, the date of
filing is determinable from two sources: (1) from the post office stamp on the
envelope or (2) from the registry receipt, either of which may suffice to prove the
timeliness of the filing of the pleadings. The Court previously ruled that if the date
stamped on one is earlier than the other, the former may be accepted as the date of
filing. This presupposes, however, that the envelope or registry receipt and the dates
appearing thereon are duly authenticated before the tribunal where they are
presented. When the photocopy of a registry receipt bears an earlier date but is not
authenticated, the Court held that the later date stamped on the envelope shall be
considered as the date of filing. In the present case, the petitioners submitted these
pieces of evidence to show the timeliness of their appeal: (a) registry receipt; (b) a
copy of the envelope that contained the memorandum of appeal and appeal fee;
and (c) Laureta’s certification. As the CA noted, all three documents indicate May 20,
2013 as the date of mailing at the POEA Post Office in Mandaluyong City.
Considering that there is no variance in the dates stated in the documents, there is
no reason for the Court to mark another date as the date of mailing.

2 Jurisprudence provides that employers claiming that their workers are project-based
employees have the burden to prove that these two requisites concur: (a) the
employees are assigned to carry out a specific project or undertaking; and (b) the
duration and scope of which were specified at the time they were engaged for such
project. In this case, Angbus failed to discharge this burden. Notably, Angbus did not
state the specific project or undertaking assigned to petitioners. As to the second
requisite, not only was Angbus was unable to produce petitioners’ employment
contracts, it also failed to present other evidence to show that it informed
petitioners of the duration and scope of their work. Since Angbus failed to discharge
its burden to prove that petitioners were project employees, the NLRC correctly
ruled that they should be considered as regular employees. Thus, the termination of
petitioner’s employment should have been for a just or authorized cause, the lack of
which, as in this case, amounts to illegal dismissal.

CASE 19: SANDOVAL SHIPYARD, INC. VS NLRC, ET. AL.

 G.R. NO. L-65689, MAY 31, 1985, SECOND DIVISION, AQUINO, J.

Facts

Sandoval Shipyards, Inc. has been engaged in the building and repair of vessels. It
contends that each vessel is a separate project and that the employment of the workers is
terminated with the completion of each project. The workers contend otherwise, they claim to
be regular workers and that the termination of one project does not mean the end of their
employment since they can be assigned to unfinished projects. 5 respondents assigned to
project no. 7511 were served with termination notice after completing the assigned project.
The termination was reported to the Ministry of Labor. They filed a complaint for illegal
dismissal. The NLRC affirmed the decision of the Labor Arbiter ordering the reinstatement of
the five complainants.

Other 17 respondents were assigned to Project No. 7901. There were 55 workers in that
project. Upon the yard’s manager recommendation, the personnel manager of Sandoval
Shipyards terminated the services of the welders, helpers and construction workers. The
termination was duly reported to the Ministry of Labor and Employment. Three days later, 27
out of 55 workers were hired for a new project. The 27 included 4 of the 17 respondents who
filed a complaint for illegal dismissal. After hearing, the Director of the Ministry’s Capital Region
ordered the reinstatement of the complainant. The Deputy Minister of Labor affirmed that
order.

Issue

Whether or not the private respondents were project employees and that their
dismissal was lawful upon completing their assigned project.

Ruling

The Court holds that private respondents were project employees whose work was
coterminous with the project for which they were hired. Project employees, as distinguished
from regular or non-project employees, are mentioned in Section 281 of the Labor Code as
those “where the employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the engagement of the
employee.”

It is significant to note that the corporation does not construct vessels for sale or
otherwise which will demand continuous productions of ships and will need permanent and
regular workers. It merely accepts contracts for ship-building or for repair of vessels from third
parties and, only, on occasion when it has work contracts of this nature that it hires workers to
do the job which, needless to say, lasts only for less than a year or longer. The completion of
their work project automatically terminates their employment, in which case, the employer is,
under the law, only obliged to render a report on the termination of the employment.

CASE 20: LUIS DE OCAMPO, JR., ET. AL. VS. NLRC AND MAKATI DEVELOPMENT CORPORATION

G.R. NO. 81077, JUNE 6, 1990, FIRST DIVISION, CRUZ,J.

Facts
The services of 65 employees of private respondent Makati Development Corporation were
terminated on the ground of the expiration of their contracts; that the said employees filed a complaint
for illegal dismissal against the MDC; as a result of the aforementioned termination, the Philippine
Transport and General Workers Association, of which the complainant were members, filed a notice of
strike on the grounds of union-busting, subcontracting of projects which could have been assigned to
the dismissed employees, and unfair labor practices; the PTWGA then declared a strike and established
picket lines in the perimeter of the MBC premises. MDC filed with the BLR a motion to declare the strike
illegal and restrain the workers from continuing the strike; that on that same day and several days
thereafter the MDC filed applications for clearance to terminate the employment of 90 striking workers,
whom it had meanwhile preventively suspended; that of the said workers, 74 were project employees
under contract with the MDC with fixed terms of employment. Labor Arbiter Sevilla rendered a decision
denying the applications for clearance filed by the MDC and directing it to reinstate the individual
complainants with two months backwages each, which was modified by the NLRC.

Issue

Whether or not NLRC committed grave abuse of discretion for acting arbitrarily and erroneously
ruling that:

a. The motion for reconsideration was filed out of time;

b. The strike was illegal; and
c. The separation of the project employees was justified.

Ruling

a. The rule on the motions for reconsideration of the decision of the NLRC is now found in Section
9 Rule X of the Revised Rules of the NLRC. However, this section was promulgated only on
November 5, 1986, and became effective only on November 29, 1986, after the required
publication. It was therefore not yet in force when the required resolution in the present case
was rendered in 1984. The petition shows that a copy of the decision was received by the
petitioner only on June 13, 1984, and it was from that date that the reglementary commenced
to run. This means that the motion for reconsideration was filed on time, only 13 days having
elapsed before the deadline.
b. The Court held that under the law then in force, to wit, PD 823 as amended by PD 849, the strike
was indeed illegal. In the first place, it was based not on the ground of unresolved economic
 issues, which was the only ground allowed at that time, when the policy was indeed to limit and
discourage strikes. Secondly, the strike was declared only after 6 days from the notice of the
strike and before the lapse of the 30-day period prescribed in the said law for a cooling-off of
the differences between the workers and management and a possible avoidance of the
intended strike.
c. The record shows that although the contracts of the project workers had indeed expired, the
project itself was still on-going and so continued to require the workers’ services for its
completion. There is no showing that such services were unsatisfactory to justify their
termination. Under Policy Instruction No. 20 of the Department of Labor, providing that
“project employees are not entitled to separation pay if they are terminated as a result of the
completion of the project or any phase thereof in which they are employed, regardless of the
projects in which they had been employed by a particular construction company.” Applying this
rule, the Court ruled that the project workers in the case at bar, who were separated even
before the completion of the project at the New Alabang Village and not really for the reason
that their contracts had expired, are entitled to separation pay.

CASE 21: CAPITOL INDUSTRIAL CONSTRUCTION GROUPS VS. NLRC, ET. AL.

G.R. NO. 105359, APRIL 22, 1993, FIRST DIVISION, GRIÑO-AQUINO, J.

Facts

The private respondents were hired by the petitioner on different dates to work in its various
projects. Before entering upon their duties, each of them executed an employment contract captioned
“Appointment as Project Contract Worker.” Instead of being assigned at their job sites, the private
respondents were made to work as welder, inventory clerk, truck helper, machinist, batteryman or
warehouseman either at the Company’s Central Shop, Central Warehouse, or Central Office, in Cainta,
Rizal. The petitioner terminated the services of the private respondents on the ground of completion of
their projects. Private respondents thereupon filed a complaint for illegal dismissal against the company
and/or its personnel coordinator, Gregorio Noriega.

The Labor Arbiter rendered judgment finding that the private respondents were contract
workers, hence, their employment as coterminous with the completion of the particular projects to
which they had been assigned to work. The NLRC found otherwise and held the employer liable for
illegal dismissal.

Issue

Whether or not the respondent workers can be considered regular employees despite the fact
that their employment contract indicated to be Project Contract Worker

Ruling

The NLRC did not err in holding that private respondents are regular employees entitled to
security of tenure. The evidence shows that the private respondents are not project employees.
 Article 28 of the Labor Code defines regular and casual employees. The determining factor of
the status of the workers is the nature of the work performed and the place where they performed their
assignment. The private respondents also worked for the petitioner not only for a specific period of
time, but long after their supposed projects had been finished. They did not always work in the project
sites. They were sometimes assigned at the Central Office which took care of administration,
engineering, auditing, and financing, or at the Central Shop which was responsible principally for the
maintenance and repair of company trucks, tools, and equipment, and the transfer of materials to the
project sites. They also works in the Central Warehouse where company materials were also stored and
issued. Clearly, they performed tasks vital and indispensable to the efficient administration and
completion of the company’s various projects, hence, they were regular employees, i.e., employees who
perform work “usually necessary and desirable in the employer’s usual business trade.”

The services of a project employee ends with the completion of the project or a phase thereof
to which he may have been assigned, and there is no necessity to defer the termination of the contract
until after he shall have attended to the equipment that he may have used, or for that matter, for any
other task that may be required of him by his employer. A rundown of the type of work and place of
assignment of the complainants, Central Shop would disclose that the complainants were not assigned
to specific projects, their appointment papers notwithstanding. Hence, the complainant, by the very
nature of their work are regular non-project employees entitled to security of tenure.

CASE 22: PHESCO, INC. AND CARLOS GANZON VS. NLRC, ET. AL.

G.R. NO. 104444-49, DECEMBER 27, 1994, FIRST DIVISION, QUIASON, J.

Facts

Petioner Phesco, Inc. is engaged in the construction business. It undertook the construction of 3
hydroelectric plants in Mindanao. To assure steady supply of aggregates for Agus I, it put up an
aggregate processing plant in Iligan City. Private respondents were separately hired by petitioners
between 1975 and 1977 to work at Agus I site in Marawi City. Because of as strike staged by workers in
the project, respondents were reassigned on a periodic basis to the aggregate processing plant. When
the strike was resolved, petitioner Phesco ceased extending the appointments of private respondents.

Private respondents filed a complaint against petitioner for illegal dismissal, separation pay and
damages with the Sub-Regional Arbitration Branch XII, Iligan City. In their answer, petitioners claimed
that the termination of the services of private respondents was valid since their services as project
employees were no longer needed. They also contended that private respondents, being project
employees, were no entitled to separation pay.

The Labor Arbiter ruled that private respondents were regular employees, not project
employees of the aggregate processing plant, and in view of the cessation of business of the plant, they
were entitled to separation pay. On appeal, the Fifth Division of the NLRC reversed the decision of the
Labor Arbiter.

Issue
 Whether or not petitioners were guilty of illegal dismissal and that private respondents were
regular employees entitled separation pay and backwages.

Ruling

Private respondents cannot be considered project employees considering their length of service
and the nature of employment, which is necessary in the business of petitioners.

In Capitol Industrial Construction Groups vs. NLRC, 221 SCRA 469 (1993), the Court rules that
where the employment of project employees is extended long after the supposed project had been
finished, the employees are removed from the scope of project employees and they shall be considered
regular employees. Petitioners had repeatedly extended the employment contract of private
respondents long after the completion of the Agus I project. If private respondents were truly project
employees, petitioners should have presented proof that they submitted a report of termination to the
nearest public employment office of the services of their project employees upon the completion of the
construction project, as required by Policy Instruction No. 20.

CASE 23: HACIENDA FATIMA, ET. AL. VS. NATIONAL FEDERATION OF SUGARCANE WORKERS – FOOD
AND GENERAL TRADE

G.R. NO. 149440 JANUARY 28, 2003, THIRD DIVISION, PANGANIBAN, J.

Facts

Respondents did not look with favor workers’ having organized themselves into a union. Thus,
when complainant union was certified as the collective bargaining representative in the certification
elections, respondents under the pretext that the result was on appeal, refused to sit down with the
union for the purpose of entering into a CBA. Moreover, the workers including complainants herein
were not given work for more than one month. In protest, complainants staged a strike which was
however settled upon signing of a Memorandum of Agreement. Alleging that complainants failed to load
the 15 wagons, respondents reneged on its commitment to sit down and bargain collectively. Instead,
respondent employed all means including the use of private armed guards to prevent the organizers
from entering the premises. Respondents did not any more give work assignments to the complainants
forcing the union to stage a strike. But due to the conciliation efforts by the DOLE, another MOA was
signed by the complainants and respondents.

When respondents again reneged on its commitment, complainants filed the present complaint.
But for all their persistence, the risk they had to undergo in conducting a strike in the face of
overwhelming odds, complainants in an ironic twist of fate now find themselves being accused of
‘refusing to work and being choosy in the kind of work they have to perform.’ The CA affirmed that while
the work of respondents was seasonal in nature, they were considered to be merely on leave during the
off-season and were therefore still employed by petitioners. Moreover, the workers enjoyed security of
tenure. Any infringement upon this right was deemed by the CA to be tantamount to illegal dismissal.
The CA likewise concurred with the NLRC’s finding that petitioners were guilty of unfair labor practice.
Issues

1. Whether or not the CA erred in holding that respondents, admittedly seasonal workers, were
regular employees, contrary to the clear provision of Article 280 of the Labor Code
2. Whether or not the CA committed grave abuse of discretion in upholding the NLRC’s conclusion
that private respondents were illegally dismissed, that petitioners were guilty of unfair labor
practices, and that the union be awarded moral and exemplary damages.

Ruling

1. The CA did not err when it held that respondents were regular employees. For respondents to
be excluded from those classifies as regular employees, it is not enough that they perform work
or services that are seasonal in nature. They must have also been employed only for the
duration of one season. The evidence proves the existence of the first, but not the second,
condition. The fact that respondents repeatedly worked as sugarcane workers for petitioners for
several years is not denied by the latter. Evidently, petitioners employed respondents for more
than one season. Therefore, the general rule of regular employment is applicable.
2. The SC upheld the ruling of NLRC in finding the petitioner guilt of unfair labor practice. From the
respondents’ refusal to bargain, to their acts of economic inducements resulting in the
promotion of those who withdrew from the union, the use of armed guards to prevent the
organizers to come in, and the dismissal of union officials and members, one cannot conclude
that respondents did not want a union in their hacienda – a clear interference in the right of the
workers to self-organization. The finding of unfair labor practice done in bad faith carries with it
the sanction of moral and exemplary damages.

CASE 24: BAGUIO COUNTRY CLUB CORPORATION VS. NLRC, ET. AL.

G.R. NO. 71664, FEBRUARY 28, 1992, FIRST DIVISION, MEDIALDEA, J.

Facts

Private respondent Calamba was employed on a day to day basis on various capacities as laborer
and dishwasher for a period of 10 months. On September 1, 1980 to October 1, 1980, private
respondent Calamba was hired as gardener and rehired as such on November 15, 1980 to January 4,
1981 when he was dismissed by the petitioner corporation. Private respondent Calamba assisted by
private respondent union instituted a complaint against petitioner corporation with the Ministry of
Labor for unfair labor practice, illegal dismissal and non-payment of 13 th month pay.

Executive Labor Arbiter Tumang rendered a decision declaring private respondent Calamba as a
regular employee and ordering petitioner to reinstate private respondent to the position of gardener
without loss of seniority and with full backwages, benefits and privileges from the time of his dismissal
up to reinstatement including 13 th month pay. The petitioner interposed an appeal to the respondent
commission, and after finding that there existed no sufficient justification to disturb the appealed
decision, the respondent Commission rendered a resolution dismissing the appeal for lack of merit.

Issue

Whether or not the private respondent Jimmy Calamba has acquired the status of a regular
employee at the time his employment was terminated.

Ruling

The Court finds no merit in the petition and holds that the respondent Commission did not
gravely abuse its discretion when it affirmed in toto the decision of the Labor Arbiter.

The law on the matter is Article 280 of the Labor Code which defines regular and casual
employment. In the case at bar, the petitioner corporation claims that private respondent was
contracted for a fixed and specific period. However, the records are that the private respondent was
repeatedly re-hired to perform tasks ranging from dishwashing and gardening, aside from performing
maintenance work. Such repeated rehiring and the continuing need for his service are sufficient
evidence of the necessity and indispensability of his service to the petitioner’s business or trade.
Furthermore, the private respondent performed the said tasks which lasted for more than one year until
he was terminated. Certainly, by this fact alone he is entitled by law to be considered a regular
employee. Owing to private respondent’s length of service with the petitioner corporation, he became a
regular employee, by operation of law, one year after he was employed. It is more in consonance with
the intent and spirit of the law to rule that the status regular employment attaches to the casual
employee on the day immediately after the end of his first year.

It is noteworthy that what determines whether a certain employment is regular or casual is not
the will and word of the employer, to which the desperate worker often accedes. It is the nature of the
activities performed in relation to the particular business or trade considering all circumstances, and in
some cases the length of time of its performance and its continued existence.

CASE 25: INTERNATIONAL CATHOLIC MIGRATION COMMISSION VS. NLRC AND BERNADETTE GALANG

G.R. NO. 72222, JANUARY 30, 1989, THIRD DIVISION, FERNAN, C.J.

Facts

Philippine International Catholic Migration Commission (ICMC) engaged the services of the
private respondent Bernadette Galang as a probationary cultural orientation teacher. After 3 months,
private respondent was informed, orally and in writing, that her services were being terminated for her
failure to meet the prescribed standards of petitioner as reflected in the performance evaluation of her
supervisors during the teacher evaluation program she underwent along with other newly-hired
personnel.

Private respondent filed a complaint for illegal dismissal, unfair labor practice and unpaid wages
against petitioner with the then Ministry of Labor and Employment, praying for reinstatement with
backwages, exemplary and moral damages. The Labor Arbiter rendered a decision dismissing the
complaint for illegal dismissal as well as the complaint for moral and exemplary damages but ordering
the petitioner to pay private respondent the sum of P6000 as payment for the last 3 months of the
agreed employment period pursuant to her verbal contract of employment. The NLRC sustained the
decision of the Labor Arbiter.

Issue

Whether or not an employee who was terminated during the probationary period of her
employment is entitled to her salary for the unexpired portion of her six-month probationary
employment.

Ruling

There is justifiable basis for the reversal of public respondent’s award of salary for the unexpired
three-month portion of private respondent’s six-month probationary employment in the light of its
express finding that there was no illegal dismissal. There is no dispute that private respondent was
terminated during her probationary period of employment for failure to qualify as a regular member of
petitioner’s teaching staff in accordance with its reasonable standards. Records show that private
respondents was found by petitioner to be deficient in classroom management, teacher-student
relationship and teaching techniques. Failure to qualify as a regular employee in accordance with the
reasonable standards of the employer is a just cause for terminating a probationary employee
specifically recognized under Article 282 of the Labor Code.

A probationary employee, as understood under Article 282 (now Art. 281) of the Labor Code, is
one who is on trial by an employer during which the employer determines whether or not he is qualified
for permanent employment. A probationary appointment is made to afford the employer an
opportunity to observe the fitness of a probationer while at work, and to ascertain whether he will
become a proper and efficient employee. The word “probationary,” as used to describe the period of
employment, implies the purpose of the term or period, but not its length. It is well settled that the
employer has the right or is at liberty to choose who will be hired and who will be denied employment.
In that sense, it is within the exercise of the right to select his employees that the employer may set or
fix a probationary period within which the latter may test and observe the conduct of the former before
hiring permanently. As the law now stands, Article 281 of the Labor Code gives ample authority to the
employer to terminate a probationary employee for a just cause or when he fails to qualify as a regular
employee in accordance with reasonable standards made known by the employer to the employee at
the time of his engagement. Private respondent was duly notified, orally and in writing that her services
were terminated for her failure to meet the prescribed standards. The dissatisfaction of petitioner over
the performance of private respondent in this regard is a legitimate exercise of it prerogative to select
whom to hire or refuse employment for the success of its program or undertaking.

CASE 26: A.M. ORETA & CO., INC. VS, NLRC AND SIXTO GRULLA, JR.

G.R. NO. 74004, AUGUST 10, 1989, FIRST DIVISION, MEDIALDEA, J.

Facts

Private respondent Grulla was engaged by Engineering Construction and Industrial Development
Company (ENDECO) through A.M. Oreta and Co., Inc., as a carpenter in its projects in Jeddah, Saudi
Arabia, with an employment contract for 12 months. Grulla met an accident which fractured his lumbar
vertebra while working at the jobsite which resulted being confined for 12 days in the hospital. He was
told that he could resume his normal duties after undergoing physical therapy for two weeks. He
reported back to his Project Manager and presented to the latter a medical certificate declaring that he
is already fit to work. Since then, the started working again until he received a notice of termination of
his employment.

Respondent Grulla filed a complaint for illegal dismissal, recovery of medical benefits, unpaid
wages for the unexpired ten 10 months of his contract and reimbursement if medical expenses against
A.M. Oreta and Company, Inc. and Engineering Construction and Industrial Development Co. (ENDECO)
with the Philippine Overseas hat Administration. POEA rendered a decision saying that the
complainant’s dismissal was illegal and warrants the award of his wages for the unexpired portion of the
contract. On appeal to the NLRC, the Commission dismissed the appeal for lack of merit and affirmed in
toto the decision of the POEA.

Issue

Whether or not the employment of respondent Grulla was illegally terminated by the petitioner;
and whether or not he is entitled to salaries corresponding to the unexpired portion of his employment
contract.

Ruling

Policy Instuction No. 12 of the then Minister of Labor provides: “PD 850 has defined the concept
of regular and casual employment. What determines regularity or casualness in not employment
contract, written or otherwise, but the nature of the job. If the job is usually necessary or desirable to
the main business of the employer, the employment is regular. . .” Petitioner admitted that respondent
Grulla was employed in the company as carpenter for a period of 12 months before he was dismissed. A
perusal of the employment contract reveals that although the period of employment of respondent
Grulla is 12 months, the contract is renewable subject to future agreements of the parties. It is clear
from the employment contract that the respondent Grulla was hired by the company as a regular
employee and not just mere probationary employee.

On the matter of probationary employment, the law in point is Article 281 of the Labor Code.
The law is clear to the effect that in all cases involving employees engaged on probationary period basis,
the employer shall make known to the employee at the time he is hired, the standards by which he will
qualify as a regular employee. Nowhere in the employment contract executed between petitioner
company and respondent Grulla is there a stipulation that the latter shall undergo a probationary period
for 3 months before he can qualify as a regular employee. There is also no evidence on record showing
that the respondent Grulla has been appraised of his probationary status and the requirements which
he should comply in order to be a regular employee. In the absence of this requisites, there is
justification in concluding that respondent Grulla was a regular employee at the time he was dismissed
by petitioner. As such, he is entitle to security of tenue during his period of employment and his services
cannot be terminated except for just and authorized causes enumerated under the Labor Code and
under the employment contract.

The alleged ground of unsatisfactory performance relied upon by petitioner for dismissing Grulla
is not one of the just causes for dismissal provided in the Labor Code. Neither is it included among the
grounds for termination of employment under Article VII of the contract of employment executed by
petitioner company and respondent grulla. Moreover, petitioner has failed to show proof of particular
acts or omissions constituting the unsatisfactory performance of Grulla of his duties, which was allegedly
due to his poor physical state after the accident. Contrary to petitioner’s claims, records show that the
medical certificate issued by the hospital where Grulla was confiece as a result of the accident, clearly
ans positively stated that Grulla was already physically fit to work after he was released from the
hospital. The dismissal of respondent Grulla violated the security of tenure under the contract of
employment which specifically provides that the contract term shall be for a period of 12 calendar
months. Consequently the respondent should be paid his salary for the unexpired portion of his contract
of employment which is 10 months.

CASE 27: ILUMINADA VER BUISER, ET. AL. VS. LEOGARDO, JR. AND GENERAL TELEPHONE DIRECTORY,
CO.

G.R. NO. L-63316, JULY 31, 1984, SECOND DIVISION, GUERRERO, J.

Facts

Petitioners were employed by the private respondent General Telephone Directory Company as
sales representatives and charged with the duty of soliciting advertisements for inclusion in a telephone
directory. The private respondent prescribed sales quotas to be accomplished or met by the petitioners.
Failing to meet their respective sales quotas, the petitioners were dismissed from the service by the
private respondent. Petitioners filed with the NCR Ministry of Labor and Employment a complaint to
illegal dismissal with claims for backwages, earned commissions and other benefits. The Regional
Director of the said ministry, dismissed the complaints of the petitioners, except the claim for
allowances which private respondent was ordered to pay. The Deputy Minister of the Ministry of Labor
affirmed the order of the Regional Director, wherein in ruled that the petitioners have not attained
permanent status since private respondents was justified in requiring a longer period of probation, and
that the termination of petitioners’ services was valid since the latter failed to meet their sales quotas.

It is petitioners’ submission that probationary employment cannot exceed 6 months, the only
exception being apprenticeship and learnership agreements as provided in the Labor Code; that the
Policy Instructions of the Minister of Labor and Employment nor any agreement of the parties could
prevail over this mandatory requirement of the law; that this six months prescription of the Labor Code
was mandated to give further efficacy to the constitutionally-guaranteed security of tenure of workers;
and that the law does not allow any discretion on the part of the Minister of Labor and Employment to
extend the probationary period for a longer period except in the aforecited instances. Finally, petitioners
maintain that since they are regular employees, they can only be removed or dismissed for any of he
just and valid causes enumerated under Article 283 of the Labor Code.
Issue

WON the petitioners probationary period exceeding 6 months as prescribed in the law is
allowed or valid.

Ruling

The Court rejected the petitioners’ contention for having no basis in law.

Generally, the probationary period of employment is limited to 6 months. The exception to this
general rule is when the parties to an employment contract may agree otherwise, such as when the
same is established by company policy or when the same is required by the nature of work to be
performed by the employee. In the latter case, there is recognition of the exercise of managerial
prerogatives in requiring a longer period of probationary employment, such as in the present case
where the probationary period was set for 18 months, especially where the employee must learn a
particular kind of work such as selling, or when the job requires certain qualification, skills, experience or
training.

The very contracts of employment signed and acquiesced to by the petitioners specifically
indicate that “the company hereby employs the employee as telephone sales representative on a
probationary status for a period of 18 months.” This stipulation is not contrary to law, morals and public
policy. The Court held and ruled that probationary employment of petitioners set to 18 months is legal
and valid and that the Regional Director and the Deputy Minister of the Labor and Employment
committed no abuse of discretion in ruling accordingly.

The practice of a company in laying off workers because they failed to make the work quota has
been recognized in this jurisdiction (Philippine American Embroideries vs. Embroidey and Garment
Workers, 26 SCRA 634, 639). In the case at bar, the petitioners’ failure to meet the sales quota assigned
to each of them constitute a just cause of their dismissal, regardless of the permanent or probationary
status of their employment. Failure to observe prescribed standards of work, or to fulfill reasonable
work assignments due to inefficiency may constitute just cause for dismissal. 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. This management
prerogative of requiring standards availed of so long as they are exercised in good faith for the
advancement of the employer’s interest.

CASE 28: MARIWASA MANUFACTURING, INC., AND ANGEL DAZO VS. HON. LEOGARDO, JR. AND
JOAQUIN DEQUILA

G.R. NO. 74246, JANUARY 26, 1989, FIRST DIVISION, NARVASA, J.

Facts
 Private respondent Dequila was hired on probation by petitioner Mariwas Manufacturing, Inc. as
a general utility worker. Upon the expiration of the probationary period of 6 month, Dequia was
informed by his employer that his work had proved unsatisfactory and had failed to meet the required
standards. To give him a chance to improve his performance and qualify for regular employment,
instead of dispensing with his service then and there, with his written consent Mariwasa extended his
probation period for another 3 month. His perforamance, however, did not improve and on that
account, Mariwasa terminated his employment at the end of the extended period.

Dequila thereupon filed with the Ministry of Labor against Mariwas and its VP for
Administrayion, a complaint for illegal dismissal and violation of PD No. 928 and 1389. His complaint was
dismissed after hearing by the Director of the Ministry of Labor NCR, who ruled that the termination of
Dequila’s employment was in the circumstances justified and rejected his money claims for insufficiency
of evidence. On appeal to the Office of the Minister, however, said disposition was reversed.
Respondent Deputy Ministed held that Dequila was already a regular employee at the time of his
dismissal, therefore, could not have been lawfully dismissed for failure to meet company standards as a
probationary worker. He was ordered reinstated to his former position without loss of seniority and with
full back wages from the date of his dismissal until actually reinstated.

Issue

Whether or not the employer and employee may, by agreement, extend the probationary
period of employment beyond the six months prescribed in Article 282 of the Labor Code

Ruling

The Court agrees with the Solicitor General, who takes the same position as the petitioners, that
such an extension may lawfully be covenanted, notwithstanding the seemingly restrictive language of
Article 282 of the Labor Code. Buiser vs. Leogardo, Jr. recognized agreements stipulating longer
probationary periods as constituting lawful exceptions to the statutory prescription limiting such periods
to six months, when it upheld as valid an employment contract between an employer and two of its
employees that provided for an 18-month probationary period.

For aught that appears of record, the extension of Dequila’s probation was ex gratia, an act of
liberality on the part of his employer affording him a second chance to make good after having initially
failed to prove his worth as an employee. Such an act cannot now unjustly be turned against said
employer’s account to compel it to keep on its payroll one who could not perform according to its work
standards. The law, surely, was never meant to produce such an inequitable results. By voluntarily
agreeing to an extension of the probationary period, Dequila in effect waived any benefit attaching t the
completion of said period if he still failed to make the grade during the period of extension. The Court
finds nothing in the law which by any fair interpretation prohibits such waiver. And no public policy
protecting the employee and the security of his tenure is served by prescribing voluntary agreements
which, by reasonably extending the period of probation, actually improve and further a probationary
employee’s prospects of demonstrating his fitness for regular employment.
 CASE 29: HOLIDAY INN MANILA, ET. AL. VS. NLRC AND ELENA HONASAN

G.R. NO. 109114, SEPTEMBER 14, 1993, FIRST DIVISION, CRUZ, J.

Facts

Elena Honasan applied for employment with the Holiday Inn and was accepted for “on-the-job
training” as a telephone operator for a period of 3 weeks. After completing her training, she was
employed on a “probationary basis” for a period of 6 months. Her employment contract stipulated that
the Hotel could terminate her probationary employment at any time prior to the expiration of the six-
month period in the event of her failure (a) to learn or progress in her job; (b) to faithfully observe and
comply with the hotel rules and the instructions and order of her superiors; or (c) to perform her duties
according to hotel standards. Four days before the expiration of the stipulated deadline, Holiday Inn
notified her of her dismissal, on the ground that her performance had not come up to the standards of
the Hotel.

Honasan filed a complaint for illegal dismissal, claiming that she was already a regular employee
at the time of her separation and so was entitled to full security of tenure. The complaint was dismissed
by the Labor Arbiter, who held that her separation was justified under Article 281 of the Labor Code. On
appeal, the decision was reversed by the NLRC, which held that Honasan had become a regular
employee and so could not be dismissed as a probationer.

Issue

Whether or not the Honasan attained the status of a regular employee at the time of her
dismissal, which was made 4 days prior the expiration of the probation period.

Ruling

On the issue of illegal dismissal, the Court finds that Honasan was places by the petitioner on
probation twice, first during her on-the-job training for three weeks, and next during another period of
six months, ostensibly in accordance with Article 281. Her probation clearly exceeded the period of six
months prescribed by this article.

Probation is the period during which the employer may determine if the employee is qualified
for possible inclusion in the regular force. In the case at bar, the period was for three weeks, during
Honasan’s on-the-job Training. When her services were continued after this training, the petitioners in
effect recognized that she had passed probation and was qualified to be a regular employee. Honasan
was certainly under observation during her three-week on-the-job training. If her services proved
unsatisfactory then, she could have been dropped as early as during that time. But she was not. On the
contrary, her services were continued, presumably because they were acceptable, although she was
formally places this time on probation. Even if it be supposed that the probation did not end with the
three-week period of on-the-job training, there is still no reason why that period should not be included
in the stipulated six-month period of probation. She had become a regular employee of Holiday Inn and
acquired full security of tenure as of October 15, 1991. The consequence is that she could no longer be
summarily separated on the ground invoked by petitioners. As a regular employee, she had acquired the
protection of Article 279 of the Labor Code.
 The hotel’s system of double probation is a transparent scheme to circumvent the plain
mandate of the law and make it easier for it to dismiss its employees even after they shall have already
passed probation. The petitioners had ample time to summarily terminate Honasan’s services during her
period of probation if they were deemed unsatisfactory. Not having done so, they may dismiss her now
only upon proof of any of the legal grounds for the separation of regular employees, to be established
according to the prescribed procedure.

CASE 30: ROBINSONS GALLERIA/ROBINSONS SUPERMARKET CORPORATION AND/OR JESS MANUEL

VS. IRENE RANCHEZ

G.R. NO. 177937, JANUARY 19, 2011, SECOND DIVISION, NACHURA, J.

Facts

Respondent was a probationary employee of petitioner Robinsons Galleria/Robinsons

Supermarket Corporation for a period of 5 months. She underwent 6 weeks of training as a cashier
before she was hired. Two weeks after she was hired, respondent reported to her supervisor the loss of
cash amounting to P20,299.00 which she had places inside the company locker. The Operation Manager
of petitioner Supermarket, ordered that respondent be strip-searched by the company guards.
However, the search on her and her personal belongings yielded nothing. Respondent acknowledged
here responsibility and requested that she be allowed to settle and pay the lost amount. However,
petitioner Manuel did not heed her request and instead reported the matter to the police. Petitioner
Manuel likewise requested the Quezon City Prosecutor’s office for inquest, and an information for
Qualified Theft was filed against the respondent.

The respondent filed a complaint for illegal dismissal and damages. The Labor Arbiter rendered a
decision dismissing the claim of illegal dismissal for lack of merit. On appeal, the NLRC reverses the
decision of the Labor Arbiter ruling that respondent was denied of due process by petitioners. Although
respondent was only a probationary employee, the subsequent lapse of her probationary contract of
employment did not have the effect of validly terminating here employment because constructive
dismissal had already been effected earlier by petitioners.

Issue

Whether or not respondent was illegally terminated from employment by petitioners.

Ruling

The court ruled in the affirmative.

A probationary employee, like a regular employee, enjoys security of tenure. Thus, the services
of an employee who has been engaged on probationary basis may be terminated for any of the
following: (1) a just or (2) an authorized cause; and (3) when he fails to qualify as a regular employee in
accordance with reasonable standards prescribed by the employer.
 In the instant case, petitioners failed to accord respondent substantive and procedural due
process. The haphazard manners in the investigation of the missing cash, which was left to the
determination of the police authorities and the Prosecutor’s Office, left respondent with no choice but
to cry foul. Administrative investigation was not conducted by petitioner Supermarket. On the same day
that the missing money was reported by respondent to her immediate supervisor, the company already
pre-judged her guilt without proper investigation, and instantly reported her to the police as the
suspected thief, which resulted in her languishing in jail for two weeks. As correctly pointed out by the
NLRC, the due process requirements under the Labor Code are mandatory and may not be supplanted
by police investigation or court proceedings.

Respondent was constructively dismissed by petitioner Supermarket. It was unreasonable for

petitioners to charge her with abandonment for not reporting for work upon her release in jail. It would
be the height of callousness to expect her to return to work after suffering in jail for two weeks. Work
had been rendered unreasonable, unlikely, and definitely impossible, considering the treatment hat was
accorded respondent by petitioners. Thus, an illegally or constructively dismissed employee, respondent
is entitled to: (1) either reinstatement, if viable, or separation pay, if reinstatement is no longer viable;
and (2) backwages. These two reliefs are separate and distinct from each other and are awarded
conjunctively. In this case, since respondent was a probationary employee at the time she was
constructively dismissed by petitioners, she is entitled to separation pay and backwages. Reinstatement
is no longer viable considering the circumstances.