SSCRM-College of Law

LABOR RELATIONS

Case Flow in Labor Cases

Some Doctrines on Procedure & Evidence

Note: This supplements Sec. 21 (procedure in Termination) and Sec. 22 ( Contesting the
Termination) of my book NOTES IN LABOR LAWS (2024).

This case flow pertains to the most common of labor cases, illegal dismissal. But the general
procedures could also be applicable to other cases filed with the Labor Arbiter’s office.

A. Pre-litigation phase

All cases filed with the Labor Arbiter are first processed through the SEnA (Single Entry Approach).
Even if the Labor Arbiter would have no jurisdiction ( e.g. purely money claims not exceeding
P5,000. jurisdiction of which belongs to the regional Director), NLRC personnel who are not
lawyers will call the parties to mediation-conciliation conference on two dates. If a compromise
is reached, compromise agreement will be executed before the SEnA officer. If no settlement
reached, the case will be endorsed to the proper agency (Labor Arbiter, Regional Director, SSC or
SSS, grievance/VA).

B. Arbitration

Jurisdiction

The employee, prior to filing a complaint, should be cognizant of jurisdictional requirements.

Cases can be filed with labor tribunals only when both of at least one of the following
circumstances are present:

1. Existence of ER-EE relationship; and/or,

2. Existence of a labor dispute : “any controversy or matter concerning terms and

conditions of employment or the association or representation of persons in
negotiating, fixing, maintaining, changing or arranging the terms and conditions of
employment, regardless of whether the disputants stand in the proximate relation of
employer and employee" (Art. 219, par. l, Labor Code).

In most cases, there is no labor dispute in the absence of employer-employee relationship. For
this reason, the following cases cannot be filed in labor tribunals:

• Intra-corporate cases ( cases filed by corporate officers [ Nacpil vs International Broadcasting

Corp. GR No. 144767, 21 March 2002]; partners (cf. Sy vs Court of Appeals, GR No. 142293, 27 February
2003], and officers of cooperatives ( Uson vs PLDT Employees Credit Cooperative Union, GR No.
253149, 08 February 2023] with respect to their rights as corporate/cooperative officers or
partners)

• Ecclesiastical cases (cases filed by ecclesiastical officers, including right to their

ecclesiastical positions: Pasay City Alliance Church vs Benito GR No. 226908, 28 November 2019).

1
 • Claims of independent contractors ( Jay Sonza & Mel Tianco cases)

Corporate officers who are or used to be at the same time employees may however file an labor
dispute case, provided the cause of action is clearly limited to a labor dispute like termination
of employment and "no incident of intra-corporate character has been linked to the
employment issue " (Gilles vs CA, GR No. 149273, 05 June 2009)
The last clause of the statutory definition of “labor dispute” ("regardless of whether the
disputants stand in the proximate relation of employer and employee"") pertains to cases where
employer-employee relationship is not required but the law nonetheless lays the jurisdiction
with the Arbitration Branch of the NLRC:
• OFW cases against the recruitment agency, and even if the foreign principal which is the employer
is not impleaded (Sameer Overseas Placement Agency vs Cabiles, GR No. 170139, 05 August 2014);

• Cases of employees against labor-only contractor or LOC, as the legal employer is the
principal/client and the LOC is merely an agent (Art. 106, Labor Code).

• Cases of employees of independent contractors against the principal (which could even be a
government entity) , for employment-related money claims for the period of assignment under
the service contract between the principal and the independent contractor (Art. 97 [b]; Labor Code;
Philippine Fisheries Development Authority v. NLRC, G.R. No. 94825, 04 September 1992; Department of
Agriculture vs NLRC, GR No. 104269, 01 November 1993). Note that the government is considered an
'employer' under Art. 97 [b] of the Labor Code. But if the cause of action is illegal dismissal
without claims for unpaid salaries, the employees of the contractor cannot implead the
government agency (Hugo vs Light Rail Transit Authority, R No. 181866, 18 March 2010).

• Cases against corporate officers impleaded in their personal capacity (Art.97 [b], Labor Code; Princess
Talent Center Production vs Masagca, GR No. 191310, 11 April 2018).

In the first three cases, the law imposes solidary liability on the recruitment agency, the LOC, and
the principal/client, respectively, and such legal nexus justifies impleading the said entities.

Note : The administrative and criminal actions may proceed independently of each other ( Section,
77, 2016 Revised POEA Rules and Regulations)

In some cases, it is the category of the employer which would preclude acquisition of jurisdiction
by labor tribunals. Thus, the government cannot be sued in labor tribunals for illegal dismissal. In
the same manner, foreign sovereigns and international organizations granted with legal immunity
cannot be sued in Philippine tribunals (SEAFDEC vs NLRC, GR No. 86773, 14 Feb 1992; JUSGMAG vs NLRC,
GR No. 108813, 15 December 1994; DFA vs NLRC, GR No. 113191, 18 September 1996).

Illegal dismissal cases are within the exclusive jurisdiction of Labor Arbiters (Art. 224[a] [1], Labor
Code).

In limited cases, the Secretary of the DOLE (in case of assumption of jurisdiction authority) or the
NLRC in the exercise of its original jurisdiction (in case the Secretary of DOLE certifies the
assumption of jurisdiction case for compulsory arbitration) may rule on the legality of dismissals
arising from a strike (Art. 278 [g]. Labor Code; Bagong Pagkakaisang Manggagawa sa Triumph vs Sec. of Labor,
GR No. 167401, 05 July 2010).

Bar Q (VA Jurisdiction on Dismissal Cases)

XYZ Company and Mr. AB, a terminated employee who also happens to be the President of XYZ
Employees Union, agree in writing to submit Mr. AB's illegal dismissal case to voluntary
arbitration. Is this agreement a valid one?

2
Answer

Yes. Both Art. 224 [a] and Art. 275 of the Labor Code allow the parties to submit "all other labor
disputes" to voluntary arbitration. An illegal dismissal case is a "labor dispute".

Note: The Voluntary Arbitrator (VA) may take cognizance of a termination dispute, but only if the CBA
explicitly provides for it. A general reference to “all other disputes “would not be sufficient to confer
jurisdiction to the VA (Viviero vs Court of Appeals, GR No. 138938, 24 October 2000; Navarro III vs Damasco, GR
No 101875, 14 July 1995).

Related Case Law: The VA is devoid of jurisdiction to rule on a controversy involving the withholding of tax on
benefits, even if derived from the CBA and submitted by the parties to VA, because the NIRC provides for a specific
remedy with the BIR Commissioner ( Honda Cars vs Honda Cars Specialists and Supervisors Union, GR No. 204141, 19 Nov
2014). It is reasonable to posit that such dispute is not a “labor dispute”.

Venue

The venue of the illegal dismissal case will be Regional Arbitration Branch having jurisdiction over
the workplace of the employee, understood as the place or locality where the employee is
regularly assigned at the time the cause of action arose. Cases involving OFWs workers may be
filed before the Regional Arbitration Branch having jurisdiction over the place where the
employee complainant resides or where the principal office of any of the respondents is situated,
at the option of the employee (Rule IV, 2011 NLRC Rules of Procedure)

Prescription

The prescriptive period for filing an illegal dismissal case is four (4) years from the time the cause
of action accrued, as an "injury to rights" under Art. 1146 the Civil Code provision (Arriola vs Pilipino
Star Ngayon, GR No. 175689, 13 August 2014).

It is important that the case is filed with the correct forum, because prescription is not tolled by
the filing of a complaint with the wrong forum.

Case Law ( Reckoning of prescription):

Case 1:

The seafarer was repatriated in August 2000 and was repeatedly instructed to wait for the results of the training
of the newly recruited crew members of the vessel, M/V Eastern Falcon, he previously boarded, and was
likewise promised for re-deployment. The seafarer patiently waited for three (3) years or until February 2003
which was the last time he visited the company. He filed his complaint on 01 July 2004. The SC held that it
cannot be said that his cause of action accrued from the time he was repatriated in August 2000 because he
was thereafter promised re-deployment. The filing of the labor complaint on 01 July 2004 is within the four-
year prescriptive period from the time the cause of action accrued in February 2003 ( Gallego vs Wallem Maritime
Services, GR No. 216440, 19 Feb 2020).

Case 2:

The prescription of an action is interrupted by (a) the filing of an action, (b) a written extrajudicial demand by
the creditor, and (c) a written acknowledgment of the debt by the debtor (Art. 1155, Civil Code).

The employee never made any written extrajudicial demand. Neither did the employer make any written
acknowledgment of its alleged obligation. The claimed "follow-ups" could not have validly tolled the running of
the prescriptive period. The employee never presented any proof to substantiate his allegation of follow-ups
(PLDT vs Pingol, GR No. 182622, 08 Sept 2010).

The Complaint

Unlike in civil cases, a labor case filed with the Arbitration Branch of the NLRC uses a pro forma
Complaint. The employee is merely required to check the listed causes of action ( illegal dismissal

3
whether actual or constructive, illegal suspension, ULP, underpayment or non-payment of salaries
and other benefits) and the relief being asked (reinstatement, separation benefits, damages, etc.)
The check list was designed to facilitate the filing of complaints by employees and laborers even
without the intervention of counsel. It allows the complainant to expediently set forth his
grievance in a general manner, but is not solely determinative of the ultimate cause of action
that he may have against the employer (Tegimenta Chemicals vs Buensalida, GR No. 176466, 17 June 2008).

The complainants in their Position Paper are allowed to add or modify their causes of action.

Case law:

Initiatory complaints filed before the NLRC are just blank forms wherein the employee-complainant simply
inputs his/her details, the respondent's details, and ticks off a checklist of causes of action which are applicable
to him/her. It is only upon the filing of position papers that the complainant is able to expound on the
employer's acts or omissions which constitute his/her causes of action against the latter. Given the foregoing,
it is only reasonable to infer that, the complaint cannot be the sole basis in determining the complainant's
causes of action given that it is in the position paper that the ultimate facts are presented and established by
the submission of all relevant documents and affidavits to support the same and prove their respective causes
of action ( Burnea vs Security Trading Corp., GR No. 231038, 26 April 2021).

The rule proscribing multiplicity of suits is observed in labor cases; hence, all related money
claims (e.g., wage differentials, overtime pay, etc.) must also be included in the illegal dismissal
case. The claims for back wages and other statutory benefits like 13 th month pay are not, strictly
speaking, cause of action. They are merely relief available to illegally dismissed employee (Arriola,
GR No. 175689, 13 August 2014).

If the employee does not contest the retrenchment or redundancy but merely disputes the
amount of separation benefits, the cause of action would be money claims.

It may happen that a dismissed employee may also be eligible for retirement benefits. This money
claim is a separate cause of action, and must be specifically pleaded (Villena vs Batangas II Electric
Coop, GR No. 205735, 04 February 2015).

The distinction is important, because the prescriptive period for employment-related money
claims is only three (3) years ( Art. 331, Labor Code).

Summons

Instead of being required to file an Answer as in civil cases, the employer in an illegal dismissal
case will only be served summons with a notice of conference. A copy of the Complaint is
attached to the notice.

The Labor Arbiter cannot acquire jurisdiction over the person of the employer without the latter
being served with summons, either by personal service or substituted service. If the employer
(which includes the corporate officers) are not served summons, not did they made voluntary
appearance, the proceedings conducted and the decision rendered are without effect on them
(Dimson vs Chua, GR No. 192318, 05 December 2016).

When the employer was always out-of-town, service of summons at the place of business,
amounts to substantial compliance with the rules (Cada vs Time Saver Laundry, G.R. No. 181480, 30
January 2009). A service of summons by registered mail at the employer's place of business was
also considered valid (ibid).

Jurisdiction over the employer could also be acquired by virtue of the latter’s voluntary
appearance. ‘Appearance’ by legal counsel is such ‘voluntary submission to a court’s jurisdiction’.
It may be made not only by actual physical appearance but likewise by the submission of

4
pleadings in compliance with the order of the court or tribunal (Sy vs Fairland Knitcraft Inc, GR No.
182915, 12 December 2011).

Once the service provided by the rules reasonably accomplishes that end, the requirement of
justice is answered, the traditional notion of fair play is satisfied, and due process is served.
Unless the contrary is proven, official duty is presumed to have been performed regularly and
judicial proceedings regularly conducted. This presumption of the regularity of the quasi-judicial
proceedings before DOLE includes the presumption of regularity of service of summons and other
notices (Cada vs Time Saver Laundry, supra).

Conciliation-Mediation Conferences

The notice sets two (2) dates for conference before the Labor Arbiter. The purpose is to allow the
parties the opportunity to come up with a compromise agreement. There is no sanction if neither
of the parties attend the mediation-conciliation conferences. If an amicable settlement is
reached and formalized, the case would be dismissed with prejudice.

Rule V of the 2011 NLRC Rules of Procedure provide that “the compromise agreement shall be approved
by the Labor Arbiter, if after explaining to the parties, particularly to the complainants, the terms,
conditions and consequences thereof, he is satisfied that they understand the agreement, that the same
was entered into freely and voluntarily by them, and that it is not contrary to law, morals, and public
policy.” A compromise agreement shall be final and binding upon the parties and shall have the force
and effect of a judgment rendered by the Labor Arbiter”.

The NLRC Rule of Procedure also provide that counsel or other authorized representatives of
parties shall have authority to bind their clients in all matters of procedure; but they cannot,
without a special power of attorney or express consent, enter into a compromise agreement
with the opposing party in full or partial discharge of a client's claim.

Labor Arbitration Proceedings

Counsels

There is no requirement that the complainant be represented by a lawyer. Employers, whether

an individual or a corporation, may also represent themselves. A union representative, if armed
with authorization, may also represent union members. IBP-accredited legal aid clinics may also
represent employees.

Motion to Dismiss

Prior to the filing of position papers, the employer or any respondent may file a motion to dismiss.
A motion to dismiss is not allowed except on grounds of :

• lack of jurisdiction over the subject matter,

• improper venue,
• res judicata,
• prescription, and
• forum shopping.

It has been held that forum non convenience is not a ground for a motion to dismiss (Pacific
Consultants International Asia vs Schonfeld, GR No. 166920, 19 February 2007).

Submission of Position Papers and Replies

5
The Labor Arbiter shall direct the parties to submit simultaneously their verified position papers
with supporting documents and affidavits. The position papers of the parties shall cover only
those claims and causes of action stated in the complaint or amended complaint, accompanied
by all supporting documents, including the affidavits of witnesses, which shall take the place of
their direct testimony

The employee would have to assert and prove two main facts: employer-employee relationship
and the fact of dismissal.

The employer ‘s defense could either rest on technical grounds (lack of jurisdiction or cause of
action based on absence of employer-employee relationship or absence of labor dispute;
prescription) or on substantive grounds ( the employee was not dismissed because he either
resigned, abandoned his work, or was simply mistaken in thinking he was factually dismissed, or
he was dismissed for lawful cause.

A reply may be filed on a date agreed upon and during a schedule set before the Labor Arbiter.
The reply shall not allege and/or prove facts and any cause or causes of action not referred to
or included in the original or amended complaint or petition or raised in the position paper.

Some Doctrines on Labor Procedures

Nature of Proceedings & Evidence

• It is sufficient that the evidence in labor cases has a “modicum of admissibility” (Asuncion
vs NLRC, GR No. 129329, 31 July 2001). The Labor Arbiter is allowed wide leeway in admitting evidence
including affidavits without the need of cross examination but subject to the appreciation of
their credibility of the witness and their testimony (Rase vs NLRC, GR No. 110637, 07 October 1994).

• Testimonies are to be weighed, not numbered; thus it has been said that a finding of guilt
may be based on the uncorroborated testimony of a single witness when the tribunal finds such
testimony positive and credible (Mitsubishi Motors vs Simon, GR No. 164081, 16 April 2008).

• Evidence which may be hearsay in the strict sense (e.g. photocopies of pay slips, memos,
logbooks, screenshots of video footage or fb posts,) may also be admitted subject to
authentication and careful scrutiny. The veracity of these document are attested through the
verification of the pleadings, by the complainants or by the authorized representative of the
company (usually the Human Resources Manager who has custody of the documents by virtue
of his position and functions). If the authenticity of documents is questioned, the proponent must
submit the original or certified true copies. Otherwise, if an allegation or document by one party
is not specifically denied by the other party, it would be taken as implied admission (Ranara vs
NLRC, GR No. 100969, 14 August 1992; Oriental Mindoro Electric coop vs NLRC, GR No. 111905, 31 July 1995).

• Emails and text messages have been accepted as evidence substantiating testimonies
(Gana vs NLRC, GR No. 164640, 13 June 2008; Simon vs The Results Co., GR No. 249351-52, 29 March 2022).

• It has been held that the Bill of Rights does not protect citizens from unreasonable
searches and seizures perpetrated by private individuals, like employers (Waterous Drug
Corporation vs NLRC, GR No. 113271, 16 October 1997). Thus, hospital items recovered in the lockers
of employees sufficiently established the charge of theft ( Perez vs Medical City, GR No. 150198, 06
March 2006).Likewise, the constitutional proscription on uncounseled statements during custodial
investigation does not apply to statements submitted by the employee during company
investigation (St. Luke's Medical Center vs Sanchez, GR No. 212054, 11 March 2015) or to statements
given by a co-employee given during police investigation (Bughaw vs Treasure Island Industrial Corp.,
GR No., 17315, 28 March 2008).

6
 • Written admissions are binding on the parties (Pangasinan II Electric Coop vs NLRC, GR No,
89876, 13 November 1992) and thus the other party is no longer required to submit proof of the
issue in question (ibid). Admission by silence, or implied admission, is also admissible evidence (
Guinto vs Sto. Nino LLong-Zeny Consignee , GR No. 250987, 29 March 2022).

• If a party refuses or fails to submit evidence in which it has exclusive possession, the
disputable presumption that evidence willfully suppressed would be adverse if produced, can
aptly apply (Opulencia Ice Plant and Storage vs NLRC, GR No. 98368, 15 December 1993).

Burden of proof / burden of evidence

• Since an employee is presumed innocent, he may opt not to submit his own evidence
The waiver to submit evidence does not necessarily mean that the employee impliedly admits
the charges, or that the charges are automatically established. The employer’s case succeeds or
fails on the strength of its evidence and not on the weakness of that adduced by the employee,
in keeping with the principle that the scales of justice should be tilted in favor of the latter in case
of doubt in the evidence presented by them (Blue Sky Trading vs Blas, GR No. 190559, 07 March 2012).

• But once the employer has adduced substantial evidence of the complained wrong
doing, the employee must submit rebuttal evidence or else the employer would be justified in
terminating the employment (Gargoles vs Del Rosario, GR 158583, 10 September 2014l; Grepalife
Employees’ Union vs Grepalife, GR No. 126717, 11 February 1999). Remaining silent would not necessarily
exonerate the employ ( Nokom vs NLRC & Rentokil, GR No. 140043, 18 July 2000; Bughaw vs Treasure Island
Industrial Corp., GR No. 17315, 28 March 2008).

• An employer’s documentary evidence showing the culpability of the employees would

prevail over the uncorroborated explanations and self-serving denials of the latter regarding
their involved in the imputed wrongdoing (Segismundo vs NLRC, GR no. 112203, 13 December 1994).
Denials are weak forms of defenses particularly when they are not substantiated by clear and
convincing evidence (Quinones vs NLRC, GR No. 105763, 14 July 1995)

• Only substantial evidence, or that amount of relevant evidence sufficient for a reasonable
man to justify a conclusion even if other minds equally reasonable would opine otherwise, is the
norm in labor cases including illegal dismissal cases. Proof beyond reasonable doubt is not
required to prove employee wrongdoing. An employee exonerated from criminal charges may
still be held validly dismissed (Golden farms vs Bughao, GR No. 82044, 18 March 1991; ).; JRS Business
Corp. vs NLRC, GR No. 108891, 17 July 1995).

• When employer-employee relationship ( the threshold issue in illegal dismissal cases ) is

denied by the respondent , the employee must submit clear and convincing evidence of the
employment relationship through the 4-fold test and the economic reality test. The burden of
proof is on the employee because he is the proponent of this affirmative allegation (Guinto vs Sto
Nino Long Zeny Consignee, GR No. 250987, 29 March 2022).

• The burden of proof in illegal dismissal cases lies with the employer. While the employee
is the complainant in termination cases (and in ordinary cases should be the one to prove his
cause of action), the Labor Code places the burden of proof on the employer because by
terminating the employee the employer asserts that a lawful cause exists to justify the dismissal.

• But before the employer is tasked with proving the legality of the dismissal, the employee
must first prove the fact of dismissal (Doctor vs NII Enterprises, GR No. 194001, 22 December 2012). Only
then when the dismissal is established that the burden shifts to the employer to prove that the
dismissal was for just and/or authorized cause. The logic is simple—if there is no dismissal, there
can be no question as to its legality or illegality (Galang vs Boei Takeda Chemicals, GR No. 182934, 20
June 2016).

7
 • In cases of resignation, most decisions hold that the burden of proving the voluntariness
of the resignation still lies with the employer since it is an illegal dismissal case (Peñaflor vs Outdoor
Clothing Manuf., GR No. 177114, 13 April 2008). Nonetheless, a significant number of cases also hold
that it is incumbent upon the employee, who alleges duress or deceit in the procurement of his
resignation, since these circumstances vitiating consent are not presumed in law (Gan vs. Galderma
Philippines, Inc. G.R. No. 177167, 17 January 2013).

• The same situation obtain with respect to constructive dismissal. Most decisions place
the burden on the employer ( since it is an illegal dismissal case) , but a substantial number of
decisions also place the legal duty on the employee inasmuch as the employer denies terminating
the former (Italkarat 18 Inc. vs Gerasmio, GR No. 221411, September 2020). The latter theory follows the
rule that the employee must prove the fact of dismissal.

• The prudent course of action for any party is to prove its affirmative propositions (Atienza
vs Saluta, GR No. 233413, 17 June 2019).

• In cases of loss of trust and confidence, the rules are applied differently on managerial
employees and rank and file employees. With respect to rank-and-file personnel, proof of
involvement in the alleged events in question, and that mere uncorroborated assertions and
accusations by the employer will not be sufficient. But as regards a managerial employee (and
personnel occupying positions of trust) the mere existence of a basis for believing that such
employee has breached the trust of his employer would suffice for his dismissal. Proof beyond
reasonable doubt is not required, it being sufficient that responsible for the purported
misconduct, and the nature of his participation therein renders him unworthy of the trust and
confidence demanded of his position (Wesleyan University vs Reyes, GR No. G.R. No. 208321 , 30 July 2014).

• A manager’s failure to report the illegal activities of his subordinates constitutes breach of
trust. The SC held these neglect of duties render him liable under the doctrine of command
responsibility (Lagamayo vs Cullinan Group, GR No. 227718, 11 November 2021).

• In cases of illegal strikes , the services of an ordinary striking worker cannot be

terminated for mere participation in an illegal strike; proof must be adduced showing that he or
she committed illegal acts during the strike. The services of a participating union officer, on the
other hand, may be terminated, not only when he actually commits an illegal act during a strike,
but also if he knowingly participates in an illegal strike. In all cases, the striker must be identified
(Phimco Industries, inc.,vs. Phimco Industries Labor Association , G.R. No. 170830 ,11 August 2010).

• Being tested positive for drug use in the work place is governed by special regulations
particularly the need for DOH-accredited drug testing center and two sets of tests consisting of
initial screening and a confirmatory tests (Nacague vs. Sulpicio Lines, Inc. G.R. No. 172589, 08 August
2010).

• All doubts—whether in the interpretation of the law, company rules, contract or evince--
- must be resolved in favor of labor (Art. 4, Labor Code; Art. 1702, Civil Code; Cataaln vs Genilo, GR no. L-
62391, 08 June 1992; Asuncion vs NLRC, GR no. 129329, 31 July 2001).

Decision of Labor Arbiter

A complaint for illegal dismissal could end in two general possible results: either the complaint is
dismissed or the dismissal of the employee is judged illegal.

A complaint for illegal dismissal may be dismissed, either because:

a. The dismissal is legal, which in turn could be based on:

8
 i. Technical grounds (e.g., prescription; res judicata; forum shopping; immunity
from suit; absence of employee-employee relationship like the complainant being an apprentice,
working scholar, medical resident; partner, or independent contractor; legal disqualification like
absence of AEP or professional license).

ii. Lack of merit (e.g., employee was not dismissed at all; end or expiry of valid
project, seasonal, or fixed term employment; complainant voluntarily resigned or was lawfully
retired; complainant was lawfully dismissed for just and authorized causes including disease ,
disability and other legal causes like act of State).

An employee who was ruled legally dismissed and who reached the mandatory are of 65 while
the case was still pending was denied retirement benefits ( Vilchez vs Free Port Service Corporation, GR
No. 183735, 06 July 2015; see also Piñero vs NLRC, GR No. 149610, 20 August 2004). But “without an express
provision on forfeiture of benefits in a company policy or contractual stipulation under an individual or
collective contract, an employee's rights, benefits, and privileges are not automatically forfeited upon
their dismissal” ( Meralco vs Argentera, GR No. 224729, 08 February 2021).

b. The complaint is dismissed because there was No Dismissal In Fact. This could happen
when the employee mistakenly believes he was dismissed (actual or constructive dismissal) but
fails to prove the fact of dismissal. An example is the employee who was barred from entering
the company premise while still under preventive suspension. In this case, the employee would
be ordered to return to his job without back wages (“ no work, no pay” principle).

An illegally dismissed employee, as judged by the labor tribunals, would generally be entitled to
the twin relief of reinstatement to his position or to a substantially equivalent position and
payment of back wages and other mandatory benefits (SIL pay, 13th month pay) from the time
of dismissal up to actual reinstatement or finality of the decision. The award shall include the
benefits and allowances regularly received by the employee as of the time of the illegal dismissal,
as well as those granted under the Collective Bargaining Agreement (CBA), if any (United Coconut
Chemicals vs Almore, GR No. 201018, 12 July 2017).

Note that with respect to claims and benefits under the CBA, the same could only be granted if
there is proof that the illegally dismissed employees are part of the bargaining unit. The existence
of the CBA must also be established ( Luces vs Coca Cola Phil., GR No. 213816, 02 December 2020).

If reinstatement is no longer possible or impractical (e.g., employee has reached retirement age,
is physically infirm due to old age or medical condition, or there exists manifest strained relations
between the parties) separation benefits equivalent to one (1) month salary for every year of
service would be granted in lieu of reinstatement (as usual, the Supreme Court is not always
consistent on the amount of separation benefits).

An order of reinstatement by the Labor Arbiter is immediately executory, even if the employer
files a timely appeal with the NLRC. There is no need for a writ of execution to be issued by the
Labor Arbiter. The employee may simply show up at the employers premises, armed with the
Labor Arbiter’s decision. The NLRC Rules of Procedure require the employer to submit a report of
compliance within 10 calendar days from receipt of the Labor Arbiter’s decision, disobedience to
which would clearly denotes a refusal to reinstate.

The employer may opt to physically reinstate the employee, or resort to payroll reinstatement.
Should the employee refuse either both kinds of reinstatement, the employees would be entitled
to unpaid salaries for the entire period he was supposed to be reinstated. This means that even
if the illegality of dismissal is reversed on appeal (and with it the award of back wages is deleted),
the employees could still collect on the unpaid salaries. If the employer opts for payroll
reinstatement, and the illegality of the dismissal is reversed on appeal, the employer could not
insist on recovery of the amounts paid for the payroll reinstatement since it had the option to

9
physically reinstate the employees in which case it would have benefitted from their actual
work/services (Bergonio vs South East Asian Airlines, GR No. 195227, 21 April 2014)

Note that reinstatement is not a relief available to illegally dismissed OFWs (they are only
entitled to the salaries for the unexpired portion of their fixed term contracts, plus other benefits
and damages when warranted). Likewise, reinstatement is not a remedy for illegally dismissed
kasambahays who are at most entitled to damages equivalent to 15 days work or, if engaged on
fixed term basis, to salaries for the unexpired portion of the contract (Integrated Labor Assistance
Corporation vs NLRC, GR No. 12335, 19 November 1996).

The decision of the Labor Arbiter is not subject to a motion for reconsideration. Instead, a verified
memorandum of appeal (not a mere notice of appeal as in civil cases) must be filed within 10
calendar days with the NLRC. The memorandum of appeal itself and the appeal bond are filed
with the same Arbitration Branch, not directly with the NLRC. But direct filing with the NLRC
would not necessarily nullify the appeal, if the appeal complies with all the requirements for its
perfection (Far East Bank & Trust Co, vs Chua, G.R. No. 187491, 08 July 2015).

Both the employer and the employee may file appeal. Sometime, a party may file a partial appeal
(e.g., the party may appeal only the illegal dismissal aspect but not the money claims issue).

If no appeal is perfected with the NLRC within the prescribed period , the Labor Arbiter's decision
becomes final and executory after 10 calendar days. A Certificate of Finality will be issued, and
execution process would follow (in case the decision is in favor of the employee). A pre-execution
conference will be scheduled, and the employer may opt for voluntary satisfaction of the
judgment. This would save the employer extra expenses for execution and sheriff’s fees. It is also
possible for the employer to negotiate for instalment payments.

Appeal at National Labor Relations Commission

An appeal to the NLRC may be brought on the following grounds (Art. 229, Labor Code):

1) prima facie evidence of grave abuse of discretion on the part of the Labor Arbiter;
2) the decision, order, or award was secured though fraud or coercion, including graft and
corruption;
3) on pure questions of law;
4) if serious errors in the findings of facts are raised which would cause grave or irreparable
harm or injury to the appellant

In case the Labor Arbiter’s grants monetary award in favor of the employee (back wages,
separation pay, 13th month pay, unpaid salaries, service incentive leave pay, etc), the employer
which files the appeal must also submit an appeal bond (cash , surety or in rare instances property
bond) equivalent to the monetary award (but excluding damages and attorneys fees). This
requirement is mandatory to perfect the appeal. This is a very inconvenient requirement for the
employer. Not only is there time pressure (10 calendar days is short to look for a surety bond),
but there are multiple requirements for a surety bond including an equivalent cash collateral
(usually, a certificate of time deposit would have to be surrendered to the surety company).

An Answer may be filed in response to the memorandum on appeal. No further pleadings are
required to be submitted. Thereafter, the appeal is deemed submitted for resolution.

The NLRC's decision is subject to a motion for reconsideration, within 10 calendar days. A
motion for reconsideration must be anchored on “patent and palpable errors”.

A second motion for reconsideration is not allowed. The NLRC's decision, or its resolution in case
a motion for reconsideration is filed and is eventually denied, becomes final and executory after

10
10 calendar days. A Notice of Finality of Judgment will then be issued, and the case records
remanded to the Labor Arbiter for execution (if the winning party is the employee).

Some Doctrines & Principles on Appellate Proceedings

• An appeal from the Labor Arbiter (LA) to the NLRC must be perfected within 10 calendar
days from receipt of such decisions, awards or orders of the LA (Tolentino-Prieto vs Elvas, GR No.
175251, 30 May 2011). A one-day delay has been allowed in a few cases , on the basis of strong and
compelling reasons such as serving the ends of justice and preventing a grave miscarriage
thereof ( Republic Cement vs Guinmapang, GR No. 168910, 24 August 2009).

• In a judgment involving a monetary award, the appeal shall be perfected only upon (1)
proof of payment of the required appeal fee; (2) posting of a cash or surety bond issued by a
reputable bonding company; and (3) filing of a memorandum of appeal ( Tolentino-Prieto vs Elvas, GR
No. 175251, 30 May 2011) .

• As payment of the requisite appeal fees is an indispensable and jurisdictional requisite

and not a mere technicality of law or procedure, and as the failure to comply with this
requirement renders the decision of the court final, the NLRC may correctly dismiss the defective
appeal. Indeed, appeal is only a statutory privilege and therefore it may only be exercised in the
manner provided by law (Luna vs NLRC, GR No. 116404, 20 March 1997).

• With respect to the bond requirement, the NLRC is allowed to relax the rules when there
is substantial compliance as when , upon finding out that the surety bond it had filed was
spurious, it immediately replaced it with a genuine one. The broader interests of justice and the
desired objective of resolving controversies on the merits demands that the appeal be given due
course(ibid).

• The requirement to file an appeal bond presupposes that the Labor Arbiter’s decision
states the specific amount awarded to the complainant. Without such amount being stated, the
requirement to file an appeal bond does not yet apply.

• The filing of the bond is not only mandatory but also a jurisdictional requirement that
must be complied with in order to confer jurisdiction upon the NLRC. Non-compliance
therewith renders the decision of the LA final and executory. This requirement is intended to
assure the workers that if they prevail in the case, they will receive the money judgment in their
favor upon the dismissal of the employer's appeal. It is intended to discourage employers from
using an appeal to delay or evade their obligation to satisfy their employees' just and lawful
claims. The submission before the NLRC of a Bank Certification, in lieu of posting a cash or surety
bond, cannot be considered as substantial compliance with Article 223 of the Labor Code. The
filing of the appeal bond is a jurisdictional requirement and the rules thereon mandate no less
than a strict construction. For failure to properly post a bond, the appeal should be deemed not
perfected (Quirante vs Oroport Cargo, G.R. No. 209689, 02 December 2015) .

• The NLRC may allow the appeal and the bond may be reduced upon motion by the
employer, subject to the conditions that :(1) the motion to reduce the bond shall be based on
meritorious grounds; and (2) a reasonable amount in relation to the monetary award is posted
by the appellant; otherwise the filing of the motion to reduce bond shall not stop the running of
the period to perfect an appeal. The NLRC has full discretion to grant or deny the motion to
reduce bond, and it may rule on the motion beyond the 10-day period within which to perfect
an appeal. Thus, the appellant always runs the risk of failing to perfect an appeal ( Garcia vs KJ
Commercial, GR No. 196830, 29 February 2012).

• The relaxation of the bond requirement has been allowed under certain exceptional
circumstances in order to resolve controversies on their merits. These circumstances include: (1)

11
fundamental consideration of substantial justice; (2) prevention of miscarriage of justice or of
unjust enrichment; and (3) special circumstances of the case combined with its legal merits, and
the amount and the issue involved (ibid).

• Non-verification of the appeal memorandum has been held to be a formal, not

substantial, defect. It is not fatal to the appeal. Likewise, failure to furnished the other party of
the copy of the appeal memorandum is not also a fatal defect.

• As a general rule, the review powers of the NLRC to resolve appealed cases is limited
to those issues raised on appeal. Those not raised on appeal may no longer be taken up and
discussed by NLRC ( United Placement International vs NLRC, GR Nos. 102081, 12 April 1993) . In
exceptional circumstances, the NLRC and the Court of Appeals may rule upon an unassigned
error to arrive at a complete and just resolution of the case. These include situations involving
matters that are evidently plain or clerical errors within contemplation of law and matters whose
consideration is necessary in arriving at a just decision and complete resolution of case or in
serving the interests of justice or avoiding dispensing piecemeal justice ( Tolentino-Prieto vs Elvas,
GR No. 175251, 30 May 2011).

• Still, the general rule should be the NLRC shall, in cases of perfected appeals, limit itself
to the issues raised on appeal. When a party limited the issue on appeal, necessarily the NLRC
may review only that issue raised. The Labor Code provision, read in its entirety, states that the
NLRC's power to correct errors, whether substantial or formal, may be exercised only in the
determination of a question, matter or controversy within its jurisdiction [Art. 218, Labor
Code]. The law does not provide that the NLRC is totally free from "technical rules of
procedure", but only that the rules of evidence prevailing in courts of law or equity shall not
be controlling in proceedings before the NLRC . This is hardly license for the NLRC to disregard
and violate the implementing rules it has itself promulgated ( Luna vs Allado Construction, GR No.
175251, 30 May 2011).

• As a rule, a party who deliberately adopts a certain theory upon which the case is tried
and decided by the lower tribunal, will not be permitted to change theory on appeal. Points of
law, theories, issues and arguments not brought to the attention of the lower court need not be,
and ordinarily will not be, considered by a reviewing court as these cannot be raised for the first
time at such late stage. It would be unfair to the adverse party who would have no opportunity
to present further evidence material to the new theory, which it could have done had it been
aware oof it at the time of the hearing before the lower tribunal. When the hotel had argued
before that the dismissal was valid, it cannot be allowed on appeal to argue that no dismissal
took place ( Regala vs Manila Hotel, GR No. 245344, 02 December 2020).

• If one party appeals and the other does not, the latter could no longer seek further
affirmative relief from the NLRC inasmuch as the Labor Arbiter’s decision had become final as to
him. Thus, the employee who did not appeal the Labor Arbiter’s decision dismissing the illegal
termination complaint cannot ask the NLRC to overturn this ruling on appeal initiated by the
company on the limited issue of the Labor Arbiter’s grant of financial assistance (Luna vs Allado
Construction, GR No. 175251, 30 May 2011).

• Nonetheless, in cases where the Labor Arbiter does not grant the remedy of
reinstatement but instead orders the award of separation benefits in its lieu, the employer which
files an appeal still runs the risk of the NLRC reversing the Labor Arbiter and subsequently
ordering reinstatement and payment of back wages even during the period of appeal (thereby
giving additional relief to the employee even if the latter does not file a separate appeal).

Case Law:

C.I.C.M Mission Seminaries School of Theology vs Perez ( GR No. 170904, 13 November 13) :

12
 The computation of backwages depends on the final awards adjudged as a
consequence of illegal dismissal, in that:

First, when reinstatement is ordered, the general concept under Article 279 of the
Labor Code, as amended, computes the backwages from the time of dismissal until the
employee’s reinstatement.

Second, when separation pay is ordered in lieu of reinstatement (in the event that this
aspect of the case is disputed) or reinstatement is waived by the employee (in the
event that the payment of separation pay, in lieu, is not disputed), backwages is
computed from the time of dismissal until the finality of the decision ordering
separation pay.

Third, when separation pay is ordered after the finality of the decision ordering the
reinstatement by reason of a supervening event that makes the award of
reinstatement no longer possible (as in the case), backwages is computed from the
time of dismissal until the finality of the decision ordering separation pay.

• It is true that questions of jurisdiction may be raised at any stage. It is also true, however,
that in the interest of fairness, questions challenging the jurisdiction of courts will not be
tolerated if the party questioning such jurisdiction actively participates in the court
proceedings and allows the court to pass judgment on the case, and then questions the
propriety of said judgment after getting an unfavorable decision. The employer had two (2)
chances of raising the issue of jurisdiction: first, in the LA level and second, in the NLRC level.
Unfortunately, it remained silent on the issue of jurisdiction while actively participating in both
tribunals and arguing on the validity of the dismissal. It cannot be allowed to subsequently claim
that the complainant was an independent contractor, and oust the LA and the NLRC of
jurisdiction ( Maxicare vs Contreras, GR No. 194352, 30 January 2013).

• In labor cases, strict adherence to the technical rules of procedure is not required. Time
and again, the SC has allowed evidence to be submitted for the first time on appeal with the
NLRC in the interest of substantial justice. Labor officials should use all reasonable means to
ascertain the facts in each case speedily and objectively, without regard to technicalities of law
or procedure, in the interest of due process. However, this liberal policy should still be subject to
rules of reason and fair play. The liberality of procedural rules is qualified by two requirements:
(1) a party should adequately explain any delay in the submission of evidence; and (2) a party
should sufficiently prove the allegations sought to be proven. The reason for these
requirements is that the liberal application of the rules before quasi-judicial agencies cannot be
used to perpetuate injustice and hamper the just resolution of the case. Neither is the rule on
liberal construction a license to disregard the rules of procedure (Loon v Power Master, G.R. No.
189404, 11 December 2013).

• It is settled that a motion for reconsideration, when allowed to be filed, is an

indispensable condition to the filing of a petition for certiorari. Under Rule 65, the remedy of
filing a special civil action for certiorari is available only when there is no appeal; or any plain,
speedy, and adequate remedy in the ordinary course of law. A "plain" and "adequate remedy" is
a motion for reconsideration of the NLRC’s assailed decision or resolution, the filing of which is
an indispensable condition to the filing of a special civil action for certiorari. This is to give the
lower court the opportunity to correct itself (Del Monte Land Transport Bus Company and, vs. Abergos,
G.R. No. 245344, 02 December 2020).

Court of Appeals

The losing party may elevate the NLRC's decision to the Court of Appeals, within 60 days , under
Rule 65 of the Rules of Court. The sole ground is “grave abuse of discretion”.

13
But unless the Court of Appeals issues a TRO, the Labor Arbiter is bound to proceed with the
execution proceedings and the appeal bond posted (if any) could be garnished to satisfy in whole
or in part any judgment award. The sheriff however may also garnish bank deposits first, instead
of garnishing the surety bond. There is a tactical advantage for the employees to opt for
garnishment of bank deposits than the surety bond. When the sheriff serves the bank with a writ
of garnishment, the bank would not only put on hold the bank deposits but would also suspend
the company’s credit line. This is highly inconvenient to the company, and disrupts its cash flow,
which pressures it to voluntarily pay the winning employees.

Separation benefits are tax exempt. But back wages are not, unless the employees are minimum
wage earners. The NLRC, pursuant to its agreement with the BIR deducts 5% from the total back
wages garnished from the employer (BIR Revenue Memorandum Circular No. 39-2012, 03 August 2012)

The Court of Appeals may sustain or reverse the NLRC. Any party may file a motion for
reconsideration, within 15 days.

Some Certiorari Doctrines in Labor Cases

• Grave abuse of discretion connotes a capricious and whimsical exercise of judgment,

done in a despotic manner by reason of passion or personal hostility, the character of which being
so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform
the duty enjoined by or to act at all in contemplation of law (UST vs Samahang Mangagagawa ng UST,
GR No. 184262, 24 April 2017 ).

• In labor cases, grave abuse of discretion may be ascribed to the NLRC when its findings
and conclusions are not supported by substantial evidence, which refers to that amount of
relevant evidence that a reasonable mind might accept as adequate to justify a conclusion. Thus,
if the NLRC's ruling has basis in the evidence and the applicable law and jurisprudence, then no
grave abuse of discretion exists and the CA should so declare and, accordingly, dismiss the
petition (ibid). However, as an exception, the appellate court may examine and measure the
factual findings of the NLRC if the same are not supported by substantial evidence ( Jarabelo vs
Household Goods Patron Inc, GR No. 223163, 02 December 2020).

• The failure of the Labor arbiter and the NLRC to express the basis for their Decisions was
an evasion of their constitutional duty, an evasion that constituted grave abuse of discretion.
The facts and the law on which decisions are based must be clearly and distinctly expressed (
Miguel vs JCT Group, G.R. No. 15775, 16 March 2005).

• Despite being filed out of time, the Court of Appeals may give due course to the petition
and reviewed factual questions, despite these questions being beyond the scope of certiorari
because the labor tribunals made conflicting findings of fact. . The certiorari court can grant or
deny a petition when the factual findings complained of are not supported by the evidence on
record; when it is necessary to prevent a substantial wrong or to do substantial justice; when the
findings of the NLRC contradict those of the Labor Arbiter; and when necessary to arrive at a
just decision of the case (Robustan Inc vs CA, GR No. 223854, 15 March 2021).

• The petition, when filed by a juridical entity, must be verified by an officer duly
authorized by the board. But the rule is not iron clad. The Supreme Court has recognized the
authority of some corporate officers to sign the verification and certification against forum
shopping even without submission of a board resolution like general manager or acting general
manager ( Mactan-Cebu International Airport Authority v. CA, G.R. No. 139495, 27 November 2000) an
“employment specialist ( Pfizer v. Galan, G.R. No. 143389, 25 May 2001), personnel officer (Novelty
Philippines, Inc. v. CA G.R. No. 146125,17 September 2003) and Chairperson and President (Lepanto
Consolidated Mining Company v. WMC Resources International Pty. Ltd G.R. No. 153885, 24 September 2003).

14
The rationale applied in the foregoing cases is to justify the authority of corporate officers or
representatives of the corporation to sign the verification or certificate against forum shopping,
being "in a position to verify the truthfulness and correctness of the allegations in the petition "(
PCI Travel Corporation vs NLRC, GR No. 154379, 31 October 2008, citing Cagayan Valley Drug Corporation v.
Commissioner of Internal Revenue).

Supreme Court

When the motion for reconsideration is denied by the Court of Appeals, any party may within 15
days file a Petition for Review with the Supreme Court under Rule 45 of the Rules of Court. The
ground would be limited to questions of law raised against the decision of the Court of Appeals,
given n that the Supreme Court is not a tier of facts (Philippine Clearing House Corp. vs Magtaan, GR No.
247775, 10 November 2012).

A question of law arises when there is doubt as to what the law is on a certain state of facts,
while there is a question of fact when the doubt arises as to the truth or falsity of the alleged
facts. For a question to be one of law, the same must not involve an examination of the probative
value of the evidence presented by the litigants or any of them. The resolution of the issue must
rest solely on what the law provides on the given set of circumstances. Once it is clear that the
issue invites a review of the evidence presented, the question posed is one of fact. Thus, the test
of whether a question is one of law or of fact is not the appellation given to such question by the
party raising the same; rather, it is whether the appellate court can determine the issue raised
without reviewing or evaluating the evidence, in which case, it is a question of law; otherwise it
is a question of fact (Republic vs Caraig, GR No. 197389, 12 October 2020)

Under Rule 45 of the Rules of Court, only questions of law may be reviewed by the Supreme
Court in decisions rendered by the Court of Appeals. There are instances, however, where the
Supreme Court departs from this rule and reviews findings of fact so that substantial justice may
be served. The exceptional instances are summarized in (Philippine Global Communications vs De Ver
GR No. 157214, 07 June 2005), where:

(1) the conclusion is a finding grounded entirely on speculation, surmise and conjecture;

(2) the inference made is manifestly mistaken;

(3) there is grave abuse of discretion;

(4) the judgment is based on a misapprehension of facts;

(5) the findings of fact are conflicting;

(6) the Court of Appeals went beyond the issues of the case and its findings are contrary to the
admissions of both appellant and appellees;

(7) the findings of fact of the Court of Appeals are contrary to those of the trial court (labor tribunals) ;

(8) said findings of facts are conclusions without citation of specific evidence on which they are based;

(9) the facts set forth in the petition as well as in the petitioner’s main and reply briefs are not disputed
by the respondents; and

(10) the findings of fact of the Court of Appeals are premised on the supposed absence of evidence and
contradicted by the evidence on record

Review under Rule 45 is discretionary, and in most cases the Supreme Court will dismiss the petition via
minute resolution.

15
Execution

When the case is finally disposed by the Supreme, Court (whether by minute resolution or full-
length decision), the case would remanded to the NLRC and the Labor Arbiter for execution (in
case there order for reinstatement or grant of an award).

It may happen that, when the case is pending before the Court of Appeals or the Supreme Court,
the employee may have been paid the money judgment awarded by the Labor Arbiter or the
NLRC pursuant to a writ of execution, In case the Court of Appeals or the Supreme Court reverses
the labor tribunal's judgment and deletes the monetary ward, the court will order the restitution
of amount erroneously awarded (Intel vs NLRC, GR No. 200575, 05 September 2012).

The remand of the case to the Labor Arbiter, when the termination is deemed illegal, will
oftentimes involved adjustment in the computation of back wages and other monetary award
since the payment of back wages is oftentimes “up to actual reinstatement or “up to the finality
of the [Supreme Court’s] decision voiding the termination.

Note: A compromise for a measly or outrageously low amount ( e.g. P150,000 for a judgment of P2.5 M)
would be a sufficient ground to void the quitclaim ( Arellano vs Powertech Corp. GR No. 150861, 22 January
2008). END

16