The Labor Code defines retrenchment as the
reduction of manpower effected by management to
minimize or prevent losses during periods of
business recession, seasonal market demand
fluctuations or shortage of production
materials.
“To prevent losses” means that the
employer is authorized to reduce manpower
before the anticipated losses
are actually sustained, not
after such losses shall have,
in fact, materialized (G.R. 168719,
2/22/06).
The Supreme Court, however, cautions that
retrenchment must be exercised only as a last
resort. It is justified only when all other less
drastic means have been tried and found
insufficient or inadequate (G.R. 168719,
2/22/06).
- - - o - - -
In trademark disputes…should
Dominancy test or Holistic test apply?
The Intellectual
Property Office (IPO) rejected the application
for registration of the trademark “MACJOY &
DEVICE”, sustaining the opposition of petitioner
McDonald’s Corporation by its ruling that the
predominance of the letter “M” and the prefixes
“Mac/Mc” in both the “MACJOY” and the
“McDONALDS” marks create a confusing similarity
especially since both marks are used on
identical or related products, i.e., food and
ingredients of food.
On appeal, the Court of Appeals reversed the
IPO decision, finding no confusing similarity
between the contending marks.
The Supreme Court did not agree.
Applying the dominancy test instead of holistic
test the Court ruled that the MacDonald’s Marks
and the “MacJoy & Device” trademark are
confusingly similar, reversing the CA ruling and
affirming and reinstating the IPO
rejection of the MacJoy application.
In an earlier case, the SC had in fact
ruled:
“The dominancy test considers the
dominant features in the competing marks in
determining whether they are confusingly
similar. Under the dominancy test, courts give
greater weight to the similarity of the
appearance of the product arising from the
adoption of the dominant features of the
registered mark, disregarding minor differences.
In another case, the SC had further
ruled:
“xxx the totality or holistic test is
contrary to the elementary postulate of the Law
on trademarks and unfair competition that
confusing similarity is to be determined on the
basis of visual, aural, connotative comparisons
and overall impressions engendered by the marks
in controversy as they are encountered in the
market place. xxx.”
Finally, the Court held that
based on the evidence on record, MacDonald has
duly established its ownership of the marks
(G.R. 166115, 2/2/07).
- - - o - - -
“Termination at will” deemed anathema to Philippine law
For resolution by the Court of
Appeals are the twin issues of jurisdiction and
a contract stipulation that employment is one
“at will, terminable by either party xxx.”
Petitioner Joseph Basso is an American
citizen with permanent residence status in the
Philippines. Continental Micronesia is a foreign
airline domiciled in Guam, U.S., licensed to do
business in the Philippines, which hired Basso
as General Manager for Philippine Operations on
January 1, 1992.
Advised that his employment had been
terminated effective January 31, 1996, Basso
filed a complaint for illegal dismissal with
money claims against Continental.
The respondent airline filed a motion to
dismiss on the ground of lack of jurisdiction.
The Labor Arbiter dismissed the complaint, in
effect affirming Continental’s defense of lack
of jurisdiction.
On Basso’s appeal, the NLRC reversed, ruling
that “xxx we are not yet convinced that the
Commission does not have jurisdiction over the
instant case. xxx” and remanding the records to
the Arbitration Branch of origin for further
appropriate proceedings. Before the next Labor
Arbiter to whom the case was raffled,
Continental raised its same defense of the
arbiter’s lack of jurisdiction, and also claimed
that Basso was validly dismissed.
On 24 September
1999, the Labor Arbiter rendered a Decision “xxx
dismissing the present case for LACK OF MERIT
AND JURISDICTION.” On appeal by
Basso to the NLRC, the Commission vacated and
set aside the 24 September 1999 decision ruling,
firstly, that the Labor Arbiter has jurisdiction
over the case, and secondly, that complainant
Basso was dismissed for a just and valid cause,
i.e. for breach of trust under Article 282 of
the Labor Code, Basso’s petition for certiorari
to the Court of Appeals raised the principal
issue of grave abuse of discretion by the NLRC
in ruling that his dismissal is valid for
alleged loss of trust and confidence.
Continental, on the other hand, maintained
its unvarying position that the NLRC has no
jurisdiction over its person and over the
subject matter of the case, and thus, acted with
grave abuse of discretion in issuing the
challenged decision.
This position [on lack
of jurisdiction] “fails to persuade” said the
court. The NLRC has jurisdiction over both the
subject matter of the action and over the
parties in the suit. Basso’s complaint against
Continental is a termination dispute
indisputably cognizable by the labor tribunals
[the NLRC, and Labor Arbiters].
The Arbiters
and the NLRC acquired jurisdiction over the
parties where Basso filed his complaint for
illegal dismissal against the employer airline.
Jurisdiction over Continental was acquired
through the service of summons and complaint to
their Philippine agent. Thereafter, Continental
appeared before, and presented their defenses
and evidence to the Labor Arbiter and the NLRC.
Although Continental
is a foreign corporation domiciled in the U.S.,
it is licensed to do and does business in the
Philippines. The license granted compels a
foreign corporation desiring to do business in
the Philippines to submit itself to the
jurisdiction of Philippine courts for regulation
of its activities in this country.
In the issues
raised on the merits, the court noted that the
required notices of termination served to Basso
specified as sole basis for termination of his
services the provision in their contract that
his employment was one “at will terminable
by either party”.
A
termination at will clause is a nullity,
declared the court, as it runs afoul with public
policy and violates the laws on security of
tenure.” The court was similarly
dismissive of Continental’s belated assertion
before the Labor Arbiter that Basso was after
all validly dismissed for breach of trust -- a
ground sustained by both the Arbiter and the
NLRC. Had Continental wanted to
terminate Basso for loss of trust and
confidence, it should have notified him
accordingly so he could have defended himself
and obtain recourse if he were so minded.
Instead Basso’s working papers clearly specified
that the sole ground for his dismissal was the
exercise of the “termination at will” clause in
the employment contract. In fact
Continental failed to prove its claim of the
acts alleged to be the bases for breach of
trust. Thus, the Court reversed the disputed
NLRC decision, ruling that Basso was illegally
dismissed, and ordering the airline to pay his
separation pay in lieu of reinstatement plus
backwages from date of dismissal until date of
the decision (CA-G.R. SP 83938, CA-G.R. SP
84281, 5/23/06).
“termination at will
clause a nullity” Court of Appeals
- - - o - - -
Residence is not
domicile
Residence is used to
indicate a place of abode, whether permanent or
temporary; domicile denotes a fixed permanent
residence to which when absent, one has the
intention of returning. A man may have a
residence in one place and a domicile in another
(G.R. 159507, 4/19/06).
- - - o - - -
Consummated
actscannot be enjoined
When the acts sought
to be enjoined had already occurred, the
injunctive relief prayed for cannot be granted.
A writ of injunction cannot be issued against
consummated acts ( G.R. 95478, 12/19/90).
- - - o - - -
Case
dismissed for wrong
venue
The Supreme Court
recently upheld the dismissal by the Court of
Appeals of the libel case filed by a former
Solicitor General against the now-defunct Smart
File and its two staffers, ruling that the
Manila Regional Trial Court where the complaint
was filed, had no jurisdiction to try the case
in the first place.
The petitioner [former Solicitor General] had
asserted, initially supported by the Manila RTC,
to hear the case despite the fact that the Smart
File being published in Makati in March 1996
when it printed the alleged libelous
article.
The rule is quite clear, wrote Justice Tinga,
“that such place of printing and first
publication stands as one of only two venues
where a private person may file the complaint
for libel, the other venue being the place of
residence of the offended party at the time the
offense was committed.”
“If the information for libel does not
established with particularity any of these two
venue requirements the trial court would have no
jurisdiction to hear the criminal case,” said
Justice Tinga.
The highest court likewise denied the
petitioner’s argument to allow a more liberal
interpretation of venue for libel cases, arguing
that Smart File used to be published in Manila
before it transferred office in Makati.
“Without the venue requirements under Article
360, a private person induced by a motive to
harass could, similarly as a public officer,
coerce a journalist to defend against a libel
suit filed in the most remote of places,” Tinga
said.
“I disapprove of what you say but I will
defend to the death your right to say it.”–
Voltaire
French Philosopher
- - - o - - -
PRA
lists benefits for foreign
retirees
The Philippine
Retirement Authority (PRA) plans to reduce its
visa processing and visitorial fees as an
additional incentive to attract more foreign
retirees in the Philippines. The PRA will reduce
the visa processing fee from $1,500 to $1,400.
In response to the request of existing members,
the PRA also intends to reduce the visitorial
fee being paid by the retirees who have already
converted their required dollar deposit to
active investment.
PRA Chairman Edgar Aglipay said that the
continuing objective of the agency “is not
only to increase the number of its retirees but
also to maintain their membership and as much as
possible make these retirees stay for life xxx.”
At present, the benefits
granted under the Special Resident Retiree’s
VISA (SRRV) are the following:
1. OPTION OF PERMANENT RESIDENCY
–may live, retire and
invest in the Philippines indefinitely;
2. MULTIPLE-ENTRY PRIVILEGES
–may come in and out
of the Philippines, anytime;
3. EXEMPTED from the Bureau
of Immigration Exit Clearance and Re-Entry
Permits;
4. EXEMPTED from the Bureau
of Immigration’s annual Registration
requirement;
5. EXEMPTED from customs
duties and taxes for the importation of personal
effects and household goods up to
US$7,000.00;
6. EXEMPTED from travel tax,
if stay in the Philippines is less than one year
from the last entry date;
7. EXEMPTED from Special
Study Permit;
8. ASSISTANCE -in
securing/obtaining documents from other
government agencies, such as:
9. DOLE – Alien Employment
Permit
10. LTO - Driver’s
License
11. NB - NBI Clearance
12. DOF - Tax
exemption/extension certificate
13. BIR - Tax identification
number
14. TAX - FREE - remittance
ofannuities and
pensions;
15. GUARANTEED REPATRIATION -
of the REQUISITE DEPOSIT still under
the PRA ACCOUNT.
- - - o - - -
Invalid dismissal
Termination of
employment on the ground of disease is invalid
in the absence of a medical certification by
competent public health
authority (G.R. 142293, 2/27/03).
- - - o - - -
Effect of
merger
When two corporations
merge, the surviving corporation assumes all
liabilities and obligations of the absorbed
entity (G.R. 89007, citing Section 88 of the
Corporation Code).
- - - o - - -
Trademark
or tradename
Simply put, said the Supreme
Court, a tradename refers to the
business and its goodwill; a trademark
refers to the goods (G.R. 120900, 7/10/2000).
- - - o - - -
Defective,
not illegal
Retrenchment effected
without the required notices is merely
defective, not illegal. In such a case the
employer is required to pay indemnity to the
employee concerned (G.R. 115394).
- - - o - - -
Penal laws should be
construed strictly
Penal statutes may not
be enlarged by implication or intent beyond the
fair meaning of the language used. Thus, words
and phrases in a statute are to be construed
according to their common meaning and accepted
usage (G.R. 155076, 2/27/2006).
- - - o - - -
NLRC may issue writ of certiorari on
“abuse of discretion”
by Labor Arbiter
Petitioners were adjudged guilty by the Labor
Arbiter of illegal dismissal and non-payment of
money claims filed by its former security
personnel. As petitioners failed to seasonably
file an appeal with the National Labor Relations
Commission, the Arbiter’s decision became final
and executory resulting in the issuance of a
writ of execution upon motion of the
respondents.
Petitioners then filed motions to recompute
the money claims as awarded as well as lift the
notices of garnishment on petitioner’s
receivables. Following the Arbiter’s denial of
these motions, petitioners filed an appeal
before the NLRC assailing the denial of their
motion to recompute money claims and the
Arbiter’s order releasing the garnished funds to
respondents. The NLRC dismissed the appeal as
well as a subsequent petition for injunction
against the implementation of the writ of
execution issued by the Arbiter on 25 August
2000.
On 14 May 2003, a 2nd alias writ of execution
was issued by Arbiter for the satisfaction of
P2,024,347.00 “representing unpaid accrued
backwages x x x including attorney’s fees plus
execution fee.” On 20 May 2003, petitioners
filed before the Court of Appeals a petition for
certiorari with prayer for issuance of a
temporary restraining order and/or a writ of
preliminary injunction. On 12 June 2003, the
Court of Appeals issued a temporary restraining
order enjoining the enforcement of the Arbiter’s
order subject of the assailed alias writ of
execution. But in its decision on the merits
dated 31 July 2003, the Court of Appeals
dismissed the petition, and affirmed the order
of the Arbiter for payment of backwages and
monetary claims of the respondents.
Moreover, the CA faulted petitioners for
immediately filing their petition for certiorari
before the Court without first seeking recourse
from the NLRC in violation not only of the Rules
of Procedure of that body but also of the
doctrine of exhaustion of administrative
remedies.
At the Supreme Court,
petitioner contend that the NLRC Rules of
Procedure (Rule III, Sec. 4) do not provide for
any remedy or procedure for disputing the order
granting a writ of execution nor the issuance of
a writ of certiorari: Hence, petitioners’
recourse to Section 1, Rule 41 of the Revised
Rules of Court under which an aggrieved party
may file a special action for certiorari to the
Court of Appeals under Rule 65. The SC Court did
not agree. The Court pointed out citing Air
Services Cooperative v. Court of Appeals, that
under Article 223 of the Labor Code, prima
facie evidence of abuse of discretion by
the Labor Arbiter - - -
“xxx is admittedly within the
ambit of certiorari and its grant thereof to the
NLRC indicates the lawmakers’ intention to
broaden the meaning of appeal as that term is
used in the Code..”
The Court
likewise upheld the observation of the Court of
Appeals that “xxx being the
administrative agency especially tasked with the
review of labor cases, the NLRC is in a far
better position to determine whether
petitioners’ grounds for certiorari are
meritorious” (G.R. 160871, 2/6/06).
- - - o - - -
Commission
not subject To withholding tax
Commission accruing to
a foreign broker for a generating export sales
abroad on behalf of the Philippine exporter is
not subject to withholding tax since the
commission earned is not deemed income from an
activity in the Philippines, and hence, not
subject to Philippines income tax (Sec. 3b (c)
(3), Tax Code).
- - - o - - -
Certification against
forum shopping
The 1997 Rules of Civil Procedure distinctly
provides that the required certification against
forum shopping is intended to cover an
“initiatory pleading,” meaning an
“incipient application of a party asserting a
claim for relief” (G.R. 153171, 5/4/06)
- - - o - - -
Certification
by counsel and not by the principal party
himself is no certification at all (G.R. 140862,
4/25/06).
In the same vein, where the city mayor filed
the suit on behalf of the city, he must
necessarily sign the certification against forum
shopping not the city Legal Officer (G.R.
145004, 5/3/06).
- - - o - - -
Project completion
report required
Failure of the
employer to submit project completion report to
the nearest employment office of the DOLE, the
termination of the workers claimed as project
employees at the time it completed the project,
is proof that complainants were not project
employees (G.R. 165910, 4/10/06).
