Respondent [complainant] was initially hired by petitioner [employer] as Professional Service Representative. He was later promoted and assigned in Isabela as Acting District Manager. In August 1995, he was transferred to Manila pending investigation of his subordinate and physicians in Region II involved in a sales discount dispute. He was then placed under “floating status” and assigned duties not connected with his position. His transfer to Manila resulted in diminution of his salary as his per diem was reduced from P13,194.00 to P2,299.00.
In May 1998 the respondent filed a complaint for illegal dismissal and damages against the petitioner company. The Labor Arbiter ruled that complainant was constructively dismissed which decision was affirmed by the Court of Appeals.
In constructive dismissal, the employer has to prove that the transfer of an employee is for just and valid grounds. If the employer cannot overcome this burden of proof, the employee’s transfer is deemed unlawful constructive dismissal. The employer failed to discharge this burden, declared the Court and hence, the employee should be reinstated with full benefits (G.R. 146653, 2/20/06).
The undertaking which petitioner signed, provides that in case of failure to comply with the promise not to accept competitive employment within one year from the given date, the respondent [employer] will have a cause of action against petitioner for “protection in the courts of law.”
The words “cause of action for protection in the courts of law” are so broad that they may also include a cause of action for prohibitory and mandatory injunction against petitioner, specific performance plus damages, or a damage suit (for actual, moral and/or exemplary damages) all inclusive of the restitution of the P963,619.28 which petitioner received from the employer. However, the Undertaking and the Release, Waiver and Quitclaim do not provide for the automatic forfeiture of the benefits petitioner received under the SRP upon his breach of said deeds.
It is settled, said the Court, that actual damages may be awarded for breach of contract. Actual damages are primarily intended to replace the loss covered by said breach but they cannot be presumed. Even if petitioner had admitted to having breached the Undertaking respondent must still prove that it suffered damages and the amount thereof. In determining the amount of damages, the Court cannot rely on mere assertions, speculations, conjectures or guesswork but must depend on competent proof and on the best evidence obtainable regarding the actual amount of losses.
On the assumption that the competitive employment ban in the undertaking is valid, petitioner is not automatically obliged to return the P963,619.28 he received from respondent. The latter is still burdened to prove its entitlement to the aforesaid amount by producing the best evidence to support its case (G.R. 163269, 4/19/06).
A seafarer, not being a regular employee, is not entitled to separation or termination pay (453 SCRA 381).
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Casual worker becomes regular after one-year service
The status of regular employment attaches to the casual worker on the day immediately after the end of his first year of service (464 SCRA 544).
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Probationary worker must be furnished job standards
Where an employee hired on a probationary basis was not informed of the standards that would qualify her as a regular employee, she is deemed to have been hired from day one as a regular employee (461 SCRA 272).
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What is meant by “wage distortion”?
A wage distortion results where the prescribed wage increase effectively erases the quantitative differences in wage rates between or among employee groups based on skills, length of service or other logical bases of wage differentiation.
Where the increase under WO NCR-13 results in distortions in the wage structure in the establishment, the same shall be corrected in accordance with the procedure under Article 12 of the Labor Code.
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Customs broker is also a common carrier
The petitioner--Sanchez Brokerage--contends that contrary to the appellate court ruling, it is not a common carrier but a customs broker whose principal function is to prepare the correct customs declaration and proper shipping documents: This claim, ruled the Court, is without merit. Article 1732 of the Civil Code does not distinguish between one whose principal business activity is the carrying of goods and one who does such carrying only as an ancillary activity. It suffices, said the Court, that petitioner undertakes to deliver the goods for pecuniary considerations.
As a common carrier, petitioner is mandated by law to exercise extraordinary diligence in the vigilance over the goods it transports. In the event that the goods are lost, destroyed or deteriorated, it is presumed to have been at fault or to have acted negligently, unless it proves that it observed extraordinary diligence. In this case, it was proven that petitioner received the cargoes from the airport warehouse in good order and condition, but upon delivery some of the cargoes were found to be in bad order. Thus, the burden of proof is on the petitioner that it exercised extraordinary diligence in the carriage of the goods which it failed to do. Hence, its presumed negligence under the Civil Code remains unrebutted (G.R. 147079, 12/21/04).
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Three-months salary or pay for unexpired portion of contract?
In affirming the decisions of the Labor Arbiter and the NLRC that respondent contract worker was illegally dismissed, the Court of Appeals reiterated the well-settled rule that –”if the contract is for a fixed term and the employee is dismissed without just cause, he is entitled to the payment of his salaries corresponding to the unexpired portion of his contract.”
In this case, as the contract worker’s contract was for one year and her dismissal was not for a just cause, she is entitled to her salaries corresponding to the unexpired portion of her contract. Hence, the NLRC, said the CA, correctly awarded the dismissed worker the amount equivalent to the unexpired portion of her contract.
In their petition for review by the Supreme Court, the petitioners asserted that CA erred in interpreting Section 10 of RA 8042 on the amount of salary that should be awarded to an illegally dismissed overseas contract worker. Sec. 10 of RA 8042 partly provides:
“In case of termination of overseas employment without just, valid or authorized xxx the worker should be entitled to the full reimbursement of his placement fee xxx plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less.”
The law clearly reveals, said the Court, that the choice of which amount to award an illegally dismissed overseas contract worker comes up only when the employment contract has a term of one (1) year or more. Since the record shows that the worker’s actual service was only for twenty one (21) days, she is entitled only to three (3) months salary which is obviously less than her salaries for the unexpired portion of her one-year employment contract (G.R. 148407, 11/12/03).
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Nature of job determines whether employment is regular or casual
The terms of a written employment contract notwithstanding, an employee is entitled to regular employment status if he/she is engaged to do work or activities which “are usually necessary or desirable in the usual business or trade of the employer”. Thus, workers hired as packers, drivers and utilitymen/carpenters by a company engaged in the moving and storage of goods owned by military personnel within the U.S. bases are regular rather than casual employees. As such regular employees, they cannot be dismissed except for just cause and after appropriate notice and investigation.
Citing Article 280 of the Labor Code, the Supreme Court reiterated the exceptions to the rule on regular employment, namely ---
1. “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 employees; or
2. “where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.”
Where any employee has, however, rendered at least one (1) year of service, whether such service is continuous or broken, such employee shall be deemed a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists (G.R. No. 96608-09, May 20, 1991).
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Privileges granted to employees not subject to income tax
Facilities or privileges granted or offered by an employer to its employees – such as entertainment, medical services, housing subsidy, so-called “courtesy” discounts on purchases of company products - -are generally not considered as compensation income subject to the withholding tax, provided that such facilities or privileges -- are of relatively small value, and are offered or granted by the employer merely as a means of promoting the health, goodwill, contentment or efficiency of its employees. This ruling of the BIR was issued on the question of whether a P500 monthly Housing Assistance offered by the Company to its employees who will opt to relocate in Laguna to be within easy reach of the Company’s plant in Sta. Rosa, Laguna, is compensation income subject to income tax. (Section 2 (a) of Revenue Regulations 6-82 as amended by Revenue Regulations 12-86, implementing Section 72 of the Tax Code).
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Employer-employee relationship for a limited purpose
In legitimate job contracting the law creates an employer-employee relationship for a limited purpose, i.e., to ensure that the employees are paid their wages. Other than that the principal employer is not responsible for any other claim by the employees, such as backwages, and separation pay (418 SCRA 404).
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Essence of due process
Where opportunity to be heard, either through oral arguments,or pleadings, is accorded, there is no denial of procedural due process (G.R. 168498, 6/16/06, quoting Batongbakal v. Zafra).
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Premise of loss of confidence
Loss of confidence, as a just cause for termination of employment, is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence (Cruz vs. Coca-Cola Bottlers, 460 SCRA 340).
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When death of seafarer is compensable
The POEA Standard Employment contract for Filipino seafarers clearly mandates that the only condition for compensability of a seafarer’s death is that such death occurs during the term of his contract of employment (467 SCRA 301).
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Labor contracts are not transferable
Unless expressly assumed, labor contracts like collective bargaining agreements are not enforceable against the transferee of an enterprise. Labor contracts are in personam and thus binding only between the parties (473 SCRA 690).
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Legal effects of consignation
Absent a creditor-debtor relationship between the parties consignation conveys no legal effects that debtor can avail of (G.R. 142882, 5/2/06).
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Waiver of reinstatement, money claims needs individual consent of claimants
In a decision rendered on May 8, 1990, the NLRC ordered the reinstatement of the union members to their former or equivalent position while in case of the union board members and shop stewards, the employer was given the option to dismiss them subject to the payment of separation pay. Pending execution of the decision, the union officers and their counsel entered into a compromise agreement with the company whereby not only the union officers, board members and shop stewards were deemed dismissed but also the union members subject to the payment of separation pay and financial assistance. Out of a total of 114 affected employees, 12 challenged the compromise agreement insisting that they should be reinstated as per the May 8, 1990 decision, rather than be dismissed with payment of separation pay on the ground that the agreement was made without their express consent or special power of attorney to the Union.
The Supreme Court agreed, holding that the waiver of reinstatement, like waivers of money claims, must be regarded as a personal right which must be exercised personally by the workers themselves.
Reiterating its earlier rulings, the Court said that “neither the officers nor the majority of the union had any authority to waive the accrued rights pertaining to the dissenting minority members x x x”. Thus, the Court held that the union members who did not sign the Agreement nor avail of its benefits should be reinstated (G.R. No. 105710, February 23, 1995).
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Payments forfeited for non-payment of amortizations
Under a contract to sell of a subdivision lot, the petitioners [buyer] committed to pay the contract price of P189,810 in 60 monthly amortizations. The buyer, however, stopped payments after having paid only about 15 installments.
Citing RA 6552, the Court said that where less than two years of installments have been paid, the law grants the vendee a grace period of not less than 60 days from the date the installment became due to pay the amortizations. If the vendee fails to pay at the end of the grace period, the vendor may cancel the contract 30 days after receipt by the vendee of the notice of cancellation.
The contract to sell similarly grants the vendor the option to cancel the contract and forfeit the payments made should the vendee fail the amortizations within 60 days from the due date. Despite the lapse of more than the 60-day grace period, the petitioners continued to default in their obligation. Thus, the vendor corporation opted to cancel the contract with forfeiture of the payments made.
Petitioners seek protection under PD 957 which provides non-forfeiture of payments due to failure of the owner to develop the subdivision. But the ocular inspection report showed substantial compliance by the owner in the development of the subdivision. Hence, the Court affirmed the CA ruling dismissing the certiorari petition (G.R. 147912, 4/26/06).
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Voluntary resignation inconsistent with alleged dismissal
Petitioners are managerial employees whose positions will be eliminated under the company’s reorganization plan. They were offered the options of termination of employment with separation benefits, or voluntary resignation with more benefits.
Petitioners accepted the second option with the improved terms and submitted their resignation letters with waiver and quitclaim.
About a week later, petitioners filed a complaint for illegal dismissal which was sustained by the Labor Arbiter. On appeal to the NLRC, the Commission reversed, upholding that the resignation with improved terms was voluntary. Absent any showing of fraud or coercion, voluntary resignation is inconsistent with alleged illegal dismissal.
The Supreme Court agreed: the petitioners voluntarily resigned for a valuable consideration, and the quitclaim they executed amounts to a valid and binding compromise agreement (G.R. 93059, Samaniego et.al. v. NLRC).
