3rd DIVISION G.R. No. 171275 July 13, 2009 VICTOR METEORO, et.al. vs. CREATIVE CREATURES, INC., NACHURA, J.:
which body/tribunal has jurisdiction over petitioners’ money claims --- the DOLE Secretary/duly authorized representative, or the NLRC?
The instant case falls within the exclusive jurisdiction of the NLRC.
The DOLE Secretary and her authorized representatives, such as the DOLE-NCR Regional Director, have jurisdiction to enforce compliance with labor standards laws under Art. 128. The visitorial and enforcement powers of the Secretary, exercised through his representatives, encompass compliance with all labor standards laws and other labor legislation, regardless of the amount of the claims filed by workers.
But the power of the Regional Director to hear and decide the monetary claims of employees is not absolute. The last sentence of Article 128 (b) of the Labor Code, (the "exception clause,") provides when the Regional Director may be divested of jurisdiction over a labor standards case. Under prevailing jurisprudence, the following elements, must all concur:
(a) that the employer contests the findings of the labor regulations officer and raises issues thereon;
(b) that in order to resolve such issues, there is a need to examine evidentiary matters; and
(c) that such matters are not verifiable in the normal course of inspection.24
In the present case, ar the earliest opportunity, respondent registered its objection to the findings of the labor inspector, reiterated in its position paper that petitioners were not its employees. It questioned the Regional Director’s jurisdiction because of the absence of an employer-employee relationship. Petitioner raised the same arguments before the Secretary of Labor and the appellate court. It is clear that respondent contested and continues to contest the findings and conclusions of the labor inspector.
To resolve the issue raised by respondent there is need to examine evidentiary matters, applying the four-fold test. Any competent and relevant evidence to prove the relationship may be admitted. Identification cards, cash vouchers, social security registration, appointment letters or employment contracts, payrolls, organization charts, and personnel lists, serve as evidence of employee status.These are readily available, as they are in the possession of either the employee or the employer; and may easily be looked into by the labor inspector (in the course of inspection) when confronted with the question of the existence or absence of an employer-employee relationship.
Some businessmen try to avoid an employer-employee relationship from arising, requiring need for other evidence to ascertain the true nature of the parties’ relationship.
In the case at bar, whether or not petitioners were independent contractors/project employees/free lance workers is a question of fact requiring the examination of evidentiary matters not verifiable in the normal course of inspection. While the contracts of independent services and check vouchers, were kept and maintained in or about the premises of the workplace and verifiable in the course of inspection, respondent claimed that petitioners were not precluded from working outside the service contracts they had entered into with it ; and that there were instances when petitioners abandoned their service contracts with the respondent, because they had to work on another project with a different company. The resolution of these issues requires the examination of evidentiary matters not verifiable in the normal course of inspection, and the Regional Director and the Secretary of Labor are divested of jurisdiction to decide the case.
"To contest" means to raise questions as to the amounts complained of or the absence of violation of labor standards laws; or, as in the instant case, issues as to the complainants’ right to labor standards benefits. Raising lack of jurisdiction alone is not the "contest" contemplated by the exception clause. The employer must contest the findings of the labor regulations officer during the hearing or after receipt of the notice of inspection results. The key requirement for the Regional Director and the DOLE Secretary to be divested of jurisdiction is that the evidentiary matters be not verifiable in the course of inspection. Where the evidence presented was verifiable in the normal course of inspection, even if presented belatedly by the employer, the Regional Director, and later the DOLE Secretary, may still examine it; and these officers are not divested of jurisdiction to decide the case.
Respondent contested the findings of the labor inspector during and after the inspection and raised issues the resolution of which necessitated the examination of evidentiary matters not verifiable in the normal course of inspection. Hence, the Regional Director was divested of jurisdiction and should have endorsed the case to the appropriate Arbitration Branch of the NLRC.
Tuesday, October 25, 2011
2nd DIVISION G.R. No. 152396 November 20, 2007 EX-BATAAN VETERANS SECURITY AGENCY, INC., vs THE SECRETARY OF LABOR BIENVENIDO E. LAGUESMA, et.al. CARPIO, J. petition for review1 with prayer for the issuance of a temporary restraining order or writ of preliminary injunction
1. On the Regional Director's Jurisdiction over EBVSAI
The Rules on the Disposition of Labor Standards Cases in the Regional Offices19 (rules) specifically state that notices and copies of orders shall be served on the parties or their duly authorized representatives at their last known address or, if represented by counsel, through the latter. The Rules of Court apply in a suppletory character only in the absence of any applicable provision.
EBVSAI does not deny having received the notices of hearing. As such, the Regional Director acquired jurisdiction and EBVSAI can no longer question it.
2. On the Regional Director's Jurisdiction over the Money Claims
Article 128 of the Labor Code(as amended by R.A. No. 7730) excludes from its coverage Articles 129 and 217 of the Labor Code by the phrase "(N)otwithstanding the provisions of Articles 129 and 217of this Code to the contrary x x x". It strengthens the power of the Secretary of Labor or his duly authorized representatives to issue compliance orders to give effect to the labor standards provisions of the Code and other labor legislation based on the findings of labor employment and enforcement officer or industrial safety engineer made in the course of inspection.
We held likewise in Cirineo Bowling Plaza, Inc. v. Sensing, where the Court said that "the visitorial and enforcement powers of the DOLE Regional Director to order and enforce compliance with labor standard laws can be exercised even where the individual claim exceeds P5,000."
2. It is when the labor standards case is covered by the exception clause of Article 128(b) of the Labor Code, that the Regional Director will have to endorse the case to the appropriate Arbitration Branch of the NLRC. The following elements must be present: (a) that the employer contests the findings of the labor regulations officer and raises issues thereon; (b) that in order to resolve such issues, there is a need to examine evidentiary matters; and (c) that such matters are not verifiable in the normal course of inspection. The employer shall raise such objections during the hearing of the case or any time after receiving the notice of inspection results.
The Regional Director validly assumed jurisdiction because such jurisdiction was exercised in accordance with Article 128(b) of the Labor Code and the case does not fall under the exception clause.
EBVSAI did not contest the findings of the labor regulations officer during the hearing or after receipt of the notice of inspection results- it did so only in its supplemental motion for reconsideration before the Regional Director. But the Regional Director and the Secretary considered EBVSAI's documentary evidence and found it wanting. The Secretary of Labor also doubted the veracity and authenticity of EBVSAI's documentary evidence.
The evidence of EBVSAI were verifiable in the normal course of inspection because all employment records of the employees should be kept and maintained in or about the premises of the workplace, the establishment where private respondents were regularly assigned.27
1. On the Regional Director's Jurisdiction over EBVSAI
The Rules on the Disposition of Labor Standards Cases in the Regional Offices19 (rules) specifically state that notices and copies of orders shall be served on the parties or their duly authorized representatives at their last known address or, if represented by counsel, through the latter. The Rules of Court apply in a suppletory character only in the absence of any applicable provision.
EBVSAI does not deny having received the notices of hearing. As such, the Regional Director acquired jurisdiction and EBVSAI can no longer question it.
2. On the Regional Director's Jurisdiction over the Money Claims
Article 128 of the Labor Code(as amended by R.A. No. 7730) excludes from its coverage Articles 129 and 217 of the Labor Code by the phrase "(N)otwithstanding the provisions of Articles 129 and 217of this Code to the contrary x x x". It strengthens the power of the Secretary of Labor or his duly authorized representatives to issue compliance orders to give effect to the labor standards provisions of the Code and other labor legislation based on the findings of labor employment and enforcement officer or industrial safety engineer made in the course of inspection.
We held likewise in Cirineo Bowling Plaza, Inc. v. Sensing, where the Court said that "the visitorial and enforcement powers of the DOLE Regional Director to order and enforce compliance with labor standard laws can be exercised even where the individual claim exceeds P5,000."
2. It is when the labor standards case is covered by the exception clause of Article 128(b) of the Labor Code, that the Regional Director will have to endorse the case to the appropriate Arbitration Branch of the NLRC. The following elements must be present: (a) that the employer contests the findings of the labor regulations officer and raises issues thereon; (b) that in order to resolve such issues, there is a need to examine evidentiary matters; and (c) that such matters are not verifiable in the normal course of inspection. The employer shall raise such objections during the hearing of the case or any time after receiving the notice of inspection results.
The Regional Director validly assumed jurisdiction because such jurisdiction was exercised in accordance with Article 128(b) of the Labor Code and the case does not fall under the exception clause.
EBVSAI did not contest the findings of the labor regulations officer during the hearing or after receipt of the notice of inspection results- it did so only in its supplemental motion for reconsideration before the Regional Director. But the Regional Director and the Secretary considered EBVSAI's documentary evidence and found it wanting. The Secretary of Labor also doubted the veracity and authenticity of EBVSAI's documentary evidence.
The evidence of EBVSAI were verifiable in the normal course of inspection because all employment records of the employees should be kept and maintained in or about the premises of the workplace, the establishment where private respondents were regularly assigned.27
Sunday, October 23, 2011
COOPERATIVE AS A CONTRACOR
COOPERATIVE AS A CONTRACOR
OLDARICO S. TRAVEÑO, et.al. -vs- BOBONGON BANANA GROWERS MULTI-PURPOSE COOPERATIVE, TIMOG AGRICULTURAL CORPORATION, DIAMOND FARMS, INC., and DOLE ASIA PHILIPPINES, G.R. No. 164205 September 3, 2009 CARPIO MORALES, J.:
Oldarico Traveño and his 16 co-petitionersclaim to have been hired in 1992 by Timog Agricultural Corporation (TACOR) and Diamond Farms, Inc. (DFI), to work at a banana plantation at Davao Del Norte, converted from rice and corn lands, whose owners agreed to the conversion upon being convinced that TACOR and DFI could provide the needed capital, expertise, and equipment. Petitioners helped prepare the lands and planted the banana suckers.
While they worked under the direct control of supervisors assigned by TACOR and DFI, these companies used different schemes to make it appear that they were hired through independent contractors; that despite the successive changes in the names of their employers they continued to perform the same work under the direct control of TACOR and DFI supervisors. Under the last scheme adopted by these companies, the nominal individual contractors were required to join a cooperative and became members of Bobongon Banana Growers Multi-purpose Cooperative (the Cooperative).
The Labor Arbiter, found the Cooperative guilty of illegal dismissal, a decision sustained by the Labor Arbiter.
Instead of remanding the case to the appellate court, the Supreme Court decided to resolve the issue whether DFI (with which TACOR had been merged) and DPI should be held solidarily liable with the Cooperative for petitioners’ illegal dismissal and money claims.
Job contracting or subcontracting refers to an arrangement where a principal agrees to farm out with a contractor or subcontractor the performance of a specific job, work or service within a definite or predetermined period, regardless of whether such job, work or service is to be performed or completed within or outside the premises of the principal. This arrangement does not exist in the present case.
DFI did not farm out to the Cooperative the performance of a specific job, work, or service. It entered into a Banana Production and Purchase Agreement with the Cooperative, where the Cooperative would handle and fund the production of bananas and operation of the plantation covering lands owned by its members , while DFI committed to provide financial and technical assistance, supply of information and equipment in growing, packing, and shipping bananas. The Cooperative would hire its own workers and pay their wages and benefits, and sell exclusively to DFI all export quality bananas that met the specifications.
The Contract between the Cooperative and DFI, is a joint venture. The rules on job contracting are inappropriate. The Court abides by the autonomy of contracts principle under Article 1306 of the Civil Code.
The Petitioners’ claim fails the four-fold test.
On selection and engagement, DFI has a total lack of knowledge on who actually were engaged by the Cooperative to work in the banana plantation. No employment contract was submitted to substantiate how petitioners were hired and by whom.
On the payment of wages, it was the Cooperative that paid the same.
On the power of dismissal, and the power of control, both were retained by the Cooperative.
There being no employer-employee relationship between petitioners and the Cooperative’s co-respondents, the latter are not solidarily liable with the Cooperative for petitioners’ illegal dismissal and money claims.
The social justice policy of labor laws and the Constitution is not meant to be oppressive of capital.
OLDARICO S. TRAVEÑO, et.al. -vs- BOBONGON BANANA GROWERS MULTI-PURPOSE COOPERATIVE, TIMOG AGRICULTURAL CORPORATION, DIAMOND FARMS, INC., and DOLE ASIA PHILIPPINES, G.R. No. 164205 September 3, 2009 CARPIO MORALES, J.:
Oldarico Traveño and his 16 co-petitionersclaim to have been hired in 1992 by Timog Agricultural Corporation (TACOR) and Diamond Farms, Inc. (DFI), to work at a banana plantation at Davao Del Norte, converted from rice and corn lands, whose owners agreed to the conversion upon being convinced that TACOR and DFI could provide the needed capital, expertise, and equipment. Petitioners helped prepare the lands and planted the banana suckers.
While they worked under the direct control of supervisors assigned by TACOR and DFI, these companies used different schemes to make it appear that they were hired through independent contractors; that despite the successive changes in the names of their employers they continued to perform the same work under the direct control of TACOR and DFI supervisors. Under the last scheme adopted by these companies, the nominal individual contractors were required to join a cooperative and became members of Bobongon Banana Growers Multi-purpose Cooperative (the Cooperative).
The Labor Arbiter, found the Cooperative guilty of illegal dismissal, a decision sustained by the Labor Arbiter.
Instead of remanding the case to the appellate court, the Supreme Court decided to resolve the issue whether DFI (with which TACOR had been merged) and DPI should be held solidarily liable with the Cooperative for petitioners’ illegal dismissal and money claims.
Job contracting or subcontracting refers to an arrangement where a principal agrees to farm out with a contractor or subcontractor the performance of a specific job, work or service within a definite or predetermined period, regardless of whether such job, work or service is to be performed or completed within or outside the premises of the principal. This arrangement does not exist in the present case.
DFI did not farm out to the Cooperative the performance of a specific job, work, or service. It entered into a Banana Production and Purchase Agreement with the Cooperative, where the Cooperative would handle and fund the production of bananas and operation of the plantation covering lands owned by its members , while DFI committed to provide financial and technical assistance, supply of information and equipment in growing, packing, and shipping bananas. The Cooperative would hire its own workers and pay their wages and benefits, and sell exclusively to DFI all export quality bananas that met the specifications.
The Contract between the Cooperative and DFI, is a joint venture. The rules on job contracting are inappropriate. The Court abides by the autonomy of contracts principle under Article 1306 of the Civil Code.
The Petitioners’ claim fails the four-fold test.
On selection and engagement, DFI has a total lack of knowledge on who actually were engaged by the Cooperative to work in the banana plantation. No employment contract was submitted to substantiate how petitioners were hired and by whom.
On the payment of wages, it was the Cooperative that paid the same.
On the power of dismissal, and the power of control, both were retained by the Cooperative.
There being no employer-employee relationship between petitioners and the Cooperative’s co-respondents, the latter are not solidarily liable with the Cooperative for petitioners’ illegal dismissal and money claims.
The social justice policy of labor laws and the Constitution is not meant to be oppressive of capital.
BADGES OF A LABOR-ONLY CONTRACTOR
BADGES OF A LABOR-ONLY CONTRACTOR
SECOND DIVISION SAN MIGUEL CORPORATION, -vs- VICENTE B. SEMILLANO, et.al. G.R. No. 164257 July 5, 2010 MENDOZA, J.: this petition for review on certiorari.
AMPCO hired Vicente et al on different dates assigned to work in SMC’s Bottling Plant situated at Brgy. Granada Sta. Fe, Bacolod City, in order to perform the following tasks:
segregating bottles
removing dirt
filing them in designated places
loading and unloading bottles to and from the delivery trucks,and
performing other tasks as ordered by SMC’s officers.
They were required to work inside the SMC premises using SMC’s equipment. They rendered service with SMC for more than 6 months.
Subsequently, SMC entered into a Contract of Services with AMPCO designating the latter as the employer of Vicente, et al. Vicente et al. failed to claim the rights & benefits ordinarily accorded a regular SMC employee. They were not paid their 13th month pay. On June 6, 1995, they were not allowed to enter the SMC premises as the AMPCO project manager told them to wait for further instructions from SMC’s supervisor. Unfortunately, Vicente et al. never heard from SMC. They filed a COMPLAINT FOR ILLEGAL DISMISSAL
ISSUE: is AM PCO a legitimate job contractor?
DOLE Department Order No. 10, Series of 1997 provides:
Sec. 8. Job contracting. – There is job contracting permissible under the Code if the following conditions are met:
(1) The contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof; and (2) The contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of his business.
Sec. 9. Labor-only contracting. – (a) Any person who undertakes to supply workers to an employer shall be deemed to be engaged in labor-only contracting where such person:
1) Does not have substantial capital or investment in the form of tools, equipment, machineries, work premises and other materials; and
(2) The workers recruited and placed by such persons are performing activities which are directly related to the principal business or operations of the employer in which workers are habitually employed.
(b) Labor-only contracting as defined herein is hereby prohibited and the person acting as contractor shall be considered merely as an agent or intermediary of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him.
(c) For cases not falling under this Article, the Secretary of Labor shall determine through appropriate orders whether or not the contracting out of labor is permissible in the light of the circumstances of each case and after considering the operating needs of the employer and the rights of the workers involved. In such case, he may prescribe conditions and restrictions to insure the protection and welfare of the workers.
Section 5 of Department Order No. 18-02 (Series of 2002) of the Rules Implementing Articles 106 to 109 of the Labor Code provides:
“Substantial capital or investment” refers to capital stocks and subscribed capitalization in the case of corporations, tools, equipment, implements, machineries and work premises, actually and directly used by the contractor or subcontractor in the performance or completion of the job work or service contracted out. (emphasis supplied)
The "right to control" shall refer to the right reserved to the person for whom the services of the contractual workers are performed, to determine not only the end to be achieved, but also the manner and means to be used in reaching that end.
The test to determine the existence of independent contractorship is whether or not the one claiming to be an independent contractor has contracted to do the work according to his own methods and without being subject to the control of the employer, except only as to the results of the work.
The following would indicate the existence of an independent & permissible contractor relationship: whether or not the contractor is carrying on an independent business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of a specified piece of work; the control and supervision of the work to another; the employer's power with respect to the hiring, firing and payment of the contractor's workers; the control of the premises; the duty to supply the premises, tools, appliances, materials, and labor; and the mode, manner and terms of payment.
Although the service contracts show indications of such, there is no independent contractorship. SMC and AMPCO cannot dictate, by a declaration in a contract, the character of AMPCO’s business. AMPCO’s actual status and participation belie the contents of the written service contract.
AMPCO’s Certificate of DOLE Registration as an Independent Contractor is not conclusive evidence. Registration simply prevents the legal presumption of being a mere labor-only contractor from arising. The totality of facts and circumstances must be considered.
Respondent performed activities which directly related to petitioner’s main line of business. Petitioner is primarily engaged in manufacturing and marketing of beer products, and respondents’ work of segregating and cleaning bottles is unarguably an important part of its manufacturing and marketing process.
SMC, as principal employer, is solidarily liable with AMPCO, the labor-only contractor. AMPCO, as the "labor-only" contractor, is deemed an agent of SMC. The law makes the principal responsible over the employees of the "labor-only" contractor as if the principal itself directly hired the employees.
SECOND DIVISION SAN MIGUEL CORPORATION, -vs- VICENTE B. SEMILLANO, et.al. G.R. No. 164257 July 5, 2010 MENDOZA, J.: this petition for review on certiorari.
AMPCO hired Vicente et al on different dates assigned to work in SMC’s Bottling Plant situated at Brgy. Granada Sta. Fe, Bacolod City, in order to perform the following tasks:
segregating bottles
removing dirt
filing them in designated places
loading and unloading bottles to and from the delivery trucks,and
performing other tasks as ordered by SMC’s officers.
They were required to work inside the SMC premises using SMC’s equipment. They rendered service with SMC for more than 6 months.
Subsequently, SMC entered into a Contract of Services with AMPCO designating the latter as the employer of Vicente, et al. Vicente et al. failed to claim the rights & benefits ordinarily accorded a regular SMC employee. They were not paid their 13th month pay. On June 6, 1995, they were not allowed to enter the SMC premises as the AMPCO project manager told them to wait for further instructions from SMC’s supervisor. Unfortunately, Vicente et al. never heard from SMC. They filed a COMPLAINT FOR ILLEGAL DISMISSAL
ISSUE: is AM PCO a legitimate job contractor?
DOLE Department Order No. 10, Series of 1997 provides:
Sec. 8. Job contracting. – There is job contracting permissible under the Code if the following conditions are met:
(1) The contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof; and (2) The contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of his business.
Sec. 9. Labor-only contracting. – (a) Any person who undertakes to supply workers to an employer shall be deemed to be engaged in labor-only contracting where such person:
1) Does not have substantial capital or investment in the form of tools, equipment, machineries, work premises and other materials; and
(2) The workers recruited and placed by such persons are performing activities which are directly related to the principal business or operations of the employer in which workers are habitually employed.
(b) Labor-only contracting as defined herein is hereby prohibited and the person acting as contractor shall be considered merely as an agent or intermediary of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him.
(c) For cases not falling under this Article, the Secretary of Labor shall determine through appropriate orders whether or not the contracting out of labor is permissible in the light of the circumstances of each case and after considering the operating needs of the employer and the rights of the workers involved. In such case, he may prescribe conditions and restrictions to insure the protection and welfare of the workers.
Section 5 of Department Order No. 18-02 (Series of 2002) of the Rules Implementing Articles 106 to 109 of the Labor Code provides:
“Substantial capital or investment” refers to capital stocks and subscribed capitalization in the case of corporations, tools, equipment, implements, machineries and work premises, actually and directly used by the contractor or subcontractor in the performance or completion of the job work or service contracted out. (emphasis supplied)
The "right to control" shall refer to the right reserved to the person for whom the services of the contractual workers are performed, to determine not only the end to be achieved, but also the manner and means to be used in reaching that end.
The test to determine the existence of independent contractorship is whether or not the one claiming to be an independent contractor has contracted to do the work according to his own methods and without being subject to the control of the employer, except only as to the results of the work.
The following would indicate the existence of an independent & permissible contractor relationship: whether or not the contractor is carrying on an independent business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of a specified piece of work; the control and supervision of the work to another; the employer's power with respect to the hiring, firing and payment of the contractor's workers; the control of the premises; the duty to supply the premises, tools, appliances, materials, and labor; and the mode, manner and terms of payment.
Although the service contracts show indications of such, there is no independent contractorship. SMC and AMPCO cannot dictate, by a declaration in a contract, the character of AMPCO’s business. AMPCO’s actual status and participation belie the contents of the written service contract.
AMPCO’s Certificate of DOLE Registration as an Independent Contractor is not conclusive evidence. Registration simply prevents the legal presumption of being a mere labor-only contractor from arising. The totality of facts and circumstances must be considered.
Respondent performed activities which directly related to petitioner’s main line of business. Petitioner is primarily engaged in manufacturing and marketing of beer products, and respondents’ work of segregating and cleaning bottles is unarguably an important part of its manufacturing and marketing process.
SMC, as principal employer, is solidarily liable with AMPCO, the labor-only contractor. AMPCO, as the "labor-only" contractor, is deemed an agent of SMC. The law makes the principal responsible over the employees of the "labor-only" contractor as if the principal itself directly hired the employees.
Thursday, October 20, 2011
CBA-MANDATED BONUS AMID LOSING PROFITS
Grant of Bonus
2nd DIVISION G.R. No. 180866 March 2, 2010 LEPANTO CERAMICS, INC., vs. LEPANTO CERAMICS EMPLOYEES ASSOCIATION PEREZ, J.: Petition for Review on Certiorari Rule 45
COMPANY GAVE SMALLER AMOUNT OF BONUS AND NOT IN CASH DESPITE WHAT THE CBA STATES: We uphold the rulings of the voluntary arbitrator and of the Court of Appeals. Findings of labor officials, who are deemed to have acquired expertise in matters within their respective jurisdictions, are generally accorded not only respect but even finality, and bind us when supported by substantial evidence, more so when findings of both the arbitrator and the Court of Appeals coincide.
As a general proposition, an arbitrator is confined to the interpretation and application of the CBA. He does not sit to dispense his own brand of industrial justice: his award is legitimate only in so far as it draws its essence from the CBA.
A "bonus" is a gratuity or act of liberality of the giver, given in addition to what is ordinarily received by or strictly due the recipient. A bonus is granted and paid to an employee for his industry and loyalty which contributed to the success of the employer’s business and made possible the realization of profits. It is also granted by an enlightened employer to spur the employee to greater efforts for the success of the business and realization of bigger profits.
Generally, a bonus is not a demandable and enforceable obligation. To be enforceable, it must have been promised by the employer and expressly agreed upon by the parties. As the bonus in this case is integrated in the CBA, the same partakes the nature of a demandable obligation. The Christmas bonus due to respondent Association has become a contractual obligation.
A CBA refers to a negotiated contract between a legitimate labor organization and the employer, concerning wages, hours of work and all other terms and conditions of employment in a bargaining unit. The CBA is the law between the parties and they are obliged to comply with its provisions . The CBA provides for the giving of a "Christmas gift package/bonus" without qualification. It did not state that the Christmas package shall depend on the petitioner’s financial standing. If the petitioner and respondent Association intended that the P3,000.00 bonus would be dependent on the company earnings, such should have been expressed in the CBA.
Business losses are a feeble ground for petitioner to repudiate its obligation under the CBA. Any benefit and supplement being enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by the employer. The principle of non-diminution of benefits is founded on the constitutional mandate to protect the rights of workers and to promote their welfare and to afford labor full protection.
Absent any proof that petitioner’s consent was vitiated by fraud, mistake or duress, it is presumed that it entered into the CBA voluntarily; had full knowledge of the contents; and was aware of its commitments under the contract.
The implementation of the subject CBA provision may further deplete petitioner’s resources. Petitioner’s remedy lies not in the Court’s invalidation of the provision but in the parties’ clarification of the same in subsequent CBA negotiation, per Article 253.
2nd DIVISION G.R. No. 180866 March 2, 2010 LEPANTO CERAMICS, INC., vs. LEPANTO CERAMICS EMPLOYEES ASSOCIATION PEREZ, J.: Petition for Review on Certiorari Rule 45
COMPANY GAVE SMALLER AMOUNT OF BONUS AND NOT IN CASH DESPITE WHAT THE CBA STATES: We uphold the rulings of the voluntary arbitrator and of the Court of Appeals. Findings of labor officials, who are deemed to have acquired expertise in matters within their respective jurisdictions, are generally accorded not only respect but even finality, and bind us when supported by substantial evidence, more so when findings of both the arbitrator and the Court of Appeals coincide.
As a general proposition, an arbitrator is confined to the interpretation and application of the CBA. He does not sit to dispense his own brand of industrial justice: his award is legitimate only in so far as it draws its essence from the CBA.
A "bonus" is a gratuity or act of liberality of the giver, given in addition to what is ordinarily received by or strictly due the recipient. A bonus is granted and paid to an employee for his industry and loyalty which contributed to the success of the employer’s business and made possible the realization of profits. It is also granted by an enlightened employer to spur the employee to greater efforts for the success of the business and realization of bigger profits.
Generally, a bonus is not a demandable and enforceable obligation. To be enforceable, it must have been promised by the employer and expressly agreed upon by the parties. As the bonus in this case is integrated in the CBA, the same partakes the nature of a demandable obligation. The Christmas bonus due to respondent Association has become a contractual obligation.
A CBA refers to a negotiated contract between a legitimate labor organization and the employer, concerning wages, hours of work and all other terms and conditions of employment in a bargaining unit. The CBA is the law between the parties and they are obliged to comply with its provisions . The CBA provides for the giving of a "Christmas gift package/bonus" without qualification. It did not state that the Christmas package shall depend on the petitioner’s financial standing. If the petitioner and respondent Association intended that the P3,000.00 bonus would be dependent on the company earnings, such should have been expressed in the CBA.
Business losses are a feeble ground for petitioner to repudiate its obligation under the CBA. Any benefit and supplement being enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by the employer. The principle of non-diminution of benefits is founded on the constitutional mandate to protect the rights of workers and to promote their welfare and to afford labor full protection.
Absent any proof that petitioner’s consent was vitiated by fraud, mistake or duress, it is presumed that it entered into the CBA voluntarily; had full knowledge of the contents; and was aware of its commitments under the contract.
The implementation of the subject CBA provision may further deplete petitioner’s resources. Petitioner’s remedy lies not in the Court’s invalidation of the provision but in the parties’ clarification of the same in subsequent CBA negotiation, per Article 253.
Tuesday, October 18, 2011
WHEN SHOULD THE ALIEN APPLY FOR ALIEN EMPLOYMENT PERMITP?
ALIEN EMPLOYMENT PERMIT
2nd DIVISION G.R. No. 169207 March 25, 2010 WPP MARKETING COMMUNICATIONS, INC., vs. JOCELYN M. GALERA,
The Ruling of the Court
1. Whether Galera is an Employee or a Corporate Officer: Corporate officers are such by virtue of either the Corporation Code or the corporation’s by-laws.
a. Galera’s appointment as Vice-President with the operational title of Managing Director of Mindshare was an appointment to a non-existent corporate office.
b. The four-fold test will show that Galera was an employee
(1) employment contract states where and how often she is to perform her work; WPP completely controls the compensation she receives; and she is subject to the regular disciplinary procedures of WPP.
(2) contract states that she is a permanent employee.
(3) contract states that the rights to any invention, discovery, improvement in procedure, trademark, or copyright created or discovered by GALERA during her employment shall automatically belong to WPP. The Intellectual Property Code states that this occurs if the creator is an employee of the one entitled to the patent or copyright.
(4) the Employment Contract, states that her right of redress (in cases of disciplinary matters) is through Mindshare’s Chief Executive Officer for the Asia-Pacific.
c. GALERA signed the DOLE Alien Employment Permit and the application for a 9(g) BID visa as WPP’ Vice President. These should not be considered against her. Assuming that her appointment as Vice-President was a valid act, these appointments occurred after she was hired as a regular employee, with no appreciable change in her duties.
2. Labor Arbiter and the NLRC have jurisdiction.
3. Whether WPP illegally dismissed Galera
a. WPP failed to prove any just or authorized cause, belied further by Galer’s documentary evidence which contents are contrary to the reasons in the termination letter.
b. The law requires that the employer to issue the worker two written notices: (1) notice which apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the subsequent notice which informs the employee of the employer’s decision to dismiss him. WPP’s did not comply with the two-notice rule.
3. Whether Galera is entitled to the monetary award: Galera worked in the Philippines without a proper work permit. The Labor Code and its Implementing Rules and Regulations state that the employment permit must be acquired prior to employment. To grant Galera’s prayer is to sanction violation of the Philippine labor laws requiring aliens to secure work permits before their employment.
The status quo must prevail; however, Galera may seek relief from other jurisdictions.
2nd DIVISION G.R. No. 169207 March 25, 2010 WPP MARKETING COMMUNICATIONS, INC., vs. JOCELYN M. GALERA,
The Ruling of the Court
1. Whether Galera is an Employee or a Corporate Officer: Corporate officers are such by virtue of either the Corporation Code or the corporation’s by-laws.
a. Galera’s appointment as Vice-President with the operational title of Managing Director of Mindshare was an appointment to a non-existent corporate office.
b. The four-fold test will show that Galera was an employee
(1) employment contract states where and how often she is to perform her work; WPP completely controls the compensation she receives; and she is subject to the regular disciplinary procedures of WPP.
(2) contract states that she is a permanent employee.
(3) contract states that the rights to any invention, discovery, improvement in procedure, trademark, or copyright created or discovered by GALERA during her employment shall automatically belong to WPP. The Intellectual Property Code states that this occurs if the creator is an employee of the one entitled to the patent or copyright.
(4) the Employment Contract, states that her right of redress (in cases of disciplinary matters) is through Mindshare’s Chief Executive Officer for the Asia-Pacific.
c. GALERA signed the DOLE Alien Employment Permit and the application for a 9(g) BID visa as WPP’ Vice President. These should not be considered against her. Assuming that her appointment as Vice-President was a valid act, these appointments occurred after she was hired as a regular employee, with no appreciable change in her duties.
2. Labor Arbiter and the NLRC have jurisdiction.
3. Whether WPP illegally dismissed Galera
a. WPP failed to prove any just or authorized cause, belied further by Galer’s documentary evidence which contents are contrary to the reasons in the termination letter.
b. The law requires that the employer to issue the worker two written notices: (1) notice which apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the subsequent notice which informs the employee of the employer’s decision to dismiss him. WPP’s did not comply with the two-notice rule.
3. Whether Galera is entitled to the monetary award: Galera worked in the Philippines without a proper work permit. The Labor Code and its Implementing Rules and Regulations state that the employment permit must be acquired prior to employment. To grant Galera’s prayer is to sanction violation of the Philippine labor laws requiring aliens to secure work permits before their employment.
The status quo must prevail; however, Galera may seek relief from other jurisdictions.
Sunday, October 16, 2011
MANAGEMENT PREROGATIVE
MANAGEMENT PREROGATIVE
FIRST DIVISION G.R. No. 161615 January 30, 2009 ARNULFO O. ENDICO, Vs QUANTUM FOODS DISTRIBUTION CENTER, CARPIO, J.: petition for review
Quantum Foods hired Endico as Field Supervisor of Davao City and was provided a service vehicle. The agreement was that after five years of continuous service and paying 10% of the vehicle’s book value, possession & ownership would transfer to Endico. His good performance over the years was noted. Economic circumstances and costsaving needs led Quantum to reduce Endico’s 12 merchandisers to five. He was also ordered immediately relieved and required to turn over all company properties issued to him including the service vehicle. Endico complied with the advise to report to the head office.
A show cause memorandum was issued regarding Endico’s "serious misconduct due to mismanagement of sales area resulting to lost sales and goodwill with number one major account.", referring to their SM Cebu account. On the same day, Endico filed an application for leave of absence. He also denied the allegation, claiming proper coordination with SM. Endico presented a 3 May 1999 letter , where he informed Acuros and the head office that the SM account wanted a merchandiser assigned to it for a whole day coverage and that SM had rejected the merchandiser assigned to it with a half-day schedule. In another letter dated 7 May 1999, Endico updated the head office on the status of the SM account. Endico claimed denial of due process by Quantum Foods because he was immediately relieved without being given the opportunity to explain his side. On the same day, Endico also withdrew his application for leave of absence.
On 17 June 1999, Quantum Foods recalled Endico’s application for leave of absence; required him to report to the head office, and issued a Personnel Action Request for Endico’s transfer to the Head Office still as Area Sales Manager effective 14 June 1999. Endico failed to report for work despite two telegrams directing him to report to the head office.
Endico filed a complaint for constructive illegal dismissal, praying for the payment of separation pay, backwages, other monetary benefits, damages, attorney’s fees and recovery of the service vehicle.
The Labor Arbiter rendered a decision in Endico’s favor. Quantum Foods appealed to the NLRC. The NLRC affirmed the Labor Arbiter’s decision with modification that Endico pay 10% of the purchase price of the service vehicle. Quantum Foods filed a motion for reconsideration but was denied. Quantum Foods filed a petition for certiorari before the Court of Appeals. The Court of Appeals ruled in favor of Quantum Foods.
The Issues raised by Endico are whether:
1. he was constructively dismissed;
2. he is entitled to separation pay, backwages, other monetary benefits, damages and attorney’s fees; and
3. he is entitled to acquire the service vehicle.
The Ruling of the Court: petition has no merit.
1. A petition for review on certiorari under Rule 45 is limited to questions of law. An exception is where the findings of the Labor Arbiter and the NLRC vary from the findings of the Court of Appeals.
Jurisprudence recognizes the exercise of management prerogatives. Labor laws also discourage interference with an employer’s judgment in the conduct of its business. The Court often declines to interfere in legitimate business decisions of employers, as the law must protect not only the welfare of employees, but also the right of employers.
In the pursuit of its legitimate business interests, especially during adverse business conditions, management has the prerogative to transfer or assign employees but there must be no demotion in rank or diminution of salary, benefits and other privileges; and the action is not motivated by discrimination, bad faith, or a form of punishment or demotion without sufficient cause.30 Employees have the right to security of tenure but they do not have vested rights to their positions such that management is deprived of its prerogative.
But Managerial prerogatives are subject to limitations provided by law, collective bargaining agreements, and general principles of fair play and justice.33 The test for determining the validity of the transfer of employees is 34 as follows:
Xxxxx the employer must be able to show that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Should the employer fail to overcome this burden of proof, the employee’s transfer shall be tantamount to constructive dismissal, which has been defined as a quitting because continued employment is rendered impossible, unreasonable or unlikely; as an offer involving a demotion in rank and diminution in pay. Likewise, constructive dismissal exists when an act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego with his continued employment.35
The decision of Quantum Foods to transfer Endico pending investigation was a valid exercise of management prerogative to discipline its employees. It was a preventive measure to avoid further loss of sales and the destruction of Quantum Foods’ image and goodwill. It was not designed to be the culmination of the on-going administrative investigation.
There was no demotion in rank or any diminution of Endico’s salary, privileges and other benefits. He was being transferred to the head office with the same position he held in Cebu. There was also no proof that the transfer involved a diminution of Endico’s salary, privileges and other benefits.
On the alleged inconvenience on Endico and his family because of the transfer to the head office, the transfer is valid, as there is no showing of bad faith on the part of Quantum Foods. Quantum Foods, considering the declining sales and the loss of a major account in Cebu, was acting in the legitimate pursuit of what it considered its best interest in deciding to transfer Endico to the head office.
Since we have ruled that Quantum Foods did not constructively dismiss Endico, there is no need to discuss the other issues raised by Endico.
PETITION DENIED AND THE CA DECISION AFFIRMED.
FIRST DIVISION G.R. No. 161615 January 30, 2009 ARNULFO O. ENDICO, Vs QUANTUM FOODS DISTRIBUTION CENTER, CARPIO, J.: petition for review
Quantum Foods hired Endico as Field Supervisor of Davao City and was provided a service vehicle. The agreement was that after five years of continuous service and paying 10% of the vehicle’s book value, possession & ownership would transfer to Endico. His good performance over the years was noted. Economic circumstances and costsaving needs led Quantum to reduce Endico’s 12 merchandisers to five. He was also ordered immediately relieved and required to turn over all company properties issued to him including the service vehicle. Endico complied with the advise to report to the head office.
A show cause memorandum was issued regarding Endico’s "serious misconduct due to mismanagement of sales area resulting to lost sales and goodwill with number one major account.", referring to their SM Cebu account. On the same day, Endico filed an application for leave of absence. He also denied the allegation, claiming proper coordination with SM. Endico presented a 3 May 1999 letter , where he informed Acuros and the head office that the SM account wanted a merchandiser assigned to it for a whole day coverage and that SM had rejected the merchandiser assigned to it with a half-day schedule. In another letter dated 7 May 1999, Endico updated the head office on the status of the SM account. Endico claimed denial of due process by Quantum Foods because he was immediately relieved without being given the opportunity to explain his side. On the same day, Endico also withdrew his application for leave of absence.
On 17 June 1999, Quantum Foods recalled Endico’s application for leave of absence; required him to report to the head office, and issued a Personnel Action Request for Endico’s transfer to the Head Office still as Area Sales Manager effective 14 June 1999. Endico failed to report for work despite two telegrams directing him to report to the head office.
Endico filed a complaint for constructive illegal dismissal, praying for the payment of separation pay, backwages, other monetary benefits, damages, attorney’s fees and recovery of the service vehicle.
The Labor Arbiter rendered a decision in Endico’s favor. Quantum Foods appealed to the NLRC. The NLRC affirmed the Labor Arbiter’s decision with modification that Endico pay 10% of the purchase price of the service vehicle. Quantum Foods filed a motion for reconsideration but was denied. Quantum Foods filed a petition for certiorari before the Court of Appeals. The Court of Appeals ruled in favor of Quantum Foods.
The Issues raised by Endico are whether:
1. he was constructively dismissed;
2. he is entitled to separation pay, backwages, other monetary benefits, damages and attorney’s fees; and
3. he is entitled to acquire the service vehicle.
The Ruling of the Court: petition has no merit.
1. A petition for review on certiorari under Rule 45 is limited to questions of law. An exception is where the findings of the Labor Arbiter and the NLRC vary from the findings of the Court of Appeals.
Jurisprudence recognizes the exercise of management prerogatives. Labor laws also discourage interference with an employer’s judgment in the conduct of its business. The Court often declines to interfere in legitimate business decisions of employers, as the law must protect not only the welfare of employees, but also the right of employers.
In the pursuit of its legitimate business interests, especially during adverse business conditions, management has the prerogative to transfer or assign employees but there must be no demotion in rank or diminution of salary, benefits and other privileges; and the action is not motivated by discrimination, bad faith, or a form of punishment or demotion without sufficient cause.30 Employees have the right to security of tenure but they do not have vested rights to their positions such that management is deprived of its prerogative.
But Managerial prerogatives are subject to limitations provided by law, collective bargaining agreements, and general principles of fair play and justice.33 The test for determining the validity of the transfer of employees is 34 as follows:
Xxxxx the employer must be able to show that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Should the employer fail to overcome this burden of proof, the employee’s transfer shall be tantamount to constructive dismissal, which has been defined as a quitting because continued employment is rendered impossible, unreasonable or unlikely; as an offer involving a demotion in rank and diminution in pay. Likewise, constructive dismissal exists when an act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego with his continued employment.35
The decision of Quantum Foods to transfer Endico pending investigation was a valid exercise of management prerogative to discipline its employees. It was a preventive measure to avoid further loss of sales and the destruction of Quantum Foods’ image and goodwill. It was not designed to be the culmination of the on-going administrative investigation.
There was no demotion in rank or any diminution of Endico’s salary, privileges and other benefits. He was being transferred to the head office with the same position he held in Cebu. There was also no proof that the transfer involved a diminution of Endico’s salary, privileges and other benefits.
On the alleged inconvenience on Endico and his family because of the transfer to the head office, the transfer is valid, as there is no showing of bad faith on the part of Quantum Foods. Quantum Foods, considering the declining sales and the loss of a major account in Cebu, was acting in the legitimate pursuit of what it considered its best interest in deciding to transfer Endico to the head office.
Since we have ruled that Quantum Foods did not constructively dismiss Endico, there is no need to discuss the other issues raised by Endico.
PETITION DENIED AND THE CA DECISION AFFIRMED.
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