Bearneza v. NLRC (G.R. No. 146930)


Petitioner Rommel Bearneza filed a complaint for permanent total disability benefits against respondent NFD International Manning Agents but was dismissed by the POEA for lack of merit. On appeal, NLRC reversed the POEA decision. Then, NFD filed a petition for certiorari before the SC. A TRO enjoining the execution of the judgment award was issued upon posting by NFD of a P1 million bond. The petition was dismissed and NFD sought reconsideration while petitioner moved for the imposition of a 12% interest per annum on the judgment award until its full satisfaction. The SC denied both motions and remanded the case back to NLRC for execution of judgment. The LA issued an alias writ of execution ordering the satisfaction of petitioner’s claims and the attorney’s fees. The sheriff then submitted a return informing the LA that the alias writ had been satisfied. Petitioner then moved for the issuance of a second alias writ of execution praying that the manning agency be held liable also for 12% p.a. interest on the judgment award. LA denied the motion. NLRC and CA affirmed.


Whether there is grave abuse of discretion in disallowing petitioner’s claim for the imposition of interest on the judgment award.

Ruling: NO.

No abuse of discretion may be imputed to the labor arbiter and the NLRC. The NLRC’s decision had already become final and executory. The sheriff’s return showed that the judgment had in fact been executed. Moreover, no discretion could have possibly been exercised on petitioner’s claim as the matter had long been resolved and laid to rest by this Court in its resolution in G.R. No. 107131.

The Court further Resolved to:

(1) DENY for lack of merit the motion for damages on the injunction bond filed by [Rommel Bearneza];

Once a judgment attains finality it becomes immutable and unalterable. It may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law, and regardless of whether the modification is attempted to be made by the court rendering it or by the highest court of the land.


Industrial Timber Corporation v. Ababon (G.R. No. 164518)


Petitioner Industrial Timber Corporation (ITC) was leased a plywood plant located at Butuan City for a period of 5 years by Industrial Plywood Group Corporation (IPGC). Thereafter, ITC commenced operation of the plywood plant and hired 387 workers. Sometime after, ITC notified DOLE and its workers of the plant’s shutdown due to the non-renewal of the anti-pollution permit and the alleged lack of logs for milling constrained ITC to lay off all its workers until further notice. A final notice of closure or cessation of business operations followed advising the workers to collect the benefits due them under the law and CBA. Later, IPGC took over the plywood plant and was issued a permit to operate coincidentally the same day the ITC ceased operation of the plant. This prompted respondents to file a complaint for illegal dismissal and unfair labor practice alleging that the cessation of ITC’s operation was intended to bust the union and that both corporations are one and the same entity. LA dismissed the complaint. On appeal, NLRC first ordered the reinstatement of employees but later on, ruled to dismiss herein respondent’s complaints. CA set aside the decision.


Whether respondents were illegally dismissed due to the closure of ITC’s business.

Ruling: NO.

The right to close the operation of an establishment or undertaking is one of the authorized causes in terminating employment of workers, the only limitation being that the closure must not be for the purpose of circumventing the provisions on termination of employment embodied in the Labor Code. Under Article 283 of the Labor Code, three requirements are necessary for a valid cessation of business operations: (a) service of a written notice to the employees and to the DOLE at least one month before the intended date thereof; (b) the cessation of business must be bona fide in character; and (c) payment to the employees of termination pay amounting to one month pay or at least one-half month pay for every year of service, whichever is higher.

We find that ITC’s closure or cessation of business was done in good faith and for valid reasons. The records reveal that the decision to permanently close business operations was arrived at after a suspension of operation for several months precipitated by lack of raw materials used for milling operations, the expiration of the anti-pollution permit, and the termination of the lease contract with IPGC over the plywood plant. Having established that ITC’s closure of the plywood plant was done in good faith and that it was due to causes beyond its control, the conclusion is inevitable that said closure is valid.

Although the closure was done in good faith and for valid reasons, we find that ITC did not comply with the notice requirement. While an employer is under no obligation to conduct hearings before effecting termination of employment due to authorized cause, however, the law requires that it must notify the DOLE and its employees at least one month before the intended date of closure.

In the case at bar, ITC notified its employees and the DOLE of the ‘no plant operation’ due to lack of raw materials. This was followed by a ‘shut down’ notice due to the expiration of the anti-pollution permit. However, this shutdown was only temporary as ITC assured its employees that they could return to work once the renewal is acted upon by the DENR. Then, ITC sent its employees a final notice of closure or cessation of business operations to take effect on the same day it was released. We find that this falls short of the notice requirement for termination of employment due to authorized cause considering that the DOLE was not furnished and the notice should have been furnished both the employees and the DOLE at least one month before the intended date of closure.

Where the dismissal is based on an authorized cause under Article 283 of the Labor Code but the employer failed to comply with the notice requirement, the sanction should be stiff as the dismissal process was initiated by the employer’s exercise of his management prerogative, as opposed to a dismissal based on a just cause under Article 282 with the same procedural infirmity where the sanction to be imposed upon the employer should be tempered as the dismissal process was, in effect, initiated by an act imputable to the employee.

Philippine Transmarine Carriers v. Laurente (G. R. No. 158883)


Respondent John Melchor Laurente was employed as Second Assistant Engineer by petitioner Philippine Transmarine Carriers, for and in behalf of its principal, Lucky Ocean Marine Corporation, after he underwent a pre-employment medical examination at petitioner’s accredited clinic and was given a clean bill of health. John Melchor embarked the vessel and after three (3) months, complained of dizziness and nausea and requested for his repatriation. Upon arrival, John Melchor was treated and was diagnosed with hypertension and chronic renal failure classified as Disability Grade I. He then underwent kidney transplant and subsequently paid sickness allowance by petitioner. Thereafter, John Melchor filed a complaint against petitioner for payment of disability benefits on the basis of the amendment to the POEA Standard Employment Contract increasing the total disability benefit from US$11,000 to US$50,000. Petitioner disputed John Melchor’s claim for disability benefit alleging that the latter’s illness occurred prior to when he disembarked from the vessel and prior to the effectivity of the new rate of disability benefits. LA ruled for respondent. During the pendency of the appeal, respondent died of pulmonary congestion at 41 years of age.


Whether the amendment increasing the rate of disability benefits should be construed to apply to respondent.

Ruling: YES.

As it is unclear whether such amendments can be held applicable to obligations that have already accrued but have not yet been paid, we are compelled to choose the interpretation that would favor labor. Therefore, even if we consider for the sake of argument that John Melchor was terminated on 5 October 1993 as petitioner claims, this clause still makes the 31 March 1994 amendment applicable. As we held in Marcopper Mining Corporation v. National Labor Relations Commission, contracts relating to employment should be interpreted keeping in sight the avowed policy of the State, enshrined in our Constitution, to accord utmost protection and justice to labor.

No less than the Constitution requires the State to afford full protection to labor, whether local or overseas. Pursuant to such mandate, Executive Order No. 247 empowered the POEA to secure the best terms and conditions of employment of Filipino contract workers. The POEA, in compliance therewith, prescribed standard employment contracts which provide the minimum terms and conditions of employment for Filipino contract workers. These minimum terms and conditions are deemed read into the parties’ primary contracts, and as such must be complied with in good faith.

Bisig Manggagawa Sa Tryco v. NLRC (G.R. No. 151309)


Tryco Pharma Corporation, manufacturer of veterinary medicines with principal office in Caloocan City, and petitioner union Bisig Manggagawa Sa Tryco (BMT), the exclusive bargaining representative of the rank-and-file employees, signed separate Memoranda of Agreement providing for a compressed workweek schedule to be implemented in the company. BMT and Tryco negotiated for the renewal of their CBA but failed to arrive at a new agreement. Meanwhile, Tryco received a letter from the Bureau of Animal Industry of the Department of Agriculture reminding the former that its production should be conducted in Bulacan City and not in Caloocan City. Accordingly, Tryco issued a memo directing petitioners herein who are members of BMT to report to the plant site in Bulacan. Contending that the transfer of its members constitutes unfair labor practice, BMT declared a strike. Later, petitioner employees filed separate complaints for illegal dismissal and added that the transfer of petitioners to the Bulacan site is intended to paralyze the union. LA dismissed the complaint. NLRC and CA affirmed.


(1) Whether the transfer of petitioners amounted to constructive dismissal; and

(2) Whether the transfer of petitioners amounted to unfair labor practice.

Ruling: NO.

(1) Management’s prerogative of transferring and reassigning employees from one area of operation to another in order to meet the requirements of the business is, therefore, generally not constitutive of constructive dismissal. Thus, the consequent transfer of Tryco’s personnel, assigned to the Production Department was well within the scope of its management prerogative. When the transfer is not unreasonable, or inconvenient, or prejudicial to the employee, and it does not involve a demotion in rank or diminution of salaries, benefits, and other privileges, the employee may not complain that it amounts to a constructive dismissal. However, the employer has the burden of proving that the transfer of an employee is for valid and legitimate grounds.

Indisputably, in the instant case, the transfer orders do not entail a demotion in rank or diminution of salaries, benefits and other privileges of the petitioners. The Court has previously declared that mere incidental inconvenience is not sufficient to warrant a claim of constructive dismissal. Objection to a transfer that is grounded solely upon the personal inconvenience or hardship that will be caused to the employee by reason of the transfer is not a valid reason to disobey an order of transfer. The distance from Caloocan to San Rafael, Bulacan is not considerably great so as to compel petitioners to seek living accommodations in the area and prevent them from commuting to Metro Manila daily to be with their families.

(2) We cannot see how the mere transfer of its members can paralyze the union. The union was not deprived of the membership of the petitioners whose work assignments were only transferred to another location. More importantly, there was no showing or any indication that the transfer orders were motivated by an intention to interfere with the petitioners’ right to organize. Unfair labor practice refers to acts that violate the workers’ right to organize. With the exception of Article 248(f) of the Labor Code of the Philippines, the prohibited acts are related to the workers’ right to self-organization and to the observance of a CBA. Without that element, the acts, no matter how unfair, are not unfair labor practices.

Eurotech Hair Systems v. Go (G.R. No. 160913)


Respondent Antonio Go was the operations manager of Eurotech Hair Systems, a domestic corporation engaged in the manufacture and export of wigs and toupees, and was responsible for the manpower planning to meet the company’s monthly production targets. When the company suffered production shortfalls, Antonio received a series of memoranda from petitioner’s general manager, advising him to improve his performance. Later, Antonio received again a memorandum giving him 24 hours to explain in writing why his services should not be terminated on the ground of loss of trust and confidence. Thereafter, petitioner relieved Antonio pending his performance evaluation and gave him another 24 hours to submit a written explanation. Lapsing without such, petitioner finally issued Antonio a termination letter citing loss of trust and confidence. Antonio then filed a complaint for illegal dismissal to which the LA ruled in his favor. NLRC reversed, but the CA reinstated the LA’s ruling. Prior to receipt of the CA’s ruling, Antonio already executed a quitclaim in consideration of P450,000. Hence, the LA dismissed with prejudice the complaint for illegal dismissal in view of said waiver. Petitioner now moved for reconsideration contending the NLRC correctly ruled there was legitimate basis to terminate respondent for gross incompetence resulting in the company’s loss of confidence in him.


Whether respondent’s dismissal was in accordance with law.

Ruling: NO.

The burden of proof in dismissal cases rests on the employer. In the instant case, however, petitioners failed to prove that respondent was terminated for a valid cause.

Loss of trust and confidence to be a valid ground for an employee’s dismissal must be based on a willful breach and founded on clearly established facts. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. While failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency may be a just cause for dismissal, the employer must show what standards of work or reasonable work assignments were prescribed which the employee failed to observe. In addition, the employer must prove that the employee’s failure to observe any such standards or assignments was due to his own inefficiency.

In this case, petitioners showed that respondent failed to meet production targets despite reminders to measure up to the goals set by the company. However, they were unable to prove that such failure was due to respondent’s inefficiency. Significant factors that might explain the company’s poor production include existing market conditions at the time, the overall spending behavior of consumers, and the prevailing state of the country’s economy as a whole. The company’s production shortfalls cannot be attributed to respondent alone, absent any showing that he willfully breached the trust and confidence reposed in him by the petitioners.