1. Voluntary company practice; Rationale. To be considered a company practice, the giving of the benefits should have been done over a long period of time, and must be shown to have been consistent and deliberate. The test or rationale of this rule on long practice requires an indubitable showing that the employer agreed to continue giving the benefits knowing fully well that said employees are not covered by the law requiring payment thereof.
  2. Ibid.; Length of time. With regard to the length of time the company practice should have been exercised to constitute voluntary employer practice which cannot be unilaterally withdrawn by the employer, jurisprudence has not laid down any hard and fast rule. It appears though from a number of cases that it is sufficient that there is regularity and deliberateness of the grant of benefits over a significant period of time. (Metropolitan Bank and Trust Company vs. NLRC, G.R. No. 152928, June 18, 2009.)

  3. Lost of trust and confidence; Requisites. To be a valid ground for dismissal, loss of trust and confidence must be based on a willful breach of trust and founded on clearly established facts. Further, the act complained of must be work-related and must show that the employee concerned is unfit to continue working for the employer.
  4. Ibid.; ibid.; Willful breach of trust; Meaning. 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. It must rest on substantial grounds and not on the employer’s arbitrariness, whims, caprices or suspicion. (Sarabia Optical vs. Camacho, G.R. No. 155502, June 18, 2009.)

  5. Four-fold test. To determine the existence of an employer-employee relationship, case law has consistently applied the four-fold test, to wit: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee on the means and methods by which the work is accomplished. The so-called “control test” is the most important indicator of the presence or absence of an employer-employee relationship. ( SGV & Co. vs. De Raedt, G.R. No. 161366, June 16, 2009.)
  6. Visitorial and enforcement power; Amount of monetary claim immaterial. The Secretary of Labor or his duly authorized representatives is empowered to hear and decide, in a summary proceeding, any matter involving the recovery of any amount of wages and other monetary claims arising out of employer-employee relations at the time of the inspection, even if the amount of the money claim exceeds P5,000.00.
  7. Ibid.; Ibid.; Exception clause. However, if the labor standards case is covered by the exception clause in Article 128(b) of the Labor Code, then the Regional Director will have to endorse the case to the appropriate Arbitration Branch of the NLRC. In order to divest the Regional Director or his representatives of jurisdiction, 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 rules also provide that the employer shall raise such objections during the hearing of the case or at any time after receipt of the notice of inspection results. (Baladares, et al., vs. Peak Ventures Corporation, et al., G.R. No. 161794, June 16, 2009.)

  8. Reinstatement and payment of backwages; Statutory intent. The statutory intent on this matter is clearly discernible. Reinstatement restores the employee who was unjustly dismissed to the position from which he was removed, that is, to his status quo ante dismissal, while the grant of backwages allows the same employee to recover from the employer that which he had lost by way of wages as a result of his dismissal.
  9. Ibid.; Separate and distinct remedies. The twin-remedies of reinstatement and payment of backwages are distinct and separate, one from the other. Though the grant of reinstatement commonly carries with it an award of backwages, the inappropriateness or non-availability of one does not carry with it the inappropriateness or non-availability of the other.

    Separation pay and backwages; Distinguished. Separation pay is the amount that an employee receives at the time of his severance from the service and is designed to provide the employee with “the wherewithal during the period that he is looking for another employment.” Backwages, on the other hand, is a form of relief that restores the income that was lost by reason of unlawful dismissal. It is designed to redress the loss of earnings that would have accrued to the dismissed employee during the period between dismissal and reinstatement.

    The grant of separation pay was a proper substitute only for reinstatement; it could not be an adequate substitute both for reinstatement and for backwages. (Nissan North Edsa Balintawak vs. Serrano, et al., G.R. No. 162538, June 4, 2009.)

  10. Voluntary resignation; Effect of oral agreement to grant separation pay. Separation pay need not be paid to an employee who voluntarily resigns. However, an employer who agrees to expend such benefit as an incident of the resignation should not be allowed to renege on the fulfillment of such commitment. Brief facts: The employer and employee had an oral agreement that if the latter voluntarily resigns, he shall be given separation pay. After the employee tendered his resignation, however, the employer refused to honor its promise arguing that an employee who voluntarily resign is not entitled to separation pay. The Court ruled that the employer is bound by its oral promise, without which, the employee would not have filed his resignation. (“J” Marketing Corp. vs. Taran, G.R. No. 163924, June 18, 2009.)
  11. Gross negligence; Explained. Gross negligence is characterized by want of even slight care, acting or omitting to act in a situation where there is a duty to act, not inadvertently but willfully and intentionally with a conscious indifference to consequences insofar as other persons may be affected.
  12. Ibid.; When habituality may be dispensed with. Habituality may be dispensed with taking into account the substantial amount of lost suffered by the employer. Brief facts: The employee, an LBC customer associate, left the company motorcycle outside the LBC office without locking it. When he returned after five minutes, the vehicle was gone. The court rule that he was grossly negligent in leaving the motorcyle without locking it despite clear instruction not to do so. The substantial amount of loss suffered by the company as a result of the negligent act justifies dispensing the habituality requirement of the Labor Code. (LBC Express-Manila, et al., vs. Mateo, G.R. No. 168215, June 9, 2009.)

  13. Conciliation proceedings; Privileged nature of information and statements made thereat. In accordance with Article 223, Labor Code, information and statements made at conciliation proceedings shall be treated as privileged communication and shall not be used as evidence.
  14. Ibid.; Ibid.; Rationale. The reasons behind the exclusion are two-fold: First, since the law favors the settlement of controversies out of court, a person is entitled to “buy his or her peace” without danger of being prejudiced in case his or her efforts fail; hence, any communication made toward that end will be regarded as privileged. Indeed, if every offer to buy peace could be used as evidence against a person who presents it, many settlements would be prevented and unnecessary litigation would result, since no prudent person would dare offer or entertain a compromise if his or her compromise position could be exploited as a confession of weakness. Second, offers for compromise are irrelevant because they are not intended as admissions by the parties making them. A true offer of compromise does not, in legal contemplation, involve an admission on the part of a defendant that he or she is legally liable, or on the part of a plaintiff, that his or her claim is groundless or even doubtful, since it is made with a view to avoid controversy and save the expense of litigation. It is the distinguishing mark of an offer of compromise that it is made tentatively, hypothetically, and in contemplation of mutual concessions.

    Abandonment; Burden of proof to justify dismissal of employee. The rule is that the burden of proof lies with the employer to show that the dismissal was for a just cause.

    Ibid.; Elements. To constitute abandonment, two elements must concur: (1) the failure to report for work or absence without valid or justifiable reason, and (2) a clear intent, manifested through overt acts, to sever the employer-employee relationship.

    Strained relation; Burden of proof. The existence of a strained relationship is for the employer to clearly establish and prove in the manner it is called upon to prove the existence of a just cause.

    Ibid.; Strained relation arising from the filing of action will not merit severance. The degree of hostility attendant to a litigation is not, by itself, sufficient proof of the existence of strained relations that would rule out the possibility of reinstatement. The conflict, if any, occasioned by the respondent’s filing of an illegal dismissal case, does not merit the severance of the employee-employer relationship between the parties. (Pentagon Steel Corp., et al., vs. CA, G.R. No. 174141, June 26, 2009.)

  15. NLRC Rules of Procedure; Dismissal of appeal on ground of non-compliance. It is well within the NLRC’s prerogative to dismiss the appeal for failure of the appellant to comply with the requirements under the NLRC Rules of Procedure. Brief facts: NLRC dismissed the appeal because the Joint Declaration submitted by appellant was found to be defective as the jurat portion did not contain the CTC numbers of the Unilab representatives and its counsel. Moreover, it was found out that the Joint Declaration was executed by Unilab, not by petitioner itself, which has a separate juridical personality. The Court upheld the dismissal, finding that the circumstances in this case do not warrant the relaxation of the rules. (Pedriatica, Inc., vs. Rafaeles, G.R. No. 180755, June 19, 2009.)

Last Edited: Friday, August 19, 2011

Caveat: Subsequent court and administrative rulings, or changes to, or repeal of, laws, rules and regulations may have rendered the whole or part of this article inaccurate or obsolete.
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