G.R. No. 191455 March 12, 2014DREAMLAND HOTEL RESORT and WESTLEY J. PRENTICE,Petitioners,vs.STEPHEN B. JOHNSON,Respondent.D E C I S I O NREYES,J.:FACTS:

Respondent, Stephen Johnson, an Australian citizen, filed an illegal dismissal case against petitioner company, Dreamland Hotel and Resorts and its President, Westley Prentice. Respondent alleged that Westley convinced him to invest his retirement money to the resort for the latters completion and he shall also take over as the resorts Operations Manager.

The parties entered into an Employment Agreement and as stipulated, respondent Johnson already reported for work on August 2007. It was then that he found out to his dismay that the resort was far from finished and he even had to do menial work to assist with the operations. Moreover, Johnson remained unpaid since August 2007 until October 2007 and despite several demands, the same were not given. Johnson further alleged that he was not given the opportunity to manage the resort since Westley almost always countermand his orders and embarrasses him in front of the staff.

Thus, on November 2007, after another embarrassment was handed out by petitioner Prentice in front of the staff, which highlighted his lack of real authority in the hotel and the disdain for him by petitioners, respondent Johnson was forced to submit his resignation, In deference to the Employment Agreement signed, Johnson stated that he was willing to continue work for the three month period stipulated therein, but Prentice considered said resignation as immediate.

The Labor Arbiter ruled in favor herein petitioner citing substantial evidence to prove Johnsons voluntary resignation and abandonment of work.

The NLRC reversed the said decision citing constructive dismissal of Johnson. The CA affirmed. Hence, this petition.

Issue: Whether respondent Johnson was illegally dismissed?

Held: The SC ruled in the affirmative.

The petitioners aver that considering that Johnson tendered his resignation and abandoned his work, it is his burden to prove that his resignation was not voluntary on his part.32With this, the Court brings to mind its earlier ruling in the case of SHS Perforated Materials, Inc. v. Diaz33where it held that:"There is constructive dismissal if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it would foreclose any choice by him except to forego his continued employment. It exists where there is cessation of work because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in pay."34It is impossible, unreasonable or unlikely that any employee, such as Johnson would continue working for an employer who does not pay him his salaries. the Court construes that the act of the petitioners in not paying Johnson his salaries for three months has become unbearable on the latters part that he had no choice but to cede his employment with them.

The resignation letter by Johnson shows that while it was Johnson who tendered his resignation, it was due to the petitioners acts that he was constrained to resign. The petitioners cannot expect Johnson to tolerate working for them without any compensation.

Since Johnson was constructively dismissed, he was illegally dismissed. Thus, an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The two reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and backwages.

G.R. No. 189871 August 13, 2013DARIO NACAR,PETITIONER,vs.GALLERY FRAMES AND/OR FELIPE BORDEY, JR.,RESPONDENTS.D E C I S I O NPERALTA,J.:KEYWORD: New Rule as to RATE OF INTERESTDOCTRINE: Interest; legal rate beginning July 1, 2013. The guidelines laid down in the case of Eastern Shipping Lines are accordingly modified to embody BSP-MB Circular No. 799FACTS: Dario Nacar filed a labor case against Gallery Frames and its owner Felipe Bordey, Jr., alleging that he was dismissed without cause by Gallery Frames on January 24, 1997. On October 15, 1998, the Labor Arbiter rendered a Decision3in favor of petitioner and found that he was dismissed from employment without a valid or just cause. Thus, petitioner was awarded backwages and separation pay in lieu of reinstatement in the amount ofP158,919.92.

Gallery Frames appealed all the way to the Supreme Court (SC). The Supreme Court affirmed the decision of the Labor Arbiter and the decision became final on May 27, 2002.On November 5, 2002, petitioner filed a Motion for Correct Computation, praying that his backwages be computed from the date of his dismissal on January 24, 1997 up to the finality of the Resolution of the Supreme Court on May 27, 2002.The LA denied the motion as he ruled that the reckoning point of the computation should only be from the time Nacar was illegally dismissed )January 24, 1997) until the decision of the LA (October 15, 1998). The LA reasoned that the said date should be the reckoning point because Nacar did not appeal hence as to him, that decision became final and executory.NLRC: Appeal was denied by the NLRC. Petitioner filed a Motion for Reconsideration, but it was likewise denied in the Resolution. COURT OF APPEALS: The CA rendered a Decision denying the petition. The CA opined that since petitioner no longer appealed the October 15, 1998 Decision of the Labor Arbiter, which already became final and executory, a belated correction thereof is no longer allowed. The CA stated that there is nothing left to be done except to enforce the said judgment. Consequently, it can no longer be modified in any respect, except to correct clerical errors or mistakes.ISSUE: Whether a re-computation, in the course of execution of the labor arbiter's original computation of the awards made, is legally properRULING OF THE SUPREME COURT: yes.There are two parts of a decision when it comes to illegal dismissal cases (referring to cases where the dismissed employee wins, or loses but wins on appeal). The first part is the ruling that the employee was illegally dismissed. This is immediately final even if the employer appeals but will be reversed if employer wins on appeal. The second part is the ruling on the award of backwages and/or separation pay. For backwages, it will be computed from the date of illegal dismissal until the date of the decision of the Labor Arbiter. But if the employer appeals, then the end date shall be extended until the day when the appellate courts decision shall become final. Hence, as a consequence, the liability of the employer, if he loses on appeal, will increase this is just but a risk that the employer cannot avoid when it continued to seek recourses against the Labor Arbiters decision. This is also in accordance with Article 279 of the Labor Code.As to the issue of award interest in the form of actual or compensatory damages, the Supreme Court ruled that the old case of Eastern Shipping Lines vs CA is already modified by the promulgation of the Bangko Sentral ng Pilipinas Monetary Board Resolution No. 796 which lowered the legal rate of interest from 12% to 6%. Specifically, the rules on interest are now as follows:Interest; legal rate beginning July 1, 2013. The guidelines laid down in the case of Eastern Shipping Lines are accordingly modified to embody BSP-MB Circular No. 799, as follows:I. When an obligation, regardless of its source, i.e., law, contracts, quasi contracts, delicts or quasi-delicts is breached, the contravenor can be held liable for damages. The provisions under Title XVIII on Damages of the Civil Code govern in determining the measure of recoverable damages.II. With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 6% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages, except when or until the demand can be established with reasonable certainty.Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code), but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged.3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 6% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit. And, in addition to the above, judgments that have become final and executory prior to July 1, 2013, shall not be disturbed and shall continue to be implemented applying the rate of interest fixed therein.

WHEREFORE, premises considered, the Decision dated September 23, 2008 of the Court of Appeals in CA-G.R. SP No. 98591, and the Resolution dated October 9, 2009 are REVERSED and SET ASIDE. Respondents are Ordered to Pay petitioner:(1) backwages computed from the time petitioner was illegally dismissed on January 24, 1997 up to May 27, 2002, when the Resolution of this Court in G.R. No. 151332 became final and executory;(2) separation pay computed from August 1990 up to May 27, 2002 at the rate of one month pay per year of service; and(3) interest of twelve percent (12%) per annum of the total monetary awards, computed from May 27, 2002 to June 30, 2013 and six percent (6%) per annum from July 1, 2013 until their full satisfaction.The Labor Arbiter is hereby ORDERED to make another recomputation of the total monetary benefits awarded and due to petitioner in accordance with this Decision.#PEREZ

G.R. No. 189456 April 2, 2014CHIANG KAI SHEK COLLEGE and CARMELITA ESPINO,Petitioners,vs.ROSALINDA M. TORRES,Respondent.D E C I S I O NPEREZ,J.:

Petitioner Chiang Kai Shek College is a private educational institution that offers elementary to college education to the public. Individual petitioner Carmelita Espino is the Vice-President of the school. Respondent had been employed as a grade school teacher of the school from July 1970 until 31 May 2003. The manner of her severance from employment is the matter at hand.Respondent was accused of leaking a copy of a special quiz given to Grade 5 students of HEKASI (HEKASI 5).Petitioners came to know about the leakage from one of the teachers of HEKASI 5, Aileen Benabese (Ms. Benabese). Ms. Benabese narrated that after giving a special quiz, she borrowed the book of one of her students, Aileen Regine M. Anduyan (Aileen), for the purpose of making an answer key. When she opened Aileens book, a piece of paper fell. Said paper turned out to be a copy of the same quiz she had just given and the same already contained answers.Ms. Benabese informed the schools Assistant Supervisor Mrs. Gloria Caneda (Mrs. Caneda) about the incident. Mrs. Caneda conferred with Assistant Supervisor Encarnacion Koo (Mrs. Koo), who was in charge of the HEKASI area, and Supervisor Luningning Tibi (Ms. Tibi). Mrs. Koo confronted respondent, who had initially denied leaking the test paper but later on admitted that she gave the test paper to Mrs. Teresita Anduyan (Mrs. Anduyan), her co-teacher and the mother of Aileen. Respondent and Mrs. Anduyan were both directed to submit their written statement on the incident.Respondent explained that she was busy checking the writing workbook when Mrs. Anduyan borrowed her special quiz for HEKASI 5. Thereafter, when she left the Faculty Room for her class, she was not aware that Mrs. Anduyan did not return the copy of the special quiz back to her. Neither did she hand over a copy of the test questions with the answers already indicated therein. Also, she expressed her concern that Mrs. Anduyan could have taken a copy of the test paper without her permission and without her knowledge.Mrs. Anduyan denied that she asked for the special quiz from respondent and that the latter forgot about the paper that she allegedly took. She averred that the respondent willingly handed over her the quiz so that she could see the copy of it. At the Administrative Hearing, the Investigating Committee found respondent and Mrs. Anduyan guilty of committing a grave offense of the school policies by leaking a special quiz. The Committee had actually decided to terminate respondent but respondent pleaded for a change of punishment from termination to suspension of one month without pay and forfeiture of all the benefits. Respondent filed a complaint for constructive dismissal and illegal suspension with the Labor Arbiter. She also sought payment of unpaid salary, backwages, holiday pay, service incentive leave pay, 13th month pay, separation pay, retirement benefits, damages and attorneys fees.Petitioners Contention: As per respondents letter, she offered to voluntarily resign at the end of the school year, provided that her punishment be changed from termination to suspension. Petitioners claim that respondent, who was faced with immediate termination of her employment, bargained for a better exit. Petitioners deny forcing, coercing or pressuring respondent into writing said letter.Respondents Contention: She averred that petitioner forced her to write the written request for a change of the action on the charges against her, from dismissal to suspension and eventual resignation. Respondent reiterates that she never intended to resign but due to intense pressure from individual petitioner who threatened that she will not receive her monetary benefits, she was pressured to write the alleged resignation letter.Labor Arbiter: Dismissed respondents complaint. The Labor Arbiter held that there was no constructive dismissal because respondent was not coerced nor pressured to write her resignation letter.NLRC: Affirmed the Labor Arbiters findings but ordering petitioners to pay respondent separation pay equivalent to one-half (1/2) month salary for every year of service on the grounds of equity and social justice.Court of Appeals: Reversed the NLRC Decision and Resolution. The Court of Appeals ruled that petitioner did not voluntarily resign but was constructively dismissed. The appellate court cited respondents years in service; her consistent denials of the accusations against her; her alleged resignation letter which did not contain any reason for her resignation; and the unsigned memorandum of termination which militate against the voluntariness of resignation. The appellate court also foreclosed any interpretation that respondent was validly dismissed for a just cause because respondent was already meted the penalty of suspension without pay and forfeiture of her bonuses. The appellate court found it unjust to penalize respondent twice for the same offense.ISSUE: whether or not the schools act of imposing the penalty of suspension instead of immediate dismissal from service in exchange for the employees resignation at the end of the school year, constitutes constructive dismissalHELD : NO. Resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed for the favor of employment, and opts to leave rather than stay employed. It is a formal pronouncement or relinquishment of an office, with the intention of relinquishing the office accompanied by the act of relinquishment. As the intent to relinquish must concur with the overt act of relinquishment, the acts of the employee before and after the alleged resignation must be considered in determining whether, he or she, in fact, intended to sever his or her employment.Given the indications of voluntary resignation, the Court ruled that there is no constructive dismissal in this case. There is constructive dismissal when there is cessation of work, because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay and other benefits. Aptly called a dismissal in disguise or an act amounting to dismissal but made to appear as if it were not, constructive dismissal may, likewise, exist if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued employment.There was here no discrimination committed by petitioners. While respondent did not tender her resignation wholeheartedly, circumstances of her own making did not give her any other option. With due process, she was found to have committed the grave offense of leaking test questions. Dismissal from employment was the justified equivalent penalty. Having realized that, she asked for, and was granted, not just a deferred imposition of, but also an acceptable cover for the penalty. The fact that she waited until the close of the school year to challenge her impending resignation demonstrate that respondent had bargained for a graceful exit and is now trying to renege on her obligation. Associate Justice Antonio T. Carpio accordingly noted that petitioners should not be punished for being compassionate and granting respondent's request for a lower penalty. Put differently, respondent should not be rewarded for reneging on her promise to resign at the end of the school year. Otherwise, employers placed in similar situations would no longer extend compassion to employees. Compromise agreements, like that in the instant case, which lean towards desired liberality that favor labor, would be discouraged. WHEREFORE, premises considered, the Petition is GRANTED

BPIBANK OF THE PHILIPPINE ISLANDS,Petitioner,-versus-BPI EMPLOYEES UNION-DAVAO CHAPTER-FEDERATION OF UNIONSIN BPI UNIBANK,Respondent.G.R. No. 164301August 10, 2010

On March 23, 2000, the Bangko Sentral ng Pilipinas and the SEC approved the Articles of Merger executed on January 20, 2000 by and between BPI, herein petitioner, and FEBTC.[5]Pursuant to the Article and Plan of Merger, all the assets and liabilities of FEBTC were transferred to and absorbed by BPI as the surviving corporation.FEBTC employees, including those in its different branches across the country, were hired by petitioner as its own employees, with their status and tenure recognized and salaries and benefits maintained.The former FEBTC rank-and-file employees in Davao City did not belong to any labor union at the time of the merger which were thereafter invited by respondent to to a meeting regarding the Union Shop Clauseofthe existing CBA between petitioner BPI and respondent Union.

After the meeting called by the Union, some of the former FEBTC employees joined the Union, while others refused.Later, however, some of those who initially joined retracted their membership.[9]Respondent Union then sent notices to the former FEBTC employees who refused to join, as well as those who retracted their membership, and called them to a hearing regarding the matter.When these former FEBTC employees refused to attend the hearing, the president of the Union requested BPI to implement the Union Shop Clause of the CBA and to terminate their employment pursuant thereto.

Petitioner did not act upon said requestnd after two months of inaction, respondent Union informed petitioner BPI of its decision to refer the issue of the implementation of the Union Shop Clause of the CBA to the Grievance Committee.However, the issue remained unresolved at this level and so it was subsequently submitted for voluntary arbitration by the parties.

VA: ruled in favor of petitioner BPIs interpretation that the former FEBTC employees were not covered by the Union Security Clause of the CBA between the Union and the Bank on the ground that the said employees were not new employees who were hired and subsequently regularized, but were absorbed employees by operation of law because the former employeesof FEBTC can be consideredassets and liabilities of the absorbed corporation.The Voluntary Arbitrator concluded that the former FEBTC employees could not be compelled to join the Union, as it was their constitutional right to join or not to join any organization.

the Court of Appeals reversed and set aside the Decision of the Voluntary Arbitrator and considered the absorbed employees as new employees subject to the Union Shop clause of the CBA.

Issue: whether or not the former FEBTC employees that were absorbed by petitioner upon the merger between FEBTC and BPI should be covered by the Union Shop Clause found in the existing CBA between petitioner and respondent Union.

Held: yes.

Petitioner argues that the term new employees in the Union Shop Clause of the CBA is qualified by the phrases who may hereafter be regularly employed and after they become regular employees which led petitioner to conclude that the new employees referred to in, and contemplated by, the Union Shop Clause of the CBA were only those employees who were new to BPI, on account of having been hired initially on a temporary or probationary status for possible regular employment at some future date.BPI argues that the FEBTC employees absorbed by BPI cannot be considered as new employees of BPI for purposes of applying the Union Shop Clause of the CBA.

We do not agree.

Section 2, Article II of the CBA is silent as to how one becomes a regular employee of the BPI for the first time.There is nothing in the said provision which requires that a new regular employee first undergo a temporary or probationary status before being deemed as such under the union shop clause of the CBA.

Moreover, the law admits of some exceptions to the union shop clause, namely, mployees who at the time the union shop agreement takes effect are bona fide members of a religious organization which prohibits its members from joining labor unions on religious grounds;[21]employees already in the service and already members of a union other than the majority at the time the union shop agreement took effect;[22]confidential employees who are excluded from the rank and file bargaining unit;[23]andemployees excluded from the union shop by express terms of the agreement.

[CHANGE OF EQUITY COMPOSITION OF CORP]G.R. No. 184517 October 8, 2013SME BANK INC., ABELARDO P. SAMSON, OLGA SAMSON and AURELIO VILLAFLOR, JR. vs. PEREGRIN T. DE GUZMAN,EDUARDO M. AGUSTIN, JR., ELICERIO GASPAR, RICARDO GASPAR JR., EUFEMIA ROSETE, FIDEL ESPIRITU, SIMEONESPIRITU, JR., and LIBERATO MANGOBAG.R. No. 186641SME BANK INC., ABELARDO P. SAMSON, OLGA SAMSON and AURELIO VILLAFLOR, JR. vs. ELICERIO GASPAR, RICARDO GASPAR, JR., EUFEMIA ROSETE, FIDEL ESPIRITU, SIMEONESPIRITU, JR., and LIBERATO MANGOBADOCTRINE: Because the corporation possesses a personality separate and distinct from that of its shareholders, a shift in the composition of its shareholders will not affect its existence and continuity. Thus, notwithstanding the stock sale, the corporation continues to be the employer of its people and continues to be liable for the payment of their just claims. Furthermore, the corporation or its new majority share holders are not entitled to lawfully dismiss corporate employees absent a just or authorized cause.FACTS: Respondent employees Elicerio, Ricardo, Eufemia, Fidel, Simeon, Jr., and Liberato were employees of Small and Medium Enterprise Bank, Incorporated (SME Bank). Originally, the principal shareholders and corporate directors of the bank were Agustin and De Guzman.In June 2001, SME Bank experienced financial difficulties. To remedy the situation, the bank officials proposed its sale to Abelardo Samson (Samson). Through his attorney-in-fact, Tomas S. Gomez IV, Samson then sent Letter Agreements to Agustin and De Guzman, stipulated there in is to terminate/retire the employees we mutually agree upon, upon transfer of shares in favor of our groups nominees;Agustin and De Guzman accepted the terms and conditions proposed by Samson. Espiritu, then the general manager of SME Bank, held a meeting with all the employees of the head office and of the Talavera and Muoz branches of SME Bank and persuaded them to tender their resignations, with the promise that they would be rehired upon reapplication. His directive was allegedly done at the behest of petitioner Olga Samson.Relying on this representation, respondent employees tendered their resignations dated 27 August 2001. On 11 September 2001, the turn over took effect. As it turned out, respondent employees, except for Simeon, Jr., were not rehired. After a month in service, Simeon, Jr. again resigned on October 2001.Respondent-employees demanded the payment of their respective separation pays, but their requests were denied.Aggrieved by the loss of their jobs, respondent employees filed a Complaint before the National Labor Relations Commission (NLRC) Regional Arbitration Branch No. III and sued SME Bank, spouses Abelardo and Olga Samson and Aurelio Villaflor (the Samson Group) for unfair labor practice; illegal dismissal; illegal deductions; underpayment; and nonpayment of allowances, separation pay and 13th month pay. Subsequently, they amended their Complaint to include Agustin and De Guzman as respondents to the case.On 27 October 2004, the labor arbiter ruled that the buyer of an enterprise is not bound to absorb its employees, unless there is an express stipulation to the contrary. However, he also found that respondent employees were illegally dismissed, because they had involuntarily executed their resignation letters after relying on representations that they would be given their separation benefits and rehired by the new management. Accordingly, the labor arbiter decided the case against Agustin and De Guzman, but dismissed the Complaint against the Samson Group.The NLRC found that there was only a mere transfer of shares and therefore, a mere change of management from Agustin and De Guzman to the Samson Group. As the change of management was not a valid ground to terminate respondent bank employees, the NLRC ruled that they had indeed been illegally dismissed. It further ruled that Agustin, De Guzman and the Samson Group should be held jointly and severally liable for the employees separation pay and backwages. The NLRC denied the Motions for Reconsideration filed by Agustin, De Guzman and the Samson Group.Agustin and De Guzman filed a Rule 65 Petition for Certiorari with the CA, docketed as CA-G.R. SP No. 97510, which was denied. The Samson Group likewise filed a separate Rule 65 Petition for Certiorari with the CA, docketed as CA-G.R. SP No. 97942, which was also denied. The appellate court denied the Motions for Reconsideration filed by the parties.The Samson Group then filed two separate Rule 45 Petitions questioning the CA Decisions and Resolutions in CA-G.R. SP No. 97510 and CA-G.R. SP No. 97942. On 17 June 2009, the Supreme Court resolved to consolidate both Petitions.ISSUE: Whether respondent employees were illegally dismissed.RULING: Respondent employees were illegally dismissed.The Samson Group contends that Elicerio, Ricardo, Fidel, and Liberato voluntarily resigned from their posts, while Eufemia retired from her position. As their resignations and retirements were voluntary, they were not dismissed from their employment. In support of this argument, it presented copies of their resignation and retirement letters, which were couched in terms of gratitude.We disagree. While resignation letters containing words of gratitude may indicate that the employees were not coerced into resignation, this fact alone is not conclusive proof that they intelligently, freely and voluntarily resigned. In order to withstand the test of validity, resignations must be made voluntarily and with the intention of relinquishing the office, coupled with an act of relinquishment. Therefore, in order to determine whether the employees truly intended to resign from their respective posts, we cannot merely rely on the tenor of the resignation letters, but must take into consideration the totality of circumstances in each particular case.The records show that Elicerio, Ricardo, Fidel, and Liberato only tendered resignation letters because they were led to believe that, upon reapplication, they would be reemployed by the new management. As it turned out, except for Simeon, Jr., they were not rehired by the new management. Their reliance on the representation that they would be reemployed gives credence to their argument that they merely submitted courtesy resignation letters because it was demanded of them, and that they had no real intention of leaving their posts.As to Eufemia, a review of the records shows that, unlike her co-employees, she did not resign; rather, she submitted a letter indicating that she was retiring from her former position. The fact that Eufemia retired and did not resign, however, does not change our conclusion that illegal dismissal took place. Retirement, like resignation, should be an act completely voluntary on the part of the employee. If the intent to retire is not clearly established or if the retirement is involuntary, it is to be treated as a discharge.In this case, the facts show that Eufemias retirement was not of her own volition. The facts show that Eufemia was likewise given the option to resign or retire in order to fulfill the precondition in the Letter Agreements that the seller should "terminate/retire the employees [mutually agreed upon] upon transfer of shares" to the buyers. Petitioner bank also argues that, there being a transfer of the business establishment, the innocent transferees no longer have any obligation to continue employing respondent employees, and that the most that they can do is to give preference to the qualified separated employees; hence, the employees were validly dismissed. The argument is misleading and unmeritorious. Contrary to petitioner banks argument, there was no transfer of the business establishment to speak of, but merely a change in the new majority shareholders of the corporation.There are two types of corporate acquisitions: asset sales and stock sales.In asset sales, the rule is that the seller in good faith is authorized to dismiss the affected employees, but is liable for the payment of separation pay under the law. The buyer in good faith, on the other hand, is not obliged to absorb the employees affected by the sale, nor is it liable for the payment of their claims. The most that it may do, for reasons of public policy and social justice, is to give preference to the qualified separated personnel of the selling firm.The transaction in stock sales takes place at the shareholder level. Because the corporation possesses a personality separate and distinct from that of its shareholders, a shift in the composition of its shareholders will not affect its existence and continuity. Thus, notwithstanding the stock sale, the corporation continues to be the employer of its people and continues to be liable for the payment of their just claims. Furthermore, the corporation or its new majority share holders are not entitled to lawfully dismiss corporate employees absent a just or authorized cause.In the case at bar, the Letter Agreements show that their main object is the acquisition by the Samson Group of 86.365% of the shares of stock of SME Bank. Hence, this case involves a stock sale, whereby the transferee acquires the controlling shares of stock of the corporation. Thus, following the rule in stock sales, respondent employees may not be dismissed except for just or authorized causes under the Labor Code.

LIBCAP MARKETING CORP.,JOHANNA J. CELIZ, andG.R. No.192011MA. LUCIA G. MONDRAGON,Petitioners,-versus -LANNY JEAN B. BAQUIAL,Respondent.

Petitioner Libcap Marketing Corporation (Libcap) is engaged in the freightforwarding business with offices in Iloilo City. Petitioner Johanna J. Celiz (Celiz)is Libcaps Human Resources Division Head, and petitioner Ma. Lucia G.Mondragon is Libcaps Vice-President for Administration.

Respondent Lanny Jean B. Baquial was employed by Libcap on October12, 1999 as accounting clerk for Libcaps Super Express branch in Cagayan deOro City. Her functions included depositing Libcaps daily sales and collectionsin Libcaps bank account with Global Bank (now PSBank).

an audit of Libcaps Super Express branch inCagayan de Oro City was conducted, and the resulting audit report5 showed thatrespondent made a double reporting of a single deposit made on April 2, 2001. Inother words, a single April 2, 2001 bank deposit of P1,437.00 was used to cover oraccount for two days sales of apparently identical amounts, covering theundeposited collection for March 19, 2001 and current sales for March 31, 2001.

On July 26, 2003, respondent received a Notice of AdministrativeInvestigation15 requiring her to attend a July 28, 2003 investigation at LibcapsIloilo office. Respondent was unable to attend due to lack of financial resources.16On July 28, 2003, respondent received a 2nd Notice of AdministrativeInvestigation17 requiring her to attend an August 4, 2003 investigation in IloiloCity. Again, respondent failed to attend.Respondent was placed on preventive suspension from July 29, 2003 toAugust 12, 2003.18Respondent sent petitioners an August 6, 2003 written explanation.19On August 16, 2003, respondent received a Notice of Termination20 datedAugust 9, 2003, stating that she was terminated from employment effectiveAugust 12, 2003 for dishonesty, embezzlement, inefficiency, and for commissionof acts inconsistent with Libcaps work standards.

Respondent filed a labor complaint for illegal dismissal

the Labor Arbiter held that respondent was dismissed for justcause, but the dismissal was ineffectual as she was deprived of procedural dueprocess; it was error for Libcap to schedule the July 28, 2003 investigation at itsIloilo office when it could very well have held it in Cagayan de Oro City. In otherwords, conducting the hearing in Iloilo City was tantamount to deprivingrespondents day in court, because she did not have the financial resources to go toIloilo City.

NLRC AFFIRMED.

CA reversed. issue:whether respondent is entitled to nominal damages despite existence of cause for dismissal

held:

yes.

Petitioners claim that respondent is not entitled to financial assistance giventhat she is guilty of theft or embezzlement. The law and jurisprudence allow the award of nominal damages in favor ofan employee in a case where a valid cause for dismissal exists but the employerfails to observe due process in dismissing the employee. On the other hand,financial assistance is granted to a dismissed employee as a measure of equity orsocial justice, and is in the nature or takes the place of severance compensation.

Accordingly, it is wise to hold that: (1) if the dismissalis based on a just cause under Article 282 but the employerfailed to comply with the notice requirement, the sanction tobe imposed upon him should be tempered because thedismissal process was, in effect, initiated by an act imputableto the employee; and (2) if the dismissal is based on anauthorized cause under Article 283 but the employer failedto comply with the notice requirement, the sanction shouldbe stiffer because the dismissal process was initiated by theemployers exercise of his management prerogative.

AMECOS INNOVATIONS, INC.and ANTONIO F. MATEO,Petitioners,- versus -G.R. No.178055Present:CARPIO, Chairperson,BRION,DEL CASTILLO,PEREZ, andLEONEN,* JJELIZA R. LOPEZ, Promulgated:Respondent.

Facts:

Petitioner Amecos Innovations, Inc. (Amecos) is a corporation dulyincorporated under Philippine laws engaged in the business of selling assorted products created by its President and herein co-petitioner, Antonio F. Mateo(Mateo). On May 30, 2003, Amecos received a Subpoena7 from the Office of theCity Prosecutor of Quezon City in connection with a complaint filed by the SocialSecurity System (SSS) for alleged delinquency in the remittance of SSScontributions and penalty liabilities in violation thereof.

By way of explanation, Amecos attributed its failure to remit the SSScontributions to herein respondent Eliza R. Lopez (respondent). Amecos claimedthat it hired respondent on January 15, 2001 as Marketing Assistant to promote itsproducts; that upon hiring, respondent refused to provide Amecos with her SSSNumber and to be deducted her contributions; that on the basis of the foregoing,Amecos no longer enrolled respondent with the SSS and did not deduct hercorresponding contributions up to the time of her termination in February 2002.Amecos eventually settled its obligations with the SSS; consequently, SSSfiled a Motion to Withdraw Complaint8 which was approved by the Office of theCity Prosecutor.9Thereafter, petitioners sent a demand letter10 to respondent for P27,791.65representing her share in the SSS contributions and expenses for processing, but tono avail. Thus, petitioners filed the instant Complaint for sum of money anddamages against respondent docketed as Civil Case No. 04-27802 and raffled toBranch 51 of the Metropolitan Trial Court (MeTC) of Caloocan City.Petitionersclaimed that because of respondents misrepresentation, they suffered actualdamages in the amount of P27,791.65 allegedly incurred by Amecos by way ofsettlement and payment of its obligations with the SSS.11

Respondent filed her Answer with Motion to Dismiss12 claiming that shewas formerly an employee of Amecos until her illegal dismissal in February 2002;that Amecos deliberately failed to deduct and remit her SSS contributions; and thatpetitioners filed the instant Complaint in retaliation to her filing of an illegaldismissal case. Respondent also averred that the regular courts do not havejurisdiction over the instant case as it arose out of their employer-employeerelationship.

LA, NLRC, CA RULED IN FAVOR OF RESPONDENT DUE TO LACK OF JURISDICTION

ISSUE:WHETHER regular courts have jurisdiction of the case

Held:No.

This Court holds that as between the parties, Article 217(a)(4) of the LaborCode is applicable. Said provision bestows upon the Labor Arbiter original andexclusive jurisdiction over claims for damages arising from employer-employeerelations. The observation that the matter of SSS contributions necessarily flowedfrom the employer-employee relationship between the parties shared by thelower courts and the CA is correct; thus, petitioners claims should have beenreferred to the labor tribunals. In this connection, it is noteworthy to state that theLabor Arbiter has jurisdiction to award not only the reliefs provided by labor laws,but also damages governed by the Civil Code.

COLEGIO DE SAN JUAN DELETRAN-CALAMBA,G.R. No. 190303Petitioner,- versus -Present:CARPIO,J.,Chairperson,BRION,DEL CASTILLOPEREZ, and'PERLAS-BERNABE, JJ.ENGR. DEBORAH P. TARDEO,

Facts:

Petitioner is an educational institution created and existing underPhilippine laws with principal office at Brgy. Bucal, Calamba City, Laguna.Respondent, on the other hand, was employed as a full-time faculty memberof the petitioner since 1985. In August 2006, respondent was elected asUnion President of Letran-Calamba Faculty and Employees Association(LECFEA) and served in such capacity until she was suspended from workin 2008.Respondents suspension arose from her request for FacultyDevelopment Program and Fund Assistance submitted for consideration ofpetitioner. Attached to her request was a two-page invitation allegedlydownloaded from Philippine Physics Societys (PPS) website which detailedthe supposed expenses in the upcoming convention.

During pre-audit, the Vice-President for Finance and concurrentlyLetrans Controller Rodolfo Ondevilla (Ondevilla) noted that the supporting document appended to respondents request was altered. While thedocuments appeared to have been taken from the PPS website, significantportions thereof were missing which led him to conclude that the said partswere deliberately omitted by respondent.6

Convinced that the misrepresentation committed by respondentconstitutes a grave offense, Jacob convened the Committee of Discipline toinvestigate the matter pursuant to the mandate of the Faculty Handbook of2006.In a Letter10 dated 28 May 2008, respondent was informed that she isunder investigation for dishonesty and serious misconduct and was given theopportunity to defend herself.

After investigation, the Committee of Discipline found thatrespondent is guilty of dishonesty and serious misconduct and meted out the Feeling aggrieved, respondent assailed the adverse decision of theCommittee of Discipline to the Office of the Voluntary Arbitrator arguingthat she was denied of her right to due process when she was not allowed toconfront Ondevilla in person during the hearing.

The case was brought to an arbitration and the latter ruled in favor of respondent

The ca affirmed.

Issue: whether the act of respondent constitute serious misconduct to warrant suspension

Held: no.

The Office of the Voluntary Arbitrator and the Court of Appeals areone in holding that respondent was not guilty of serious misconduct whenshe omitted a portion of the invitation, and, in effect, declared respondentssuspension from employment for one semester, unlawful. For failing toadduce substantial evidence to prove that respondent was guilty of seriousmisconduct, both bodies held that respondents suspension fromemployment is unwarranted.

As amplified by jurisprudence, themisconduct must (1) be serious; (2) relate to the performance of theemployees duties; and (3) show that the employee has become unfit tocontinue working for the employer.2018

Under Article 282 of the labor Code, the misconduct, to be just causefor termination, must be serious. This implies that it must be of such graveand aggravated character and not merely trivial or unimportant.

Although respondent was not terminated from employment but wasmerely suspended from work for one semester or equivalent to 101 daysschool days, her infraction should still be measured against the foregoingstandards considering that the charge leveled against her is seriousmisconduct.

Hence, suspension is illegal.