What are the different types of dismissal? (Labor Law)

As culled from the Labor Code (LC) and existing jurisprudence, the following are the types of dismissal:

1. Dismissal for a just cause under Art. 288 of the LC with due process;
2. Dismissal for authorized cause under Art. 289 of the LC with due process;
3. Dismissal for health reasons under Art. 290 of the LC with due process;
4. Dismissal without just or authorized cause with due process;
5. Dismissal without just or authorized cause without due process;
6. Dismissal for just or authorized cause without due process; and
7. Dismissal for a false or non-existent cause.

Under numbers (1) to (3), the dismissal is undoubtedly valid and the employer will not suffer any liability (Agabon vs. NLRC, G.R. No. 158693, 17 November 2004).

In numbers (4) and (5) which refer to dismissal without just or authorized cause with or without due process, the dismissals are illegal and Art. 285 of the Labor Code mandates that the employee is entitled to reinstatement without loss of seniority rights and other privileges and full backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from the time the compensation was not paid up to the time of actual reinstatement (Ibid).

In number (6) which is dismissal for just or authorized cause without due process, because of the failure to observe the procedural requirements a sanction may be imposed by the Court on the employer to indemnify the dismissed employee (Ibid).

Lastly, the dismissal for a false or non-existent cause is a form of discharge where the employer does not intend to dismiss the employee but for a specific cause which turns out to be false or non-existent. Since there is no intention on the part of the employer to dismiss the employee concerned, reinstatement is therefore warranted. On the other hand, the employer in a dismissal without cause, has the intention to dismiss the employee without cause whatsoever (Pepito vs. Sec. of Labor, 96 SCRA 454; Magtoto vs. NLRC, G.R. No. 63370, 18 November 1985).

Related articles online:
Termination of Employment in the Philippines | Kittelson and Carpo Consulting
July 2012 Philippine Supreme Court Decisions on Labor Law and Procedure | Lexoterica
Agabon vs. NLRC | UST Law Review

Heirs of Ignacio vs. Home Bankers Savings and Trust Co. (2013) (Civil Law)

Heirs of Ignacio vs. Home Bankers Savings and Trust Co. | G.R. No. 177783 | January 23, 2013

Facts: The case sprang from a real estate mortgage of two parcels of land in August 1981. Fausto C. Ignacio mortgaged the properties to Home Bankers Savings and Trust Company (Bank) as security for a loan extended by the Bank. After Ignacio defaulted in the payment of the loan, the property was foreclosed and subsequently sold to the Bank in a public auction.Ignacio offered to repurchase the property. Universal Properties Inc. (UPI), the bank’s collecting agent sent Ignacio a letter on March 22, 1984 which contained the terms of the repurchase. However, Ignacio annotated in the letter new terms and conditions. He claimed that these were verbal agreements between himself and the Bank’s collection agent, UPI.No repurchase agreement was finalized between Ignacio and the Bank. Thereafter the Bank sold the property to third parties. Ignacio then filed an action for specific performance against the Bank for the reconveyance of the properties after payment of the balance of the purchase price. He argued that there was implied acceptance of the counter-offer of the sale through the receipt of the terms by representatives of UPI. The Bank denied that it gave its consent to the counter-offer of Ignacio. It countered that it did not approve the unilateral amendments placed by Ignacio.

Issue: Whether or not the negotiations between Ignacio and UPI is binding on the Bank.

Held: A contract of sale is perfected only when there is consent validly given. There is no consent when a party merely negotiates a qualified acceptance or a counter-offer. An acceptance must reflect all aspects of the offer to amount to a meeting of the minds between the parties.In this case, while it is apparent that Ignacio proposed new terms and conditions to the repurchase agreement, there was no showing that the Bank approved the modified offer. 

The negotiations between Ignacio and UPI, the collection agent, were merely preparatory to the repurchase agreement and, therefore, was not binding on the Bank. Ignacio could not compel the Bank to accede to the repurchase of the property.

A corporation may only give valid acceptance of an offer of sale through its authorized officers or agents. Specifically, a counter-offer to repurchase a property will not bind a corporation by mere acceptance of an agent in the absence of evidence of authority from the corporation’s board of directors.

Metropolitan Bank vs. Absolute Management Corp. (2013) (Civil Law)

Metropolitan Bank vs. Absolute Management Corp. | G.R. No. 170498 | January 9, 2013

Facts: Metrobank deposited the AMC checks to Ayala Lumber and Hardware’s account; because of Chua’s control over AMC’s operations, Metrobank assumed that the checks payable to AMC could be deposited to Ayala Lumber and Hardware’s account.

Ayala Lumber and Hardware had no right to demand and receive the checks that were deposited to its account; despite Chua’s control over AMC and Ayala Lumber and Hardware, the two entities are distinct, and checks exclusively and expressly payable to one cannot be deposited in the account of the other.

In its fourth-party complaint, Metrobank claims that Chua’s estate should reimburse it if it becomes liable on the checks that it deposited to Ayala Lumber and Hardware’s account.

Issue: Whether or not Ayala Lumber must return the amount of said checks to Metrobank.

Held: Metrobank acted in a manner akin to a mistake when it deposited the AMC checks to Ayala Lumber and Hardware’s account because it assumed that the checks payable to AMC could be deposited to Ayala Lumber and Hardware’s account. This disjunct created an obligation on the part of Ayala Lumber and Hardware, through its sole proprietor, Chua, to return the amount of these checks to Metrobank.

This fulfills the requisites of solutio indebiti. Metrobank’s fourth-party complaint falls under the quasi-contracts enunciated in Article 2154 of the Civil Code. Article 2154 embodies the concept "solutio indebiti" which arises when something is delivered through mistake to a person who has no right to demand it. It obligates the latter to return what has been received through mistake. Solutio indebiti, as defined in Article 2154 of the Civil Code, has two indispensable requisites: first, that something has been unduly delivered through mistake; and second, that something was received when there was no right to demand it. 

Sps. Mamaril vs. Boy Scout of the Philippines (2013) (Civil Law)

Sps. Mamaril vs. Boy Scout of the Philippines | G.R. No. 179382 | January 14, 2013

Facts: PUJ operators Sps. Mamaril would park their 6 passenger jeepneys every night at BSP’s compound in Malate, Manila for a fee of P300.00 per month for each unit. One day, one of the vehicles was missing and was never recovered. According to the security guards Peña and Gaddi of AIB Security Agency with whom BSP had contracted for its security and protection, a male person who looked familiar to them took the subject vehicle out of the compound. Sps. Mamaril prayed that Peña and Gaddi, together with AIB and BSP, be held liable for: (a) the value of the subject vehicle; (b) amount representing daily loss of income/boundary reckoned from the day the vehicle was lost; (c) exemplary damages; (d) moral damages; (e) attorney's fees; and (f) cost of suit.

BSP denied any liability contending that not only did Sps. Mamaril directly deal with AIB with respect to the manner by which the parked vehicles would be handled, but the parking ticket itself expressly stated that the "Management shall not be responsible for loss of vehicle or any of its accessories or article left therein." It also claimed that Sps. Mamaril erroneously relied on the Guard Service Contract. Apart from not being parties thereto, its provisions cover only the protection of BSP's properties, its officers, and employees.

Issue: Whether or not BSP may be held liable for the loss of the vehicle caused by the negligence of its security guards.

Held: The proximate cause of the loss of Sps. Mamaril's vehicle was the negligent act of security guards Peña and Gaddi in allowing an unidentified person to drive out the subject vehicle. The records are bereft of any finding of negligence on the part of BSP. Neither will the vicarious liability of an employer under Article 2180 of the Civil Code apply in this case. Peña and Gaddi were assigned as security guards by AIB to BSP pursuant to the Guard Service Contract. No employer-employee relationship existed between BSP and the security guards assigned in its premises. Sps. Mamaril are not parties to the Guard Service Contract. Guard Service Contract between defendant-appellant BSP and defendant AIB Security Agency is purely between the parties therein.

Contracts take effect only between the parties, their assigns and heirs, except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law. The heir is not liable beyond the value of the property he received from the decedent. If a contract should contain some stipulation in favor of a third person, he may demand its fulfillment provided he communicated his acceptance to the obligor before its revocation. A mere incidental benefit or interest of a person is not sufficient. The contracting parties must have clearly and deliberately conferred a favor upon a third person.

Thus, in order that a third person benefited by the second paragraph of Article 1311, referred to as a stipulation pour autrui, may demand its fulfillment, the following requisites must concur: (1) There is a stipulation in favor of a third person; (2) The stipulation is a part, not the whole, of the contract; (3) The contracting parties clearly and deliberately conferred a favor to the third person - the favor is not merely incidental; (4) The favor is unconditional and uncompensated; (5) The third person communicated his or her acceptance of the favor before its revocation; and (6) The contracting parties do not represent, or are not authorized, by the third party. However, none of the foregoing elements obtains in this case.There is absolutely nothing in the said contract that would indicate any obligation and/or liability on the part of the parties therein in favor of third persons such as herein plaintiffs-appellees.

Moreover, the Court concurs with the finding of the CA that the contract between the parties herein was one of lease as defined under Article 1643 of the Civil Code. It has been held that the act of parking a vehicle in a garage, upon payment of a fixed amount, is a lease. The agreement with respect to the ingress and egress of Sps. Mamaril's vehicles were coordinated only with AIB and its security guards, without the knowledge and consent of BSP. Accordingly, the mishandling of the parked vehicles that resulted in herein complained loss should be recovered only from the tort feasors (Peña and Gaddi) and their employer, AIB; and not against the lessor, BSP. 

Meralco vs. Vera (1975) (Taxation Law)

Meralco vs. Vera | G.R. No. L-29987 | October 22, 1975

Facts: Meralco is the holder of a franchise to construct, maintain, and operate an electric light, heat, and power system in the City of Manila and its suburbs. In 1962 and 1963, Meralco imported and received from abroad copper wires, transformers, and insulators for use in the operation of its business.  The Collector of Customs, as deputy of the Commissioner of Internal Revenue, levied and collected a compensating tax.  Meralco claimed for refund for the said years, but such claims were either not acted upon or denied by the Commissioner.

Issue: Whether or not Meralco is exempt from payment of a compensating tax on poles, wires, transformers and insulators imported by it for use in the operation of its electric light, heat, and power system.

Held: Meralco is not exempt from paying the compensation tax provided for in Section 190 of the Tax Code, the purpose of which is to “place casual importers, who are not merchants on equal footing with established merchants who pay sales tax on articles imported by them.” Meralco’s claim for exemption from payment of  the compensating tax is not clear or expressed, contrary to the rule that “exemptions from taxation are highly disfavored in law,  and he who claims exemption must be able to justify his claim by the clearest grant of organic or statute law.”  Tax exemption are strictly construed against the taxpayer, they being highly disfavored and may almost be said to be “odious to the law.” When exemption is claimed, it must be shown indubitably to exist, for every presumption is against it, and a well-founded doubt is fatal to the claim.

Valley Trading Co. vs. CFI of Isabela, et al. (1989) (Taxation Law)

Valley Trading Co. vs. CFI of Isabela, et al. | G.R. No. L-49529 | March 31, 1989

Facts: Petitioner Valley Trading filed a complaint with CFI of Isabela seeking a declaration of nullity of a local ordinance which imposed a graduated tax on retailers, independent wholesalers and distributors. Petitioner likewise prayed for issuance of writ of preliminary injunction to stop collection of said tax. Petitioner takes the position that said ordinance imposes a "graduated fixed tax based on Sales" that "in effect imposes a sales tax in contravention of Sec. 5, Charter I, par. (L) of P.D. 231 amended by P.D. 426 otherwise known as the Local Tax Code " which prohibits a municipality from imposing a percentage tax on sales.

Respondents, on the other hand, claim in their answer that the tax is an annual fixed business tax, not a percentage tax on sales, imposable by a municipality under Section 19(A-1) of the Local Tax Code. They cited the ruling of the Acting Secretary of Finance, in his letter of April 14, 1977, upholding the validity of said tax on the ground that the same is an annual graduated fixed tax imposed on the privilege to engage in business, and not a percentage tax on sales which consists of a fixed percentage of the proceeds realized out of every sale transaction of taxable items sold by the taxpayer.

CFI denied the prayer for a writ of preliminary injunction on the ground that the collection of taxes cannot be enjoined.

Issue: Whether or not the enforcement of said ordinance may be enjoined?

Held: Circumstances required for the writ to issue do not obtain in the case at bar. The damage that may be caused to the petitioner will not, of course, be irreparable; where so indicated by subsequent events favorable to it, whatever it shall have paid is easily refundable. Besides, the damage to its property rights must perforce take a back seat to the paramount need of the State for funds to sustain governmental functions. Compared to the damage to the State which may be caused by reduced financial resources, the damage to petitioner is negligible. The policy of the law is to discountenance any delay in the collection of taxes because of the oft-repeated but unassailable consideration that taxes are the lifeblood of the Government and their prompt and certain availability is an imperious need.

In the present case, it is evident that the only ground relied upon for injunction relief is the alleged patent nullity of the ordinance. If the court should issue the desired writ, premised on that sole justification therefor of petitioner, it would be a virtual acceptance of his claim that the imposition is patently invalid or, at the very least, that the ordinance is of doubtful validity. There would, in effect, be a prejudgment of the main case and a reversal of the rule on the burden of proof since it would assume the proposition which the petitioner is inceptively duty bound to prove.

Furthermore, such action will run counter to the well settled rule that laws are presumed to be valid unless and until the courts declare the contrary in clear and unequivocal terms. A court should issue a writ of preliminary injunction only when the petitioner assailing a statute has made out a case of unconstitutionality or invalidity strong enough to overcome, in the mind of the judge, the presumption of validity, aside from a showing of a clear legal right to the remedy sought. This case presents no features sufficient to overcome such presumption. This must have been evident to the trial court from the answer of the respondents and the well reasoned ruling of the Acting Secretary of Finance. The mere fact that a statute is alleged to be unconstitutional or invalid will not entitle a party to have its enforcement enjoined.

Good thing we have RJ De Guzman to keep the balance in law school, ever magnanimous...

What is the coverage of the law on termination? (Labor Law)

The law on termination under the Labor Code applies to all establishments or undertakings whether for profit or not. The purpose of the law is to extend the same rights and benefits enjoyed by employees in profit establishments to employees in non-profit entities (Art. 284, LC).

Safety Deposit Boxes

The  contract  for  rent  of  safety  deposit  boxes  is  Not  an Ordinary  contract  of  Lease  of  things  because  the  Full  and Absolute Possession and Control of the safety deposit box is Not Given to the party renting. It is actually a special kind of deposit. It is a contractual relation  between  the  parties. The  liability  rules  are governed  by  the Civil Code provisions on  Obligations and Contracts, and not on donations.  

A stipulation which Exempts the bank from Liability is Void. Even if as a rule, the Bank may limit its liability to   some extent by agreement or stipulation, the agreement or stipulation must not be contrary to law and public policy.  

The law on deposit provides that the depositary is liable for loss due to fraud, negligence, delay, or  contravention of the tenor of the agreement. Hence, any contrary stipulation would be void.

Notes on Voluntary Deposit

VOLUNTARY DEPOSIT
*Read Art. 1968 in relation to Art. 1984 (NCC), Rule 63 Sec. 1 (RRC)

- When the Delivery of object is made by the Will/Mere Consent of the Depositor
- As opposed to Necessary Deposit, where Complete Freedom of Action is Absent.
- Depositor Need Not be the Owner - after all, depositor does Not Transfer Ownership over subject matter
        + "Depositary cannot demand that the depositor prove his ownership of the thing deposited" (Art. 1984)
- Remedy of depositary is Interpleader

Art. 1969
Form:
- Oral
- Written
       + Both requires Delivery

Art. 1970
When Depositor is Incapacitated
(See Arts. 1970, 1379)
- Depositary is subject to all  the obligations of a depositary, whether or not the depositor is capacitated 
- Depositary may still accept the thing from Depositor but latter cannot compel its return
- Unless by latter's legal representative (E.g. Guardian or Administrator) or by Depositor if he should acquire capacity (Ex. of sound mind again)
- Contract under Art. 1970 is Voidable
- If ca

When Depositary is Incapacitated
- See Art. 1971)
- Depositor may recover the thing deposited while it is still in the possession of the Depositary