Category: Legal News & Updates

Covers new legislation, landmark court decisions, and policy changes.

  • Transfer of Employee, Constructive Dismissal, Management Prerogative

    Transfer of Employee, Constructive Dismissal, Management Prerogative

    constructive dismissal case involving employee transfer

    Alt text: constructive dismissal case involving employee transfer

    July 26, 2022

    Companies have management prerogative to regulate all aspects of employment which includes the right to prescribe to its employees the manner on how a work shall be performed and to re-assign or transfer employees. Abusive exercise of management prerogative may amount to constructive dismissal of an employee.

    Case in point is Morales vs. Harbor Centre Port Terminal, Inc. [1] Morales, a division manager of the company’s accounting department, was transferred to operations cost accounting with duties of monitoring and evaluating all consumables request.

    Morales protested the transfer stating that the same was a clear demotion as the position of operation cost accounting was not even in the plantilla of the company. The company responded by reminding Morales that transfer of employees is a management prerogative.

    For the ensuing month, Morales would either be tardy or absent from work. Thereafter, on April 29, 2003 the company issued a warning reminding Morales that as employee he is subject to company rules and regulations and he may be disciplinarily dealt with.

    In view of Morales’ continues absence or tardiness, a second warning was issued on May 6, 2003 and another “notice to report for work & final warning” on May 22, 2003.

    In the meantime however, 3 days before the first warning was issued or on April 25, 2003, Morales already filed a case for illegal dismissal against the company and its officers.

    In his complaint before the Labor Arbiter (LA), Morales stated that he was constructively dismissed. On the other hand, the company argued that Morales’ transfer was a valid exercise of management prerogative and Morales abandoned his new work assignment. The LA dismissed Morales’ complaint ruling that his transfer was a valid exercise of management prerogative. On appeal the National Labor Relations Commission (NLRC) reversed the LA finding that Morales’ transfer was a clear demotion. The Court of Appeals, on petition for certiorari, reversed the NLRC. The Supreme Court reinstated the NLRC ruling.

    What is a Constructive Dismissal?

    Constructive dismissal exists where 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.

    In cases of a transfer of an employee, the rule is settled that the employer is charged with the burden of proving that its conduct and action are for valid and legitimate grounds such as genuine business necessity and that the transfer is not unreasonable, inconvenient or prejudicial to the employee. If the employer cannot overcome this burden of proof, the employee’s transfer shall be tantamount to unlawful constructive dismissal.

    What is a Management Prerogative and How May a Company Validly Exercise It?

    Admittedly, the right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to change their assignments or to transfer them. By management prerogative is meant the right of an employer to regulate all aspects of employment, such as the freedom to prescribe work assignments, working methods, processes to be followed, regulation regarding transfer of employees, supervision of their work, lay-off and discipline, and dismissal and recall of workers.

    Although jurisprudence recognizes said management prerogative, it has been ruled that the exercise thereof, while ordinarily not interfered with, is not absolute and is subject to limitations imposed by law, collective bargaining agreement, and general principles of fair play and justice.

    Thus, an employer may transfer or assign employees from one office or area of operation to another, provided there is no demotion in rank or diminution of salary, benefits, and other privileges, and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause. Indeed, having the right should not be confused with the manner in which that right is exercised.

    References

    [1] G.R. No. 174208 – January 25, 2012

  • First and Second Level Courts Jurisdiction under Republic Act 11576

    First and Second Level Courts Jurisdiction under Republic Act 11576

    September 12, 2021

    Judges Explaining Court levels and jurisdiction

    Jurisdiction of MetroTC, MTC, MTCC, MCTC under Republic Act 11576 has been expanded to cover up to Two million peso value of controversy

    Jurisdictions of Metropolitan Trial Court, Municipal Trial Courts in Cities, Municipal Trial Courts and Municipal Circuit Trial Courts in civil cases as expanded by Republic Act 11576 are:

    1. Exclusive original Jurisdiction over civil actions and probate proceedings, testate and intestate, including the grant of provisional remedies in proper cases, where the value of the personal property, estate, or amount of the demand does not exceed Two million pesos (2,000,000), exclusive of interest, damages of whatever kind, attorney’s fees, litigation expenses, and costs, the amount of which must be specifically alleged: Provided, That interest, damages, of whatever kind, attorney’s fees, litigation expenses, and costs shall be included in the determination of the filing fees: Provided, further, That where there are several claims or causes of actions between the same or different parties, embodied  in the same complaint, the amount of the demand shall be the totality of the claims in all the causes of action, irrespective of whether the causes of action arose out of the same or different transaction;

    2. Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real property, or any interest therein where the assessed value of the property or any interest therein does not exceed Four hundred thousand pesos (P400,000.00), exclusive of interest, damages of whatever kind, attorney’s fees, litigation expenses and cost s: Provided, That in cases of land not declared for taxation purposes, the value of such property shall be determined by the assessed value of the adjacent lots.

    3. Exclusive original jurisdiction in admiralty and maritime actions where the demand or claim does not exceed Two million pesos (P2,000,000.00).

    while the Regional Trial Court’s new jurisdiction in civil cases under the same law is:

    1. In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the assessed value exceeds Four hundred thousand pesos (400,000.00), except for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon Metropolitan Trial Court, Municipal Trial Courts in Cities, Municipal Trial Courts and Municipal Circuit Trial Courts;

    2. In all actions in admiralty and maritime jurisdiction where the demand or claims exceeds Two million pesos (P2,000,000.00);

    3. In all matters of probate, both testate and intestate, where the gross value of the estate exceeds Two million pesos (P2,000,000.00);

    4. In all other cases in which the demand, exclusive of interest, damages of whatever kind, attorney’s fees, litigation expenses and costs or the value of the property in controversy exceeds Two million pesos (P2,000,000.00).

  • Valid Employee Quitclaim

    Valid Employee Quitclaim

    November 15, 2024

    Legal quitclaim document validated by Supreme Court ruling.

    As ruled by the Hon. Supreme Court in the case of Leo A. Abad et. al. vs. San Roque Metals Inc., G.R. No. 255368 – May 29, 2024, the requisites of a valid quitclaim executed by an employee are the following:

    A valid quitclaim must be voluntary, fair, and free from fraud.

    (1) the employees execute the deed of quitclaim voluntarily;

    (2) there is no fraud or deceit on the part of any of the parties;

    (3) the consideration of the quitclaim must be credible and reasonable; and,

    (4) the contract is not contrary to law, public order, public policy, morals, or good customs, or prejudicial to a third person with a right recognized by law. Absent these elements, the quitclaim may be invalidated. Consequently an invalidated quitclaim does not have the effect of res judicata between the parties.”

    Also in the same case, the Hon. Supreme Court ruled that “[W]hen the Court reviews a Decision of the CA in a petition for Certiorari assailing a ruling of the NLRC, its scope of review is limited to the correctness of review of the CA’s finding of grave abuse of discretion. In labor cases, the NLRC abuses its discretion when “its findings and conclusions are not supported by substantial evidence, which refers to that amount of relevant evidence that a reasonable might accept as adequate to justify a conclusion,” or when its ruling finds no basis in the evidence and applicable statutes and case law.”

  • BIR Removed the Expiration of Ors/SIs!

    BIR Removed the Expiration of Ors/SIs!

    July 5, 2022

    BIR removes expiration on official receipts.

    One of the Ease of Doing Business Policies, sana noon pa!

    BIR Removed the Expiration of Ors/SIs!

    Citing the clamor of the taxpayers in line with the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, the Bureau of Internal Revenue (BIR) issued a revenue regulation mandating the removal of expiration of duly printed official receipts of a business entity or professional. One better part of this regulation is that the existing manual receipts/invoices may still be used until fully exhausted. The Authority to Print receipts/invoices inclusive of its serial numbers and its usage shall also have no more expiration, and the phrase “THIS INVOICE/RECEIPT SHALL BE VALID FOR FIVE (5) YEARS FROM THE DATE OF THE ATP” should now be omitted and for existing unused receipts should be disregarded.

    The full text of Revenue Regulation 6-2022 dated 30 June 2022 is reproduced herein:

    SECTION 1. BACKGROUND

    ln 2012, Revenue Regulations (RR) No. l8-2012 regulated the printing of all invoices and receipts by setting a 5-year validity period on Authority to Print (ATP). Some taxpayers clamored that they incurred additional costs in printing new sets of manual receipts/invoices once the five-year validity already lapsed despite the remaining inventory of the said receipts/invoices.

    The said five-year validity was extended to the system-generated receipts/invoices issued from Cash Register Machines (CRMs), Point-of-Sale (POS) Machines and Other Sales Receipting System Software pursuant to the provisions of RR No. l0-2015, as amended. Similarly, there will be additional burden to the taxpayers if they will apply for the renewal/ reissuance of their Permit to Use (PTU) whenever the five-year validity period will transpire.

    In line with Republic Act (RA) No. 11032, otherwise known as “Ease of Doing Business and Efficient Government Service Delivery Act of 2018”, the Bureau is continuously revisiting its policies and business processes to improve, streamline and reduce financial burden on the part of its clients.

    SECTION 2. SCOPE

    Pursuant to the provisions of Section 244 of the National Internal Revenue Code (NIRC) of 1997, as amended, these Regulations shall cover taxpayers who will apply for the following:

    1. ATP Official Receipts (ORs), Sales Invoices (SIs) and Other Commercial Invoices (CIs) based on Revenue Memorandum Order (RMO) No. I 2-2013;
    2. Registration of Computerized Accounting System (CAS)/Component of CAS based on Revenue Memorandum Circular (RMC) No. 10-2020,, RMC No. 5-2021 and RMO No. 9-2021; and
    3. PTU CRMs and PoS machines based on RR No. ll-2004 and RMO No. l0-2005.

    SECTION 3. POLICIES AND GUIDELINES

    1. The five-year validity period of the PTU and/or system-generated receipts/invoices based on the abovementioned revenue issuances is hereby removed, hence all PTUs to be issued shall be valid unless revoked by the Bureau of Internal Revenue (BIR) on grounds which shall include, but not limited to, the following:

    a. Tampering of sales data/integrity of the data and/or software specification/features to alter/avoid the recording of a sale transaction;

    b. Any major repair, upgrade, integration and modification/alteration without prior notification and approval by the BIR office concerned, including the items enumerated in Section V, Item No. 8 of RMO No. 9-2021, to wit:

    i. Change in the functionalities of the system, particularly on enhancements that will have a direct effect on the financial aspect of the system that includes modified computations and other financial-related issues that were considered;

    ii. Addition or Removal of modules or sub-modules within the system that will have a direct impact on the financial aspect of the system;

    iii. Change in the system/software Version or Release Number that will have enhancements on the financial aspect of the system; and

    iv. All other enhancements that will be deemed as a major system enhancement based on the recommendation of the technical evaluators of the BIR.

    c. Any violation(s) on the policies and procedures for registration under RMO No. l0-2005 and RMO No. 9-2021, and other related revenue issuances.

    2. The phrase “THIS INVOICE/RECEIPT SHALL BE VALID FOR FIVE (5) YEARS FROM THE DATE OF THE PERMIT TO USE” as previously required under RR No. l0-2015 as amended by RR No.16-2018, and the phrase “Valid Until” required on RMC No. 107-2019 shall be OMITTED at the bottom portion of the system-generated receipts/invoices.

    3. ATP principal and supplementary receipts/invoices inclusive of its serial numbers and its usage shall also have no expiration, thus, the phrase “THIS INVOICE/RECEIPT SHALL BE VALID FOR FIVE (5) YEARS FROM THE DATE OF THE ATP” and the phrase “Valid Until (mm/dd/yyyy)” on the manual receipts/invoices previously required on RMO No. 12-2013 shall also be OMITTED (or DISREGARDED for unused receipts/invoices).

    SECTION 4. TRANSITORY PROVISIONS

    For Manual Receipts/Invoices with ATP

    The validity date and the phrase as mentioned under Section 3 (3) of these regulations printed on the unused manual principal and supplementary receipts/invoices shall be disregarded and the same way may still be used until fully exhausted. Further, the subsequent printing of manual receipts/invoices upon the effectivity of these Regulations must not reflect the phrase (under Section 3 (3) of these Regulations) and shall no longer adopt the five-year validity.

    For Receipts/Invoices Generated from CAS, Component of CAS with PTU or AC

    All system-generated receipts/invoices that were issued with the aforementioned phrases previously required under RR No. 10-2015 as amended by RR No. I 6-2018 and RMO No. 9-2021, and RMC No. 107-2019 based on the previously approved system/software with corresponding PTU/AC shall be disregarded; however, the said system/software generating such receipts/invoices must be reconfigured to omit the said phrases.

    For Receipts/Invoices Generated from CRMs and POS machines with PTU

    All system-generated receipts/invoices that were issued with the aforementioned phrases previously required under RR No. 10-2015 as amended by RR No. I 6-2018, and RMC No. 107-2019, based on the previously approved CRMs and POS machines with corresponding PTU shall be disregarded; however, the said system/software generating such receipts/invoices must be reconfigured to omit the said phrases.

    SECTION 5. REPEALING CLAUSE

    All regulations, rules, orders or portions thereof contrary to the provisions of these Regulations are hereby repealed, amended or modified accordingly.

    SECTION 6. EFFECTIVITY CLAUSE

    These Regulations shall take effect fifteen (15) days after publication in the Official Gazette or in a newspaper of general circulation, whichever comes earlier.

  • Mga Pamatay na Pangako Ever Made

    Mga Pamatay na Pangako Ever Made

    A group of Filipino politicians making bold campaign promises.

    August 8, 2022

    These are the top most grandiose, if not most irritating, promises made by Filipino politicians I have heard.

    1. President Joseph Estrada – “Ngayon pa lamang, ang mga kamag anak ko ay nilalapitan na ng kung sinu-sino. Kung anu-anong deal at kickback ang pinapangako. Binabalaan ko sila. Walang kaibigan, walang kumpare, walang kamag-anak o anak na maaring mag samantala sa ngayon. At ngayon pa lang sinasabi ko sa inyo, nag aaksaya lamang kayo ng panahon. Huwag ninyo akong subukan.” Unfortunately, Erap was kicked out of the presidency because of corruption and on allegations of favoring his friends and families.
    2. President Benigno Simeon C. Aquino – “At pag hindi ho nangyari ito, nandyan ho si Secretary Abaya na nangangasiwa ng proyektong ito, dalawa na kaming magpapasagasa siguro sa train.” In this instance Pres. Aquino declared that if the LRT project missed the 2015 deadline, he was ready to be run over by a train. The train project did not happen but Aquino died of illness and not because he was run over by a train.
    3. President Rodrigo R. Duterte – “If elected president, give me about three to six months, I will get rid of corruption, drugs and criminality.” Pres. Duterte’s term ended on 30 June 2022 but the drug problem and criminality are still rampant.
    4. Senator Alan Peter Cayetano – This is the “Sampung Libong Pag Asa” program promise of Cayetano which was designed to give 10 thousand pesos to select beneficiary to alleviate the effects of COVID pandemic. As a congressman of the 18th Congress (2019-2022), he actually filed a bill for this but it never ripened into law. Still this is such an ostentatious promise which should have not been vocalized to citizens who are still waiting for such promise until now. Sen. Cayetano promised to file a similar bill in the 19th Congress (2022-2025) of which he is a member as a senator who had just received a 6-year fresh electoral mandate in the just concluded elections (2022 National Elections).
    5. President Ferdinand “Bongbong” Marcos, Jr. – One of the promises of Pres. Marcos, Jr. in election campaign speeches was to lower the price of rice (Philippines’ primary staple food) to as low as Php20.00 per kilo. He formally assumed presidency on 30th of June 2022, and many Filipinos, including myself, are waiting for this to happen. Many doubts the realization of this promise. We will see.

  • Fraudulent Concealment of Pregnancy as a Ground for Annulment of Marriage?

    Fraudulent Concealment of Pregnancy as a Ground for Annulment of Marriage?

    November 15, 2024

    Man questioning paternity before marriage as basis for annulment.

    This is the case of Republic of the Philippines vs. Villacorta, G.R. No. 249953 June 23, 2021

    FACTS

    In April of 2001, Melvin learned that Janufi was pregnant. Melvin was “surprised” and “doubtful” to learn Janufi was already one month pregnant because they had sexual intercourse only in March of 2001. Although Melvin doubted the paternity of the child, Janufi supposedly assured him that he was the only person she had sexual intercourse with. This put his doubts to rest. On December 1, 2001, Janufi gave birth to a baby girl named Mejan Dia and she and Melvin then began living together. After almost three years or on August 14, 2004, Melvin and Janufi finally got married. When the couple quarreled Melvin had the DNA test of the Mejan Dia. The DNA test result showed that there is a 00.00% probability that Mejan Dia is daughter of Melvin.

    Melvin seeks annulment of their marriage on the ground of fraud alleging concealment of pregnancy.

    Supreme Court interprets the legal grounds for annulment based on fraud.

    “The Republic argues that the RTC decision annulling the marriage is not in accord with law and jurisprudence because the Family Code expressly provides that a marriage may be annulled on the basis of fraud through concealment only if “x x x at the time of the marriage, the wife was pregnant and she concealed the fact that such pregnancy was by a man other than her husband.” In the case at bar, Mejan Dia was already almost three years old when Melvin and Janufi got married on August 4, 2004. Evidently, Janufi was not pregnant at the time of her marriage and Article 46(2) cannot apply. Further, the OSG claims that it is clear from Janufi’s messages that she had no intention to deceive Melvin into acknowledging the paternity of Mejan Dia. While Janufi may have misrepresented the state of her chastity, it cannot be discounted that she honestly believed that Mejan Dia was sired by Melvin. The Court agrees.

    “…. . . . . In this regard, the Family Code provides:

    Art. 45. A marriage may be annulled for any of the following causes, existing at the time of the marriage:

    (I) That the party in whose behalf it is sought to have the marriage annulled was eighteen years of age or over but below twenty-one, and the marriage was solemnized without the consent of the parents, guardian or person having substitute parental authority over the party, in that order, unless after attaining the age of twenty-one, such party freely cohabited with the other and both lived together as husband and wife;

    (2) That either party was of unsound mind, unless such party after coming to reason, freely cohabited with the other as husband and wife;

    (3) That the consent of either party was obtained by fraud, unless such party afterwards, with full knowledge of the facts constituting the fraud, freely cohabited with the other as husband and wife;

    (4) That the consent of either party was obtained by force, intimidation or undue influence, unless the same having disappeared or ceased, such party thereafter freely cohabited with the other as husband and wife;

    (5) That either party was physically incapable of consummating the marriage with the other, and such incapacity continues and appears to be incurable; or

    (6) That either party was afflicted with a sexually transmissible disease found to be serious and appears to be incurable. (Underscoring supplied)

    As opined by CA Justice Eduardo P. Caguioa, a member of the Civil Code Revision and Family Law Committee, “[a]lthough fraud to vitiate consent has been defined by the Civil Code as insidious words and machinations which lead a party to enter into a contract without which he would not have entered into, this general definition of fraud in the Civil Code is not absolutely applicable to marriage since the subsequent article of the Code (referring to Article 86 of the Civil Code) limits the kinds of fraud which will serve as grounds for annulment. Consequently, in order to annul a marriage on the ground of fraud, the fraud must consist of one of those enumerated in Article 86.”  Article 86 of the Civil Code is the precursor of Article 46 of the Family Code, which now states:

    Art. 46. Any of the following circumstances shall constitute fraud referred to in Number 3 of the preceding Article:

    (1) Non-disclosure of a previous conviction by final judgment of the other party of a crime involving moral turpitude;

    (2) Concealment by the wife of the fact that at the time of the marriage, she was pregnant bv a man other than her husband;

    (3) Concealment of sexually transmissible disease, regardless of its nature, existing at the time of the marriage; or

    (4) Concealment of drug addiction, habitual alcoholism or homosexuality or lesbianism existing at the time of the marriage.

    No other misrepresentation or deceit as to character, health, rank, fortune or chastity shall constitute such fraud as will give grounds for action for the annulment of marriage.

    Annulment denied due to absence of valid fraud under family law.

    “Based on the foregoing, it is evident that to constitute fraud that warrants annulment under Article 46(2): I) the wife must have been pregnant by a man other than her husband at the time of the marriage and 2) the wife must have fraudulently concealed the same.

    “In this regard, the OSG correctly argues that the concealed pregnancy, which vitiates consent, must have existed at the time of the marriage. Justice Eduardo Caguioa explains that “[t]he essence of the fraud in this case is the non-disclosure of the present pregnancy of the wife x x x the pregnancy must exist at the time of the celebration of the marriage, thus, if the wife had previous relations with other men and as a consequence of which she became pregnant or bore a child previously, the concealment thereof will not be a ground for annulling the marriage if at the time the marriage was celebrated the wife was not pregnant.” It is the concealment of the fact of pregnancy by another man at the time of marriage that constitutes fraud as a ground for annulment. “No other misrepresentation or deceit as to character, health, rank, fortune or chastity shall constitute such fraud as will give grounds for action for the annulment of marriage.

    “In the instant case, the facts readily reveal that Mejan Dia was already almost three years old when Melvin and Janufi got married on August 4, 2004. As Janufi was not pregnant at the time of the marriage, any purported fraud she may have committed to induce Melvin to marry her cannot be considered the fraudulent concealment contemplated under Article 46(2). Indeed, the Court has held that not all fraudulent acts can be invoked to annul a marriage. The circumstances of fraud under Article 45(3) are exclusive and restrictive. In Anaya v. Palaroan, the Court resolved the question of whether or not the non-disclosure to a wife by her husband of his pre-marital relationship with another woman was a ground for annulment of marriage under Article 86 of the Civil Code. Speaking through Justice J.B.L. Reyes, the Court held that:

    The intention of Congress to confine the circumstances that can constitute fraud as ground for annulment of marriage to the foregoing three cases may be deduced from the fact that, of all the causes of nullity enumerated in Article 85, fraud is the only one given special treatment in a subsequent article within the chapter on void and voidable marriages. If its intention were otherwise, Congress would have stopped at Article 85, for, anyway, fraud in general is already mentioned therein as a cause for annulment. But Article 86 was also enacted, expressly and specifically dealing with “fraud referred to in number 4 of the preceding article,” and proceeds by enumerating the specific frauds (misrepresentation as to identity, nondisclosure of a previous conviction, and concealment of pregnancy), making it clear that Congress intended to exclude all other frauds or deceits. To stress further such intention, the enumeration of the specific frauds was followed by the interdiction: “No other misrepresentation or deceit as to character, rank, fortune or chastity shall constitute such fraud as will give grounds for action for the annulment of marriage.”

    Non-disclosure of a husband’s pre-marital relationship with another woman is not one of the enumerated circumstances that would constitute a ground for annulment; and it is further excluded by the last paragraph of the article, providing that “no other misrepresentation or deceit as to [x x x] chastity” shall give ground for an action to annul a marriage. While a woman may detest such non-disclosure of premarital lewdness or feel having been thereby cheated into giving her consent to the marriage, nevertheless the law does not assuage her grief after her consent was solemnly given, for upon marriage she entered into an institution in which society. and not herself alone, is interested. The lawmaker’s intent being plain, the Court’s duty is to give effect to the same, whether it agrees with the rule or not.