MANAGEMENT PREROGATIVE GR No. 162053, March 3, 2007 ST.

LUKE’S MEDICAL CENTER EMPLOYEE’S ASSOCIATION-AFW (SLMCEA-AFW) AND MARIBEL S. SANTOS, Petitioners, versus NATIONAL LABOR RELATIONS COMMISSION (NLRC) AND ST. LUKE’S MEDICAL AZCUNA, J.: Challenged in this petition for review on certiorari is the Decision[1] of the Court of Appeals (CA) dated January 29, 2004 in CA-G.R. SP No. 75732 affirming the decision[2] dated August 23, 2002 rendered by the National Labor Relations Commission (NLRC) in NLRC CA No. 026225-00. The antecedent facts are as follows: Petitioner Maribel S. Santos was hired as X-Ray Technician in the Radiology department of private respondent St. Luke’s Medical Center, Inc. (SLMC) on October 13, 1984. She is a graduate of Associate in Radiologic Technology from The Family Clinic Incorporated School of Radiologic Technology. On April 22, 1992, Congress passed and enacted Republic Act No. 7431 known as the “Radiologic Technology Act of 1992.” Said law requires that no person shall practice or offer to practice as a radiology and/or x-ray technologist in the Philippines without having obtained the proper certificate of registration from the Board of Radiologic Technology. On September 12, 1995, the Assistant Executive Director-Ancillary Services and HR Director of private respondent SLMC issued a final notice to all practitioners of Radiologic Technology to comply with the requirement of Republic Act No. 7431 by December 31, 1995; otherwise, the unlicensed employee will be transferred to an area which does not require a license to practice if a slot is available. On March 4, 1997, the Director of the Institute of Radiology issued a final notice to petitioner Maribel S. Santos requiring the latter to comply with Republic Act. No. 7431 by taking and passing the forthcoming examination scheduled in June 1997; otherwise, private respondent SLMC may be compelled to retire her from employment should there be no other position available where she may be absorbed. On May 14, 1997, the Director of the Institute of Radiology, AED-Division of Ancillary Services issued a memorandum to petitioner Maribel S. Santos directing the latter to submit her PRC Registration form/Examination Permit per Memorandum dated March 4, 1997. On March 13, 1998, the Director of the Institute of Radiology issued another memorandum to petitioner Maribel S. Santos advising her that only a license can assure her of her continued employment at the Institute of Radiology of the private respondent SLMC and that the latter is giving her the last chance to take and pass the forthcoming board examination scheduled in June 1998; otherwise, private respondent SLMC shall be constrained to take action which may include her separation from employment. On November 23, 1998, the Director of the Institute of Radiology issued a notice to petitioner Maribel S. Santos informing the latter that the management of private respondent SLMC has approved her retirement in lieu of separation pay. On November 26, 1998, the Personnel Manager of private respondent SLMC issued a “Notice of Separation from the Company” to petitioner Maribel S. Santos effective December 30, 1998 in view of the latter’s refusal to accept private respondent SLMC’s offer for early retirement. The notice also states that while said private respondent exerted its efforts to transfer petitioner Maribel S. Santos to other position/s, her qualifications do not fit with any of the present vacant positions in the hospital. In a letter dated December 18, 1998, a certain Jack C. Lappay, President of the Philippine Association of Radiologic Technologists, Inc., wrote Ms. Judith Betita, Personnel Manager of private respondent SLMC, requesting the latter to give “due consideration” to the organization’s three (3) regular members of his organization (petitioner Maribel S. Santos included) “for not passing yet the Board of Examination for X-ray Technology,” “by giving them an assignment in any department of your hospital awaiting their chance to pass the future Board Exam.” On January 6, 1999, the Personnel Manager of private respondent SLMC again issued a “Notice of Separation from the Company” to petitioner Maribel S. Santos effective February 5, 1999 after the latter failed to present/ submit her appeal for rechecking to the Professional Regulation Commission (PRC) of the recent board examination which she took and failed. On March 2, 1999, petitioner Maribel S. Santos filed a complaint against private respondent SLMC for illegal dismissal and non-payment of salaries, allowances and other monetary benefits. She likewise prayed for the award of moral and exemplary damages plus attorney’s fees. In the meantime, petitioner Alliance of Filipino Workers (AFW), through its President and Legal Counsel, in a letter dated September 22, 1999 addressed to Ms. Rita Marasigan, Human Resources Director of private respondent

SLMC, requested the latter to accommodate petitioner Maribel S. Santos and assign her to the vacant position of CSS Aide in the hospital arising from the death of an employee more than two (2) months earlier. In a letter dated September 24, 1999, Ms. Rita Marasigan replied thus: Gentlemen: Thank you for your letter of September 22, 1999 formally requesting to fill up the vacant regular position of a CSS Aide in Ms. Maribel Santos’ behalf. The position is indeed vacant. Please refer to our Recruitment Policy for particulars especially on minimum requirements of the job and the need to meet said requirements, as well as other pre-employment requirements, in order to be considered for the vacant position. As a matter of fact, Ms. Santos is welcome to apply for any vacant position on the condition that she possesses the necessary qualifications. As to the consensus referred to in your letter, may I correct you that the agreement is, regardless of the vacant position Ms. Santos decides to apply, she must go through the usual application procedures. The formal letter, I am afraid, will not suffice for purposes of recruitment processing. As you know, the managers requesting to fill any vacancy has a say on the matter and correctly so. The manager’s inputs are necessarily factored into the standard recruitment procedures. Hence, the need to undergo the prescribed steps. Indeed we have gone through the mechanics to accommodate Ms. Santos’ transfer while she was employed with SLMC given the prescribed period. She was given 30 days from issuance of the notice of termination to look for appropriate openings which incidentally she wittingly declined to utilize. She did this knowing fully well that the consequences would be that her application beyond the 30-day period or after the effective date of her termination from SLMC would be considered a re-application with loss of seniority and shall be subjected to the pertinent application procedures. Needless to mention, one of the 3 X-ray Technologists in similar circumstances as Ms. Santos at the time successfully managed to get herself transferred to E.R. because she opted to apply for the appropriate vacant position and qualified for it within the prescribed 30-day period. The other X-ray Technologist, on the other hand, as you may recall, was eventually terminated not just for his failure to comply with the licensure requirement of the law but for cause (refusal to serve a customer). Why Ms. Santos opted to file a complaint before the Labor Courts and not to avail of the opportunity given her, or assuming she was not qualified for any vacant position even if she tried to look for one within the prescribed period, I simply cannot understand why she also refused the separation pay offered by Management in an amount beyond the minimum required by law only to re-apply at SLMC, which option would be available to her anyway even (if she) chose to accept the separation pay! Well, here’s hoping that our Union can timely influence our employees to choose their options well as it has in the past. (Signed) RITA MARASIGAN Subsequently, in a letter dated December 27, 1999, Ms. Judith Betita, Personnel Manager of private respondent SLMC wrote Mr. Angelito Calderon, President of petitioner union as follows: Dear Mr. Calderon: This is with regard to the case of Ms. Maribel Santos. Please recall that last Oct. 8, 1999, Ms. Rita Marasigan, HR Director, discussed with you and Mr. Greg Del Prado the terms regarding the re-hiring of Ms. Maribel Santos. Ms. Marasigan offered Ms. Santos the position of Secretary at the Dietary Department. In that meeting, Ms. Santos replied that she would think about the offer. To date, we still have no definite reply from her. Again, during the conference held on Dec. 14, 1999, Atty. Martir promised to talk to Ms. Santos, and inform us of her reply by Dec. 21, 1999. Again we failed to hear her reply through him. Please be informed that said position is in need of immediate staffing. The Dietary Department has already been experiencing serious backlog of work due to the said vacancy. Please note that more than 2 months has passed since Ms. Marasigan offered this compromise. Management cannot afford to wait for her decision while the operation of the said department suffers from vacancy. Therefore, Management is giving Ms. Santos until the end of this month to give her decision. If we fail to hear from her or from you as her representatives by that time, we will consider it as a waiver and we will be forced to offer the position to other applicants so as not to jeopardize the Dietary Department’s operation. For your immediate action. (Signed) JUDITH BETITA Personnel Manager

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On September 5, 2000, the Labor Arbiter came out with a Decision ordering private respondent SLMC to pay petitioner Maribel S. Santos the amount of One Hundred Fifteen Thousand Five Hundred Pesos (P115,500.00) representing her separation pay. All other claims of petitioner were dismissed for lack of merit. Dissatisfied, petitioner Maribel S. Santos perfected an appeal with the public respondent NLRC. On August 23, 2002, public respondent NLRC promulgated its Decision affirming the Decision of the Labor Arbiter. It likewise denied the Motion for Reconsideration filed by petitioners in its Resolution promulgated on December 27, 2002. Petitioner thereafter filed a petition for certiorari with the CA which, as previously mentioned, affirmed the decision of the NLRC. Hence, this petition raising the following issues: I. Whether the CA overlooked certain material facts and circumstances on petitioners’ legal claim in relation to the complaint for illegal dismissal. II. Whether the CA committed grave abuse of discretion and erred in not resolving with clarity the issues on the merit of petitioner’s constitutional right of security of tenure.[3] For its part, private respondent St. Luke’s Medical Center, Inc. (SLMC) argues in its comment[4] that: 1) the petition should be dismissed for failure of petitioners to file a motion for reconsideration; 2) the CA did not commit grave abuse of discretion in upholding the NLRC and the Labor Arbiter’s ruling that petitioner was legally dismissed; 3) petitioner was legally and validly terminated in accordance with Republic Act Nos. 4226 and 7431; 4) private respondent’s decision to terminate petitioner Santos was made in good faith and was not the result of unfair discrimination; and 5) petitioner Santos’ non-transfer to another position in the SLMC was a valid exercise of management prerogative. The petition lacks merit. Generally, the Court has always accorded respect and finality to the findings of fact of the CA particularly if they coincide with those of the Labor Arbiter and the NLRC and are supported by substantial evidence.[5] True this rule admits of certain exceptions as, for example, when the judgment is based on a misapprehension of facts, or the findings of fact are not supported by the evidence on record[6] or are so glaringly erroneous as to constitute grave abuse of discretion.[7] None of these exceptions, however, has been convincingly shown by petitioners to apply in the present case. Hence, the Court sees no reason to disturb such findings of fact of the CA. Ultimately, the issue raised by the parties boils down to whether petitioner Santos was illegally dismissed by private respondent SLMC on the basis of her inability to secure a certificate of registration from the Board of Radiologic Technology. The requirement for a certificate of registration is set forth under R.A. No. 7431[8] thus: Sec. 15. Requirement for the Practice of Radiologic Technology and X-ray Technology. — Unless exempt from the examinations under Sections 16 and 17 hereof, no person shall practice or offer to practice as a radiologic and/or xray technologist in the Philippines without having obtained the proper certificate of registration from the Board. It is significant to note that petitioners expressly concede that the sole cause for petitioner Santos’ separation from work is her failure to pass the board licensure exam for X-ray technicians, a precondition for obtaining the certificate of registration from the Board. It is argued, though, that petitioner Santos’ failure to comply with the certification requirement did not constitute just cause for termination as it violated her constitutional right to security of tenure. This contention is untenable. While the right of workers to security of tenure is guaranteed by the Constitution, its exercise may be reasonably regulated pursuant to the police power of the State to safeguard health, morals, peace, education, order, safety, and the general welfare of the people. Consequently, persons who desire to engage in the learned professions requiring scientific or technical knowledge may be required to take an examination as a prerequisite to engaging in their chosen careers.[9] The most concrete example of this would be in the field of medicine, the practice of which in all its branches has been closely regulated by the State. It has long been recognized that the regulation of this field is a reasonable method of protecting the health and safety of the public to protect the public from the potentially deadly effects of incompetence and ignorance among those who would practice medicine.[10] The same rationale applies in the regulation of the practice of radiologic and x-ray technology. The clear and unmistakable intention of the legislature in prescribing guidelines for persons seeking to practice in this field is embodied in Section 2 of the law: Sec. 2. Statement of Policy. — It is the policy of the State to upgrade the practice of radiologic technology in the Philippines for the purpose of protecting the public from the hazards posed by radiation as well as to ensure safe and proper diagnosis, treatment and research through the application of machines and/or equipment using radiation.[11] In this regard, the Court quotes with approval the disquisition of public respondent NLRC in its decision dated August 23, 2002: The enactment of R.A. (Nos.) 7431 and 4226 are recognized as an exercise of the State’s inherent police power. It should be noted that the police power embraces the power to prescribe regulations to promote the health, morals,

educations, good order, safety or general welfare of the people. The state is justified in prescribing the specific requirements for x-ray technicians and/or any other professions connected with the health and safety of its citizens. Respondent-appellee being engaged in the hospital and health care business, is a proper subject of the cited law; thus, having in mind the legal requirements of these laws, the latter cannot close its eyes and [let] complainantappellant’s private interest override public interest. Indeed, complainant-appellant cannot insist on her “sterling work performance without any derogatory record” to make her qualify as an x-ray technician in the absence of a proper certificate of Registration from the Board of Radiologic Technology which can only be obtained by passing the required examination. The law is clear that the Certificate of Registration cannot be substituted by any other requirement to allow a person to practice as a Radiologic Technologist and/or X-ray Technologist (Technician).[12] No malice or ill-will can be imputed upon private respondent as the separation of petitioner Santos was undertaken by it conformably to an existing statute. It is undeniable that her continued employment without the required Board certification exposed the hospital to possible sanctions and even to a revocation of its license to operate. Certainly, private respondent could not be expected to retain petitioner Santos despite the inimical threat posed by the latter to its business. This notwithstanding, the records bear out the fact that petitioner Santos was given ample opportunity to qualify for the position and was sufficiently warned that her failure to do so would result in her separation from work in the event there were no other vacant positions to which she could be transferred. Despite these warnings, petitioner Santos was still unable to comply and pass the required exam. To reiterate, the requirement for Board certification was set by statute. Justice, fairness and due process demand that an employer should not be penalized for situations where it had no participation or control.[13] It would be unreasonable to compel private respondent to wait until its license is cancelled and it is materially injured before removing the cause of the impending evil. Neither can the courts step in to force private respondent to reassign or transfer petitioner Santos under these circumstances. Petitioner Santos is not in the position to demand that she be given a different work assignment when what necessitated her transfer in the first place was her own fault or failing. The prerogative to determine the place or station where an employee is best qualified to serve the interests of the company on the basis of the his or her qualifications, training and performance belongs solely to the employer.[14] The Labor Code and its implementing Rules do not vest in the Labor Arbiters nor in the different Divisions of the NLRC (nor in the courts) managerial authority.[15] While our laws endeavor to give life to the constitutional policy on social justice and the protection of labor, it does not mean that every labor dispute will be decided in favor of the workers. The law also recognizes that management has rights which are also entitled to respect and enforcement in the interest of fair play.[16] Labor laws, to be sure, do not authorize interference with the employer's judgment in the conduct of the latter’s business. Private respondent is free to determine, using its own discretion and business judgment, all elements of employment, "from hiring to firing" except in cases of unlawful discrimination or those which may be provided by law. None of these exceptions is present in the instant case. The fact that another employee, who likewise failed to pass the required exam, was allowed by private respondent to apply for and transfer to another position with the hospital does not constitute unlawful discrimination. This was a valid exercise of management prerogative, petitioners not having alleged nor proven that the reassigned employee did not qualify for the position where she was transferred. In the past, the Court has ruled that an objection founded on the ground that one has better credentials over the appointee is frowned upon so long as the latter possesses the minimum qualifications for the position.[17] Furthermore, the records show that Ms. Santos did not even seriously apply for another position in the company. WHEREFORE, the petition is DENIED for lack of merit. Costs against petitioners. SO ORDERED. ADOLFO S. AZCUNA Associate Justice WE CONCUR: REYNATO S. PUNO, ANGELINA SANDOVAL-GUTIERREZ, RENATO C. CORONA, CANCIO C. GARCIA G.R. No. 155421, July 7, 2004 ELMER M. MENDOZA, Petitioner, versus RURAL BANK OF LUCBAN, Respondent. DECISION PANGANIBAN, J.: The law protects both the welfare of employees and the prerogatives of management. Courts will not interfere with business judgments of employers, provided they do not violate the law, collective bargaining agreements, and general principles of fair play and justice. The transfer of personnel from one area of operation to another is

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inherently a managerial prerogative that shall be upheld if exercised in good faith -- for the purpose of advancing business interests, not of defeating or circumventing the rights of employees. The Case The Court applies these principles in resolving the instant Petition for Review[1] under Rule 45 of the Rules of Court, assailing the June 14, 2002 Decision[2] and September 25, 2002 Resolution[3] of the Court of Appeals (CA) in CAGR SP No. 68030. The assailed Decision disposed as follows: “WHEREFORE, the petition for certiorari is hereby DISMISSED for lack of merit.”[4] The challenged Resolution denied petitioner’s Motion for Reconsideration. The Facts On April 25, 1999, the Board of Directors of the Rural Bank of Lucban, Inc., issued Board Resolution Nos. 99-52 and 99-53, which read: “Board Res. No. 99-52 “‘RESOLVED AS IT IS HEREBY RESOLVED’ that in line with the policy of the bank to familiarize bank employees with the various phases of bank operations and further strengthen the existing internal control system[,] all officers and employees are subject to reshuffle of assignments. Moreover, this resolution does not preclude the transfer of assignment of bank officers and employees from the branch office to the head office and vice-versa.” “Board Res. No. 95-53 “Pursuant to Resolution No. 99-52, the following branch employees are hereby reshuffled to their new assignments without changes in their compensation and other benefits. NAME OF EMPLOYEES PRESENT ASSIGNMENT NEW ASSIGNMENT JOYCE V. ZETA Bank Teller C/A Teller CLODUALDO ZAGALA C/A Clerk Actg. Appraiser ELMER L. MENDOZA Appraiser Clerk-Meralco Collection CHONA R. MENDOZA Clerk-Meralco Bank Teller”[5] Collection In a letter dated April 30, 1999, Alejo B. Daya, the bank’s board chairman, directed Briccio V. Cada, the manager of the bank’s Tayabas branch, to implement the reshuffle.[6] The new assignments were to "be effective on May 1, 1999 without changes in salary, allowances, and other benefits received by the aforementioned employees."[7] On May 3, 1999, in an undated letter addressed to Daya, Petitioner Elmer Mendoza expressed his opinion on the reshuffle, as follows: -RE: The recent reshuffle of employees as per Board Resolution dated April 25, 1999 -Dear Sir: -This is in connection with the aforementioned subject matter and which the undersigned received on April 25, 1999. -Needless to state, the reshuffling of the undersigned from the present position as Appraiser to Clerk-Meralco Collection is deemed to be a demotion without any legal basis. Before this action on your part[,] the undersigned has been besieged by intrigues due to [the] malicious machination of a certain public official who is bruited to be your good friend. These malicious insinuations were baseless and despite the fact that I have been on my job as Appraiser for the past six (6) years in good standing and never involved in any anomalous conduct, my being reshuffled to [C]lerk-[M]eralco [C]ollection is a blatant harassment on your part as a prelude to my termination in due time. This will constitute an unfair labor practice. -Meanwhile, may I beseech your good office that I may remain in my position as Appraiser until the reason [for] my being reshuffled is made clear. "Your kind consideration on this request will be highly appreciated."[8] On May 10, 1999, Daya replied: -Dear Mr. Mendoza, -Anent your undated letter expressing your resentment/comments on the recent management’s decision to reshuffle the duties of bank employees, please be informed that it was never the intention (of management) to downgrade your position in the bank considering that your due compensation as Bank Appraiser is maintained and no future reduction was intended. -Aside from giving bank employees a wider experience in various banking operations, the reshuffle will also afford management an effective tool in providing the bank a sound internal control system/check and balance and a basis in evaluating the performance of each employee. A continuing bankwide reshuffle of employees shall be made at the discretion of management which may include bank officers, if necessary as expressed in Board Resolution No.

99-53, dated April 25, 1999. Management merely shifted the duties of employees, their position title [may be] retained if requested formally. "Being a standard procedure in maintaining an effective internal control system recommended by the Bangko Sentral ng Pilipinas, we believe that the conduct of reshuffle is also a prerogative of bank management."[9] On June 7, 1999, petitioner submitted to the bank’s Tayabas branch manager a letter in which he applied for a leave of absence from work: -Dear Sir: -I wish I could continue working but due to the ailment that I always feel every now and then, I have the honor to apply for at least ten (10) days sick leave effective June 7, 1999. "Hoping that this request [merits] your favorable and kind consideration and understanding."[10] On June 21, 1999, petitioner again submitted a letter asking for another leave of absence for twenty days effective on the same date.[11] On June 24, 1999, while on his second leave of absence, petitioner filed a Complaint before Arbitration Branch No. IV of the National Labor Relations Commission (NLRC). The Complaint -- for illegal dismissal, underpayment, separation pay and damages -- was filed against the Rural Bank of Lucban and/or its president, Alejo B. Daya; and its Tayabas branch manager, Briccio V. Cada. The case was docketed as NLRC Case SRAB-IV-6-5862-99-Q.[12] The labor arbiter’s June 14, 2000 Decision upheld petitioner’s claims as follows: “WHEREFORE, premises considered, judgment is hereby rendered as follows: 1. Declaring respondents guilty of illegal dismissal. 2. Ordering respondents to reinstate complainant to his former position without loss of seniority rights with full backwages from date of dismissal to actual reinstatement in the amount of P55,000.00 as of June 30, 2000. 3. Ordering the payment of separation pay if reinstatement is not possible in the amount of P30,000.00 in addition to 13th month pay of P5,000.00 and the usual P10,000.00 annual bonus afforded the employees. 4. Ordering the payment of unpaid salary for the period covering July 1-30, 1999 in the amount of P5,000.00 5. Ordering the payment of moral damages in the amount of P50,000.00. 6. Ordering the payment of exemplary damages in the amount of P25,000.00 7. Ordering the payment of Attorney’s fees in the amount of P18,000.00 which is 10% of the monetary award.[13] On appeal, the NLRC reversed the labor arbiter.[14] In its July 18, 2001 Resolution, it held: -We can conceive of no reason to ascribe bad faith or malice to the respondent bank for its implementation of its Board Resolution directing the reshuffle of employees at its Tayabas branch to positions other than those they were occupying. While at first the employees thereby affected would experience difficulty in adjusting to their new jobs, it cannot be gainsaid that the objective for the reshuffle is noble, as not only would the employees obtain additional knowledge, they would also be more well-rounded in the operations of the bank and thus help the latter further strengthen its already existing internal control system. -The only inconvenience, as [w]e see it, that the [petitioner] may have experienced is that from an appraiser he was made to perform the work of a clerk in the collection of Meralco payments, which he may have considered as beneath him and his experience, being a pioneer employee. But it cannot be discounted either that other employees at the Tayabas branch were similarly reshuffled. The only logical conclusion therefore is that the Board Resolution was not aimed solely at the [petitioner], but for all the other employees of the x x x bank as well. Besides, the complainant has not shown by clear, competent and convincing evidence that he holds a vested right to the position of Appraiser. x x x. "How and by what manner a business concern conducts its affairs is not for this Commission to interfere with, especially so if there is no showing, as in the case at bar, that the reshuffle was motivated by bad faith or ill-will. x x x."[15] After the NLRC denied his Motion for Reconsideration,[16] petitioner brought before the CA a Petition for Certiorari[17] assailing the foregoing Resolution. Ruling of the Court of Appeals Finding that no grave abuse of discretion could be attributed to the NLRC, the CA Decision ruled thus: -The so-called ‘harassment’ which Mendoza allegedly experienced in the aftermath of the reshuffling of employees at the bank is but a figment of his imagination as there is no evidence extant on record which substantiates the same. His alleged demotion, the ‘cold shoulder’ stance, the things about his chair and table, and the alleged reason for the harassment are but allegations bereft of proof and are perforce inadmissible as selfserving statements and can never be considered repositories of truth nor serve as foundations of court decisions anent the resolution of the litigants’ rights. -When Mendoza was reshuffled to the position of clerk at the bank, he was not demoted as there was no [diminution] of his salary benefits and rank. He could even retain his position title, had he only requested for it Labor Standards | To digest (old cases) | Ajean Tuazon| 3

even as the [petitioner’s] demotion in rank is admitted by both parties. 1999 letter of Daya to petitioner. Likewise. other employees were also reassigned without their express consent. but not necessarily illegal. or when a clear discrimination.[40] The absence of constructive dismissal in the instant case precludes the application of Serrano. then he is not entitled to his claimed monetary benefits.[36] While the rules of evidence prevailing in courts of law are not controlling in proceedings before the NLRC. but also the right of employers. because he had been demoted from appraiser to clerk and not given any work to do. while on leave. the main issue is whether petitioner was constructively dismissed from his employment. Inasmuch as the instant Petition challenges the Decision of the CA.R.[27] 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. insensibility or disdain by an employer becomes unbearable to the employee. 1999 Aug 25.[23] Management Prerogative to Transfer Employees Jurisprudence recognizes the exercise of management prerogatives.based on their qualifications. collective bargaining agreements. this Petition is DENIED. Costs against petitioner. 2002 Decision and the September 25.that amount of relevant evidence that a reasonable mind might accept as justification for a conclusion.[35] Purely conjectural is his claim that the reshuffle of personnel was a harassment in retaliation for an alleged falsification case filed by his relatives against a public official. since respondent’s appeal before the NLRC had allegedly been filed beyond the reglementary period. Thus. Their finding is supported by substantial evidence -."[20] In short. we cannot rule on arguments that were not brought before it. and the May 10. Should the employer fail to overcome this burden of proof. aptitudes and competencies -. as an offer involving a demotion in rank and diminution in pay. labor laws discourage interference in employers’ judgments concerning the conduct of their business. Whether or not the reshuffling of private respondent’[s] employees was done in good faith and cannot be made as the basis of a finding of constructive dismissal.[24] Indeed. -IV. constructive dismissal exists when an act of clear discrimination. damages. petitioners. This fact is clear in respondent’s Board Resolutions. and given no work assignment. In particular. INC. and other privileges. it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker. NATIONAL LABOR RELATIONS COMMISSION and WILFREDO T.[39] Thus. and "V. 2002 Resolution of the Court of Appeals are AFFIRMED. Neither was there any demotion in the rank of petitioner. PANGANIBAN Associate Justice W E C O N C U R: HILARIO G. 1999 letter of Bank President Daya to Branch Manager Cada. and general principles of fair play and justice. 1999. bearing in mind the basic elements of justice and fair play.[19] The Issues Petitioner raises the following issues for our consideration: -I. however.pursuant to the reply of the Chairman of the bank’s board of directors to Mendoza’s letter protesting the reshuffle. and unpaid salaries for the period July 1-30. SO ORDERED. this Petition. nor does it involve a demotion in rank or a diminution of his salaries. the procedural infirmity was remedied by ordering payment of his full back wages from the time of his dismissal. therefore. there are limits thereto. when there is a demotion in rank or a diminution of pay. Whether or not the Court of Appeals erred in dismissing the petitioner’s money claims. In the instant case. 2nd Division MARSAMAN MANNING AGENCY. NLRC[30] as follows: "[L]ike other rights.provided there is no demotion in rank or diminution of salary. or effected as a form of punishment or demotion without sufficient cause. ARTEMIO V. made in bad faith. Secondary Issues: Serrano v. unless it has been raised in the court below. On the other hand. to ‘further strengthen the existing internal control system’ of the bank. the April 30. inconvenient or prejudicial to the employee. 2000 was on the 15th day or five (5) days beyond the reglem[e]ntary period of ten (10) days as provided for by law and the NLRC Rules of Procedure. Petitioner was not singled out. The Court ruled therein that the lack of notice and hearing made the dismissal of the employee ineffectual.. are subject to limitations provided by law. because it was designed primarily to force him to resign. the employee’s transfer shall be tantamount to constructive dismissal.[32] Petitioner’s transfer was made in pursuit of respondent’s policy to "familiarize bank employees with the various phases of bank operations and further strengthen the existing internal control system"[33] of all officers and employees.[25] The law must protect not only the welfare of employees. he filed the illegal dismissal case against his employer for no apparent reason at all. unreasonable or unlikely. NLRC Inapplicable Serrano v. Whether or not the ruling in the landmark case of Ruben Serrano vs. no cause to doubt the reasons which the bank propounded in support of its move to reshuffle its employees.[43] WHEREFORE. and the action is not motivated by discrimination. "The fact that Mendoza was no longer included in the bank’s payroll for July 1 to 15."[31] Petitioner’s Transfer Lawful The employer bears the burden of proving that the transfer of the employee has complied with the foregoing test. vs.[26] This privilege is inherent in the right of employers to control and manage their enterprise effectively. CONSUELO YNARES-SANTIAGO ANTONIO T. insensibility or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego with his continued employment.[41] A careful scrutiny of his Petition for Review[42] with the appellate court shows that this issue was not raised there. This ruling is consistent with the due-process requirement that no question shall be entertained on appeal.[21] Petitioner argues that he was compelled to file an action for constructive dismissal. made to work without a table. (MARSAMAN) and its foreign principal DIAMANTIDES MARITIME. G.[34] There appears no justification for denying an employer the right to transfer employees to expand their competence and maximize their full potential for the advancement of the establishment. CAJERAS. The Court’s Ruling The Petition has no merit. 127195. petitioner has offered no sufficient proof to support his allegations. In the pursuit of its legitimate business interest. There is. DAVIDE. The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion. (DIAMANTIDES) assail the Decision of public respondent National Labor Relations Commission dated 16 Labor Standards | To digest (old cases) | Ajean Tuazon| 4 . JR. which has been defined as a quitting because continued employment is rendered impossible. unreasonable or unlikely. Whether or not the entire proceedings before the Honorable Court of Appeals and the NLRC are a nullity since the appeal filed by private respondent before the NLRC on August 5. AZCUNA RECRUITMENT AND PLACEMENT OF WORKERS MARSAMAN MANNING AGENCY..[28] Managerial prerogatives. although this was not disputed by the private respondent.[37] parties must nonetheless submit evidence to support their contentions. management has the prerogative to transfer or assign employees from one office or area of operation to another -. or any diminution of his salary. viz: 1. No. Alleged Nullity of NLRC and CA Proceedings Petitioner argues that the proceedings before the NLRC and the CA were void. -II. privileges and other benefits."[18] Hence. we find no reason to disturb the conclusion of the NLRC and the CA that there was no constructive dismissal. NLRC[38] does not apply to the present factual milieu. on June 24. Because herein petitioner was not dismissed. to ‘familiarize bank employees with the various phases of bank operations. CARPIO ADOLFO S. For this reason. respondents. NLRC [and Isetann Department Store (323 SCRA 445)] is applicable to the case at bar. Whether or not the petitioner is deemed to have voluntarily separated himself from the service and/or abandoned his job when he filed his Complaint for constructive and consequently illegal dismissal. the employer must be able to show that the transfer is not unreasonable.to positions in which they can function with maximum benefit to the company.’ and 2. Given no credence by both lower tribunals was his bare and self-serving statement that he had been positioned near the comfort room. We have previously held that employees may be transferred -. 1999. INC. benefits. INC.[22] He adds that the reshuffling of employees was done in bad faith. and the June 14. and DIAMANTIDES MARITIME. -III. Mendoza separated himself from the bank’s employ when. 1999 does not signify that the bank has dismissed the former from its employ.[29] The test for determining the validity of the transfer of employees was explained in Blue Dairy Corporation v. INC. courts often decline to interfere in legitimate business decisions of employers. Having the right should not be confused with the manner in which that right is exercised. while his table had been placed near the toilet and eventually removed. -The reshuffling of its employees was done in good faith and cannot be made the basis of a finding of constructive dismissal. privileges and other benefits. Main Issue: Constructive Dismissal Constructive dismissal is defined as an involuntary resignation resorted to when continued employment is rendered impossible.

[11] (b) in not appreciating the Medical Report issued by Dr. After his arrival in Manila on 29 September 1995 Cajeras complained to MARSAMAN but to no avail. However a day after the ship’s arrival at the port of Rotterdam. the Medical Report prepared by Dr. Petitioners' motion for reconsideration was denied by the NLRC in its Resolution dated 12 November 1996. (c) in affirming the award of attorney’s fees despite the fact that Cajeras' claim for exemplary damages was denied for lack of merit. in what stage it was. Alekos in the Deck Log was dismissed as of little probative value because it was a mere unilateral act unsupported by any document showing mutual consent of Capt. Hoed of Holland was dismissed as being of dubious value since it contained only a sweeping statement of the supposed ailment of Cajeras without any elaboration on the factual basis thereof.[4] Private respondent was then sent to the Medical Center for Seamen at Rotterdam where he was examined by Dr. On 28 September 1995 he was handed his Seaman's Service Record Book with the following entry: "Cause of discharge . (d) in ordering a monetary award beyond the maximum of three (3) months’ salary for every year of service set by RA 8042. the findings of doctors who are not proven experts are not binding on this Court. No document exists whereby Capt. on the other hand. Hence. on the contrary. private respondent was unceremoniously ordered to prepare for immediate repatriation the following day as he was said to be suffering from a disease of unknown origin. v. the employment of a Filipino seaman may be terminated prior to the expiration of the stipulated period provided that the master and the seaman (a) mutually consent thereto and (b) reduce their consent in writing. the Labor Arbiter disposed of the case as follows: WHEREFORE. and how it affected respondent's functions as Chief Cook Steward which. Kouvakas Alekos.Mutual Consent. this jurisprudential principle does not apply to win the case for petitioners. In the Contract of Employment[12] entered into with private respondent.100.[8] The NLRC subscribed to the view that Cajeras’ repatriation by alleged mutual consent was not proved by petitioners. NLRC. plus attorney's fees. Inc. Wden Hoed whose diagnosis appeared in a Medical Report as “paranoia” and “other mental problems. Secondly.00 or its peso equivalent at the time of payment plus USD 510. Wden Hoed. to jointly and severally pay complainant the sum of USD 5. the local manning agent of petitioner DIAMANTIDES. petitioners do not deny the fact that they have fallen short of the requirement.[18] The Court reasoned that since the log book was the only piece of evidence presented to prove just cause for the termination of respondent therein.” On 17 November 1995 private respondent Cajeras filed a complaint for illegal dismissal against petitioners with the NLRC National Capital Region Arbitration Branch alleging that he was dismissed illegally. he was repatriated to the Philippines allegedly by “mutual consent.[9] Hence. v. NLRC.[7] On 16 September 1996 the NLRC affirmed the appealed findings and conclusions of the Labor Arbiter. Alekos relented and had him examined at the Medical Center for Seamen. overtime pay. Alekos. evidenced by a contract between the parties dated 15 June 1995. He was refused at first by Capt. Cajeras was hired by petitioner MARSAMAN. The following paragraph in the vessel's Deck Log was allegedly entered by Capt. the disputed entry in the Deck Log was neither authenticated nor supported by credible evidence. as master of the MV Prigipos. Neither could the “Medical Report” prepared by Dr. In Wallem Maritime Services. for a contract period of ten (10) months with a monthly salary of US$600. 1995).[14] the NLRC could not be accused of grave abuse of discretion in not accepting anything less. Cajeras salaries corresponding to the unexpired portion of his employment contract. Dr. For one thing. The claims for nonpayment of wages and overtime pay are dismissed for having been withdrawn (Minutes. to wit: Cajeras approached me and he told me that he cannot sleep at night and that he feels something crawling on his body and he declared that he can no longer perform his duties and he must be repatriated. However petitioners contend that the entry should be considered prima facie evidence that respondent himself requested his repatriation conformably with the rulings in Haverton Shipping Ltd. In the instant case. this petition contending that the NLRC committed grave abuse of discretion: (a) in not according full faith and credit to the official entry by Capt. v. Alekos. Hence.[1] Cajeras alleged that he was assigned not only as Chief Cook Steward but also as assistant cook and messman in addition to performing various inventory and requisition jobs. since the latter sets the minimum terms and conditions of employment for the protection of Filipino seamen subject only to the adoption of better terms and conditions over and above the minimum standards. the Medical Report issued by Dr. Cajeras as illegal and ordering respondents Marsaman Manning Agency. If Dr. However. Alekos in the Deck Log was not considered reliable proof that private respondent agreed to his repatriation because no opportunity was given the latter to contest the entry which was against his interest.[3] MARSAMAN and DIAMANTIDES. and Diamantides Maritime. not even an allegation. However.”[5] Consequently. Haverton says that a vessel’s log book is prima facie evidence of the facts stated therein as they are official entries made by a person in the performance of a duty required by law. Alekos in the vessel’s Deck Log conformably with the rulings in Haverton Shipping Ltd. was even rated “Very Good” in respondent's Service Record Book. H of the Standard Employment Contract Governing the Employment of all Filipino Seamen on Board Ocean-Going Vessels. The employment of the seaman shall cease upon expiration of the contract period indicated in the Crew Contract unless the Master and the Seaman.00. We deny the petition. or on 28 September 1995.00 as 10% attorney’s fees it appearing that complainant had to engage the service of counsel to protect his interest in the prosecution of this case. judgment is hereby rendered declaring the repatriation and dismissal of complaint Wilfredo T. owned and operated by DIAMANTIDES. Hoed's qualifications to diagnose mental illnesses.” supposedly just causes for his repatriation. Hoed contained only a general statement that private respondent was suffering from “paranoia” and “other mental problems” without providing the details on how the diagnosis was arrived at or in what stage the illness was. Hoed’s recommendation. Alekos on 26 September 1995 and informed the latter that he could not sleep at night because he felt something crawling over his body. However. who just ordered him to continue working. was offered to enlighten the NLRC or this Court as to Dr. Instead. by mutual consent. Wden Hoed as conclusive evidence that respondent Cajeras was suffering from paranoia and other mental problems. The entry made by Capt. Similarly. Inc. On 29 January 1996 Labor Arbiter Ernesto S. Hoed be considered corroborative and conclusive evidence that private respondent was suffering from “paranoia” and “other mental problems. under the foregoing. the NLRC correctly dismissed its evidentiary value. it is a unilateral act which is vehemently denied by private respondent. Hoed’s diagnosis that private respondent was suffering from “paranoia” and “other mental problems” was likewise dismissed as being of little evidentiary value because it was not supported by evidence on how the paranoia was contracted. Private respondent Wilfredo T. Petitioners cannot rely on the Labor Standards | To digest (old cases) | Ajean Tuazon| 5 . and Cajeras to the premature termination of the overseas employment contract as required by Sec. denying that his repatriation was by mutual consent. absolutely no evidence. Inc. Alekos purported to show that private respondent himself asked for his repatriation.[16] Indeed. Upon returning to the vessel. Inc. Dr. NLRC[17] the Haverton ruling was not given unqualified application because the log book presented therein was a mere typewritten collation of excerpts from what could be the log book. Because of his additional assignments he began to feel sick just a little over a month on the job constraining him to request for medical attention. Cajeras reportedly declared that he could no longer perform his duties and requested for repatriation. Hoed indeed competently examined private respondent then he would have been able to discuss at length the circumstances and precedents of his diagnosis. especially after noting that private respondent did not actually sign his Seaman’s Service Record Book to signify his assent to the repatriation as alleged by petitioners. the NLRC found the allegation to be actually untrue since no signature of private respondent appeared in the Record Book. Although petitioners claim that Cajeras signed his Seaman’s Service Record Book to signify his conformity to the repatriation. It is a matter of judicial notice that there are various specializations in medical science and that a general practitioner is not competent to diagnose any and all kinds of illnesses and diseases. and attorney’s fees. as Chief Cook Steward on the MV Prigipos. December 18. on 26 September 1995 Capt. denied the imputation of illegal dismissal. Cajeras started work on 8 August 1995 but less than two (2) months later. Thus. and. Cajeras was repatriated to the Philippines on 28 September 1995.September 1996 as well as its Resolution dated 12 November 1996 affirming the Labor Arbiter's decision finding them guilty of illegal dismissal and ordering them to pay respondent Wilfredo T. and asking for his unpaid wages. upon Dr. v. petitioners convenanted strict and faithful compliance with the terms and conditions of the Standard Employment Contract approved by the POEA/DOLE[13] which provides: 1. in writing. NLRC[10] and Wallem Maritime Services. They alleged that Cajeras approached Capt. Dinopol resolved the dispute in favor of private respondent Cajeras ruling that the latter's discharge from the MV Prigipos allegedly by “mutual consent” was not proved by convincing evidence. Furthermore.[19] Secondly. petitioners presented the vessel's Deck Log wherein an entry unilaterally made by Capt."[2] Private respondent promptly objected to the entry but was not able to do anything more as he was immediately ushered to a waiting taxi which transported him to the Amsterdam Airport for the return flight to Manila. In the instant case. v. Holland. Firstly. Alekos and private respondent reduced to writing their alleged “mutual consent” to the termination of their employment contract. since no evidence was presented to show that bad faith characterized the dismissal. neither apprised private respondent about the diagnosis nor issued the requested medical certificate allegedly because he himself would forward the results to private respondent’s superiors. the log book had to be duly identified and authenticated lest an injustice would result from a blind adoption of its contents which were but prima facie evidence of the incidents stated therein. The entry made by Capt. The claims for damages are likewise dismissed for lack of merit. the entry in no way satisfies the requirement of a bilateral documentation to prove early termination of an overseas employment contract by mutual consent required by the Standard Employment Contract. NLRC[15] and Abacast Shipping and Management Agency. damages. agree to an early termination x x x x (underscoring ours). Clearly. master of the MV Prigipos. Inc.[6] Petitioners appealed to the NLRC. the examining physician.

the offended party was later induced to give accused. BENY MALIGAYA and ANGELES JAVIER. vs. in order to discuss her chances for overseas employment. for 8. A plain reading of Sec. The Labor Arbiter. whichever is less. to pay private respondent WILFREDO T. the rule has always been that an illegally dismissed worker whose employment is for a fixed period is entitled to payment of his salaries corresponding to the unexpired portion of his employment. 2208[24] of the Civil Code. salaries for three (3) months only pursuant to the last portion of Sec. Wden Hoed was not shown to be. concur. 2 (a) RPC). accused. Grave abuse of discretion is committed only when the judgment is rendered in a capricious. and CLODUALDO DE LA CRUZ. a maximum award of ten percent (10%) of the monetary award by way of attorney’s fees is legally and morally justifiable under Art. Lastly. applies in the case of private respondent and to all overseas contract workers dismissed on or after its effectivity on 15 July 1995 in the same way that Sec. valid or authorized cause as defined by law or contract. conspiring together. On the contrary his ability as Chief Cook Steward. enlist and recruit workers for employment abroad.. Q-91-21908. plus his salaries for the unexpired portion of the employment contract or for three (3) months for every year of the unexpired term whichever is less (underscoring ours). confederating with and mutually helping one another. whimsical.6 months awarded by the Labor Arbiter and affirmed by the NLRC.[20] which Dr..” To follow petitioners’ thinking that private respondent is entitled to three (3) months salary only simply because it is the lesser amount is to completely disregard and overlook some words used in the statute while giving effect to some.e.000. which is Labor Standards | To digest (old cases) | Ajean Tuazon| 6 . i. Furthermore. by means of false pretenses and/or fraudulent acts executed prior to or simultaneously with the commission of the fraud. the above-named accused. 442). Art. Court of Appeals[26] cited by petitioners in arguing against the award of attorney’s fees is clearly not applicable.. simply awarded private respondent his salaries corresponding to the unexpired portion of his employment contract. This is evident from the words “for every year of the unexpired term” which follows the words “salaries x x x for three months. and within the jurisdiction of this Honorable Court. the questioned Decision and Resolution dated 16 September 1996 and 12 November 1996. Sometime in May. his repatriation on 28 September 1995 without just. AMELIA DE LA CRUZ AND CLODUALDO DE LA CRUZ of the crime of ESTAFA (Art. neither did petitioners prove that private respondent was incompetent or continuously incapacitated for the duties for which he was employed by reason of his alleged mental state. accused-appellant told Maligaya that she would be able to leave for Taiwan as a factory worker once she gave accused-appellant the fees for the processing of her documents. and the amounts involved. accused-appellant pleaded not guilty to all the charges against him. Quezon City. RA 8042 is applicable because although private respondent’s contract of employment was entered into before the law became effective his alleged cause of action. But petitioners now insist that Sec. accused-appellant. Considering all the foregoing we cannot ascribe grave abuse of discretion on the part of the NLRC in ruling that petitioners failed to prove just cause for the termination of private respondent's overseas employment. Meanwhile accused Amelia de la Cruz and Clodualdo de la Cruz have remained at large. was rated “Very Good” in his Seaman’s Service Record Book as correctly observed by public respondent. reimburse the latter's placement fee with twelve percent (12%) interest per annum conformably with Sec. Maligaya paid accused-appellant and Amelia de la Cruz the amount of P35. accused falsely pretended to the offended party that they had connection and capacity to deploy workers for overseas employment and that they could secure employment/placement for said Beny Maligaya and believing said misrepresentations. 39(a) of the Labor Code of the Philippines. In case of termination of overseas employment without just. offices. We agree with petitioners that Sec. 10. arbitrary or despotic manner. in violation of said law. being a civil action for damages which deals with only one of the eleven (11) instances when attorney’s fees could be recovered under Art. AMELIA DE LA CRUZ. are ordered.[28] RA 6715. and once in possession of the said amount and far from complying with their commitment and despite repeated demands made upon them to return said amount. as well as attorney's fees of ten percent (10%) of the total monetary award. whether his salaries for the unexpired portion of his employment contract or three (3) months’ salary for every year of the unexpired term.00. Upon arraignment. together with Amelia de la Cruz and Clodualdo de la Cruz. misapply and convert the same to their own personal use and benefit.e. RA 8042. in Quezon City.6 months. then and there wilfully. 10 clearly reveals that the choice of which amount to award an illegally dismissed overseas contract worker. did. unlawfully and feloniously for a fee. were charged with violation of Article 38 (b) of the Labor Code[1] for illegal recruitment in large scale in an information which states CRIM. 1990. i. departments. bureaus. 10. misappropriate. then and there wilfully. respectively. Quezon City and they assured her that they were authorized by the Philippine Overseas Employment Administration (POEA) to recruit workers for Taiwan. 2018.[30] However. CASE NO. JJ.[32] Ut res magis valeat quam pereat. 10 as opposed to the salaries for 8. plaintiff-appellee. and/or its political subdivisions.: Accused-appellant. as amended by P. Except for the names of the complainants. AMELIA DE LA CRUZ and CLODUALDO DE LA CRUZ. Quisumbing. Philippines. went to accused-appellant's house in San Francisco del Monte. Rule VIII. No. the dates of commission of the crime charged.00. the prosecution sought to prove the following material facts and circumstances surrounding the commission of the crimes: Benny Maligaya. 7. having learned from a relative of accused-appellant that the latter was recruiting workers for Taiwan. unlawfully and feloniously defraud one BENY MALIGAYA. wilfully. accused were charged with three counts of estafa (Criminal Case Nos.[25] The case of Albenson Enterprises Corporation v.[22] Sec. which is not true in the present case. 2000 PEOPLE OF THE PHILIPPINES. 38(b) in relation to Art. The NLRC affirmed the award and the Office of the Solicitor General (OSG) fully agreed. This is contrary to the well-established rule in legal hermeneutics that in interpreting a statute. 34. of public respondent National Labor Relations Commission are AFFIRMED. 8. GR No. we cannot subscribe to the view that private respondent is entitled to three (3) months’ salary only. committed as follows: That on or about the period comprised from April 1990 to May 1990 in Quezon City. then and there.. confederating with and mutually helping one another. During that meeting which took place sometime in April or May. did. CASE NO. with intent of gain. by falsely representing themselves to have the capacity to contract. i.000.[29] is made applicable to locally employed workers dismissed on or after 21 March 1989.[21] With respect to attorney’s fees. the informations[3] were identical in their allegations CRIM. par.[33] WHEREFORE. CAJERAS his salaries for the unexpired portion of his employment contract or USD$5. SO ORDERED. of the crime of ILLEGAL RECRUITMENT IN LARGE SCALE (ART. Q-91-21909 and Q-91-21910).D. J. the above-named accused. on the amount of salaries due private respondent. 10 of which provides: Sec. 2208 of the Civil Code. DECISION GONZAGA-REYES. Q-91-21908 The undersigned Assistant City Prosecutor accuses ROMULO SAULO. 315.[23] and par. Mendoza. CONTRARY TO LAW.00. as in fact she did give the total amount of P35.presumption of regularity in the performance of official duties to make the Medical Report acceptable because the presumption applies only to public officers from the highest to the lowest in the service of the Government. 1990. 125903.. suffice it to say that in actions for recovery of wages or where an employee was forced to litigate and thus incurred expenses to protect his rights and interests. 10. Maligaya also met with Amelia de la Cruz and Clodualdo de la Cruz at their house in Baesa. Costs against petitioners. November 15.. the worker shall be entitled to the full reimbursement of his placement fee with interest at twelve percent (12%) per annum. Philippines. comes into play only when the employment contract concerned has a term of at least one (1) year or more. Petitioners MARSAMAN MANNING AGENCY. to wit: on the date and in the place aforementioned. rationalizing that the aforesaid law did not apply since it became effective only one (1) month after respondent's overseas employment contract was entered into on 15 June 1995.[27] However on 15 July 1995. to the damage and prejudice of said offended party in the aforementioned amount and in such amount as may be awarded under the provisions of the Civil Code. unlawfully and feloniously and with intent to defraud. Philippine Currency. and Buena. Q-91-21911 The undersigned Assistant City Prosecutor accuses ROMULO SAULO. recruit and promise employment/job placement abroad to LEODEGARIO MAULLON. 111 of the Labor Code. jointly and severally. INC. INC. committed as follows: That on or about the period comprised from April 1990 to May 1990.[2] In addition. Book III of its Implementing Rules. That the crime described above is committed in large scale as the same was perpetrated against three (3) persons individually or as [a] group penalized under Articles 38 and 39 as amended by PD 2018 of the Labor Code (P. During trial. i.e. care should be taken that every part or word thereof be given effect[31] since the law-making body is presumed to know the meaning of the words employed in the statue and to have used them advisedly. / ROMULO SAULO. up to the very moment of his repatriation. without first securing the required license or authority from the Department of Labor and Employment.. Petitioners' purpose in so arguing is to invoke the law in justifying a lesser monetary award to private respondent. together with Angeles Javier and Amelia de la Cruz. Sec.D.e. RA 8042 otherwise known as the “Migrant Workers and Overseas Filipinos Act of 1995” took effect. and DIAMANTIDES MARITIME. in the following manner. 10 of RA 8042. conspiring together. CONTRARY TO LAW.100. did. occurred when the law was already in effect. ROMULO SAULO. and within the jurisdiction of the Honorable Court. valid or authorized cause.

He asserts that it was for this reason that he met all three complainants as they all went together to Amelia de la Cruz' house in Novaliches. Maullon thus filed a complaint with the POEA. A person charged with illegal recruitment may be convicted on the strength of the testimonies of the complainants. At a meeting in accused-appellant's Quezon City residence. are as follows: (1) the accused engages in the recruitment and placement of workers. Relying completely upon such representations. with costs against the said accused. Angeles Javier and Leodigario Maullon .000. individually or as a group.00 with interest thereon at 12% per annum until the said amount is fully paid. went to accusedappellant's house in order to discuss his prospects for gaining employment abroad. 1990 (Exhibit B in Crim. claiming that he never received any money from the complainants nor processed their papers. and this Court sentences the accused Romulo Saulo to suffer the penalty of life imprisonment and to pay a fine of One Hundred Thousand Pesos (P100. meaning that the criminal intent of the accused is not necessary for conviction in the former. accused-appellant argues that complainants could not have honestly believed that he could get them their passports since they did not give him any of the necessary documents.800. hiring or procuring workers. transporting. Javier was told by accused-appellant that he could get her a job in Taiwan as a factory worker and that she should give him P35.000. the Court finds that the trial court was justified in holding that accused-appellant was engaged in unlawful recruitment and placement activities. and this Court hereby sentences the accused Romulo Saulo to suffer the indeterminate penalty of imprisonment of two (2) years. That any person or entity which.[4] Angeles Javier. 1990 signed by accused-appellant and Amelia de la Cruz (Exhibit A in Crim. The reason for this is that illegal recruitment is a malum prohibitum.00 to accused-appellant's wife. complainants entrusted their hard-earned money to accused-appellant in exchange for what they would later discover to be a vain hope of obtaining employment abroad. Q-91-21910). whether for profit or not. in any manner. The Labor Code states that "any person or entity which.00 with interest thereon at 12% per annum until the said amount is fully paid. 39 of the Labor Code. four (4) months and one (1) day of prision correccional as minimum to seven (7) years and one (1) day of prision mayor as maximum.900. They cannot stand against the straightforward and explicit testimonies of the complainants. Seeing that he had reneged on his promise to send her to Taiwan. B. Q-91-21909. was told by Ligaya.00 for the processing of his papers. that engages in recruitment activities without the necessary license or authority shall be penalized under Art. Again. in any manner. whether locally or overseas. NBI clearance. baptismal certificate. to file the present cases against him. but is required in the latter.00 to a certain Loreta Tumalig. and to indemnify the complainant Angeles Javier in the amount of P20.[19] Labor Standards | To digest (old cases) | Ajean Tuazon| 7 . as defined under Article 13 (b) or in any prohibited activities under Article 34 of the Labor Code. guilty beyond reasonable doubt of Illegal Recruitment in Large Scale as defined and punished under Article 38 (b) in relation to Article 39 (a) of the Labor Code of the Philippines as amended. Q-91-21911. This argument is specious and illogical.00 in the presence of accused-appellant and Amelia de la Cruz.00. Instead. Quezon City sometime in May. Further. In Criminal Case No. and not accused-appellant. such as their birth certificate. revoked. whereas estafa is malum in se. 13 (b) of the Labor Code. or whose license or authority has been suspended." After a careful and circumspect review of the records. It is accused-appellant's contention that the complainants were prevailed upon by accused-appellant's mother-in-law. four (4) months and one (1) day of prision correccional as minimum to six (6) years and one (1) day of prision mayor as maximum. As the overseas employment never materialized. Finally.00). Thereafter. C. contract services. who have identified accusedappellant as the person who enticed them to part with their money upon his representation that he had the capability of obtaining employment for them abroad. The essential elements of illegal recruitment in large scale. Maullon paid P7. testified that licenses for recruitment and placement are issued only to corporations and not to natural persons. Case No. a widow and relative by affinity of accused-appellant. paragraph 2(a) of the Revised Penal Code as amended. guilty beyond reasonable doubt of Estafa under Article 315. or canceled by the POEA or the Secretary. guilty beyond reasonable doubt of Estafa under Article 315. Accused-appellant flatly denied that he was an overseas employment recruiter or that he was working as an agent for one.700. Provided. and to indemnify the complainant Leodigario Maullon in the amount of P30. with interest thereon at 12% per annum until the said amount is fully paid. He contends that the fact that Benny Maligaya and Angleles Javier went to the house of Amelia and Clodualdo de la Cruz in Novaliches. four (4) months and one (1) day of prision correccional as minimum to six (6) years and one (1) day of prision mayor as maximum. with whom he had a misunderstanding.[7] In his defense.[17] It also bears stressing that agents or representatives appointed by a licensee or a holder of authority but whose appointments are not previously authorized by the POEA fall within the meaning of the term nonlicensee or nonholder of authority.[6] The prosecution also presented a certification dated July 26. upon the invitation of his neighbor Araceli Sanchez. Maullon paid P15.evidenced by a receipt dated May 21. offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement. and this Court hereby sentences the accused Romulo Saulo to suffer the indeterminate penalty of imprisonment of two (2) years. to apply for work abroad through accused-appellant.[14] The absence of receipts to evidence payment does not warrant an acquittal of the accused. Leodigario Maullon. In the absence of any evidence that the prosecution witnesses were motivated by improper motives. with costs against said accused.[10] Under Art. The absence of the necessary license or authority renders all of accused-appellant's recruitment activities criminal. 38 (b) of the Labor Code and penalized under Art. as shown by a receipt dated September 14. and includes referrals. to get back their money and to follow-up their application proves that complainants knew that it was the de la Cruz' who received the processing fees. accused-appellant's wife. without any mitigating or aggravating circumstances. accused-appellant claimed that he was also applying with Amelia de la Cruz for overseas employment. Javier was prompted to bring the matter before the POEA. promising or advertising for employment. a labor and employment officer at the POEA. It adjudged: WHEREFORE. offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement. accused-appellant failed to deliver on the promised employment."[16] Corrolarily.[8] The trial court found accused-appellant guilty of three counts of estafa and of illegal recruitment in large scale. and this Court hereby sentences the accused Romulo Saulo to suffer the indeterminate penalty of imprisonment of three (3) years. as defined in Art. 1990 in order to follow up their applications. Q-91-21910. paragraph 2(a) of the Revised Penal Code as amended. accused-appellant assured Maullon that he could secure him a job as a factory worker in Taiwan if he paid him P30. a friend of accused-appellant. if found to be credible and convincing. Javier gave an initial amount of P20. 1990. this Court finds the accused Romulo Saulo: A.000. As in the case of Maligaya and Javier. whether natural or juridical. D.000.[5] On April 19. guilty beyond reasonable doubt of Estafa under Article 315. accused-appellant insists that he was merely a co-applicant of the complainants and similarly deceived by the schemes of Amelia and Clodualdo de la Cruz.000. Maligaya filed a complaint against accused-appellant with the POEA.[13] The fact that accused-appellant did not sign all the receipts issued to complainants does not weaken the case of the prosecution. Q-91-21910). Case No. and (3) accused commits the same against three (3) or more persons. without any mitigating or aggravating circumstances. which payment is also evidenced by a receipt dated April 25.000. paragraph 2(a) of the Revised Penal Code as amended. Q-91-21910). particularly with respect to the securing of a license or an authority to recruit and deploy workers. corporation or entity which has not been issued a valid license or authority to engage in recruitment and placement by the Secretary of Labor.[9] The Court finds no merit in the instant appeal. enlisting. Case No. The prosecution clearly established that accused-appellant promised the three complainants . Case No. and to indemnify the complainant Beny Maligaya in the amount of P35. Q-91-21908).[15] Accused-appellant contends that he could not have committed the crime of illegal recruitment in large scale since Nancy Avelino.400. who issued a receipt dated April 21. In Criminal Case No. In Criminal Case No. Q-91-21908. (2) accused has not complied with the guidelines issued by the Secretary of Labor and Employment. In Criminal Case No. any person. Maullon paid an additional amount of P6.00 to accused-appellant. and it is not necessarily fatal to the prosecution's cause. 1990 (Exhibit C in Crim.employment in Taiwan as factory workers and that he asked them for money in order to process their papers and procure their passports. It is well established in jurisprudence that a person may be charged and convicted for both illegal recruitment and estafa.[18] Thus. Accused-appellant interposes a denial in his defense. 1994 issued by the POEA stating that accused are not licensed to recruit workers for overseas employment (Exhibit A in Crim.Benny Maligaya. with costs against said accused. a nonlicensee or nonholder of authority is any person. He also denied having received any money from any of the complainants or having signed any of the receipts introduced by the prosecution in evidence. It is not disputed that accused-appellant is not authorized[11] nor licensed[12] by the Department of Labor and Employment to engage in recruitment and placement activities.00 for purposes of preparing Javier's passport. but she did not ask for a receipt as she trusted him. recruitment and placement refers to "any act of canvassing. the accused Romulo Saulo shall be entitled to the benefits of Article 29 of the Revised Penal Code as amended. 1990 (Exhibit A in Crim. Case No. contracting. Accused-appellant's asseverations are self-serving and uncorroborated by clear and convincing evidence. 39 of the same Code. Q-91-21911). the trial court's assessment of the credibility of the witnesses shall not be interfered with by this Court. locally or abroad. utilizing. SO ORDERED. without any mitigating or aggravating circumstances. Being a detention prisoner. Quezon City. and marriage contract.

Accused-appellant shall also pay Angeles Javier P20. the penalty for the crime of estafa is as follows: 1st.R.400. the March 6.400. 315. accused-appellant shall suffer the indeterminate penalty of four (4) years and two (2) months of prision correccional medium. The following day. There. 1990 with a daily wage rate of P66. When the amounts involved in the offense exceeds P22. for the crime of illegal recruitment in large scale (Criminal Case No. xxx xxx xxx Under the Indeterminate Sentence Law. at ang lahat ng ito ay aking pagkakasala sa hindi pagsunod sa alintuntunin ng kompanya. molder and core maker as evidenced by an apprenticeship agreement 2 for a period of six (6) months from May 28. concur. In Criminal Case No. in view of the attending circumstances. Accused-appellant shall also pay Leodigario Maullon P30. of the Revised Penal Code are: (1) that the accused has defrauded another by abuse of confidence or by deceit. accused-appellant shall suffer the indeterminate penalty of four (4) years. Q-91-21911) and pursuant to Article 39 (a) of the Labor Code. hired Roberto Capili sometime in May 1990 as an apprentice machinist. the minimum term of the indeterminate sentence should be anywhere within six (6) months and one (1) day to four (4) years and two (2) months. 1996 Decision of the trial court finding accused-appellant guilty beyond reasonable doubt of the crime of illegal recruitment in large scale and estafa is hereby AFFIRMED subject to the following modifications: In Criminal Case No. (Chairman). five (5) months and eleven (11) days of prision correccional maximum. At around 1:00 p. as minimum to nine (9) years of prision mayor as maximum.000 pesos.) Roberto Capili Labor Standards | To digest (old cases) | Ajean Tuazon| 8 .00. although the total penalty which may be imposed shall not exceed twenty (20) years. adding one year for each additional P10. accused-appellant shall suffer the indeterminate penalty of four (4) years. In fixing the maximum term. Owing to accused-appellant's false assurances that he could provide them with work in another country. 8 months and 20 days Maximum Period : From 6 years. of the Revised Penal Code. and if such amount exceeds the latter sum. SO ORDERED. Q-91-21908 where accused-appellant defrauded Benny Maligaya in the amount of P35. mula ika-30 ng Hulyo at ika-4 ng Agosto.000. 315 of the Revised Penal Code.04 Bibigyan siya ng kompanya ng Siyam na araw na libreng sahod hanggang matanggal ang tahi ng kanyang kamay. Under Art. Petitioner spent the amount of P1. 1990.000.00. which reversed the decision of the Labor Arbiter. WHEREFORE.00 Medicines (sic) and others 317. Briefly.000.400. The penalty of prision correccional in its maximum period to prision mayor in its minimum period. as minimum to eight (8) years of prision mayor. the prescribed penalty of prision correccional maximum to prision mayor minimum should be divided into three equal portions of time. the penalty shall be termed prision mayor or reclusion temporal. to their damage and prejudice. if the amount of the fraud is over 12.000. five (5) months and eleven (11) days of prision correccional maximum.m. Sa araw ding ito limang (5) minuto ang nakakalipas mula alas-singko ng hapon siya ay pumasok sa shop na hindi naman sakop ng kanyang trabaho. hinihingi ng kompanya ang kanyang resignasyon.00 provided for in Article 315 shall be added to the maximum period of the prescribed penalty of prision correccional maximum to prision mayor minimum. as minimum to eight (8) years of prision mayor. and (2) that damage or prejudice capable of pecuniary estimation is caused to the offended party or third person. in relation to Article 64. Thus. and Panganiban.000 pesos but does not exceed 22. accused-appellant shall suffer the indeterminate penalty of four (4) years and two (2) months of prision correccional medium.400. In addition. Accused-appellant shall also pay Benny Maligaya P35. No. as maximum.: This is a petition for certiorari under Rule 65 of the Rules of Court seeking to annul the decision 1 rendered by public respondent National Labor Relations Commission. 5 months and 10 days Medium Period : From 5 years.000. Q-91-21909 where accused-appellant defrauded Angeles Javier in the amount of P20.75 which was 75% of the applicable minimum wage. Since the penalty prescribed by law for the estafa charge against accused-appellant is prision correccional maximum to prision mayor minimum. Q-91-21910 where accused-appellant defrauded Leodigario Maullon in the amount of P30. DECISION KAPUNAN.000. but the total penalty which may be imposed shall not exceed twenty years. Later that same day. Accused-appellant shall also pay Angeles Javier P20. respondents. Thus.00 by way of actual damages.The elements of estafa under Art.000. accused-appellant shall suffer the indeterminate penalty of one (1) year..00. the penalty prescribed in Article 315 of the Revised Penal Code shall be imposed in its maximum period.00 by way of actual damages.000. vs. petitioner.000.00). of August 2.000.00 by way of actual damages. each of which portion shall be deemed to form one period.00.00. 1990 Wala siyang tanggap ng utos mula sa superbisor at wala siyang experiensa kung papaano gamitin and "TOOL" sa pagbuhat ng salamin. Nakagastos ang kompanya ng mga sumusunod: Emergency and doctor fee P715.000. (Sgd. the facts of the case are as follows: Petitioner Nitto Enterprises. 1995 NITTO ENTERPRISES. eight (8) months and twentyone (21) days of prision correccional minimum to five (5) years. eight (8) months and twentyone (21) days of prision correccional minimum to five (5) years.00 by way of actual damages. paragraph 2 (a). APPRENTICES 248 SCRA 654 G. he operated one of the power press machines without authority and in the process injured his left thumb. kasama ng kanyang confirmasyon at pag-ayon na ang lahat ng nakasulat sa itaas ay totoo. the following penalties shall be imposed upon accused-appellant: In Criminal Case No. In addition. JJ. In Criminal Case No. as maximum. as minimum to nine (9) years of prision mayor as maximum.[21] Accordingly. Costs against accused-appellant. after office hours.[20] The trial court was correct in holding accusedappellant liable for estafa in the case at bench.00).00. 2 months and 1 day to 5 years. could be properly imposed under the Revised Penal Code. 1990 to November 28. Vitug.000. L-114337.000.04 to cover the medication of private respondent. adding one year for each additional 10. and two (2) months of prision correccional medium.00 in excess of P22.000. accidentally hit and injured the leg of an office secretary who was treated at a nearby hospital. accused-appellant shall suffer the penalty of life imprisonment and a fine of One Hundred Thousand Pesos (P100. the penalty provided in this paragraph shall be imposed in its maximum period. Tatanggapin niya ang sahod niyang anim na araw. 5 months and 11 days to 6 years. accused-appellant shall suffer the indeterminate penalty of one (1) year. private respondent entered a workshop within the office premises which was not his work station. Ang kompanya ang magbabayad ng lahat ng gastos pagtanggal ng tahi ng kanyang kamay.00. as follows Minimum Period : From 4 years. xxx xxx xxx Naiintindihan ko ang lahat ng nakasulat sa itaas. Q-91-21908 where accused-appellant defrauded Benny Maligaya in the amount of P35. the maximum term of the penalty shall be that which. for the crime of illegal recruitment in large scale (Criminal Case No. one year for the additional amount of P13. and ROBERTO CAPILI. 1990.00 by way of actual damages. complainants parted with their money. one year for the additional amount of P13. the penalty next lower in degree is prision correccional minimum to medium. 8 months and 21 days to 8 years pursuant to Article 65. sarili niyang desisyon ang paggamit ng tool at may disgrasya at nadamay pa ang isang sekretarya ng kompanya. Roberto Capili was asked to resign in a letters 3 which reads: August 2. and two (2) months of prision correccional medium.00 provided for in Article 315 shall be added to the maximum period of the prescribed penalty of prision correccional maximum to prision mayor minimum.[22] Accused-appellant shall also pay Benny Maligaya P35. Q-91-21911) and pursuant to Article 39 (a) of the Labor Code. and in connection with the accessory penalties which may be imposed under the provisions of this Code. since the promised employment never materialized. Pinakialaman at kinalikot ang makina at nadisgrasya niya ang kanyang sariling kamay. Thus. Melo. J. accused-appellant shall suffer the penalty of life imprisonment and a fine of One Hundred Thousand Pesos (P100. NATIONAL LABOR RELATIONS COMMISSION.00 by way of actual damages.[23] Accused-appellant shall also pay Leodigario Maullon P30. and the minimum shall be within the range of the penalty next lower to that prescribed for the offense. Q-91-21910 where accused-appellant defrauded Leodigario Maullon in the amount of P30. Roberto Capili who was handling a piece of glass which he was working on. September 29. a company engaged in the sale of glass and aluminum products. In Criminal Case No.000 pesos. Sa lahat ng nakasulat sa itaas.000. In such cases. pagkatapos ng siyam na araw mula ika-2 ng Agosto.000.00 in excess of P22. In Criminal Case No.023. as the case may be. Q-91-21909 where accused-appellant defrauded Angeles Javier in the amount of P20.

private respondent had shown that "he does not have the proper attitude in employment particularly the handling of machines without authority any proper training.85 representing his backwages as called for in the dispositive portion. workers and government and non-government agencies" and "to establish apprenticeship standards for the protection of apprentices. 3rd Div. Feliciano. No. National Capital Region a complaint for illegal dismissal and payment of other monetary benefits. Labor Arbiter Libo-on called for a conference at which only private respondent's representative was present. any employee who has rendered at least one year of service. 1990. the dispositive portion of which reads: WHEREFORE. shall conform to the rules issued by the Minister of Labor and Employment. The Ministry shall develop standard model programs of apprenticeship. It is mandated that apprenticeship agreements entered into by the employer and apprentice shall be entered only in accordance with the apprenticeship program duly approved by the Minister of Labor and Employment. 1994.The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties. Portero. Inc. the dismissal becomes void. 1990 could be validly used by the Labor Arbiter as basis to conclude that the complainant was hired by respondent as a plain 'apprentice' on May 28. Clearly. The role of the DOLE in apprenticeship programs and agreements cannot be debased.) to prove that the dismissal of complainant was for a valid cause. which in no case shall start below 75% per cent of the applicable minimum wage. Article XIII of our 1987 Constitution.R. must be complied with. Petitioner filed a motion for reconsideration but the same was denied. premises considered. The act of filing the proposed apprenticeship program with the Department of Labor and Employment is a preliminary step towards its final approval and does not instantaneously give rise to an employer-apprentice relationship. The twin requirements of notice and hearing constitute the essential elements of due process. petitioner did not comply with the requirements of the law. 280. 1993. a condition sine qua non before an apprenticeship agreement can be validly entered into. the appealed decision is hereby set aside. mphasis supplied) and pursuant to the constitutional mandate to "protect the rights of workers and promote their welfare. therefore. 1994. 8 On January 28. The issues raised before us are the following: I. Petitioner further insists that the mere signing of the apprenticeship agreement already established an employerapprentice relationship.Apprenticeship agreements. the National Labor Relations Commission issued an order reversing the decision of the Labor Arbiter. There is an abundance of cases wherein the Court ruled that the twin requirements of due process. Metro Manila or at any other places where their properties are located and effect the reinstatement of herein [private respondent] to his work last performed or at the option of the respondent by payroll reinstatement. Libo-on gave two reasons for ruling that the dismissal of Roberto Capili was valid. before valid dismissal exists. 1990 allegedly employing the latter as an apprentice in the trade of "care maker/molder. . there is a valid cause for the dismissal of private respondent. On the same date. prior approval of the DOLE to any apprenticeship program has to be secured as a condition sine qua non before any such apprenticeship agreement can be fully enforced. Notwithstanding the absence of approval by the Department of Labor and Employment. except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. finding merit in [private respondent's] Motion for Issuance of the Writ. In the case at bench.912. 6 On July 26." To translate such objectives into existence. SO ORDERED. a Writ of Execution was issued. Article 61 of the Labor Code provides: Contents of apprenticeship agreement. Hence.79. 10 Without which. 1990 private respondent executed a Quitclaim and Release in favor of petitioner for and in consideration of the sum of P1. and turn over such amount to this Office for proper disposition. The dispositive portion of the ruling reads: WHEREFORE. This simply means that the employer shall afford the worker ample opportunity to be heard and to defend himself with the assistance of his representative. the apprenticeship agreement between petitioner and private respondent was executed on May 28. the instant petition-for certiorari. Hence. since the apprenticeship agreement between petitioner and private respondent has no force and effect in the absence of a valid apprenticeship program duly approved by the DOLE. Petitioner's argument is erroneous. On April 22. 90349. 1990. WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN HOLDING THAT PRIVATE RESPONDENT WAS NOT AN APPRENTICE.690. therefore. if he so desires. NLRC: 12 The law requires that the employer must furnish the worker sought to be dismissed with two (2) written notices before termination of employee can be legally effected: (1) notice which apprises the employee of the particular acts or omissions for which his dismissal is sought. We find no merit in the petition Petitioner assails the NLRC's finding that private respondent Roberto Capili cannot plainly be considered an apprentice since no apprenticeship program had yet been filed and approved at the time the agreement was executed. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided That. II. you are hereby commanded to proceed to the premises of [petitioner] Nitto Enterprises and Jovy Foster located at No. Apprenticeship agreements providing for wage rates below the legal minimum wage. private respondent formally filed before the NLRC Arbitration Branch. Article 57 of t he Labor Code provides that the State aims to "establish national apprenticeship program through the participation of employers. The respondent is hereby directed to reinstate complainant to his work last performed with backwages computed from the time his wages were withheld up to the time he is actually reinstated. WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN HOLDING THAT PETITIONER HAD NOT ADEQUATELY PROVEN THE EXISTENCE OF A VALID CAUSE IN TERMINATING THE SERVICE OF PRIVATE RESPONDENT. and (2) the subsequent notice which informs the employee of the Labor Standards | To digest (old cases) | Ajean Tuazon| 9 . private respondent who was hired as an apprentice violated the terms of their agreement when he acted with gross negligence resulting in the injury not only to himself but also to his fellow worker. SO ORDERED 5 Labor Arbiter Patricio P. Second. and the money claims dismissed for lack of merit. substantive and procedural. NLRC. Ample opportunity connotes every kind of assistance that management must accord the employee to enable him to prepare adequately for his defense including legal representation 11 As held in the case of Pepsi-Cola Bottling Co.00 as financial assistance. Prior approval by the Department of Labor and Employment of the proposed apprenticeship program is. as early as May 28. . v.Roberto Capili On August 3. whether such service is continuous or broken. 7 The NLRC declared that private respondent was a regular employee of petitioner by ruling thus: As correctly pointed out by the complainant. the complainant was respondent' s regular employee under Article 280 of the Labor Code. The respondent however is ordered to pay the complainant the amount of P500. private respondent's assertion that he was hired not as an apprentice but as a delivery boy ("kargador" or "pahinante") deserve credence. shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. J.". et al. 1990 who thus enjoyed the security of tenure guaranteed in Section 3. 1990. which reads: NOW. or on August 6. The law is clear on this matter. You are also to collect the amount of P122. First. we cannot but rule that the complainant was illegally dismissed. the termination is valid and for cause.. including the main rates of apprentices. the apprenticeship Agreement was filed only on June 7. (G." 9 Petitioner further argues that. On October 9. pursuant to Art. an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. Based on the evidence before us. Regular and Casual Employment. Malabon. However. The Arbiter of origin is hereby directed to further hear complainant's money claims and to dispose them on the basis of law and evidence obtaining. THEREFORE. 1993. 277(b) and as ruled in Edwin Gesulgon vs. He should rightly be considered as a regular employee of petitioner as defined by Article 280 of the Labor Code: ART. The period of apprenticeship shall not exceed six months. Absent such proof. March 5. 1991. 1 74 Araneta Avenue. may be entered into only in accordance with apprenticeship program duly approved by the Minister of Labor and Employment. The complaint being for illegal dismissal (among others) it then behooves upon respondent. an apprenticeship program was prepared by petitioner and submitted to the Department of Labor and Employment. 4 Three days after.. the Labor Arbiter rendered his decision finding the termination of private respondent as valid and dismissing the money claim for lack of merit. we cannot understand how an apprenticeship agreement filed with the Department of Labor only on June 7. the apprenticeship agreement was enforced the day it was signed.

petitioner submitted its apprenticeship program for approval to the Technical Education and Skills Development Authority (TESDA) of the Department of Labor and Employment (DOLE). the dispositive portion of which reads: WHEREFORE.. Apprenticeship agreements providing for wage rates below the legal minimum wage. The fact is private respondent filed a case of illegal dismissal with the Labor Arbiter only three days after he was made to sign a Quitclaim.).” On the same date. [4] According to petitioner. Jr. However. the Labor Arbiter dismissed the complaint for lack of merit but ordered petitioner to pay Palad her last salary and her pro-rated 13th month pay.: The Case This is a petition for review[1] of the Decision[2] dated 12 November 2001 and the Resolution dated 5 April 2002 of the Court of Appeals in CA-G. the apprenticeship agreement was enforced the day it was signed. 152894. 182 SCRA 365 L [1990]). premises considered. The period of apprenticeship shall not exceed six months. However. Registration and Approval by the TESDA of Apprenticeship Program Required Before Hiring of Apprentices The Labor Code defines an apprentice as a worker who is covered by a written apprenticeship agreement with an employer. and non-payment of pro-rated 13th month pay for the year 1997. including the wage rates of apprentices.. vs. mphasis supplied) In Nitto Enterprises v. G. (c) ordering private respondent to reinstate petitioner to her former position without loss of seniority rights and to pay her full backwages computed from the time compensation was withheld from her up to the time of her reinstatement. according to the performance evaluation. the TESDA approved petitioner’s apprenticeship program. NLRC. The Issues Petitioner raises the following issues: 1.632. The dispositive portion of the Labor Arbiter’s decision reads: WHEREFORE.R. the decision of the Arbiter dated 25 February 1999 is hereby MODIFIED in that. As a consequence. 168 SCRA 122. PALAD. Labor Standards | To digest (old cases) | Ajean Tuazon| 10 . The Court of Appeals likewise held that Palad was not afforded due process because petitioner did not comply with the twin requirements of notice and hearing. NLRC. the apprenticeship agreement was filed only on June 7. any judgment reached by management is void and inexistent (Tingson. The Court of Appeals ruled that petitioner failed to show that Palad was properly apprised of the required standard of performance. in the absence of which. On 12 November 2001. Furthermore. Palad then filed a complaint for illegal dismissal. Petitioner. an apprenticeship program was prepared by petitioner and submitted to the Department of Labor and Employment. 60. respondents are ordered to pay complainant’s backwages for two (2) months in the amount of P7. SO ORDERED. Palad signed on 17 July 1997 an apprenticeship agreement[3] with petitioner.. 13 Petitioner cannot disguise the summary dismissal of private respondent by orchestrating the latter's alleged resignation and subsequent execution of a Quitclaim and Release. the apprenticeship agreement between petitioner and private respondent was executed on May 28. — Only employers in the highly technical industries may employ apprentices and only in apprenticeable occupations approved by the Minister of Labor and Employment.[6] On appeal.[7] Upon denial of Palad’s motion for reconsideration. 1990 allegedly employing the latter as an apprentice in the trade of “care maker/molder. 13. WHEREFORE. in view of the foregoing. All other issues are likewise dismissed.employer's decision to dismiss him (Sec. Palad filed a special civil action for certiorari with the Court of Appeals. Palad incurred numerous tardiness and absences.[8] The Ruling of the Court of Appeals The Court of Appeals held that the apprenticeship agreement which Palad signed was not valid and binding because it was executed more than two months before the TESDA approved petitioner’s apprenticeship program. shall conform to the rules issued by the Minister of Labor and Employment. 185 SCRA 498 [1990]. 2nd Division DECISION CARPIO. where petitioner gave Palad a rating of N.[13] the Court cited Article 61 of the Labor Code and held that an apprenticeship program should first be approved by the DOLE before an apprentice may be hired. (b) ordering private respondent to pay petitioner her underpayment in wages. which in no case shall start below 75 percent of the applicable minimum wage. the appealed decision is hereby AFFIRMED. Contents of apprenticeship agreements. National Labor Relations Commission. Bellosillo and Hermosisima. (d) ordering private respondent to pay petitioner attorney’s fees equivalent to ten (10%) per cent of the monetary award herein. NLRC. in addition.00 (P138. The Court of Appeals also held that petitioner illegally dismissed Palad. the Court of Appeals rendered a decision. All other dispositions of the Arbiter as appearing in the dispositive portion of his decision are AFFIRMED. Palad received an apprentice allowance of P138. WHETHER THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT PRIVATE RESPONDENT WAS NOT AN APPRENTICE. may be entered into only in accordance with apprenticeship programs duly approved by the Minister of Labor and Employment. or “needs improvement” since she scored only 27. SP No. Notwithstanding the absence of approval by the Department of Labor and Employment. SO ORDERED. Respondents.[12] In line with this objective. Rules and Regulations Implementing the Labor Code as amended). Ruffy vs. On 25 July 1997.176. he did not have a choice. Articles 60 and 61 of the Labor Code provide: ART. 1990.75 daily.228. Palad (Palad) as “fish cleaner” at petitioner’s tuna and sardines factory.75 x 26 x 2 mos. a clear indication that such resignation was not voluntary and deliberate.[11] One of the objectives of Title II (Training and Employment of Special Workers) of the Labor Code is to establish apprenticeship standards for the protection of apprentices. Century Canning Corporation (petitioner) hired Gloria C. finding no abuse of discretion committed by public respondent National Labor Relations Commission. Jr. — Apprenticeship agreements. underpayment of wages. WHETHER THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT PETITIONER HAD NOT ADEQUATELY PROVEN THE EXISTENCE OF A VALID CAUSE IN TERMINATING THE SERVICE OF PRIVATE RESPONDENT. otherwise the person hired will be considered a regular employee. On 26 September 1997.[9] where it was held that prior approval by the DOLE of the proposed apprenticeship program is a condition sine qua non before an apprenticeship agreement can be validly entered into. J. Book V. SO ORDERED. and 2. concur. and (e) ordering private respondent to pay the costs of the suit. CENTURY CANNING CORPORATION.. petitioner issued a termination notice[5] dated 22 November 1997 to Palad. judgment is hereby rendered declaring that the complaint for illegal dismissal filed by the complainant against the respondents in the above-entitled case should be. Padilla. On 25 February 1999. BP130.R. a performance evaluation was conducted on 15 November 1997. mphasis supplied) ART.75% based on a 100% performance indicator. Petitioner made it clear to him that anyway.00) PESOS representing her prorated 13th month pay.[10] The Ruling of the Court The petition is without merit. He further asserted that petitioner "strong-armed" him into signing the aforementioned resignation letter and quitclaim without explaining to him the contents thereof. 2007 Aug 17. thus: WHEREFORE. 2-6 Rule XIV. Private respondent averred that he was actually employed by petitioner a delivery boy ("kargador" or "pahinante").I. The Court of Appeals cited Nitto Enterprises v. premises considered. Jr.00). Davide. informing her of her termination effective at the close of business hours of 28 November 1997. This procedure is mandatory. Employment of apprentices. representing her last salary and the amount of SEVEN THOUSAND TWO HUNDRED TWENTY EIGHT (P7. National Labor Relations Commission. SO ORDERED. National Service Corp. vs. The Court held: In the case at bench. to wit: (a) finding the dismissal of petitioner to be illegal. 60379. JJ. Sec. versus COURT OF APPEALS and GLORIA C. the National Labor Relations Commission (NLRC) affirmed with modification the Labor Arbiter’s decision. No. The Facts On 15 July 1997. the respondents are hereby ordered to pay the complainant the amount of ONE THOUSAND SIX HUNDRED THIRTY-TWO PESOS (P1. The Ministry shall develop standard model programs of apprenticeship. the questioned decision of the NLRC is hereby SET ASIDE and a new one entered. A judicious examination of both events belies any spontaneity on private respondent's part. Failure to comply with the requirements taints the dismissal with illegality. 61. as it is hereby DISMISSED for lack of merit.

which provides the guidelines in the implementation of the Apprenticeship and Employment Program of the government. prior approval of the DOLE to any apprenticeship program has to be secured as a condition sine qua non before any such apprenticeship agreement can be fully enforced. Palad was not accorded due process. mphasis supplied)[14] Republic Act No. as shown that nothing thereon indicate that complainant was notified of the results. Besides the absence of any written warnings given to complainant reminding her of “poor performance. petitioner submitted for approval its apprenticeship program. therefore. Even if petitioner did conduct a performance evaluation on Palad. under RA 7796.[24] Furthermore. Book II of the Implementing Rules of the Labor Code. He should rightly be considered as a regular employee of petitioner as defined by Article 280 of the Labor Code x x x. Department Order No. The TESDA’s approval of the employer’s apprenticeship program is required before the employer is allowed to hire apprentices. Article 57 of the Labor Code provides that the State aims to “establish a national apprenticeship program through the participation of employers. WHEREFORE. Petitioner and Palad executed the apprenticeship agreement on 17 July 1997 wherein it was stated that the training would start on 17 July 1997 and would end approximately in December 1997. Such intent is clear under Section 4 of RA 7796: SEC. petitioner failed to warn Palad of her alleged poor performance. Thus. The act of filing the proposed apprenticeship program with the Department of Labor and Employment is a preliminary step towards its final approval and does not instantaneously give rise to an employer-apprentice relationship. which is below the signature of complainant’s immediate superior who made the evaluation indicated as “11-15-97. habitual absenteeism and poor efficiency of performance are among the valid causes for which the employer may terminate the apprenticeship agreement after the probationary period. Prior approval by the Department of Labor and Employment of the proposed apprenticeship program is. suffice to state that the findings of the Arbiter that complainant was dismissed due to failure to meet the standards is nebulous. Rule VI. 68-04 on 18 August 2004.[19] Thus.[17] On 25 July 1997. the employer must send the employee who is about to be terminated. must at least have a modicum of authenticity. Hence. a written notice stating the causes for termination and must give the employee the opportunity to be heard and to defend himself. This is to ensure the protection of apprentices and to obviate possible abuses by prospective employers who may want to take advantage of the lower wage rates for apprentices and circumvent the right of the employees to be secure in their employment. which the TESDA subsequently approved on 26 September 1997. Illegal Termination of Palad We shall now resolve whether petitioner illegally dismissed Palad. the law considers the matter a case of illegal dismissal. l) “Apprentice Agreement” is a contract wherein a prospective employer binds himself to train the apprentice who in turn accepts the terms of training for a recognized apprenticeable occupation emphasizing the rights. to constitute valid dismissal from employment. mphasis supplied) In this case. respondents failed to comply with. which created the TESDA. we AFFIRM the Decision dated 12 November 2001 and the Resolution dated 5 April 2002 of the Court of Appeals in CA-G. the NLRC found that petitioner failed to prove the authenticity of the performance evaluation which petitioner claims to have conducted on Palad. In fact. Palad also claims she did not receive a notice of dismissal. it appears that the Labor Arbiter’s conclusion that petitioner validly terminated Palad was based mainly on the performance evaluation allegedly conducted by petitioner. 7796[15] (RA 7796). specifically. Under Article 280[21] of the Labor Code. It is mandated that apprenticeship agreements entered into by the employer and apprentice shall be entered only in accordance with the apprenticeship program duly approved by the Minister of Labor and Employment. Under Article 227 of the Labor Code.[29] Furthermore. private respondent’s assertion that he was hired not as an apprentice but as a delivery boy (“kargador” or “pahinante”) deserves credence. since the apprenticeship agreement between petitioner and private respondent has no force and effect in the absence of a valid apprenticeship program duly approved by the DOLE. complainant is entitled to the payment of her wages for the remaining two (2) months of her apprenticeship agreement. 4. As such.” Clearly. However. SP No. What clearly appears is that complainant already passed the probationary status of the apprenticeship agreement of 200 hours at the time she was terminated on 28 November 1997 which was already the fourth month of the apprenticeship period of 1000 hours.R. she can only be dismissed for cause. in this case. the Labor Arbiter held that petitioner terminated Palad for habitual absenteeism and poor efficiency of performance. This is of doubtful authenticity and/or credibility. a condition sine qua non before an apprenticeship agreement can be validly entered into. as in this case. Petitioner merely relies on the performance evaluation to prove Palad’s inefficiency. — As used in this Act: xxx j) “Apprenticeship” training within employment with compulsory related theoretical instructions involving a contract between an apprentice and an employer on an approved apprenticeable occupation. Evidence. Its authenticity therefor. This. the apprenticeship agreement was entered into between the parties before petitioner filed its apprenticeship program with the TESDA for approval. duties and responsibilities of each party. The role of the DOLE in apprenticeship programs and agreements cannot be debased.Based on the evidence before us. The records are bereft of evidence to show that petitioner ever gave Palad the opportunity to explain and defend herself. petitioner did not comply with the requirements of the law. and (2) the employee must be afforded an opportunity to be heard and to defend himself. under Article 277(b)[25] of the Labor Code. Under Article 279[22] of the Labor Code. the employer has the burden of proving that the termination was for a valid or authorized cause. Thus.[27] mphasis supplied) Indeed. has transferred the authority over apprenticeship programs from the Bureau of Local Employment of the DOLE to the TESDA.[18] Clearly. and hence lacks any credibility. is a big question mark. m) “Apprenticeable Occupation” is an occupation officially endorsed by a tripartite body and approved for apprenticeship by the Authority [TESDA]. Definition of Terms. the apprenticeship agreement was enforced even before the TESDA approved petitioner’s apprenticeship program. However. an employment is deemed regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer.” The only conclusion We can infer is that this evaluation was made belatedly. When the alleged valid cause for the termination of employment is not clearly proven. nor was she given the chance to explain.” To translate such objectives into existence. From the looks of it.75%. Under Section 25. Palad denies any knowledge of the performance evaluation conducted and of the result thereof. Palad alleges that she had no knowledge of the performance evaluation conducted and that she was not even informed of the result of the alleged performance evaluation. We noted that no clear and sufficient evidence exist to warrant her dismissal as an apprentice during the agreed period. SO ORDERED. employers can only hire apprentices for apprenticeable occupations which must be officially endorsed by a tripartite body and approved for apprenticeship by the TESDA. Clearly. the NLRC reversed the finding of the Labor Arbiter on the issue of the legality of Palad’s termination: As to the validity of complainant’s dismissal in her status as an apprentice. Palad is deemed a regular employee performing the job of a “fish cleaner. workers and government and non-government agencies” and “to establish apprenticeship standards for the protection of apprentices. It was likewise not shown that petitioner ever apprised Palad of the performance standards set by the company. 68-04. k) “Apprentice” is a person undergoing training for an approved apprenticeable occupation during an established period assured by an apprenticeship agreement.[16] RA 7796 emphasizes TESDA’s approval of the apprenticeship program as a pre-requisite for the hiring of apprentices. Labor Standards | To digest (old cases) | Ajean Tuazon| 11 . specifically states that no enterprise shall be allowed to hire apprentices unless its apprenticeship program is registered and approved by TESDA. the apprenticeship agreement is void because it lacked prior approval from the TESDA. for poor efficiency of performance on the job or in the classroom for a prolonged period despite warnings duly given to the apprentice. the two requisites for a valid dismissal are lacking in this case.[20] Since Palad is not considered an apprentice because the apprenticeship agreement was enforced before the TESDA’s approval of petitioner’s apprenticeship program. an employer may terminate the services of an employee for just causes[23] or for authorized causes. this signature is close to and appertains to the typewritten position of “Division/Department Head”. where Palad received a performance rating of only 27.” respondents’ evidence in this respect consisted of an indecipherable or unauthenticated xerox of the performance evaluation allegedly conducted on complainant. under the Code.[28] Petitioner failed to substantiate its claim that Palad was terminated for valid reasons. Prior approval from the TESDA is necessary to ensure that only employers in the highly technical industries may employ apprentices and only in apprenticeable occupations.[26] In this case. the job of a “fish cleaner” is necessary in petitioner’s business as a tuna and sardines factory. after the filing of the case and during the progress thereof in the Arbitral level. to be admissible in administrative proceedings. being not only incomplete in the sense that appearing thereon is a signature (not that of complainant) side by side with a date indicated as “1/16/98”. Petitioner likewise admits that Palad did not receive the notice of termination[30] because Palad allegedly stopped reporting for work. 60379. According to petitioner. Palad did not receive the termination notice because Palad allegedly stopped reporting for work after being informed of the result of the evaluation. two requisites must concur: (1) the dismissal must be for a just or authorized cause. In fact. The requisite TESDA approval of the apprenticeship program prior to the hiring of apprentices was further emphasized by the DOLE with the issuance of Department Order No. As such.

cognizant of its social responsibility. and residing at __________________ (hereinafter referred to as the (‘EMPLOYEE’). and v. TATLONGHARI.ANTONIO T. ELIZABETH VENTURA. 2. REBECCA E.] "WHEREFORE. ________________ years old. ISABEL B. DAVID P. that it adopted the special program to help tide over a group of handicapped workers such as deaf-mutes like the complainants who Labor Standards | To digest (old cases) | Ajean Tuazon| 12 . WITNESSETH: That WHEREAS. in 1992. THELMA SEBASTIAN. 1999 Jul 12. at eight (8) hours a day. ARIEL DEL PILAR. IN WITNESS WHEREOF. 3-39. pp. the EMPLOYEE hereby acknowledges that the provisions of Book Six of the Labor Code of the Philippines as amended. CORPUZ. the BANK and the EMPLOYEE have entered into this Employment Contract as follows: 1. GRACE S. 5. 22 1994 ruling of Labor Arbiter Cornelio L. Submit bundled bills to the bank teller for verification." Also assailed is the August 4. LIGUTAN JR. after which the BANK shall determine whether or not he/she should be allowed to finish the remaining term of this Contract. 3. ISABEL MAMAUAG. the EMPLOYEE acknowledges and accepts the fact that the terms and conditions of the employment generally observed by the BANK with respect to the BANK’s regular employee are not applicable to the EMPLOYEE. judgment is hereby rendered dismissing the above-mentioned complaint for lack of merit. ROBERT MARCELO. xxxxxxxxx "Disclaiming that complainants were regular employees. The EMPLOYEE shall likewise be entitled to the following benefits: i. with business address at FEBTC Building. JOSELITO O. MA. respondent Far East Bank and Trust Company maintained that complainants who are a special class of workers – the hearing impaired employees were hired temporarily under [a] special employment arrangement which was a result of overtures made by some civic and political personalities to the respondent Bank. (pp. GRUELA.] of the NLRC. self-reliant and useful citizens to enable them to fully integrate in the mainstream of society. ADRIANA F. for which reason the standard hiring requirements of the BANK were not applied in his/her case. COCOY NOBELLO.. as Money Sorters and Counters through a uniformly worded agreement called ‘Employment Contract for Handicapped Workers’. MELODY V. Ireneo B. 3rd Division) DECISION PANGANIBAN. respondents. PINKY BALOLOA. training continues so that the regular employee grows in the corporate ladder. and that therefore. iii. 1995 Decision2 [Rollo. in 1989 another two (2). YAZAR. VELASCO. Muralla. but on justice for all. CONCEPCION. particularly on regulation of employment and separation pay are not applicable to him/her. DELFIN.and ________________. DORENDA CANTIMBUHAN. . MARANAN. The EMPLOYEE shall perform among others. THEREFORE. the BANK. either manually or with the aid of a counting machine. MARGARET CECILIA CANOZA.00 per day. LEQUIGAN.3 [Penned by Presiding Comm. JEANETTE CERVANTES. Linsangan. Joaquin A. petitioners vs. there were fifty-six (56) deaf-mutes who were employed by respondent under the said employment agreement. ROZAIDA PASCUAL. Bernardo. The BANK agrees to employ and train the EMPLOYEE. entered into by and between: FAR EAST BANK AND TRUST COMPANY. ELVIRA GO DIAMANTE. _____________. BERNADETH D. MR. ALBERT HALLARE. a universal banking corporation duly organized and existing under and by virtue of the laws of the Philippines. uplift their socio-economic well being and welfare and make them productive. Javier and concurred in by Comm. The regular work schedule of the EMPLOYEE shall be five (5) days per week. 47-55. 2-10. MONTES. pp. and the EMPLOYEE agrees to diligently and faithfully work with the BANK.’ "In 1988. PRESBITERO J. LANI R. WHEREAS. CORTEZ. ALEX G. in 1991 six (6).: The Magna Carta for Disabled Persons mandates that qualified disabled persons be granted the same terms and conditions of employment as qualified able-bodied employees. IKE CABANDUCOS. represented herein by its Assistant Vice President. which denied the Motion for Reconsideration. J. (hereinafter referred to as the ‘BANK’). for which overtime work he/she [shall] be paid an additional compensation of 125% of his daily rate if performed during ordinary days and 130% if performed during Saturday or [a] rest day. The Employment Contract shall be for a period of six (6) months or from ____ to ____ unless earlier terminated by the BANK for any just or reasonable cause. WHEREAS. CARPIO Associate Justice WE CONCUR: LEONARDO A. Records) The full text of said agreement is quoted below: ‘EMPLOYMENT CONTRACT FOR HANDICAPPED WORKERS This Contract. Count each denomination per hundred. 1995 Resolution5 [Rollo. The EMPLOYEE may be required to perform overtime work as circumstance may warrant. pp. TABAQUERO. CORTEZ. payable every 15th and end of the month. 68 & 69. and the BANK ha[s] been approached by some civic-minded citizens and authorized government agencies [regarding] the possibility of hiring handicapped workers for these positions. Five (5) days incentive leave. Wrap and label bills per hundred. CORAZON C. the terms and conditions of the EMPLOYEE’s employment with the BANK shall be governed solely and exclusively by this Contract and by the applicable rules and regulations that the Department of Labor and Employment may issue in connection with the employment of disabled and handicapped workers.] which affirmed the August. PARDO & RICO TIMOSA. 4. realizes that there is a need to provide disabled and handicapped persons gainful employment and opportunities to realize their potentials.] of the National Labor Relations Commission (NLRC). The other member. there are certain positions in the BANK which may be filled-up by disabled and handicapped persons. FLORENDO G. MA. RONALD M. ii. AGDON GEORGE P. NOORA. Proportionate 13th month pay based on his basic daily wage. that the idea of hiring handicapped workers was acceptable to them only on a special arrangement basis. Tanodra. G. notwithstanding written or verbal contracts to the contrary. that in addition to this. dissented. PASCUAL. Manila. DANTE O. ROWENA M. 6. No. Records) are deaf-mutes who were hired on various periods from 1988 to 1993 by respondent Far East Bank and Trust Co. 9. the parties. 73-74. The labor arbiter’s Decision disposed as follows:4 [Rollo. in 1990. More specifically. CYNTHIA DE VERA. Comm. DELOS REYES. Manila. Put the wrapped bills into bundles. Intramuros. particularly deaf-mutes. nineteen (19). ROBERT G. The EMPLOYEE acknowledges the fact that he/she had been employed under a special employment program of the BANK. EDMUND M. iv. JEANNIE RAMIL. pp.R. LILIBETH Q. iii. SSS premium payment. of legal age. DAVID. This treatment is rooted not merely on charity or accommodation. Any continuation or extension of this Contract shall be in writing and therefore this Contract will automatically expire at the end of its terms unless renewed in writing by the BANK. that complainant[s] were hired due to ‘pakiusap’ which must be considered in the light of the context of the respondent Bank’s corporate philosophy as well as its career and working environment which is to maintain and strengthen a corps of professionals trained and qualified officers and regular employees who are baccalaureate degree holders from excellent schools which is an unbending policy in the hiring of regular employees. 176. ALBINO TECSON. twenty-one (21). six (6) and in 1993. from Mondays thru Fridays. The EMPLOYEE shall be entitled to an initial compensation of P118. 122917. as Money Sorter and Counter. VIOLETA G. 113. pp. Once they have attained the status of regular workers. RAQUEL ESTILLER. Philippines. have hereunto affixed their signature[s] this ____ day of _________________. CELSO M. DINDO VALERIO. and to conduct himself/herself in a manner expected of all employees of the BANK. TINGA. Their employment[s] were renewed every six months such that by the time this case arose. MILAGROS O.] before us is the June 20. The EMPLOYEE binds himself/herself to abide [by] and comply with all the BANK Rules and Regulations and Policies. Consequently.] "Complainants numbering 43 (p. JR. they should be accorded all the benefits granted by law. The last one was Thelma Malindoy who was employed in 1992 and whose contract expired on July 1993. JOSE E. p. 7. ZENAIDA MATA. the following duties and responsibilities: i Sort out bills according to color. 8. AGERO. HANDICAPPED WORKERS 310 SCRA 186 MARITES BERNARDO. The Facts The facts were summarized by the NLRC in this wise:6 [NLRC Decision. QUISUMBING. subject to adjustment in the sole judgment of the BANK. Lourdes C. 4665. The EMPLOYEE shall undergo a training period of one (1) month. NOW. NATIONAL LABOR RELATIONS COMMISSION & FAR EAST BANK AND TRUST COMPANY. SALES. the EMPLOYEE is one of those handicapped workers who [were] recommended for possible employment with the BANK. ii. for and in consideration of the foregoing premises and in compliance with Article 80 of the Labor Code of the Philippines as amended. two (2) deaf-mutes were hired under this Agreement. ____________ at Intramuros. MARMOLEJO.. rollo. CONCHITA CARPIO MORALES. The Case Challenged in the Petition for Certiorari1 [Rollo.

could do manual work for the respondent Bank. JEANNIE RAMIL Intramuros 23 APR 90 12 OCT 93 39. MA. only the employees. 12. RICO TIMOSA Intramuros 28 APR 93 28 OCT 93" 8 [This is a typographical error on the part of the petitioner. p." that they could not become regular employees because there were no plantilla positions for "money sorters. 474. ROWENA M. The Honorable Commission committed grave abuse of discretion in holding that the petitioners . 7277)." Issues In their Memorandum. TATLONGHARI Intramuros 22 JAN 93 22 JUL 93 18. DINDO VALERIO Intramuros 30 MAY 93 30 NOV 93 33. The Honorable Commission committed grave abuse of discretion in not applying the provisions of the Magna Carta for the Disabled (Republic Act No.which provide for a period of six (6) months . CYNTHIA DE VERA Bel-Air 26 JUN 90 3 DEC 93 30. Their contracts were renewed several times. BERNADETH D. DAVID Intramuros 16 APR 90 23 OCT 93 4. Intramuros 6 SEPT 89 19 JAN 94 10.money sorters and counters working in a bank . the labor arbiter and. The case was given due course on December 8. PARDO West 4 APR 90 13 MAR 94 43." At the outset.were valid. In resolving whether the petitioners have become regular employees. rollo. rollo. ADRIANA F.] The Ruling of the NLRC In affirming the ruling of the labor arbiter that herein petitioners could not be deemed regular employees under Article 280 of the Labor Code. submits that petitioners were hired only as "special workers and should not in any way be considered as part of the regular complement of the Bank. the ‘special position’ that was created for the petitioners no longer exist[s] in private respondent [bank]. ZENAIDA MATA Intramuros 10 FEB 93 10 AUG 93 34. we shall not change the facts found by the public respondent. p. JR. ARIEL DEL PILAR Intramuros 24 FEB 93 24 AUG 93 35. MILAGROS O. CORTEZ Bel-Air 15 OCT 88 10 DEC 93 31. 80. the NLRC ruled against herein petitioners. In fact. when the Memorandum of the private respondent was received by the Court. JEANETTE CERVANTES West 6 JUN 92 7 DEC 93 38. "considering the prevailing circumstances/milieu of the case. should be deemed regular employees. p. viz:7 [Petition. LEQUIGAN Intramuros 1 FEB 93 1 AUG 93 17. CONCEPCION West 6 SEPT 90 6 FEB 94 32. True. does not review the factual findings of public respondents in a certiorari proceeding.9 [The case was deemed submitted for resolution on December 1. "II. LIGUTAN. 63. "with the assistance of government representatives. this recourse to this Court. that through the ‘pakiusap’ of Arturo Borjal. p. 97. they have acquired legal rights that this Court is duty-bound to protect and uphold. who worked for more than six months and whose contracts were renewed are deemed regular. it maintains that the Court cannot pass upon the findings of public respondents that petitioners were not regular employees. DELOS REYES Intramuros 8 FEB 93 8 AUG 93 15. However. The facts. they were "special" workers under Article 80 of the Labor Code. EDMUND M. THELMA SEBASTIAN Intramuros 12 NOV 90 17 NOV 93 37. that the counting and sorting of money are tellering works which were always logically and naturally part and parcel of the tellers’ normal functions. which was submitted before the labor arbiter. 14. Hence. p. the Court will resolve whether petitioners have become regular employees. 10)] As earlier noted. whose employment was merely an "accommodation" in response to the requests of government officials and civic-minded citizens. VIOLETA G. 1997. as amended. MONTES Intramuros 2 FEB 90 15 JAN 94 26. not 1993 (Rollo. DORENDA CATIMBUHAN Intramuros 15 FEB 93 15 AUG 93 21. They were told from the start. CORAZON C."11 [Petitioners’ Memorandum. DAVID P. The Honorable Commission committed grave abuse of discretion in holding that the employment contracts signed and renewed by the petitioners . However. p. that the tellers themselves already did the sorting and counting chore as a regular feature and integral part of their duties (p. AGDON Intramuros 5 NOV 90 17 NOV 93 9. p. MARGARET CECILIA CANOZA Intramuros 27 JUL 90 4 FEB 94 36. that from the beginning there have been no separate items in the respondent Bank plantilla for sorters or counters. the Court. CELSO M. Hence. COCOY NOBELLO Intramuros 22 FEB 93 22 AUG 93 20. PINKY BALOLOA West 3 JUN 91 2 DEC 93 41." Respondent submits that "as of the present. This Court’s Ruling The petition is meritorious. Hence. ROBERT G." Petitioners specified when each of them was hired and dismissed. indubitably show that the petitioners. ROZAIDA PASCUAL Bel-Air 20 APR 89 29 OCT 93 40. rollo. on appeal. ELVIRA GO DIAMANTE Intramuros 24 JAN 90 11 JAN 94 3. rollo. YAZAR Intramuros 8 FEB 93 8 AUG 93 11. not as a matter of compassion but as a consequence of law and justice. IKE CABANDUCOS Intramuros 24 FEB 93 24 AUG 93 19. as a rule. SALES West 6 AUG 92 12 OCT 93 24. RAQUEL ESTILLER Intramuros 2 JUL 92 4 JAN 94 6." whose task used to be performed by tellers. 280 is not controlling herein. JOSELITO O.were not regular employees. LANI R. JOSE E. p. GRACE S. Preliminary Matter: Propriety of Certiorari Respondent Far East Bank and Trust Company argues that a review of the findings of facts of the NLRC is not allowed in a petition for certiorari. Main Issue: Are Petitioners Regular Employees? Petitioners maintain that they should be considered regular employees. GRUELA West 28 OCT 91 3 NOV 93 28. DELFIN Intramuros 22 FEB 93 22 AUG 93 13.] Rather. their dismissal from employment was illegal. Specifically. we cannot allow it to elude the legal consequences of that effort. the terms of the contract shall be the law between the parties. NOORA Intramuros 15 FEB 93 15 AUG 93 16. except sixteen of them. MELODY V. ROBERT MARCELO West 31 JUL 938 1 AUG 93 22. 3.] The NLRC also declared that the Magna Carta for Disabled Persons was not applicable. Records). REBECCA E. MARITES BERNARDO Intramuros 12 NOV 90 17 NOV 93 2. MA. because their task as money sorters and counters was necessary and desirable to the business of respondent bank. CORTEZ Bel-Air 15 JAN 91 3 DEC 93 8. the tellers were relieved of this task of counting and sorting bills in favor of deaf-mutes without creating new positions as there is no position either in the respondent or in any other bank in the Philippines which deals with purely counting and sorting of bills in banking operations. ISABEL B. ALEX G. RONALD M. shows that Petitioner Robert Marcelo was hired on July 31. We give due credence to the conclusion that complainants were hired as an accommodation to [the] recommendation of civic oriented personalities whose employment[s] were covered by xxx Employment Contract[s] with special provisions on duration of contract as specified under Art. Respondent Commission ratiocinated as follows: "We agree that Art. on the other hand. PASCUA Bel-Air 15 OCT 88 21 NOV 94 5. simply because it now deems their employment irrelevant. LILIBETH Q. GEORGE P. "III. ELIZABETH VENTURA West 12 MAR 90 FEB 94 [SIC] 42. viewed in light of the Labor Code and the Magna Carta for Disabled Persons. AGERO West 19 DEC 90 27 DEC 93 29.523. not because of need "but merely for humanitarian reasons. CORPUZ Intramuros 15 FEB 93 15 AUG 93 12. ISABEL MAMAUAG West 8 MAY 92 10 NOV 93 25. after the latter had decided not to renew anymore their special employment contracts. ALBINO TECSON Intramuros 7 NOV 91 10 NOV 93 27. MARMOLEJO West 15 JUN 90 21 NOV 93 23. as above-quoted from the assailed Decision. ALBERT HALLARE West 4 JAN 91 9 JAN 94 7. TABAQUERO Intramuros 22 FEB 93 22 AUG 93 14."12 [Respondent’s Memorandum.] "NAME OF PETITIONER WORKPLACE Date Hired Date Dismissed 1. for it is unlikely that the Contract of Employment was terminated the day after it was executed. p. that the task of counting and sorting of bills which was being performed by tellers could be assigned to deaf-mutes. petitioners cite the following grounds in support of their cause: "I. Private respondent contends that it never solicited the services of petitioners. 18. Our task is merely to determine whether the NLRC committed grave abuse of discretion in applying the law to the established facts. 1998. 10. They further allege that their contracts served merely to preclude the application of Article 280 and to bar them from becoming regular employees. 1992. on proscription against discrimination against disabled persons. Labor Standards | To digest (old cases) | Ajean Tuazon| 13 . As such."10 [NLRC Decision. Private respondent. let it be known that this Court appreciates the nobility of private respondent’s effort to provide employment to physically impaired individuals and to make them more productive members of society.] In the main. Annex "C" of petitioners’ Position Paper. as correctly held by the Labor Arbiter a quo.

Ople. In other words. p. 450. 284 SCRA 105. August 21. NLRC. its validity is based on Article 80 of the Labor Code. per Kapunan." The stipulations in the employment contracts indubitably conform with the aforecited provision. 1992. citing Brent School v. 236 SCRA 108. 1994. Jeannie Ramil. J. In L.19 [Respondent’s Memorandum.13 [Approved on March 24.] petitioners are hereby awarded separation pay in lieu of reinstatement. Bernadeth D.. p. Any employer who employs handicapped workers shall enter into an employment agreement with them.m. J.No disabled person shall be denied access to opportunities for suitable employment. but only with respect to such activity. As regular employees. Thus. two of them worked from 1988 to 1993.] Because the other sixteen worked only for six months. Cynthia de Vera. and the procedure of hiring x x x but on the nature of the activities performed by the employee.] these twenty-seven petitioners are deemed illegally dismissed and therefore entitled to back wages and reinstatement without loss of seniority rights and other privileges. October 7. the employment contracts were prepared in accordance with Article 80 of the Labor Code. which mandate that petitioners must be treated as qualified able-bodied employees. under the Magna Carta for Disabled Persons. CJ. the task of counting and sorting bills is necessary and desirable to the business of respondent bank. which provides: "ART. benefits.20 [Zarate v. petitioners proved themselves to be qualified disabled persons who. to 5:00 p."] Provisions of applicable statutes are deemed written into the contract. Rozaida Pascual. and to some extent. justify the application of Article 280 of the Labor Code. hence. Applicability of the Brent Ruling Respondent bank. Rebecca E. the twenty-seven petitioners are entitled to security of tenure. T. the employer may terminate the contract at any time for a just and reasonable cause. Verily. Marmolejo.] Considering the allegation of respondent that the job of money sorting is no longer available because it has been assigned back to the tellers to whom it originally belonged. Unless renewed in writing by the employer. Concepcion. Thus. Datu v. When the bank renewed the contract after the lapse of the six-month probationary period. 280. Ma. Ma."23 [Pakistan Airlines Corporation v. their services may be terminated only for a just or authorized cause. Jeanette Cervantes. With the exception of sixteen of them. 1996. therefore. 1996. Isabel B. even if the performance is not continuous and merely intermittent. The validation of the limit imposed on their contracts. Equal Opportunity for Employment. whether such service is continuous or broken.. NLRC. Gruela. Olegario. rollo. Melody V.m.18 [Article 279 of the Labor Code as amended. Because respondent failed to show such cause. Violeta G. March 18. their disability did not render them unqualified or unfit for the tasks assigned to them. The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. p. September 28.] in which the Court upheld the validity of an employment contract with a fixed term. Agdon. they are not deemed regular employees and hence not entitled to the same benefits. Montes.] We find no basis for this argument. per Puno. Equally unavailing are private respondent’s arguments that it did not go out of its way to recruit petitioners. which agreement shall include: (a) The names and addresses of the handicapped workers to be employed. Margaret Cecilia Canoza. it reasons that this task "could not be done by deaf mutes because of their physical limitations as it is very risky for them to travel at night. Employment agreement. Albino Tecson.] the Court held that "the determination of whether employment is casual or regular does not depend on the will or word of the employer. NLRC. This excuse cannot justify the termination of their employment. NLRC. Villa v. p. Thelma Sebastian. the employees thereby became regular employees. "An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided. argues that the parties entered into the contract on equal footing. 15. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. petitioners performed these tasks for more than six months. The term limit in the contract was premised on the fact that the petitioners were disabled. Zamora21 [181 SCRA 802. Cortez. Hence. Since the Magna Carta accords them the rights of qualified able-bodied persons. Article 80 does not apply because petitioners are qualified for their positions. imposed by reason of their disability. Respondent bank entered into the aforesaid contract with a total of 56 handicapped workers and renewed the contracts of 37 of them. September 1. 529. J. Moreover. the following twenty-seven petitioners should be deemed regular employees: Marites Bernardo. which provides: "ART. ad infinitum. that is. Pascual. But as noted earlier. Article 281. Respondent’s reason for terminating the employment of petitioners is instructive. As held by the Court. 1989. 1990. According to private respondent.14 [176 SCRA 615. and the "parties are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other. (c) The duration of employment period. an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. Joselito O. Indeed. Also if the employee has been performing the job for at least one year. was a glaring instance of the very mischief sought to be addressed by the new law. Regular and Casual Employment. 7277 (the Magna Carta for Disabled Persons). February 6. Lilibeth Q. Sales. the Magna Carta for Disabled Persons mandates that a qualified disabled employee should be given the same terms and conditions of employment as a qualified able-bodied person. respondent resorted to nighttime sorting and counting of money. A qualified disabled employee shall be subject to the same terms and conditions of employment and the same compensation. Albert Hallare. Succeeding events and the enactment of RA No. 1999. They are so impressed with public interest that labor contracts must yield to the common good. except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. privileges. Edmund M. Isabel Mamauag. More important. the law deems repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. they are thus covered by Article 280 of the Labor Code. the employment is considered regular. January 14. 621. these facts show that they were qualified to perform the responsibilities of their positions.22 [Article 1700 of the Civil Code provides: "The relations between capital and labor are not merely contractual. 16. NLRC. In this light. after which the employer shall determine whether or not they should be allowed to finish the 6-month term of the contract.The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties. David P. and (d) The work to be performed by handicapped workers." Without a doubt. Furthermore. are entitled to terms and conditions of employment enjoyed by qualified able-bodied individuals. Elvira Go Diamante. any employee who has rendered at least one year of service. 128682. the agreement of the parties regarding the period of employment cannot prevail over the provisions of the Magna Carta for Disabled Persons. because they were backed by then DSWD Secretary Mita Pardo de Tavera and Representative Arturo Borjal." The fact that the employees were qualified disabled persons necessarily removes the employment contracts from the ambit of Article 80. the length of performance and its continued existence. (b) The rate to be paid the handicapped workers which shall be not less than seventy five (75%) per cent of the applicable legal minimum wage." The test of whether an employee is regular was laid down in De Leon v. fringe benefits. This fact does not change the nature of their employment.] in which this Court held: "The primary standard. Labor Code.] however. and that the bank had to determine their fitness for the position. Because the Bangko Sentral ng Pilipinas (BSP) required that cash in the bank be turned over to the BSP during business hours from 8:00 a. Jose E. 263 SCRA 1."15 [CENECO v. In fact. See also Servidad v. As earlier noted. Raquel Estiller. George P. it must be emphasized that a contract of employment is impressed with public interest. rollo.25 [253 SCRA 440.] Clearly. We are not persuaded. David. the renewal of the contracts of the handicapped workers and the hiring of others lead to the conclusion that their tasks were beneficial and necessary to the bank. Agero. 528. Other Grounds Cited by Respondent Respondent argues that petitioners were merely "accommodated" employees. That. Elizabeth Ventura and Grace S. "Articles 280 and 281 of the Labor Code put an end to the pernicious practice of making permanent casuals of our lowly employees by the simple expedient of extending to them probationary appointments. GR No. not because of the mode or even the reason for hiring them.. Cortez. an employee is regular because of the nature of work and the length of service.] No employer is allowed to determine indefinitely the fitness of its employees. The employment agreement shall be subject to inspection by the Secretary of Labor or his duly authorized representatives. x x x. 1990."24 [Respondent’s Memorandum. February 9. per Feliciano. the contract shall automatically expire at the end of the term. Pardo.17 [Articles 282 to 284 of the Code. Section 5 of the Magna Carta provides: "Section 5. Ligutan Jr. of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer. 80. Pinky Baloloa. and that its plantilla did not contain their positions. and while such activity exists. It adds that the petitioners had in fact an advantage.] The contract signed by petitioners is akin to a probationary employment. -. Travelling at night involves risks to handicapped and able-bodied persons alike.The uniform employment contracts of the petitioners stipulated that they shall be trained for a period of one month. 190 SCRA 90." Labor Standards | To digest (old cases) | Ajean Tuazon| 14 . 1998. shall be considered as regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. Lani R.16 [Ibid. incentives or allowances as a qualified able bodied person. per Fernan. during which the bank determined the employees’ fitness for the job.

as far back as 1981. pursuant to existing laws and regulations. 1995. the tenants had the priority right to purchase the property. Rozaida Pascual. Isabel Mamauag. Why then should they be dismissed. on October 12. Maravillas. namely. However. 1995. through Luis Javellana.] Otherwise. on October 24. Marites Bernardo. 3. 1989. the representatives of the Office of the Building Official conducted an ocular inspection of the building. Elizabeth Ventura and Grace S. On January 31. Sometime in 1964. Vitug.[7] On November 3. August 10. Lani R. August 19. The court rendered judgment dismissing the complaint. 3. 160867. 3. Margaret Cecilia Canoza. Wiring system are already old. 1983. within fifteen days from the finality of this Decision. Upon failure to pay the loan. Samuel S. versus MANILA TOWERS DEVELOPMENT CORPORATION. the Manila Tower Development Corporation (MTDC) for P21. the building administrator. they should be struck down or disregarded as contrary to public policy and morals.8 Rule VII-IRR. Amado Ramoneda. the City Engineer and Building Official had ordered the building condemned after inspection. Broken window glass panes and rusted steel casement. Violeta G. the tenants filed several suits against it. Respondent. Jeanette Cervantes. Rebecca E. The well-settled rule is that the character of employment is determined not by stipulations in the contract. 1981 to MTDC urging that the building be immediately repaired. Samuela stated that when the MTDC was about to initiate the repairs on the building. J. pp. obsolete and not properly maintained. 3. "x x x x x x x x x "At this juncture. Jr. Jeannie Ramil.m. but also the concern of the State for the plight of the disabled. In the present case. but by the nature of the work performed. we note the Office of the Solicitor General’s prayer joining the petitioners’ cause. 2003 and the Resolution dated November 19. Gruela. STRUCTURAL ASPECT (Sec. rollo. Steel frames and roofings at deck are rusted/corroded and inadequately maintained. HIBTAI assailed the ruling in this Court via petition for review.00. HIBTAI filed another complaint for annulment of contract and damages in the CFI of Manila. The letter mentioned that. It averred that under Presidential Decree (P. Raquel Estiller. 1995 Resolution of the NLRC are REVERSED and SET ASIDE. 10. with GSIS as the winning bidder. Albert Hallare. NLRC. City of Manila.. Damages to beams and columns are feasible. III. Joselito O. Petitioner. 176 SCRA 208. The eloquent proof of this statement is the repeated renewal of their employment contracts.) No. OTHERS 12. Illegal use of 14th floor as sauna bath parlor which is non-conforming to City Ordinance. ELECTRICAL ASPECT (Sec. Ma. Inadequate light and ventilation resulting from illegal constructions at the required open space areas. In fact. Isabel B.5 Rule VII-IRR) 5. on October 2. requesting that the defects of the building be corrected. Where an employee has been engaged to perform activities which are usually necessary or desirable in the usual business of the employer. It ruled that the decisive determinant in ‘term employment’ should not be the activities that the employee is called upon to perform but the day certain agreed upon the parties for the commencement and termination of their employment relationship. Ligutan Jr.. David P. but on justice and the equal treatment of qualified persons. disabled or not. Sta. before the MTDC could make the necessary repairs. were the real parties-in-interest as parties-plaintiffs. no employee can become regular by the simple expedient of incorporating this condition in the contract of employment. 11. its owner. leased the building to about 200 Filipino Chinese tenants who used the same for either residential or commercial purposes. v. 1981. G. due to lack of proper maintenance has los[t] their trap seals. 1st Division) DECISION CALLEJO. Cracks on the exterior interior walls are prominent which manifest earthquake movement and decrease in seismic resistance. Melody V. concur.M.D.[4] According to the Court. and Gonzaga-Reyes.] WHEREFORE. 1987." In rendering this Decision. 72289 dated August 25. In this light. Romero (Chairman). He used the unit as his law office. Samuela. they agreed with the stipulation in the contract regarding this point. 13. this prevented MTDC from complying with the said order. Purisima. this Court has upheld the legality of fixed-term employment. Ma. per Martinez. 1517. sold the property to the Centertown Marketing Corporation (CMC) which assigned all its rights to its sister-corporation. About eight (8) years later.Private respondent argues that the petitioners were informed from the start that they could not become regular employees.28 [Manifestation of the Office of the Solicitor General. they should be treated and granted the same rights like any other regular employees. Zamora proves instructive. Atty. prompting HIBTAI to appeal the decision to the appellate court. Defective sanitary/plumbing installations.. The Antecedents A 14-storey high rise building was constructed at 777 Ongpin St. Cruz. The latter. SO ORDERED. Usage of dangling extension cords and octopus wiring connections were likewise observed. such employee is deemed a regular employee and is entitled to security of tenure notwithstanding the contrary provisions of his contract of employment. not the HIBTAI. Cheong Kiao Ang. 8.3 Rule VII-IRR) 2. the handicap of petitioners (deaf-mutes) is not a hindrance to their work. During the pendency of these cases. II. The ruling of the trial court was later affirmed on February 4. Respondent Far East Bank and Trust Company is hereby ORDERED to pay back wages and separation pay to each of the following twenty-seven (27) petitioners. the court rendered judgment dismissing the complaint. Bernadeth D. The June 20. claiming that its members had the priority to buy the property. the tenants of the building. the HIBTAI. Still. BONIFACIO NAKPIL. It was also recommended that the use of the sauna bath be discontinued and the old electrical Labor Standards | To digest (old cases) | Ajean Tuazon| 15 . He pleaded to the Building Official to give priority to his request to prevent undue injuries and protect the lives of the tenants. George P. Montes. ARCHITECTURAL ASPECT (Sec.6 Rule VII-IRR). 2006 Sep 20. Bonifacio Nakpil who leased Room 204 in the mezzanine floor. (HIBTAI). against the CMC. Sales. Albino Tecson. Poor drainage system that caused the stagnation of waste water within the back part (Ground Floor) of the building. the Law to Enhance Mobility of Disabled Persons. Thelma Sebastian. 10th & 11th floors. on February 23. SANITARY/PLUMBING ASPECT (Sec.[8] nderscoring supplied) The City Building Official recommended that the windows glass/frames be repaired and the illegally appended structures removed. However. Inc. No. All sanitary/plumbing fixtures on vacated 9th. 3. JJ. NLRC:27 [GR No. On June 30.R. On June 29. Pascual. Atty. Lilibeth Q. Inc. Agdon. wrote Architect Juan A. the leading case of Brent School.000. 7. The City Engineer reiterated his request in a letter dated July 10. docketed as Civil Case No. Illegal construction at the estero easement area and at the required open spaces in violations of Section 3.] "Article 280 was emplaced in our statute books to prevent the circumvention of the employee’s right to be secure in his tenure by indiscriminately and completely ruling out all written and oral agreements inconsistent with the concept of regular employment defined therein. in turn.[2] The tenants of the building later formed the House International Building Tenants Association. Some junction boxes are not properly covered thus exposing the wiring connections. we iterate our ruling in Romares v.000. The property was mortgaged with the Government Service Insurance System (GSIS) as security for a loan Ang had earlier obtained. Edmund M. As reaffirmed in subsequent cases. v.R.[5] The City Building Official granted the request and scheduled an ocular inspection of the building at 2:00 p.[3] The tenants refused to pay their rentals and instead remitted them to HIBTAI. the bank adds. The noble objectives of Magna Carta for Disabled Persons are not based merely on charity or accommodation. the tenants likewise took control of the building and even illegally put up structures in the building without MTDC’s consent.. The City Engineer warned the MTDC that the defects were serious and would endanger the lives of the tenants if not immediately corrected.26 [A. simply because they are physically impaired? The Court believes. 122327. this Court rendered judgment affirming the decision of the CA. In this light. that. the City Engineer wrote the MTDC. David. Office of the Building Official. The HIBTAI protested. Jose E. we are not persuaded.: This is a consolidation of two Petitions for Review.1 Rule VII-IRR) 1. 354-375. MTDC and GSIS. The NLRC is hereby directed to compute the exact amount due each of said employees.. 9. filed a complaint against the GSIS for injunction and damages in the Court of First Instance (CFI) of Manila. requesting for an immediate ocular inspection of the building to determine its safety. 83-15875. Manila. 2003 denying the motion for reconsideration thereof. Cynthia de Vera. CV No. 1986. 1982. they submitted a Building Inspection Report with the following findings: I. 1998. But this Court went on to say that where from the circumstances it is apparent that the periods have been imposed to preclude acquisition of tenurial security by the employee.[6] With prior notices to the tenants and in the presence of a representative of HIBTAI. this allowed the escape of toxicating sewer gas from the system. 1983. 4. IV. Marmolejo. Oreta & Co. Concepcion. Non-compliance with the provisions of BP 344. No costs.. Agero. Pardo. Cortez. 1995. 1995 Decision and the August 4. assailing the Decision[1] of the Court of Appeals (CA) in CAG. after showing their fitness for the work assigned to them. SR. 6. Cortez. then Officer-in-Charge (OIC). Elvira Go Diamante. the Petition is hereby GRANTED. One of these tenants was Atty. J. premises considered. the Court emphasizes not only the constitutional bias in favor of the working class. the GSIS had the real estate mortgage foreclosed and the property sold at public auction. Pinky Baloloa.

He also stated that the structural integrity of the building was questionable. He averred that he had been in the law practice for 30 years. He pointed out that he had been renting the premises and complying with the conditions of the lease since 1965. 1096. and his secretary was left behind to take care of the law office. 2) the directive of national as well as local leaders to intensify the campaign against buildings which are dangerous to life and limb as exemplified in the tragic Ozone case in Quezon City. He never used any instrument to determine the structural stability because there was no danger. Around 20 members of the demolition crew entered the office of Atty. the Chief Slum Clearance and Demolition Services of the Office of the City Building Official.00 as moral damages. Clemente Sy. or stolen. Atty. as well as the other existing laws and ordinances. MTDC alleged that it was the City of Manila which caused the repair of the building. His personal belongings were either scattered. 1096. he was in the United States for treatment when his daughter informed him. 96-79267. b) The sum of P500. scope of project activities.m. the MTDC did not respond to the letter. That all the occupants thereat already vacated the premises to give way for the repair work of the subject structure except for the unit occupied by the security guards at the ground floor.000. Atty. 1996. For your information and further instruction. Ong prayed that a TRO be issued to enjoin respondents from conducting repair and rehabilitation work within the building. His room was destroyed. For his part. That most of the interior walls were already dismantled by this Office to give way for immediate replacement. a complaint in the Regional Trial Court (RTC) of Manila against the MTDC. 1996.[14] However. entered the building and. notwithstanding notices to this effect. 1996. costs of suit and other reliefs. cut the electric current. Nakpil presented Engr. Some members of the demolition crew looted the room and took everything they could carry.[21] In its answer to the complaint. commenced the repairs and tore down some of the structures. made the following recommendation: It is recommended that because of: 1) the adamant refusal of the owners of the building to correct the serious defects noted by this Office as early as 1981 up to the present. that his place was being demolished. one of the tenants in the building and the President of the HIBTAI. He rushed back home and arrived in Manila on July 30. and 3) the possibility of City officials incurring criminal as well as administrative liabilities for failure to take positive steps to protect the lives of the people against ruinous or dangerous buildings. filed a petition for prohibition with a plea for a writ of preliminary injunction and/or a temporary restraining order (TRO) with damages against the MTDC. the City Building Official wrote a letter to the building administrator. two manual typewriters.[20] The MTDC later had the building demolished. he had leased a portion of the mezzanine floor.000. and destroyed the pipes with the use of heavy equipments and crowbars. the trial court dismissed the complaint of Ong in Civil Case No.[10] However. Nakpil’s claims. together with a certification on structural stability from the building’s structural designer and to attach thereto the results of the structural testing as well as the recommendation/evaluation reports. and the owners of the building. a group of men led by Engr. They demolished the mezzanine and upper floors and other parts of the building. 96-79267. a tanguile table. 65980. He stated that what he and the tenants received were notices to repair and not notice of demolition. Consequently. 1996. 1996 as a result of the TRO issued by the court in favor of Ong in Civil Case No.wiring system and fixtures be replaced.[9] Consequently. and e) The sum of P50. 1998 to the President and officers of the MTDC. moral. He also directed MTDC to file an application for the necessary permits before the start of the actual repairs. including MTDC. 1996. gained entry into the building.D. which he used as his clinic.m. The MTDC violated his right as lessee to the possession of the premises. in fact. on July 19. 1990. all spent in Room 204. Nakpil was in the United States for medical treatment. and 694 to 707 of the Civil Code. In view of this development. at the time. 2. on July 19. 1990. Rule VIII-IRR. representing the value of the personal belongings and important papers which were lost and/or stolen by the representatives of the defendant during the actual demo[li]tion and tearing or hammering down of the walls and partitions of the room of the plaintiff. all valued at P100. it will undertake the repair and all expenses shall be charged against them. The demolition team (the sheriff. on November 5. The case was docketed as Civil Case No.[19] The Office of the Mayor made it clear that the order became necessary to protect the people from any injury as a consequence of the dilapidated and serious deterioration of the building. sound and stable. the complaint and summons were served on MTDC on April 14. P. Guillermo de Leon who testified that he was requested to conduct an ocular inspection of the building. Plaintiff prays for such other relief and remedies he is entitled to in the premises. The persistence of the owners of the building in not undertaking the required urgent repairs allegedly because of suits filed against them. 96-79267. he could not resume his law practice. This is without prejudice to further legal action that may be taken under the provisions of Articles 482 and 694 to 707 of the Civil Code of the Philippines. Engr. Nakpil filed. since 1973.[12] The City Mayor approved the recommendation and directed the repairs of the building by the City Building Official with the expenses therefor to be charged against the account of MTDC. litigation expenses. 3. Zone 29 where the building was located and the incumbent President of the House International Building Tenants Association. Balagot submitted the following Report: 1. without prejudice to further action that may be taken under the provisions of Articles 482.[22] He lost some of his books. policemen and laborers). As per his report dated August 9. Slum Clearance and Demolition Services. the City Building Official issued a Closure Order to the MTDC and ordered the building administrator to cause the tenants to vacate the building within fifteen (15) days from notice and to commence its repair. it could withstand any earthquake. ordering him to cause the tenants to vacate the building and undertake the necessary repairs and rehabilitation of the building. which the court granted. On January 24. the Office of the Mayor sent a letter dated March 6. thrown away. The building was not destroyed by the earthquake on July 6. Atty. Nakpil. it was not liable for Atty.[15] At about 4:00 p. Room 200. On July 23. The MTDC forthwith applied for a demolition permit with the Office of the Building Official which was granted on March 30.[18] Meantime. 1996. 1996. on November 10. who claimed to be the Barangay Captain of Barangay No. following the tragic Ozone fire incident in Quezon City. through its agents and representatives and the policemen who accompanied the demolition team.[17] Atty. He alleged that the MTDC. giving them fifteen (15) days within which to vacate the building to give way to its general repair. and the electricity was cut off. No. Nakpil prayed that MTDC be ordered to pay the following: a) P100. armed with crowbars. on July 19. 65980. Nakpil testified that he had been a lessee of Room 204 and used the room as a law office. City Engineer and Police Major Franklin Gacutan. repair/renovation plans and retrofitting plans. At around 3:00 p. 1998. Felix Ong. Labor Standards | To digest (old cases) | Ajean Tuazon| 16 .[16] Upon his arrival in the Philippines. 1996. 1996. a group of employees of the City Engineer’s Office. docketed as Civil Case No.[13] On June 28. c) The sum of P100. caused probably by temperature. Atty. The following warning was also issued: Failure to comply herewith shall constrain this Office to impose further administrative sanctions in accordance with the provisions of the National Building Code PD.[11] The City Building Official conducted a reinspection of the building and. He stated that upon inspection. Joseph Villanueva declared that. The order would only be lifted after the defects or deficiencies of the subject building or structure shall have been corrected or substantially complied with in accordance with Section 21. 297. forced the guard to open the gate to the building. BALAGOT Engineer V Chief. accompanied by policemen and sheriffs. otherwise. the repair works were temporarily suspended on July 22. in compliance with the order of the City Mayor as recommended by the City Building Official. Melvin Balagot. he found no hairline cracks and that the building could be saved by plastering. as well as other existing laws and ordinances. In due course. on March 26. 1996. d) The sum equivalent to 20% of the amount due to the plaintiff as attorney’s fees. because of the demolition of his office. filed a similar petition against the same respondents.00. through phone.000 as litigation expenses. (SGD) MELVIN Q. directing them to undertake immediate repairs within three (3) days from receipt thereof. gives this Office no better alternative but to recommend that the City Engineer be authorized and directed to make the necessary repairs and all expenses thereto be shouldered by the owners of the building and also to order the occupants of the building to immediately vacate the premises to give way to the repair and to ensure the protection of their lives and property. unlawfully depriving him of said possession without any lawful authority or court order.00 as exemplary damages. and. It is likewise reported that the said building is not safe for occupancy for the meantime.000 for actual damages. 1998 in Civil Case No. three paintings. 200 people armed with hammer and crowbars started destroying the mezzanine floor of the building on July 19. looted the room and destroyed the pipes and cabinets and scattered his things. However. 1995. thereafter. He found hairline cracks. the walls and partitions were completely hammered down. and discovered that he had no more office to speak of. plus costs of suit.000. he assessed the building to be safe. and exemplary damages. and that structural testing was needed. notices were sent to the tenants. Approval of this request is urgently needed. attorney’s fees. seeking for actual.

with the assistance of the employees of the City Engineer’s Office. No. He maintains that as of June 1995.[30] The parties filed their respective motions for reconsideration of the decision. moral and exemplary damages to Nakpil. the obligor (lessor) who acted in good faith is liable for damages that are the material and probable consequence of the breach of the obligation and which the parties have foreseen or could have reasonably foreseen at the time the obligation was contracted. either by others’ acts [save in the case provided for in the article 1560 (now Article 1664)]. no exemplary damages could likewise be awarded. HIBTAI did not use the rentals to make the necessary repairs but used it instead to pay its accounts and obligations. for he is obliged to give warranty in the manner we have set forth in our commentary on article 1553. Dangerous and Ruinous Buildings or Structures Labor Standards | To digest (old cases) | Ajean Tuazon| 17 . 1996. consequently.[31] The parties filed their respective petitions for review on certiorari in this Court. and (2) whether the award of P50. unless there is a stipulation to the contrary. In G. being the person principally obligated by the contract.R. In 1998. we understand it to be trespass in fact only (de mero hecho). the value of each volume of the SCRA was P520. The appellate court cited Goldstein v. On the other hand.000. 160867 is denied for lack of merit. MTDC adduced testimonial and documentary evidence that the Office of the City Engineer. and some portions of the ceiling which needed to be replaced. malice or wanton attitude. Nakpil and that the door and partitions were damaged. In case of fraud. possession. it must be distinguished whether it is trespass in fact or in law because the lessor is not liable for a trespass in fact or a mere act of trespass by a third person. Moreover.[32] It alleged that it acquired the building from the GSIS in 1981. he suffered mental anguish and was embarrassed by his eviction. contends that. SO ORDERED. Moreover. Sections 214 and 215 of the National Building Code read: SECTION 214. not a third person. He insists that he has presented proof that he suffered losses when his office was demolished and the value he gave was a fair and reasonable assessment thereof. the employees of the City Engineer’s office were the ones who demolished the building. thereby disturbing the peaceful and adequate enjoyment of the lessee. 96-79267. No. 04393.000. This is without prejudice to the provisions of Articles 482. trespass in fact was distinguished from legal trespass. On August 25.[25] but had to stop due to the temporary restraining order from the RTC of Manila on the complaint of Felix Ong. This led to the demolition of the leased premises.[28] The CA held that MTDC was remiss in its duty as lessor under Article 1654.000. A new one is hereby rendered ordering defendant-appellee.[27] Atty. to perform any promise which forms the whole or part of the contract. deprived him of his possession of the leased premises. the CA ruled that the HIBTAI had no right to collect the rentals. petitioner therein. is hereby REVERSED and SET ASIDE.400. the value of 245 volumes would be P127. and. 1996 conducted by the Clerk of Court in connection with Civil Case No. he had his law office for more than 30 years and considered it his second home. there is no showing that it failed to maintain him in the peaceful and adequate possession of the leased premises for the same reason. the Office of Atty.[37] In the early case of Goldstein v. the court rendered judgment in favor of MTDC and ordered the dismissal of the complaint.[24] They started the work on the 9th and 10th floors of the building.[34] In contracts. Nakpil was unoccupied. pointed out that the obligation to maintain the lessee in the peaceful and adequate enjoyment of the leased property seeks to protect the lessee not only from acts of third persons but also from the acts of the lessor.m. MTDC. Roces. the most that could be adjudged in his favor was nominal damages for violation of his right. Manila Towers to pay herein plaintiff-appellant Bonifacio Nakpil the amount of P50.[35] We do not agree with the ruling of the CA that the MTDC committed a breach of its lease contract with Nakpil when it failed to comply with its obligation as lessor. safety and/or well-being of the general public and its occupants as provided in Section 215 thereof. (3) To maintain the lessee in the peaceful and adequate enjoyment of the lease for the entire duration of the contract. in such wise that the lessee can only distinguish the material fact. laborers and policemen who were tasked to check the flow of traffic. and by others’ acts. By his own acts. The petition of Nakpil in G. disturb. She rushed to the mezzanine and saw that ten of them were in the law office of Atty.[29] However. it was prohibited from taking possession of the property by the tenants who had filed several suits against it. because. the appealed decision of the Regional Trial Court. commenced the repairs of the building on July 19. 694 and 707 of the New Civil Code. through Engr. they did not remove the walls and partitions in the mezzanine floor.00 nominal damages awarded to him is too minimal. He contends that MTDC allowed the city to demolish the building even when the order was only for its repair. object to. (2) To make on the same during the lease all the necessary repairs in order to keep it suitable for the use for which it has been devoted. Nakpil counters that while MTDC may have failed to make the necessary repairs because it was prevented by the tenants’ association from doing so. The lights were off at the time. No. which the CA denied in its Resolution dated November 19. Branch 152 in Civil Case No. They removed the cracked interior walls of the building with crowbars. while Carmelita Tan declared that she did not know who those people were. he should attempt to render ineffective in practice the right in the thing he had granted to the lessee.”[41] Further. in going back on his agreement. dispute.[40] In the Goldstein case. bad faith. stripped of all legal form or reasons. to make the necessary repairs on the building. seeking to reverse the decision and resolution of the appellate court. he shall be responsible for all damages which may be reasonably attributed to the non-performance of the obligation. or place difficulties in the way of the lessee’s peaceful enjoyment of the premises that in some manner cast doubt upon the right of the lessor by virtue of which the lessor himself executed the lease. or by his own. Nakpil failed to prove that it had anything to do with the demolition/repairs and the loss of his personal property. the CA also ruled that no actual damages could be awarded to Atty. the CA rendered judgment granting the appeal and reversing the decision of the RTC. thus: “if the act of trespass is not accompanied or preceded by anything which reveals a juridic intention on the part of the trespasser. Neither can moral damages be awarded to him since he likewise failed to prove bad faith or any fraudulent act on the part of MTDC. Nakpil. health. depending upon the degree of danger to life. a matter which the court can take judicial notice of. The duty to maintain the lessee in the peaceful and adequate enjoyment of the lease for the duration of the contract is merely a warranty that the lessee shall not be disturbed in his legal.[26] On May 20. Melvin Balagot. 1996 and the loss of the personal properties of Atty. According to the CA. 160886 is meritorious. maintenance or demolition of the building found or declared to be dangerous or ruinous.00. that is.00 for nominal damages has factual and legal basis. he was not entitled to attorney’s fees. on July 19. Nakpil failed to prove that the building was demolished on July 30. and. No.R. the obligation under Article 1654(3) arises only when acts. thus: The lessor must see that the enjoyment is not interrupted or disturbed. it is incumbent upon him to protect the lessee in the latter’s peaceful enjoyment. avers that it cannot be made liable for actual. it is enough that loss is proven. moral and exemplary damages because it had not been remiss in its duty to make the necessary repairs. hammers and other instruments. carrying hammers and crowbars and long irons. No. there were already 245 volumes of the Supreme Court Reports Annotated (SCRA).[23] However. The fallo of the decision reads: WHEREFORE premises considered. Jr. in G. because he must guarantee the right he created. 2001.[36] There is no factual and legal basis for any award for damages to respondent. Thus. It bears stressing that the City Building Official is authorized and mandated under Section 214 of the National Building Code to order the repair. The trial court declared that Atty. He posits that the MTDC is liable for damages because the MTDC. gained entry into the building. the failure of MTDC to fulfill such obligation entitled Atty. 160867. 1996. the tenants of the subject building prevented MTDC from performing its duty to maintain them in their peaceful possession and enjoyment of the property. During the ocular inspection of the building on August 8. Nakpil since he failed to present competent evidence to prove the actual damages sustained. Nakpil appealed to the CA. hence.[39] When the act of trespass is done by third persons. Nakpil to damages.R. and it was the HIBTAI that had been managing the affairs of the said building and collected the rentals from the tenants. while actual damages must be proven as a general rule and the amount of damages must possess at least a degree of certainty. and that the MTDC is liable for nominal damages.R. Failure of the lessor to fulfill any of these obligations will render the lessor liable for damages. in this sense. the P50.R. Thus. Roces. without legal excuse. it is not necessary to prove exactly how much the loss was. 2003. As admitted by one of his witnesses (Villanueva). and not physical. By their own actions. The Ruling of the Court The petition of the MTDC in G. 1996 was actually done by the employees under the City Engineer of Manila and the City Building Official on orders of the City Mayor without the participation of the MTDC.00. 160886. Breach of contract is the failure without legal reason to comply with the terms of a contract. It is also defined as the failure. He maintains that he is entitled to moral damages because the MTDC had the building demolished to have him evicted from his office. Nakpil..00 as nominal damages. testified that she owned a grocery store in the ground floor and in the mezzanine. At about 4:00 p. 100 persons.[33] The threshold issues are: (1) whether or not the MTDC is liable for actual. Assuming that the evidence he presented is not sufficient to entitle him to an award of actual damages. Article 1654 of the Civil Code enumerates the obligations of the lessor: (1) To deliver the thing which is the object of the contract in such a condition as to render it fit for the use intended. termed as legal trespass (perturbacion de derecho). 2003.[38] the Court. It pointed out that in CA-G. he would openly violate it if. citing the commentaries of Manresa. petitioner therein. a member of the HIBTAI.[42] What is evident in the present case is that the disturbance on the leased premises on July 19. 1996 and failed to link MTDC to the incident on July 19.Carmelita Tan.

No 160867 is DENIED. renovated or removed shall be sold at public auction to satisfy the claim of the OBO. hence. After such period. health. or which in relation to existing use. a complaint was filed against the GSIS by one of the tenants entitled Dy v. INC. Abatement of Dangerous Building When any building or structure is found or declared to be dangerous or ruinous. constitute a hazard to safety or health or public welfare because of inadequate maintenance.R.[43] Such conclusion is grounded on the fact that the lessors. the lessor is likewise obliged to make the necessary repairs on the leased premises which would undoubtedly include those that are structural and substantial in nature. The RTC dismissed the complaint of HIBTAI. or which otherwise contribute to the pollution of the site or the community to an intolerable degree. or in substantial part. shall extend beyond thirty (30) days from the date of completion of the repair. respondents Bastida and Caban. the petition in G. Respondents Albert Caban and Chiquito Bastida were hired by petitioner on June 25. 1993 and October 29. the petition was denied for lack of merit. Respondents. In a month. Neither did respondent abandon the leased premises.[44] It bears stressing. in 1995. refused to pay rentals and remitted the same to the HIBTAI which used the money partly to finance its suits against the MTDC.” The evidence of Nakpil shows that the mezzanine floor was dark. Batangas. Admittedly.[46] Moreover. constitutes constructive eviction. Petitioner imports cattle by the boatload from Australia into the ports of General Santos City. the deed of assignment executed by the CMC and its sister corporation was null and void. or are otherwise dangerous to human life. the Building Official shall order its repair. in whole. 1982 against the MTDC. meat processors. meat traders. CHICO-NAZARIO EMPLOYER-EMPLOYEE RELATIONSHIP (DEALCO FARMS. painting. 2009 Jan 30. filed a Complaint for illegal dismissal with claims for separation pay with full backwages.D. canned good manufacturers and other dealers in Mindanao and in Metro Manila. through the HIBTAI. or in Magalang. No. and to insure the personal safety of the tenants and their properties. SP No.R. Plaintiff alleged therein that its members.[45] Nakpil failed to establish any of the foregoing factors. the MTDC requested the City Building Official for the inspection of the building to determine its safety. Even after the dismissal of the complaint. independently of and separate from the obligation of the MTDC to effect the required immediate repair/rehabilitation of the building. petitioner’s farms in Polomolok. Shortly. The City Building Official was tasked merely to repair/rehabilitate the building and not to demolish the same and cause the placement eviction of the tenants. he should have inquired from the office of the City Engineer/City Building Official and requested that they be returned to him. Rule II of the Implementing Rules of the National Building Code which reads: 10. MINITA V.500. as escorts or “comboys” for the transit of live cattle from General Santos City to Manila. that the CMC was not qualified to purchase the property from the GSIS under its Articles of Information and. and housed in. fattening and distribution of live cattle for sale to meat dealers. demolition and removal. it requested for an immediate ocular inspection of the building to determine the condition and safety of the building under Sections 214 and 215 of the National Building Code. Moreover. Villanueva merely testified that the laborers carried away “things they could carry. consequently. Government Service Insurance System. Admittedly. including Nakpil. South Cotabato. and many lives were lost. the lessor’s failure to make repairs or alterations to the leased premises as required by public authorities. the MTDC failed to make the necessary repairs in the building despite requests of the City Building Official as early as June 29. said building materials of the building thus repaired. respondents were each paid P1. Subic. there may be a constructive eviction if the landlord does a wrongful act or is guilty of any default or neglect whereby the leased premises are rendered unsafe. Thus. SO ORDERED. Atty. these imported cattle are transported to.Dangerous buildings are those which are herein declared as such or are structurally unsafe or not provided with safe egress.D. Any act or omission by the lessor which causes a substantial interference with the actual possession of the lessee will constitute a breach of the obligation of quiet enjoyment. the tenants. at the very least. No. 1981 and July 10. renovation.00. the tenants in the building had the priority right under P. In turn. 1987. The HIBTAI filed a petition for review in this Court and. Assuming that Atty. There is no question that the possession by respondent of the leased premises had been disturbed by the attempt of the personnel of the City Building Official to repair and rehabilitate the building due to MTDC’s failure to undertake the same. renovation. ALICIA AUSTRIA-MARTINEZ. In fact. [47] The Court ruled that the HIBTAI had no personality to assail the contracts and to invoke P. however. MA. 68972 denying due course to and dismissing petitioner Dealco Farms. or Manila. respondents’ work ceases. Petitioner. these were building materials which they were authorized to carry away under Section 10. The only recourse of the MTDC was for the repair/rehabilitation of the building through the Office of the City Engineer/City Building Official. 160886 is GRANTED. CONSUELO YNARES-SANTIAGO. SR. and ALBERT CABAN. in 1988. For every round trip travel which lasted an average of 12 days. However. 1983. for the purposes for which they were leased. together with Ramon Maquinsay and Roland Parrocha. a complaint for injunction and damages was filed by the HIBTAI on October 2.. dilapidation. the HIBTAI filed a complaint against the GSIS. On the whole. the Ozone Bar and Grill in Quezon City had just been burned down. or safety. Nakpil’s witness. WE CONCUR: ARTEMIO V. the MTDC cannot be faulted for such failure. thus depriving the latter from generating funds for the repair of the building. Any amount in excess of the claim of the government realized from the sale of the building and/or building materials shall be delivered to the owner. a similar complaint was filed against the GSIS by another tenant entitled Cruz v. 1517 for its members. or abandonment. which permanently interferes with the tenant’s beneficial enjoyment or use of the leased premises. premises considered. service Labor Standards | To digest (old cases) | Ajean Tuazon| 18 .[49] Even Nakpil admitted that the MTDC was prevented by the HIBTAI and its members from undertaking any repairs in the building. GSIS. SECTION 215. In fine. in no case. CHIQUITO BASTIDA. production. or unsuitable for occupancy. On October 15. G. It included feeding and frequently showering the cattle to prevent dehydration and to develop heat resistance. In some jurisdictions. on January 31. 1981. respondents usually made two trips. nor in the selection. at which point. the deed of conditional sale was ultra vires. 153192. demolition and removal is made by the owner which.[48] In 1994. under our laws. This is without prejudice to further action that may be taken under the provisions of Articles 482 and 694 to 707 of the Civil Code of the Philippines. table. the cattle are turned over to and received by the duly acknowledged buyers or customers of petitioner.R. and (2) an abandonment of possession by the lessee within a reasonable time.’s petition for certiorari. Even Villanueva.: Under review are Resolutions[1] of the Court of Appeals (CA) in CA-G. When the personnel of the City Building Official/City Engineer in coordination with the Philippine National Police undertook the repair/rehabilitation of the building. The 12-day period is occasionally extended when petitioner’s customers are delayed in receiving the cattle. thereafter. 1986. respectively. obsolescence. The building/structure as repaired or in case of demolition. 1517 to purchase the property. The petition in G. ROMEO J. 1994. PANGANIBAN. J. No less than the HIBTAI or its members prevented MTDC from instituting the necessary repairs. and typewriter. for fattening until the cattle individually reach the market weight of 430 to 450 kilograms. CALLEJO. Upon arrival in Manila. respondents ensured that the cattle would be safe from harm or death caused by a cattle fight or any such similar incident. salary differentials. The tenants in the building. Petitioner is a corporation engaged in the business of importation. No costs. Nakpil lost any of his personal properties.R. on June 30. No. conformably with its obligation under Article 1654 of the New Civil Code to maintain peaceful and adequate enjoyment of the tenants of the leased premises. already controlled the premises. admitted that HIBTAI objected to the orders of the City Building Official for the repair of the building. unfit. If at all the laborers had taken any of the materials from any of the rooms in the building. in those cases. Nakpil failed to present preponderance of evidence to prove that any of the laborers under the Office of the City Building Official/City Engineer carried away his books. particularly those that are substantial and structural in nature. vacation or demolition depending upon the degree of danger to life. Pampanga. which makes the lessor liable for damages. WHEREFORE. or someone acting under his authority. CMC and MTDC with the RTC of Manila for the nullification of the deed of conditional sale between the GSIS and the CMC and the deed of assignment executed by the defendant CMC and the MTDC over the property. supervision and control of the laborers to initially repair/rehabilitate the building. presumably including Nakpil. At the time. The same doctrine could very well be applied in our jurisdiction considering that. Respondents’ work entailed tending to the cattle during transportation.. The decision of the Regional Trial Court is AFFIRMED. Inc. were obliged to make structural and substantial repairs on the leased property. as the lights had been turned off to prevent a conflagration. No. 1999. versus NATIONAL LABOR RELATIONS COMMISSION (5th DIVISION). that two factors must exist before there can be a constructive eviction: (1) an act or omission by the landlord. The Intermediate Appellate Court affirmed the dismissal on February 4. 3rd Division) DECISION NACHURA. The Decision of the Court of Appeals is REVERSED AND SET ASIDE. or which constitute a fire hazard. the building materials gathered after the demolition thereof shall be held by the OBO until full reimbursement of the cost of repair. The MTDC had no involvement in the actual repairs/rehabilitation of the building. they did so in the lawful performance of their duties. including Nakpil.

petitioner relates only one instance when it engaged the services of respondents as “comboys. 1994 (Bastida) and June 25. 280). its import of cattle from Australia substantially decreased due to the devalued dollar. Thus. a fact which [petitioner] dismally failed to refute.00 per trip. 1993 (Caban). We also deny the “claim” for salary differentials.000. they are fed. Petitioner claims that once the finished cattle are bought by the buyers. Respondents’ repeated attempts to see and meet with Ramis. starting with the admissions of [petitioner] who acknowledged the engagement of [respondents] as escorts of their cattles shipped from General Santos to Manila. does not persuade us.400.” Petitioner maintains that their arrangement with respondents was only on a “per-trip” or “per-contract” basis to escort cattle to Manila which contemplated the cessation of the engagement upon return of the ship to the port of origin – the General Santos City port. The “claim” for salary differentials is denied on two grounds: (1) [these are] not prayed for in their complaint. COLA and union service fees. to wit: But we deny the “claim” for backwages which was merely inserted in the prayer portion of [respondents’] position paper. It appears that. cattle fattening to market weight and production. Bibiana Farms and other big cattle feedlot farms in SOCSARGEN (Annexes “A” and “E. [Petitioner’s] contention. as petitioner failed to prove payment thereof or its exemption therefrom.00 P17. Bibiana Farms. [Respondents] were paid P1. damages.] during the conference held on January 6. and attorney’s fees against petitioner. It tacitly admits having terminated [respondents’] services when it said that [respondents] were among the group of escorts who were no longer accommodated due to the decrease in volume of imports and shipments. The preparation of the cattle for shipment. even assuming they were casual employees they may be considered regular employees with respect to the activity in which they were employed and their employment shall continue while such activity exists (last par.00 TOTAL -----P41. Inc. petitioner denies the existence of an employer-employee relationship with respondents. In this regard.400.00 P37. therefore. and well into 1999. The NLRC declared: After a judicious review of the records of this case. the Labor Arbiter denied respondents’ claim for backwages. salary differentials. is erroneous. Maquinsay and Parrocha executed affidavits in favor of petitioner praying for the dismissal of the complaint insofar as they were concerned. respondents prayed for money claims.[7] On appeal to the NLRC. x x x [Respondents] also performed activities which are usually necessary or desirable in the usual business or trade of [petitioner] (Art. NLRC CA No. a part of the scheme of the operation.400. and the sale and shipments to Manila were drastically reduced.000. a hepe de viaje. In all. Given the foregoing.e.500. [petitioner’s] contention that [respondents] were independent contractors and free lancers deserves little consideration. The claim for damages is denied for lack of factual and legal basis as there is no showing that respondent acted in bad faith in downsizing the number of its caretakers. in fact.00 2. i. 2000. thereby limiting the escort or “comboy” activity for which respondents were employed.580. respondents were told by a Jimmy Valenzuela. 2000). compelling them to file an illegal dismissal case against petitioner and its officers. petitioner was forced to downsize.00 Plus 10% Union Service Fees 3. [Respondents]. whether continuous or broken.00[6] However.) But not a modicum of evidence was adduced to prove payment of [respondent’s] services by any of these supposed traders or that [respondents] received instructions from them. (b) COLA. and (c) escort or “comboy” services to feed and water the cattle during transit.. Or.e. Although the four complainants collectively filed a case against petitioner. Valenzuela proffered no reason for respondents’ replacement. [petitioner] manifested its willingness to reinstate [respondents] to their former work as [comboys] under the same terms and conditions but [respondents] answered that they do not want to return to work and instead are asking for payment of their separation pay. Petitioner. i. XI. Even if we include counting the return trip that would be total of six (6) days to the maximum.. 1999.400. Thus. these buyers act separately from. as well as to write Alcoriza. The presence of the four (4) elements in the determination of an employer-employee relationship has been clearly established by the facts and evidence on record. the Fifth Division affirmed the Labor Arbiter’s ruling on the existence of an employeremployee relationship between the parties and the total monetary award of P41. we found no cogent reason to disturb the findings of the branch..incentive leave pay. respondents are free from the control and supervision of the cattle owner since the latter is interested only in the result thereof. [respondents] prayed for separation pay (not reinstatement with consequent backwages) thereby indicating right from the start that they do not want to work with [petitioner] again. As held by [the NLRC’s] Fifth Division in one case: Complainant’s task of escorting the livestock shipped to Manila. Its argument that its usual trade or business (importation/production and fattening) ends in General Santos City. Maquinsay and Parrocha never appeared in any of the conferences and/or hearings before the Labor Arbiter. were hired on October 29.e. Consequently. and making a report upon return to General Santos City to tally the records of the cattle shipped out versus cattle that actually reached Manila are certainly all in accordance with [petitioner’s] instructions. thus: [Petitioner] admits having engaged the services of [respondents] as caretakers or “comboys” (convoys) though it qualifies that it was on a “per trip” or “per contract” basis. Finally[. Hogs do not swim. In its position paper. It is of judicial notice that the bulk of the market for livestock of big livestock raisers such as respondent is in Manila. [Petitioner] also undoubtedly exercised control and supervision over [respondents’] work as caretakers considering that the value of the cattle shipped runs into hundreds of thousands of pesos. [x x x] [respondents] were. Petitioner posits that: (a) respondents are independent contractors who offer “comboy” services to various shippers and traders of cattle. Thus. the buyers and end-users of their finished cattle actually purchase the cattle as soon as they are considered ready for the market. Sub-Regional Arbitration Branch No. and (2) for lack of merit. the buyers themselves arrange. Delfin Alcoriza[2] and Paciano Danilo Ramis[3] before the National Labor Relations Commission (NLRC). Ultimately. Petitioner further narrates that sometime in 1998. It even appears that the same is due to a legitimate cause. When in transit (usually two-and-one-half days) they do not queue to the mess hall. General Santos City. 280. It takes not more than 3 days for the Gen. set forth in Article 280[4] of the Labor Code. failing to give them written notice thereof. they are shipped. paints a different picture. It also admits paying their remuneration of P1. Former complainants Maquinsay and Parrocha mentioned the names of these traders/buyers or shippers as Lozano Farms. respondents alleged in their position paper that: (1) they were illegally dismissed. (b) in the performance of work on board the ship. In fact. and does not include transporting the cattle. Most importantly. More. manning and feeding them prior to and during transit. and (3) petitioner did not observe due process in effecting their dismissal. thus. April 28. 13th month pay. it also appears that [respondents] had rendered service for more than one year doing the same task repeatedly. to the contrary. employees of [petitioner]. as petitioner’s shipments were substantially reduced in 1998-1999. the Labor Arbiter granted respondents’ claim for separation pay. the Labor Arbiter found that respondents were employees of petitioner. (c) in the alternative. Labor Code). service incentive leave pay and damages.00 for a twelve (12) days’ work (or the equivalent of P250. on August 19.780. that he had been instructed by Ramis to immediately effect their replacement. More importantly[. petitioner’s business. COLA and union service fees. (NFL and Ricardo Garcia v. (2) their dismissal was not due to any just or authorized cause.800.500.00 representing respondents’ separation pay. respondents can only be considered as casual employees performing work not necessary and desirable to the usual business or trade of petitioner. petitioner and/or its buyers no longer retained escort or “comboy” services.580. XI-065089-99 (rab-xi-01-50026-98).00 Albert Caban 18. and the Labor Standards | To digest (old cases) | Ajean Tuazon| 19 . for the (a) hauling from petitioner’s farm to the port area. 13th month pay. according to petitioner. Neither did they sign the verification page of complainants’ position paper. through local representatives.00 P2. of Art. not only to [petitioner]. is an activity which is necessary and desirable in the usual business or trade of respondent. and (d) respondents likewise failed to complete the one-year service period. x x x The caretaker is a component of the business. all the four elements in the determination of an employer-employee relationship being present. Santos-Manila trip. [Petitioner’s] witnesses tried to corroborate [its] contention that [respondents] also offered their services to various shippers and traders of cattle. Reasons are abundant why we decline to grant the same. not only to petitioner. The Labor Arbiter awarded respondents: (a) separation pay of one month for every year of service. Petitioner asserts that the finished cattle are sold to traders and middlemen who undertake transportation thereof to Manila for distribution to the wet markets.00 per trip. dollar devaluation. In their complaint.] [respondents] do not dispute that [petitioner’s] downsizing of its escorts in 1999 was due to a legitimate cause. and (c) union service fees fixed at 10% of the total monetary award.” [petitioner’s] position paper. 2000. taking care of the livestock in transit.000. On June 30. however. [Respondents] are not entitled to their claims for 13th month pay and service incentive leave pay because they were paid on task basis. Also to go are [respondents’] labor standard claims for 13th month pay and service incentive leave pay as well as the claim for damages. proved futile. i. since they made an average of 2 trips/month they were paid P3. prom. There is also no record that shows that the trader/s actually shipped livestock and engaged the services of caretakers. as they never violated any of petitioner’s company rules and policies.. salary differential.00 20. cost of living allowance (COLA) and 13th month pay.00/day). (b) shipment of the finished cattle to Manila.[5] Accordingly. service incentive leave pay. Transporting the cattle to its main market in Manila is an essential and component aspect of [petitioner’s] operation. The Labor Arbiter computed respondents’ total monetary awards as follows: NAME SEPARATION PAY COLA SUB-TOTAL Chiquito Bastida P15. and independently of.

middlemen and traders of petitioner. nothing less. Ibid. we observe that petitioner raises extraneous issues which were obviously not passed upon by appellate court when the latter denied due course and dismissed outright the petition for certiorari. on the other hand. petitioner’s] witnesses. Petitioner claims that the merits of its case necessitate a liberal interpretation of the Rules of Court leading to a reversal of the appellate court’s outright dismissal of its petition. Quite apparent from the foregoing is that the CA did not err. The branch has noticed that the preparation of the shipment of cattle. both the Labor Arbiter and the NLRC were one in their conclusion that respondents were not independent contractors. however.compensation of the latter at a fee of P1. copies of all pleadings and documents relevant and pertinent thereto. Petitioner asseverates that the CA dismissal “defeat[s] substantial justice considering that [it] has a strong cause of action against [respondents]. original complainants before the Labor Arbiter. Rule 56.[10] Corollary thereto.[11] Section 5. 3. Rule 46. Petitioner’s failure to attach copies of all pleadings and documents relevant and pertinent to its petition for certiorari warranted the outright dismissal thereof. affirmed by the NLRC. we emphasize the fact that even on appeal [petitioner] declines to refute. The well-entrenched rule is that factual findings of administrative or quasi-judicial bodies. But not a modicum of evidence was adduced to prove payment of [respondents’] services by any of these supposed traders or that [respondents] received instructions from them. Order to comment. are generally accorded not only respect but even finality. likewise. x x x SEC. Regrettably. which is undertaken by the middlemen. Rule 13. supervision and control by [petitioner] on [respondents’] performance of work as escorts for which they were hired. the second paragraph of Section 6. According to petitioner. as owners thereof. We detect petitioner’s ploy to sidestep a more fatal procedural error. 3.[8] Undaunted. invokes the righteous ends of substantial justice as would exempt it from adherence to procedural rules. much less commit grave abuse of discretion. the power of control is the most important element.. 48. This is the point where the case of NFL v. thus: Labor Standards | To digest (old cases) | Ajean Tuazon| 20 .500. which are supported by substantial evidence. traders and buyers. did not offer their services to petitioner alone. in denying due course to and dismissing the petition for certiorari for its procedural defects. and this is strictly adhered to in labor cases.” Consistent therewith is the doctrine that this Court is not a trier of facts. this appeal positing the following issues: 1. Bibiana Farms and other big cattle feedlot farms in SOCSARGEN (Annexes “A” and “B”. both the Labor Arbiter and the NLRC examined and weighed the circumstances against the four-fold test which has the following elements: (1) the power to hire. Petitioner likewise points out that the Explanation for the resort to service of the petition for certiorari via registered mail is found on page 30 thereof. denies that claim. who. petitioner submits that it had faithfully complied with Section 11. herein respondents. manning and feeding them while in transit. Should losses of a shipment occur due to [respondents’] neglect these would still be [petitioners’] loss. which are deemed to have acquired expertise in matters within their respective jurisdictions. as their business was mainly livestock production. in the name of the hog shippers were submitted as proof that said shippers engaged. There is also no record that the trader/s actually shipped livestock and engaged the services of caretakers. As such. 51. or the so-called “control test. petitioner filed a petition for certiorari before the CA. shall be observed. Rule 46 respectively read: SEC. the control test merely calls for the existence of the right to control. the first paragraph of Section 2.”[14] Of the four. Whether the CA gravely abused its discretion when it dismissed the petition for certiorari based on technical rules of procedure. Bibiana Farms cited by [petitioner] differs from the instant case in that bills of lading issued to.[16] Echoing the same observation. such as whether respondents were employees of petitioner and if they are entitled to their money claims. has not been demolished by any evidence to the contrary. It is illogical for [petitioner] to argue that the shipment was not necessary [or] desirable to their business. and a sworn certification of non-forum shopping as provided in the third paragraph of Section 3. and nobody else’s. and bind the Court when supported by substantial evidence.” In all. and that they and their fellow “comboys” or escorts. denied by the appellate court. mandamus. Corollary thereto. The dates claimed by [respondents] that they were engaged remain not disputed by [petitioner] as observed by the branch. (3) the power to dismiss. 3. — The procedure in original cases for certiorari. and 2) there is no written explanation why personal service was not resorted to. the NLRC declared. petitioner simply presents the affidavits of Maquinsay and Parrocha. and not necessarily the exercise thereof. Curiously. More importantly. jurisprudentially considered the most essential element of the four. Rule 56. [9] Petitioner’s motion for reconsideration was. in violation of Sec. — x x x The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient ground for the dismissal of the petition. declares that the dismissal was done with grave abuse of discretion for sticking to the provisions of the Rules of Court – a “mere technicality” as petitioner cavalierly puts it. and simultaneously asserts that respondents are free lance escorts who offer their services to the buyers.[13] In the case at bench. 2. at that juncture. The livestock shipment would cost thousands of pesos and the certainty of it reaching its destination would be the only thing any operator would consider at all [time] and under all circumstances. 11. were under the control and supervision of these middlemen. The element of control. Rule 13 of the Rules of Court by submitting an explanation and a duly notarized affidavit of service of Maria Fe Sobrevega. the instant petition for review on certiorari directly assails the NLRC’s decision which mainly involves factual issues.[15] Naturally. Rule 46 of the 1997 Rules of Civil Procedure. [12] We may take cognizance of and resolve factual issues only when the findings of fact and conclusions of law of the Labor Arbiter are inconsistent with those of the NLRC and the CA. engage respondents’ services to care for the cattle while in transit. Petitioner is unconcerned with the CA’s reasons for dismissing the petition and. both petitioner’s and respondents’ claims are on opposite poles. and the last paragraph of Section 3. Rule 65. 2. i. Even if we are to overlook petitioner’s account on the curious case of the missing Explanation only in the CA’s copy of the petition. Petitioner. prohibition. the CA denied due course and dismissed the petition for the following procedural flaws: 1) other material portions of the record referred to in the petition are not attached thereto such as the Complaint for illegal dismissal and position papers of the parties. we do not find cause to disturb the findings of the Labor Arbiter. laws. because they were undeniably the owners of the cattle escorted by [respondents]. order or resolution subject thereof. To support the foregoing contentions. petitioner ultimately asserts that respondents. in fact. the Labor Arbiter pointed out the following: [Maquinsay and Parrocha.] x x x SEC. its business does not include the shipment of cattle. Whether the NLRC gravely abused its discretion when it affirmed the Labor Arbiter’s ruling on the existence of an employer-employee relationship between the parties. or that said traders actually shipped livestock. as required under Sec. Rules applicable. [petitioner’s] position paper). only the copy of the same document submitted to the CA lacked an Explanation.00 per trip. praying for the withdrawal of the complaint for illegal dismissal insofar as they are concerned. not only to [petitioner].e. Former complainants Maquinsay and Parrocha mentioned the names of these traders/buyers or shippers as Lozano Farms. the provisions of Section 2. petitioner’s non-compliance with the requisites for the filing a petition for certiorari remains. We completely agree with the appellate court’s forthright dismissal of the petition for certiorari. At the outset. thus. 6. — x x x In petitions for certiorari before the Supreme Court and the Court of Appeals. and (4) the power to control the employees’ conduct. (2) the payment of wages. whether the NLRC gravely erred when it affirmed the Labor Arbiter’s finding that respondents were illegally dismissed by petitioner and the consequent award of money claims to respondents. Petitioner. by way of evidence. Respondents aver that they were regular employees of petitioner. compensated and supervised the escorts or convoys in their work. Nothing more. effect of non-compliance with requirements. As previously adverted to. Maquinsay and Parrocha both allege that their engagement with petitioner is on a “per-trip” or “percontract” basis. and Rules 46. 49. and not the hog raisers. however. Petitioner further asserts that its business is only confined to the fattening of cattle and their sale once they reach the required market weight. In determining the existence of an employer-employee relationship between the parties. the finding of the branch that they failed to prove the payment of [respondents’] services by any of the supposed traders. Hence. quo warranto and habeas corpus shall be in accordance with the applicable provisions of the Constitution. Rule 133 defines substantial evidence as “that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. Thus. This we agree on all four[s]. Rule 65 of the Rules of Court which reads: The petition shall be accompanied by a certified true copy of the judgment. Paying no heed to petitioner’s narration of the contemplated arrangement with respondents. Contents and filing of petition. 52 and this Rules[. At this point. designated as escorts or “comboys” for the latter’s cattle. tried to corroborate [petitioner’s] contention that complainants also offered their services to various shippers and traders of cattle. but employees of petitioner. and making a report upon their return to General Santos that the cattle shipped and which reached Manila actually tallied were all indicators of instructions. upon an evaluation of the merits of the petition. the failure to attach copies of all pleadings and documents relevant and pertinent to the petition for certiorari set forth in paragraph 2. traders and buyers. Section 1.

thirty (30) days prior to effectivity of termination. as “comboys. ROBINA Y. "This is in accordance with our contract signed last July 1. CHICO-NAZARIO. petitioner was to solicit advertisements for "The Manila Times.. Even assuming that respondents’ task is not part of petitioner’s regular course of business.R. Gomez. we emphasize the fact that even on appeal [petitioner] decline to refute. we are not wont to disturb the award of separation pay. That. for P500. control and supervision of the buyers and traders. whether such service is continuous or broken. respondent Metromedia Times Corporation entered. for its purposes. This agreement cannot be amended or modified in any way except with the duly authorized consent in writing of both parties. petitioner filed a case before the labor arbiter. and to pay him his commissions and other remuneration accruing from the date of dismissal on 15 August 1992 up until his reinstatement. i. The arbiter ordered respondent Metromedia Times Corporation and its officers to reinstate petitioner to his former position. As a result. 1st Division) DECISION VITUG.e. be held liable to petitioner for moral damages in the amount of P20. Apart from commissions. 1992.[22] Undoubtedly.000. MINITA V. 147816. they filed. attest to the nature of a “comboy’s” or escort’s work. In their defense. Noteworthy is the fact that Maquinsay’s and Parrocha’s affidavit merely contain a statement that the offer of their services as “comboys” or escorts was not limited to petitioner alone. respondents were regular employees of petitioner with respect to the escort or “comboy” activity for which they had been engaged since 1993 and 1994. Costs against the petitioner.At this point. was to receive compensation consisting of a 15% commission on direct advertisements less withholding tax and a 10% commission on agency advertisements based on gross revenues less agency commission and the corresponding withholding tax. for his efforts.00monthly quota. This assertion petitioner failed anew to substantiate.000.. PAGUIO. Petitioner also prayed that respondent company officials be held accountable for acts of unfair labor practice. respondents. YOLANDA E. 1992. Regular and Casual Employment. First. The only rights and obligations between us are those set forth in this agreement. Rejecting the assertion of petitioner that he was a regular employee. including herein respondents.00 exemplary damages. released every fifteen days of each month. the complaint for illegal dismissal against petitioner. or that said traders actually shipped livestock. which commenced upon embarkation on a ship for Manila and terminated upon their return to the port of origin. except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. FREDERICK D. Basically. M-0059742000 (RAB-11-10-50453-99) is hereby AFFIRMED. likewise fails to persuade. Conveniently.[21] Moreover. the National Labor Relations Commission (NLRC) reversed the ruling of the labor arbiter and declared the contractual relationship between the parties as being for a fixed-term employment. Bibiana Farms cited by [petitioner] differ from the instant case in that bills of lading issued to. appointing the latter to be an account executive of the firm. and not the hog raisers. at one point. at most.[4] Asserting their right to terminate the contract with petitioner. duress or improper pressure being brought to bear upon the worker and absent any other circumstances vitiating his consent. WHEREFORE. which are informal in nature and. JR. thirty days prior to the intended date of termination. GO and ALDA IGLESIA. Accordingly.[17] Yet. The NLRC declared a fixedterm employment to be lawful as long as "it was agreed upon knowingly and voluntarily by the parties. petitioner was also entitled to a monthly allowance of P2. a day certain being understood to be that which (would) necessarily come. thus. published by respondent company."[2] On 15 August 1992. You are not an employee of the Metromedia Times Corporation nor does the company have any obligations towards anyone you may employ. petitioner is adamant that its lack of documentary evidence should not be taken against it since Maquinsay and Parrocha. respondents may only be considered as casual employees. Maquinsay and Parrocha did not state that respondents’ engagement by petitioner was on a one-time basis. Paguio.00 moral damages and for P200. 2003 May 9. On appeal."[6] Labor Standards | To digest (old cases) | Ajean Tuazon| 21 .[19] Labor Code[20] and Civil Code. claims for COLA and union service fees fixed at 10% of the total monetary award. Petitioner. herein respondents. ANTONIO EDUARDO B. are under the responsibility. He likewise adjudged that Liberato I. any employee who has rendered at least one year of service."[3] Apart from vague allegations of misconduct on which he was not given the opportunity to defend himself. petitioner. no definite cause for petitioner’s termination was given." a newspaper of general circulation. the contentious points raised by the parties had something to do with the following stipulations of the agreement. shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. having indeed personally prepared his pleadings without the aid of counsel. the finding of the branch that they failed to prove the payment of [respondents’] services by any of the supposed traders.000. The Resolution dated July 29. In fact. G. asking that his dismissal be declared unlawful and that his reinstatement.00. petitioner’s other contention that the shipment and the escort of live cattle is not part of its business. respectively. TINGA. petitioner admits that respondents were engaged. general manager of respondent corporation. two of the original complainants. into an agreement with petitioner Efren P. Significantly. along with herein respondents.00 as long as he met the P30. be ordered. the petition is DENIED. 2001 of the NLRC in NLRC CA No. nor any responsibility for your operating expenses or for any liability you may incur.” Essentially.000. an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. "13. respectively. this does not preclude their attainment of regular employee status. The commissions. The labor arbiter found for petitioner and declared his dismissal illegal. "Please be advised of our decision to terminate your services as Account Executive of Manila Times effective September 30. — The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties. Article 280 of the Labor Code explicitly provides: Art. PERALTA EFREN P. Paguio. in the first place. without loss of seniority rights. were to be given to petitioner only after the clients would have paid for the advertisements. barely two months after the renewal of his contract. without any force. petitioner received the following notice from respondent firm "Dear Mr. thus. in the name of the hog shippers were submitted as proof that said shippers engaged. ALICIA AUSTRIA-MARTINEZ.[18] The policy is reflected in no less than the Constitution. with entitlement to backwages without loss of seniority rights. Lastly. METROMEDIA TIMES CORPORATION. pirating clients from his co-executives and failing to produce results. Petitioner failed to disprove respondents’ claim that they were hired by petitioner as “comboys” from 1993 and 1994. vs. Second. GOKONGWEI. by way of evidence. considering that we have sustained the Labor Arbiter’s and the NLRC’s finding of an employer-employee relationship between the parties. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided. for the fifth time. This is the point where the case of NFL v. we likewise sustain the administrative bodies’ finding of respondents’ illegal dismissal. ARAGON. The affidavits simply aver that they. Either party may terminate this agreement at any time by giving written notice to the other. we stick to the settled rule in controversies between a laborer and his master that doubts reasonably arising from the evidence should be resolved in the former’s favor. the day certain agreed upon by the parties for the commencement and termination of their employment relationship. Maquinsay and Parrocha made an absolute turnaround and retracted their previous claim of regular employee status without proof to support their allegations as against the claim of the remaining complainants.: On 22 June 1992. was an unlikely victim of a lopsided contract. DIOSDADO M. the corresponding notice to the other. on account of his educated stature.000. compensated and supervised the escorts or convoys in their work.[1] Again. respondents pointed to the last provision thereof stating that both parties could opt to end the contract provided that either party would serve. viz: "12. J. petitioner’s claim remains an unsubstantiated and bare-faced allegation. NATIONAL LABOR RELATIONS COMMISSION. Maquinsay’s and Parrocha’s affidavits proffer no reason why. petitioner insists that the affidavits of Maquinsay and Parrocha should bear more weight than the claims of respondents in their complaint and position paper. LIBERATO GOMEZ."[5] The finding of the NLRC was primarily hinged on the assumption that petitioner.” on a “per trip” or “per contract” basis. 280. were engaged by Dealco on a “per trip” basis. Having failed to substantiate its allegation on the relationship between the parties. respondent Metromedia Times Corporation asserted that it did not enter into any agreement with petitioner outside of the contract of services under Articles 1642 and 1644 of the Civil Code of the Philippines. DANTE O. the NLRC held: "The decisive determinant would not be the activities that the employee (was) called upon to perform but rather. Aggrieved. petitioner claims that Maquinsay’s and Parrocha’s affidavits “substantiate the claim of petitioner that indeed shipping arrangements and accommodation of escorts. No. thus. SO ORDERED. without regard to continuity or brokenness of the service. as these were based on the finding that respondents were dismissed without just or authorized cause. unrecorded.. NACHURA WE CONCUR: MA. although it (might) not be known when. We reject petitioner’s self-serving contention.

If these terms and conditions are acceptable to you. to submit a daily sales activity report and also a monthly sales report as well. Various solicitation letters would indeed show that Robina Gokongwei. regardless of the nature of the activity performed or of whether it is continuous or intermittent. 41-42. INC. The evidence. and d) the presence or absence of the power to control the conduct of the putative employee or the power to control the employee with respect to the means or methods by which his work is to be accomplished.A. of the following factors ... All advertisements are subject to acceptance by us and we reserve the right in our absolute discretion to reject or omit any advertisements.000.J. The appellate court likewise ordered TAPE to pay nominal damages for its failure to observe statutory due process in the termination of respondent’s employment for authorized cause. found by the appellate court is wanting that would indicate bad faith or malice on the part of respondents. The decision of the Court of Appeals in C. A stipulation in an agreement can be ignored as and when it is utilized to deprive the employee of his security of tenure. SERVAÑA. Jr. It is not shown that respondent company has fully bothered itself with either of these requirements in terminating the services of petitioner. You will be paid your approved commission only after the payment for the liquidation (sold and/or consumed) of the goods received from the advertiser has been completed. 13. 2. and/or ANTONIO P. directed and monitored the sales activities of petitioner. often scarcely provides him real and better options. G. Commissions earned on paid advertisements covering the period from the first (1st) to the fifteenth (15) of every month shall be payable at the end of the same month. 7. an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. please indicate your conformity by signing below. WHEREFORE. and Frederick Go. does so."[7] The crux of the matter would entail the determination of the nature of contractual relationship between petitioner and respondent company .The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties. (Chairman). You will be paid fifteen (15) percent commission on direct advertisements less corresponding withholding tax. rightly taken into account by the labor arbiter. SP No.000. are not commissionable. "An employment shall be deemed to be casual if it is not covered by the proceeding paragraph: Provided. it not being indispensable that he be first issued a regular appointment or be formally declared as such before acquiring a regular status. could hardly be denied. Gomez. versus ROBERTO C.00 moral damages adjudged against respondent Liberato I. the instant petition is GRANTED. "WHETHER OR NOT PETITIONER IS ENTITLED TO BACKWAGES AND MORAL DAMAGES. Ynares-Santiago.00 provided that you meet a monthly quota of P30. 5." whether it is one or not.00 in advertising lineage. c) the presence or absence of the power of dismissal. the barter agreement and your commission will be subject to the written approval of the President and Treasurer on a case-to-case basis. Robina Gokongwei. where such person has rendered at least one year of service. That. company president. the advertising manager. 2nd Division) DECISION Tinga. for the survival and continued operation of the business of respondent corporation.a) the manner of selection and engagement of the putative employee. The only rights and obligations between us are those set forth in this agreement. Paguio: This letter is to appoint you as Account Executive for The Manila Times for a period of twelve (12) months effective July 1. whether such service is continuous or broken. and to set forth the terms and conditions of your contract.was it or was it not one of regular employment? A "regular employment. respondent corporation recognized petitioner’s invaluable contribution to the business when it renewed. SO ORDERED. Either party may terminate this agreement at any time by giving written notice to the other thirty (30) days prior to the effectivity of termination.) TELEVISION AND PRODUCTION EXPONENTS. 12. where the scales generally tip against the employee. nor any responsibility for your operating expenses or for any liability you may incur. [1] The letter contract dated 22 June 1992 read Dear Mr. not solicited by the Advertising staff. 10 For all ex-deal arrangements. clearly necessary and desirable. b) the mode of payment of wages. however. . "WHETHER OR NOT PETITIONER'S DISMISSAL IS LEGAL. any employee who has rendered at least one year of service. G. its President. is aptly gauged from the concurrence. and that the same went on for more than a year. herself admitted that the income generated from paid advertisements was the lifeblood of the newspaper's existence. The Labor Code. Carpio. The notice of termination recites no valid or just cause for the dismissal of petitioner nor does it appear that he has been given an opportunity to be heard in his defense. 527773 and that of the National Labor Relations Commission are hereby SET ASIDE and that of the Labor Arbiter is REINSTATED except with respect to the P20. Walk-in advertisements.[9] An indicum of regular employment. A lawful dismissal must meet both substantive and procedural requirements.Petitioner appealed the ruling of the NLRC before the Court of Appeals which upheld in toto the findings of the commission. pp.R. This agreement cannot be amended or modified in any way except with the duly authorized consent in writing of both parties. provides: "ART. you will use your best efforts to obtain advertisements exclusively for us and for such projects that The Manila Times may decide to do from time to time. your allowance shall be charged against your future account. have been paid for. petitioner raised the following issues for resolution: "WHETHER OR NOT PETITIONER'S CONTRACT WITH PRIVATE RESPONDENT’S COMPANY IS FOR A FIXED PERIOD. shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.R. In his petition for review on certiorari. All payments must be paid direct to Metromedia Times Corporation. Petitioner was an account executive in soliciting advertisements. not just once but five times. Regular and Casual Employment. Respondent. concur.: This petition for review under Rule 45 assails the 21 December 2004 Decision[1] and 8 April 2005 Resolution[2] of the Court of Appeals declaring Roberto Servaña (respondent) a regular employee of petitioner Television and Production Exponents. in defining their contractual relationship. Davide. 2008 Jan 28. Even in these latter cases. however. Gomez which award is deleted. 3. 6. will commission be paid until and unless the advertisements. commissions earned on paid advertisements covering the period from the sixteenth (16th ) to the end of the month shall be payable on the fifteenth (15) of the succeeding month. except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. You are authorized to solicit advertisements and quote advertising rates in accordance with and subject to all the terms and conditions in our rate cards. Alda Iglesia.[12] The law affords protection to an employee. particularly by respondent Liberato I.000. No. Labor Standards | To digest (old cases) | Ajean Tuazon| 22 . 280. As account executive. But should you fail to meet your quota. 1.[8] The "control test" assumes primacy in the overall consideration. The law. a regular employee is one who is engaged to perform activities which are necessary and desirable in the usual business or trade of the employer as against those which are undertaken for a specific project or are seasonal. Inc. 1992 to June 30. the employment is considered regular as long as the activity exists. the advertising director. not necessarily or exclusively upon the terms of their written or oral contract. (TAPE). JJ. the dismissal must be for a just or authorized cause and must comply with the rudimentary due process of notice and hearing. 167648. (Rollo. subject to the corresponding withholding taxes authorized by law. among other things.[13] The sheer inequality that characterizes employer-employee relations. or the non-concurrence. not only as to the result of the work but also as to the manner and details of the performance desired. in Article 280 thereof. In no case. Petitioners.[11] That petitioner performed activities which were necessary and desirable to the business of the employer. but also on the basis of the nature of the work petitioner has been called upon to perform. 9. Under this test. and Azcuna. J. and the award of moral damages must thus be deleted. 1993. The real question that should thus be posed is whether or not petitioner has been justly dismissed from service. 11." Thus defined. and it will not countenance any attempt to subvert its spirit and intent. TUVIERA. You will be entitled to a monthly allowance of P2. You are not an employee of Metromedia Times Corporation nor does the Company have any obligations towards anyone you may employ. whether agency or direct. was the reservation by respondent Metromedia Times Corporation not only of the right to control the results to be achieved but likewise the manner and the means used in reaching that end. 4. in fine.[10] Metromedia Times Corporation exercised such control by requiring petitioner. its contract with petitioner.. 8. Respondent company cannot seek refuge under the terms of the agreement it has entered into with petitioner. You will be paid ten (10) percent commission on agency advertisements based on gross ad revenues less agency commission and corresponding withholding tax. C.. Implicitly. an employment relation obtains where work is performed or services are rendered under the control and supervision of the party contracting for the service.

00.TAPE is a domestic corporation engaged in the production of television programs. Otherwise. Inc.[7] On appeal. on the other.[17] In concluding that respondent was an employee of TAPE. Third. that his services will be terminated as soon as the services of the newly hired security agency begins. and ordered the payment of respondent’s separation pay equivalent to one (1)-month pay for every year of service. the Court of Appeals found respondent to be a regular employee. unpaid vacation and sick leave benefits and other monetary considerations were withheld from him. x x x The bundy cards representing the time petitioner had reported for work are evident proofs of private respondents’ control over petitioner more particularly with the time he is required to report for work during the noontime program of “Eat Bulaga!” If it were not so. whose functions would be rendered redundant by the engagement of the security agency.44 per month. is not absolute. the Sun Shield Security Agency. TAPE issued memoranda to all talents. For the right to hire and fire is another important element of the employer-employee relationship. TAPE made the following assertions: (1) that respondent was initially employed as a security guard for Radio Philippines Network (RPN-9). [14] At the outset.000. namely: (a) the selection and engagement of the employee. the petition is hereby GRANTED. He worked for other companies. . private respondents in effect acknowledged petitioner to be their employee. and (d) the employer's power to control the employee with respect to the means and method by which the work is to be accomplished. on one hand. Second. (4) that it was agreed that complainant would render his services until such time that respondent company shall have engaged the services of a professional security agency. Even without the performance of such services on a regular basis. SO ORDERED. The Decision dated 22 April 2002 of the public respondent NLRC reversing the Decision of the Labor Arbiter and its Resolution dated 28 June 2002 denying petitioner’s motion for reconsideration are REVERSED and SET ASIDE. Jurisprudence is abound with cases that recite the factors to be considered in determining the existence of employer-employee relationship. The dispositive portion of the decision reads: WHEREFORE. whether or not related to security services. as part of the support group and thus a talent. informing them of the management’s decision to terminate their services. He claimed that the holiday pay. security services may not be deemed necessary and desirable in the usual business of the employer. These matters may be summed up into one main issue: whether an employeremployee relationship exists between TAPE and respondent.m.[11] Reversing the decision of the NLRC.44. Cauton-Barcelona declared respondent to be a regular employee of TAPE. he is being paid for being the security of “Eat Bulaga!” during the above-mentioned period. Respondent filed a complaint for illegal dismissal and nonpayment of benefits against TAPE.444. that the Memorandum dated 2 March 2000 served on respondent was for the discontinuance of the contract for security services and not a termination letter. respondent received a memorandum informing him of his impending dismissal on account of TAPE’s decision to contract the services of a professional security agency. .[5] Respondent for his part insisted that he was a regular employee having been engaged to perform an activity that is necessary and desirable to TAPE’s business for thirteen (13) years. With respect to the elements of selection. at the same time that he was working for respondent company. The foregoing indubitably shows that complainant-appellee was a program employee. and that of the NLRC. Its president is Antonio P. By informing petitioner through the Memorandum dated 2 March 2000. and (8) that on 2 March 2000. such as the long-running variety program. respondents are hereby ordered to pay complainant his separation pay computed at the rate of one (1) month pay for every year of service or in the total amount of P78. to provide security service to production staff. the Court of Appeals applied the “four-fold test” in this wise: First. This rule. The daily time cards of petitioner are not just for mere record purposes as claimed by private respondents. and still gets his compensation for being a “talent. as necessary and desirable in the usual business activity of TAPE. stars and guests of “Eat Bulaga!” as well as to control the audience during the one-and-a-half hour noontime program. the “control test” is the most important. the Court of Appeals issued a Resolution[13] dated 8 April 2005 denying said motion. In fact. Respondent asserted that he was a regular employee considering the nature and length of service rendered. he would have two (2) employers at the same time. when his contract with RPN-9 expired. wages and dismissal. to 1:00 p.” Precisely. xxxx The primary standard to determine regularity of employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. At the time of his termination. Respondent Roberto C.[12] Finding TAPE’s motion for reconsideration without merit. instead it was the latter who offered his services as a talent to TAPE. Under the control test. The records of this case also show that complainant was employed by respondent company beginning 1995 after respondent company transferred from RPN-9 to GMA-7. The Decision dated 29 June 2001 of the Labor Arbiter is REINSTATED with MODIFICATION in that private respondents are ordered to pay jointly and severally petitioner the amount of P10. The selection and hiring of petitioner was done by private respondents. respondent was receiving a monthly salary of P6. TAPE engaged respondent’s services. The Labor Arbiter also ruled that the termination was valid on the ground of redundancy. On 27 September 2006. (5) that in 1995. He alleged that he was first connected with Agro-Commercial Security Agency but was later on absorbed by TAPE as a regular company guard. however.m. respondent was retained as a talent and a member of the support group. a fact which complainant does not dispute. Servaña had served as a security guard for TAPE from March 1987 until he was terminated on 3 March 2000. (6) that respondent was not prevented from seeking other employment. TAPE proffers the following arguments: that it never hired respondent. His last salary was P5. specifically. [4] TAPE averred that respondent was an independent contractor falling under the talent group category and was working under a special arrangement which is recognized in the industry. Tuviera (Tuviera). Labor Standards | To digest (old cases) | Ajean Tuazon| 23 . This connection can be determined by considering the nature and work performed and its relation to the scheme of the particular business or trade in its entirety. only questions of law are entertained in appeals by certiorari to the Supreme Court. xxxx Complainant was indubitably a program employee of respondent company. the Court gave due course to the petition and considered the case submitted for decision. Accordingly. It is a form of control by the management of private respondent TAPE. Labor Arbiter Daisy G. Among the several recognized exceptions is when the findings of the Court of Appeals and Labor Arbiters. and that the talent fees given to respondent were the pre-agreed consideration for the services rendered and should not be construed as wages.444. aggravated by nonpayment of separation pay. Payment as admitted by private respondents was given by them on a monthly basis at a rate of P5. x x x Respondent company is engaged in the business of production of television shows. complainant’s position is hereby declared redundant. He was detailed at Broadway Centrum in Quezon City where “Eat Bulaga!” regularly staged its productions. which is securing and maintaining order in the studio.00 as nominal damages for non-compliance with the statutory due process. Of the four elements of the employer-employee relationship.[3] In a motion to dismiss which was treated as its position paper.[18] TAPE asseverates that the Court of Appeals erred in applying the “four-fold test” in determining the existence of employer-employee relationship between it and respondent. thus: We have scoured the records of this case and we find nothing to support the Labor Arbiter’s conclusion that complainant was a regular employee.000. petitioner would be free to report for work anytime even not during the noontime program of “Eat Bulaga!” from 11:30 a. We quote the dispositive portion of the decision: IN LIGHT OF THE FOREGOING.00. until such time that TAPE shall have engaged the services of a professional security agency. Respondent filed a petition for certiorari with the Court of Appeals contending that the NLRC acted with grave abuse of discretion amounting to lack or excess of jurisdiction when it reversed the decision of the Labor Arbiter. the National Labor Relations Commission (NLRC) in a Decision[8] dated 22 April 2002 reversed the Labor Arbiter and considered respondent a mere program employee. Payment of wages is one of the four factors to be considered in determining the existence of employeremployee relation. (b) the payment of wages. to control the crowd. are conflicting. respondent’s company’s business will not grind to a halt. he did not observe working hours x x x. private respondents themselves admitted having engaged the services of petitioner only in 1995 after TAPE severed its relations with RPN Channel 9. Generally. it bears emphasis that the existence of employer-employee relationship is ultimately a question of fact. (7) that sometime in late 1999. On 2 March 2000. (3) that when RPN-9 severed its relationship with the security agency.[16] The most important factor involves the control test. TAPE started negotiations for the engagement of a professional security agency. before or after attending to his “Eat Bulaga!” functions.[9] Respondent filed a motion for reconsideration but it was denied in a Resolution[10] dated 28 June 2002. such as M-Zet TV Production. TAPE countered that the labor arbiter had no jurisdiction over the case in the absence of an employer-employee relationship between the parties. there is an employer-employee relationship when the person for whom the services are performed reserves the right to control not only the end achieved but also the manner and means used to achieve that end.[6] On 29 June 2001. (c) the power of dismissal. TAPE filed the instant petition for review raising substantially the same grounds as those in its petition for certiorari before the Court of Appeals. He further contended that his dismissal was undertaken without due process and violative of existing labor laws. Unlike [a] regular employee. The Labor Arbiter relied on the nature of the work of respondent.000.[15] as obtaining in the case at bar. (2) that he was tasked to assist TAPE during its live productions. “Eat Bulaga!”. In such industry.

however designated. xxxx Under recent jurisprudence. private respondents will not be liable to pay the benefits prayed for in petitioner’s complaint. work or service on its own account and under its own responsibility according to its own manner and method. Considering the circumstances in the case at bench. taking into account the relevant circumstances. This is the reason why private respondents try to seek refuge under the concept of an independent contractor theory. the Court of Appeals ruling on this point has to be modified. retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title. TAPE insists that it had no control over respondent in that he was free to employ means and methods by which he is to control and manage the live audiences.[28] More importantly. as well as the safety of TAPE’s stars and guests. including those hired by advertising or sponsoring companies. whichever is higher. that. the employer must give the employee and the Deparment of Labor and Employment written notice 30 days prior to the effectivity of his separation. As found by the Court of Appeals: We find the annexes submitted by the private respondents insufficient to prove that herein petitioner is indeed an independent contractor. with respect to the liability of petitioner Tuviera. capable of being expressed in terms of money. the effectivity of his dismissal is fifteen days from the start of the agency’s take over which was on 3 March 2000. are remuneration or earnings. Procedurally. stills. Inc. However. However.”[20] Clearly. Even granting arguendo that respondent is a program employee. respondent cannot be terminated except for just cause or when authorized by law. To negate the element of control.00 as nominal damages for non-compliance with the statutory due process and petitioner Antonio P. When the security agency’s contract with RPN-9 expired in 1995. It can be recalled that during said period.[26] TAPE relies on Policy Instruction No. the said certificate categorically stated that respondent reported for work on Thursdays from 1992 to 1995. Labor Standards | To digest (old cases) | Ajean Tuazon| 24 . the Supreme Court fixed the amount of P30. the employer should be liable for non-compliance with procedural requirements of due process.00. For if petitioner were indeed an independent contractor. Tuviera is accordingly absolved from liability. The amount of such damages is addressed to the sound discretion of the court. As a regular employee. 280. or other method of calculating the same. the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year or service. Notably. classifying him as an independent contractor is misplaced.44 as his monthly salary while TAPE prefers to designate such amount as talent fees.[22] Respondent claims to have been receiving P5.[30] In sum. It bears stressing that although notice was served upon petitioner through a Memorandum dated 2 March 2000. the nature and extent of the work and the term and duration of the relationship between herein petitioner and private respondent TAPE.[19] The position of TAPE is untenable. a legitimate job contractor or subcontractor carries on a distinct and independent business and undertakes to perform the job. as defined in the Labor Code. an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. issued by the Department of Labor. xxxx We uphold the finding of the Labor Arbiter that “complainant [herein petitioner] was terminated upon [the] management’s option to professionalize the security services in its operations. The theory of private respondents that petitioner is an independent contractor runs counter to their very own allegation that petitioner is a talent or a program employee. Regular and Casual Employment. The Memorandum informing respondent of the discontinuance of his service proves that TAPE had the power to dismiss respondent. 40 defines program employees as— x x x those whose skills. respondent had been continuously under the employ of TAPE from 1995 until his termination in March 2000. it should not invalidate the dismissal. [we] find that although petitioner’s services [sic] was for an authorized cause. is liable to pay respondent the amount of P10. Neither did it comply with the contract-registration requirement. the assailed Decision and Resolution of the Court of Appeals are AFFIRMED with MODIFICATION in that only petitioner Television and Production Exponents. private respondents failed to prove that it complied with service of written notice to the Department of Labor and Employment at least one month prior to the intended date of retrenchment. he cannot be held solidarily liable with TAPE.00 as nominal damages. or for a span of 5 years. We believe this form of damages would serve to deter employer from future violations of the statutory due process rights of the employees. 40. piece or commission basis. Petitioner’s services with private respondents were severed less than the month requirement by the law. in the latter’s language. shall be under a written contract specifying.444.—The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties. Regardless of whether or not respondent had been performing work that is necessary or desirable to the usual business of TAPE. stations. Under prevailing jurisprudence the termination for an authorized cause requires payment of separation pay. He was required to report daily and observe definite work hours. except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of engagement of the employee or where the work or service to be performed is seasonal in nature and employment is for the duration of the season. the dismissal should be upheld. redundancy.[29] It is clear from the tenor of the 2 March 2000 Memorandum that respondent’s termination was due to redundancy. it absorbed respondent in late 1995. an identification card is usually provided not just as a security measure but to mainly identify the holder thereof as a bona fide employee of the firm who issues it.[25] TAPE failed to establish that respondent is an independent contractor. The basis of the violation of petitioners’ right to statutory due process by the private respondents warrants the payment of indemnity in the form of nominal damages. the nature of the work to be performed. The contract shall be duly registered by the station with the Broadcast Media Council within three (3) days from its consummation. we deem it proper to fix it at P10.000. the Court of Appeals correctly disposed of this issue. any employee who has rendered at least one year of service.000. we find no reversible error committed by the Court of Appeals in its assailed decision. while a talent or program employee is an employee. At the very least. if the dismissal is based on authorized causes under Articles 283 and 284. The Court of Appeals had this to say: We cannot subscribe to private respondents’ conflicting theories.. Respondent presented his identification card[21] to prove that he is indeed an employee of TAPE. WHEREFORE. and free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof. absent any showing that he acted with malice or bad faith in terminating respondent. which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done. Control is manifested in the bundy cards submitted by respondent in evidence.[31] Thus. It is beyond dispute that respondent received a fixed amount as monthly compensation for the services he rendered to TAPE. Private respondents failed to show that petitioner has substantial capital or investment to be qualified as an independent contractor. An employment shall be deemed to be casual if it is not covered by the preceding paragraph. Respondent was first connected with Agro-Commercial Security Agency.[27] TAPE failed to adduce any evidence to prove that it complied with the requirements laid down in the policy instruction. respondent was still working for RPN-9. it provides a vindication or recognition of this fundamental right granted to the latter under the Labor Code and its Implementing Rules. or for service rendered or to be rendered. None of the above conditions exist in the case at bar. In case of termination due to the installation of labor saving devices or redundancy. TAPE presented a certification from M-Zet Productions to prove that respondent also worked as a studio security guard for said company. They likewise failed to present a written contract which specifies the performance of a specified piece of work. shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. respondent is still considered a regular employee under Article 280 of the Labor Code which provides: Art. Thus. in classifying respondent as a program employee and equating him to be an independent contractor. x x x” However.e. by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof.[23] TAPE further denies exercising control over respondent and maintains that the latter is an independent contractor. Wages. The only difference between a talent or program employee and a regular employee is the fact that a regular employee is entitled to all the benefits that are being prayed for. The engagement of program employees.Anent the element of control. whether such service is continuous or broken. respondent was absorbed by TAPE or.000. It did not even present its contract with respondent. Provided. It has been in held that in a business establishment. While the procedural infirmity cannot be cured. advertising agencies or sponsoring companies. which assigned him to assist TAPE in its live productions. task. “retained as talent. among other things. viz: Article 283 of the Labor Code provides that the employer may also terminate the employment of any employee due to the installation of labor saving devices. president of TAPE. Policy Instruction No. Where the dismissal is for an authorized cause but due process was not observed. i. whether fixed or ascertained on a time. talents or services are engaged by the station for a particular or specific program or undertaking and who are not required to observe normal working hours such that on some days they work for less than eight (8) hours and on other days beyond the normal work hours observed by station employees and are allowed to enter into employment contracts with other persons. An independent contractor is not an employee of the employer. As admitted by TAPE. rates of pay and the programs in which they will work. respondent was hired by TAPE. redundancy. [24] Aside from possessing substantial capital or investment.

While it may be true that the respondents are given the discretion to decide on how to treat the petitioner’s patients. Reporting at the hospital twice-a-week on twenty-fourhour shifts.000. it reinstated the NLRC decision in an Amended Decision[23] dated September 26. Lanzanas a notice of termination which he received on April 25. Dr. you are hereby terminated for cause from employment effective today. and the Court’s decision dated June 30. operating room assistance and discharge billings. thus: On April 23. hence. 176484. Merceditha) in March 1992 and August 1995. 1998. Meluz Trinidad (Dr. Petitioner. the petition is DISMISSED.00.[21] Petitioner’s motion for reconsideration having been denied. April 25. SO ORDERED.. 2006 but tempered the award to each of the spouses of moral and exemplary damages to P100. also a resident physician at the hospital.[2] The work schedules of the members of the team of resident physicians were fixed by petitioner’s medical director Dr. PRESBITERO J. Lanzanas thus amended his original complaint to include illegal dismissal. treatment of cases. In the case of respondent Merceditha Lanzanas.[12] On March 20. 1998. etc.[1] It appears that resident physicians were also given a percentage share out of fees charged for out-patient treatments. INC. Respondents. except those employees that were already terminated or are serving disciplinary actions.[10] admitted that he spoke with Miscala over the phone but that their conversation was taken out of context by Dr. exemplary damages of P250. admission of patients.e. by letter of March 9. Labor Standards | To digest (old cases) | Ajean Tuazon| 25 . the fourth requisite or the “control test” in the determination of an employment bond being absent. you still did not report for work despite memorandum issued by the CMC Medical Director implementing the Labor Secretary’s ORDER. Trinidad. the petitioner alleged that the respondents were free to put up their own clinics or to accept other retainership agreement with the other hospitals. respectively and omitted the award of attorney’s fees. Macam dismissed the spouses’ complaints for want of jurisdiction upon a finding that there was no employer-employee relationship between the parties. 1998. as part of its team of resident physicians. 1999. You are likewise aware that you were observed (re: signatories [sic] to the Saligang Batas of BMCMC-UWP) to be unlawfully participating as member in the rank-and-file union’s concerted activities despite knowledge that your position in the hospital is managerial in nature (Nurses. Dr.[6] Dr.” Petitioner later sent Dr. CONCHITA CARPIO MORALES. the appellate court held: x x x. Orderlies. petitioner did not give respondent Dr. (Emphasis and italics in the original.--you still did not report for work [sic]. This was not controverted by the petitioner. However. without prejudice to further action for revocation of your license before the Philippine [sic] Regulations [sic] Commission. G. respectively. 1998 reading: As a Licensed Resident Physician employed in Calamba Medical Center since several years ago. VELASCO.000. Trinidad). JR.000. disposing as follows: WHEREFORE. respectively. the instant Motion for Reconsideration is GRANTED. review or revise the decisions of the resident physicians.. manner of characterizing cases. By Decision[19] of March 23.[11] the rank-and-file employees union of petitioner went on strike due to unresolved grievances over terms and conditions of employment.[9] Responding to the memorandum. the NLRC. In lieu thereof. 1998. Diosdado Miscala. The foregoing factors taken together are sufficient to constitute the fourth element. Lanzanas and Miscala were discussing the low “census” or admission of patients to the hospital. No. The same is true on April 24. Lanzanas with a fellow employee.[17] (Emphasis and underscoring supplied) Dr. Lanzanas filed a complaint for illegal suspension[13] before the National Labor Relations Commission (NLRC)-Regional Arbitration Board (RAB) IV. engaged the services of medical doctorsspouses Ronaldo Lanzanas (Dr. the petitioner failed to substantiate the allegation with substantial evidence. the petitioner did not adduce any piece of evidence to show that respondent Ronaldo indeed participated in the strike. The fact is the petitioner’s Medical Director still has to approve the schedule of duties of the respondents. x x x. Lanzanas a Memorandum of March 7.e. 1998.00 each..[7] (Emphasis. the details of which are contained in the hereto attached affidavit of witness. ANTONIO T.000. DANTE O. CALAMBA MEDICAL CENTER. then Sec.00 each. 1998 order of the Secretary of Labor directing all union officers and members to return-to-work “on or April 23. Dr. Lanzanas) and Merceditha Lanzanas (Dr. underscoring partly in the original and partly supplied) For these reasons as grounds for termination.[25] nderscoring supplied) The fallo of the appellate court’s decision reads: WHEREFORE. 1998. In denying that it had control over the respondents.00 each and P50. is SET ASIDE. by Decision[20] of May 3. the petitioner has not denied nor explained why its Medical Director still has the direct supervision and control over the respondents. Cresenciano Trajano of the Department of Labor and Employment (DOLE) certified the labor dispute to the NLRC for compulsory arbitration and issued on April 21.000. inadvertently overheard a telephone conversation of respondent Dr. The petitioner’s ground for dismissing respondent Ronaldo Lanzanas was based on his alleged participation in union activities. indicating as grounds therefor his failure to report back to work despite the DOLE order and his supposed role in the striking union. TINGA WE CONCUR: LEONARDO A. In finding the existence of an employer-employee relationship between the parties. and may even overrule. (Emphasis and underscoring supplied)[24] The appellate court thus declared that respondents were illegally dismissed. specifically in joining the strike and failing to observe the return-to-work order issued by the Secretary of Labor. i. RAB-IV-3-9879-98-L. Merceditha. 2002 and order dated September 24. Merceditha’s complaints were consolidated and docketed as NLRC CASE NO. who was not involved in the said incident. 1998 and April 25. On appeal. 2008 Nov 25. 1998. Yet. i. QUISUMBING. you are hereby placed under 30-days [sic] preventive suspension effective upon receipt hereof.SO ORDERED.” Dr. respondents were paid a monthly “retainer” of P4.00 each plus ten percent (10%) of the total award as attorney’s fees. Raul Desipeda (Dr. in addition to their fixed monthly retainer. And they were issued identification cards[3] by petitioner and were enrolled in the Social Security System (SSS). and staff of the Emergency Room carry out your orders using your independent judgment) which participation is expressly prohibited by the New Labor Code and which prohibition was sustained by the Med-Arbiter’s ORDER dated February 24. through an extension telephone line. CARPIO. Desipeda thus ordered the officers and members of the union to “report for work as soon as possible” to the hospital’s personnel officer and administrator for “work scheduling. Such is not one of the grounds to justify the termination of her employment. 1998 return-to-work Order to the striking union officers and employees of petitioner pending resolution of the labor dispute. upon a subsequent motion for reconsideration filed by respondents. Pending investigation of your case. This is the reason why you were awarded the privilege to practice in the hospital and were entrusted hospital functions to serve the interest of both the hospital and our patients using your capability for independent judgment. Desipeda). Dr. 1998. the existence of the employer-employee relationship. On March 14. 1998. You are therefore given 24 hours to explain why no disciplinary action should be taken against you. separation pay of one month salary for every year of service in lieu of reinstatement. 2004.[4] Income taxes were withheld from them. 1998.00 and P50. 2002. The respondents stressed that the petitioner’s Medical Director also issues instructions or orders to the respondents relating to the means and methods of performing their duties. x x x.000. as follows: WHEREFORE. a new judgment is entered.[22] initially granted petitioner’s petition and set aside the NLRC ruling. 1998. reversed the Labor Arbiter’s findings.[8] nor inform her the reason therefor. the hospital management has committed upon you utmost confidence in the performance of duties pursuant thereto.[5] On March 7. control test. moral damages of P500.: The Calamba Medical Center (petitioner).[18] His and Dr. Merceditha subsequently filed a complaint for illegal dismissal. versus NATIONAL LABOR RELATIONS COMMISSION. Dr. Apparently. Labor Arbiter Antonio R. it brought the case to the Court of Appeals on certiorari. the petitioner’s explanation that “her marriage to complainant Ronaldo has given rise to the presumption that her sympat[hies] are likewise with her husband” as a ground for her dismissal is unacceptable. 2004 Decision. But. 2nd Division DECISION CARPIO MORALES. a privately-owned hospital. albeit she was later informed by the Human Resource Department (HRD) officer that that was part of petitioner’s cost-cutting measures. Lanzanas. by June 30. RONALDO LANZANAS AND MERCEDITHA* LANZANAS. 019823-99 are AFFIRMED with the MODIFICATION that the moral and exemplary damages are reduced to P100.[14] In the meantime. Very recently though and unfortunately. The appellate court. assignments and/or re-assignments. The assailed decision dated May 3. any work schedule after sending her husband Dr. The respondents are ordered to pay the complainants their full backwages.R. you have committed acts inimical to the interest of the hospital. italics and underscoring supplied) Inexplicably. J. 2002 of the NLRC in NLRC NCR CA No. the assailed decision is set aside. Lanzanas the memorandum.800.[15] In a memorandum[16] of April 22. Desipeda echoed the April 22. Dr.00 each. Desipeda whose attention was called to the above-said telephone conversation issued to Dr.

Under the “control test.— xxxx (g) x x x x x x x x. Lanzanas] declared that he was going to boycott the scheduling of their workload by the medical doctor. charge nurses and orderlies.[40] Participation in a strike and intransigence to a return-to-work order must.[35] except in cases of compulsory coverage of the self-employed. At most. As for the case of Dr. they cannot be considered supervisory employees. there is nothing in the records that would bear out Dr.[44] The termination notice sent to and received by Dr. Its termination of her employment on the basis of her conjugal relationship is not analogous to any of the causes enumerated in Article 282[47] of the Labor Code. And the medical director’s Memorandum[41] of April 22. 1998. x x x x (Emphasis and underscoring supplied) An assumption or certification order of the DOLE Secretary automatically results in a return-to-work of all striking workers. Lanzanas was a union member in the hospital. petitioner itself provided incontrovertible proof of the employment status of respondents. 1998 contains nothing more than a general directive to all union officers and members to return-to-work. property and the hospital’s interest. respondents’ work is monitored through its nursing supervisors.[28] These circumstances. namely x x x Rolando Lanzonas [sic] x x x. task. Respondents were in fact made subject to petitioner-hospital’s Code of Ethics. Lanzanas’ claim that. however. or commission basis.[38] (Emphasis and underscoring supplied) xxxx Admittedly. x x x (Emphasis and underscoring supplied). the operating room. He was not afforded. In respondents’ case. There is thus no gainsaying that her dismissal was both substantively and procedurally infirm. be duly proved in order to justify immediate dismissal in a “national interest” case. it enrolled respondents in the SSS and Medicare (Philhealth) program.[32] the provisions of which cover administrative and disciplinary measures on negligence of duties. petitioner never even mentioned Dr. overlooked its twice-a-week reporting arrangement with respondents who are free to practice their profession elsewhere the rest of the week. In such cases. are clear badges of the absence of any employment relationship between them. or for services rendered or to be rendered and includes the fair and reasonable value.[26] (Emphasis and italics in the original. the present petition calls for a determination of whether there exists an employer-employee relationship[27] between petitioner and the spouses-respondents. he was presumed to be speaking for himself [and] for his wife Merceditha. the Court upholds the appellate court’s conclusion that private respondents were illegally dismissed.[37] assigned at the emergency rooms and ward sections. it is not essential for the employer to actually supervise the performance of duties of the employee. they were not undergoing any specialization training. Merceditha. they do not however recommend any managerial action. whose movement and services shall be unhampered and unrestricted. Denying the existence of such relationship. and the second to inform the employee of the employer's decision to dismiss him. Mere suspicion or belief. and is compensated according to the result of his efforts and not the amount thereof. her dismissal was worse. STRIKES. They were considered non-training general practitioners. This is the import of the Secretary of Labor’s Resolution of May 22. underscoring supplied) Preliminarily. prohibitions and/or injunctions as are issued by the Secretary of Labor and Employment or the Commission. for the duration of the strike or lockout. aside from their monthly retainers. admitting. Dr. private respondents maintained specific work-schedules. the contending parties are strictly enjoined to comply with such orders. PICKETING. under pain of immediate disciplinary action. he was never given any work schedule[42] was not refuted by petitioner. Without the approval or consent of petitioner or its medical director.notice and hearing . no matter how strong. the first to apprise the employee of the particular acts or omissions for which his dismissal is sought. Merceditha’s case. This Court is unimpressed. of board. His was a “termination upon receipt” situation. including dismissal or loss of employment status or payment by the locking-out employer of backwages. the employer (CMC) alleged that 24 members of petitioner are supervisors. even criminal prosecution against either or both of them. whether fixed or ascertained on a time.before dismissal can be effected . AND LOCKOUTS. Petitioner in fact never released any findings of its supposed investigation into Dr. failing to comply with which is punishable by dismissal or loss of employment status. damages and other affirmative relief. it shall be the duty of the striking union or locking-out employer to provide and maintain an effective skeletal workforce of medical and other health personnel. petitioner argues that the appellate court. were entitled to one-half of all suturing. which consisted of 24-hour shifts totaling forty-eight hours each week and which were strictly to be observed under pain of administrative sanctions.[45] he was not with respect to his supposed participation in the strike and failure to heed the return-to-work order. and offenses against persons. their job is merely routinary in nature and consequently. Merceditha was a member of the union or was a participant in the strike remained just that.”[46] Petitioner’s contention that Dr. 263.[39] The DOLE Secretary in fact issued a return-to-work Order. As the appellate court as well as the NLRC observed. whether a corresponding return-to-work order had been issued. personnel conduct and behavior. the payslips[33] and BIR W-2 (now 2316) Forms which reflect their status as employees. under Section 15. Lanzanas’ alleged “inimical acts. capable of being expressed in terms of money. the Secretary of Labor and Employment is mandated to immediately assume. as well as the NLRC. as determined by petitioner through its medical director. And it invites attention to the uncontroverted allegation that respondents. or other facilities customarily furnished by the employer to the employee. cannot substitute for factual findings carefully established through orderly procedure.” an employment relationship exists between a physician and a hospital if the hospital controls both the means and the details of the process by which the physician is to accomplish his task. and the training program is duly accredited or approved by the appropriate government agency. lodging. piece. namely. In labor disputes adversely affecting the continued operation of such hospitals. petitioner never proferred any valid cause for her dismissal except its view that “her marriage to [Dr.[30] As priorly stated. Lanzanas was neither a managerial nor supervisory employee but part of the rank-and-file. Article 263(g) of the Labor Code provides: ART. 1998 in OS A-05-15-98 which reads: xxxx In the motion to dismiss it filed before the Med-Arbiter.[48] The Court even notes that after the proceedings at the NLRC. as are necessary to insure the proper and adequate protection of the life and health of its patients. That petitioner exercised control over respondents gains light from the undisputed fact that in the emergency room. Finally. unless there is a training agreement between them. [and that when [Dr. Moreover. how does it account for its issuance of the earlier-quoted March 7. it being enough that it has the right to wield the power. More importantly. 1998 memorandum explicitly stating that respondent is “employed” in it and of the subsequent termination letter indicating respondent Lanzanas’ employment status. medico-legal and operating room assistance fees. however. after his 30-day preventive suspension ended on or before April 9. which the petitioner [the union] is seeking to represent in the instant case. For this purpose. however designated. They are not therefore barred from membership in the union of rank[-]and[-]file.[43] Non-observance of these requirements runs afoul of the procedural mandate. and the classification as “salary” of their remuneration. Lanzanas on April 25. most especially emergency cases. it stresses. jurisdiction over the same or certify to the Commission for compulsory arbitration. It would be preposterous for an employer to report certain persons as employees and pay their SSS premiums as well as their wages if they are not its employees.SO ORDERED. 1998 was the first and only time that he was apprised of the reason for his dismissal. as determined by the Secretary of Labor. Dr. Dr. While he was priorly made to explain on his telephone conversation with Miscala. which is considered indispensable to the national interest. In labor disputes adversely affecting the continued operation of a hospital. no operations can be undertaken in those areas. it having been effected without any just or authorized cause and without observance of due process.” Petitioner thus failed to observe the two requirements. In fact. A close scrutiny of the job descriptions of the alleged supervisors narrated by the employer only proves that except for the contention that these employees allegedly supervise.[29] Where a person who works for another does so more or less at his own pleasure and is not subject to definite hours or conditions of work. which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done. Labor Standards | To digest (old cases) | Ajean Tuazon| 26 . the identification cards it issued them. even the slightest opportunity to explain his side. consultation. Rule X of Book III of the Implementing Rules of the Labor Code. or other method of calculating the same. this scheme does not sever the employment tie between them and petitioner as this merely mirrors additional form or another form of compensation or incentive similar to what commission-based employees receive as contemplated in Article 97 (f) of the Labor Code. Lanzanas’ actual participation in the strike. For control test to apply.which constitute essential elements of the statutory process. however. Turning now to the issue of dismissal. It bears noting at this juncture that mandatory coverage under the SSS Law[34] is premised on the existence of an employer-employee relationship. or any department or ward for that matter. thus: “Wage” paid to any employee shall mean the remuneration or earning. the element of control is absent.[31] With respect to respondents’ sharing in some hospital fees. Mere membership in a labor union does not ipso facto mean participation in a strike. clinics or medical institutions. within twenty-four hours from knowledge of the occurrence of such strike or lockout. an employer-employee relationship exists between the resident physicians and the training hospitals.[36] And if respondents were not petitioner’s employees. Lanzanas] has given rise to the presumption that her sympath[y] [is] with her husband.

NATIONAL LABOR RELATIONS COMMISSION (2nd Division) and H. likewise. and her brothers and sisters are all professionals. has no prejudice to your re-employment in this company in its local and overseas projects should the need for your services arises. This. Is the Certificate of employment issued to an employee by his employer. G. profit-sharing and separation pay with the NLRC-NCR Arbitration Branch. petitioner received a memorandum issued by private respondent's project manager. the appeal is hereby Dismissed and the assailed decision is Affirmed en toto. being a licensed physician. DELANTAR Project manager Noted By: (Sgd. SO ORDERED. unfair labor practice. thereby giving a right of action for damages by the employees prejudiced. Manila. Batangas [that] contains her name. the NLRC rendered the assailed decision. SO ORDERED. 6 On 29 January 1993. Petitioner. 002855-92 dated 27 . as exemplary damages were correctly awarded.: This is a petition for certiorari * to annul the decision of the National Labor Relations Commission in NLRC Case No. Consider the following portions of Dr. 3 The Labor Arbiter ruled that petitioner was a managerial employee and therefore exempt from payment of benefits such as overtime pay. SALAZAR Project Engineer MONTE DE PIEDAD BLDG. premises considered. was also not entitled to separation pay. reimbursement of legal expenses and unpaid wages for lack of basis. 1st Division) KAPUNAN. Where an employee was induced to accept a low or distorted salary or wage level. Is the employer liable for the payment of the attorney's pay incurred by his employee in a work connected criminal prosecution against him for an act done by another employee assigned by same employer to do the act which was the subject of the criminal prosecution? 8 Petitioner prays that judgment be rendered. WHEREFORE. BRION WORKING CONDITIONS AND REST PERIOD HOURS OF WORK ENGINEER LEONCIO V. Labor Arbiter Raul T. The Complainant has a family protection [sic] to protect. you are hereby advised to wind up all technical reports including accomplishments. 2 On 29 January 1992. Cornista Vice President 1 On 13 September 1991. however. On 16 April 1991. No. respondents. x x x. (Sgd. being engineers.. employed petitioner as construction/project engineer for the construction of the Monte de Piedad building in Cubao. vs. 1996 Apr 17. The alleged watchlist or “watch out list. Ernesto Naval of PAMANA Hospital. In all other aspects. CONCHITA CARPIO MORALES WE CONCUR: LEONARDO A. Nestor A. Thank you for your invaluable services rendered to this company.[51] (Emphasis and underscoring supplied) The circulation of such list containing names of alleged union members intended to prevent employment of workers for union activities similarly constitutes unfair labor practice. 7 Hence.R. Tomas. her father being a retired full Colonel in the Army. The NLRC's resolution dated 22 February 1993 is similarly impugned for denying petitioner's motion for reconsideration. service incentive leave pay and premium pay for holidays and rest days. SO ORDERED. service incentive leave pay. On 27 November 1992. the Decision of the Court of Appeals in CA-G. Further. SP No. one of which [was] procured from Foothills Hospital in Sto. PROJECT Quezon City Due to the impending completion of the aforementioned project and the lack of up-coming contracted works for our company in the immediate future. allowances. because he really worked during the period included in said Certificate? V..November 1992 which affirmed in toto the decision of the Labor Arbiter in NLRC NCR-00-0905335-91 dated 29 January 1992 dismissing the complaint filed by petitioner for lack of merit. were merely lists obtained by one Dr.Adding insult to injury was the circulation by petitioner of a “watchlist” or “watch out list”[49] including therein the names of respondents.. JR. Granting for the sake of argument without conceding. 4. Vente. Reproduced hereunder is the abovementioned memorandum: April 16. That private respondent be ordered to pay petitioner the following: Labor Standards | To digest (old cases) | Ajean Tuazon| 27 . thus: 1. at a monthly salary of P4.00. Labor Arbiter Aquino further declared. 1991. Engr. is it not legally proper. 1991 MEMORANDUM TO: LEONCIO V. as in this particular case? III. There being no basis advanced in deleting it. by virtue of an oral contract. 75871 is AFFIRMED with MODIFICATION in that the award by the National Labor Relations Commission of 10% of the total judgment award as attorney’s fees is reinstated. the instant case is hereby DISMISSED for lack of merits. viz: 20. Complainant came from a reputable and respected family.85 per hour. CARLOS CONSTRUCTION. She likewise has a professional reputation to protect. He was hired as a project employee and his services were terminated due to the completion of the project. Arnold and Romeo Jr.500. the dispositive portion of which reads. it pointed to the lack of any board action on its part to initiate such listing and to circulate the same. DANTE O. 109210.L. non-payment of wages. but was damaged. volume of work for our engineering and technical personnel has greatly been diminished.[53] the award of attorney’s fees should be reinstated. but which such fact of insistence or request is also denied by the employee. ARTURO D. illegal deduction. because of an incentive promise to receive a bigger compensation than that which would be his true and correct wage level as shown by documents for the payment of his distorted wages and overtime services. CO. This is not only unprofessional. Is there any portion of the Labor Code that prohibits contracts between employer and employee giving the latter the benefit of being paid overtime services. 4 The Labor Arbiter. etc. J. the instant petition wherein the following issues were raised: I. the decision of the appellate court is affirmed. petitioner appealed to the National Labor Relations Commission (NLRC). Romeo A. Moreover. was his verbal contract to be paid his overtime services as stated in paragraph 2(b) of this Petition invalid? and the payments of such overtime services as evidenced by Exhibits "B" to "B-24" (the genuineness and authenticity of which are not disputed) are they not evidentiary and of corroborative value to the true unwritten agreement between the parties in this case? II. but runs smack of oppression as CMC is trying permanently deprived [sic] Complainant of her livelihood by ensuring that she is barred from practicing in other hospitals.) Mario B. that complainant-petitioner herein was a managerial employee. her brothers. PRESBITERO J. Quezon City. petitioner filed a motion for reconsideration which the NLRC denied for lack of merit on 22 February 1993. Said list was given by a stockholder of respondent who was at the same time a stockholder of PAMAN[A] Hospital. Col. change orders. denied petitioner's claim for a share in the project's profits.. overtime rendered. The antecedent facts are as follows: On 17 April 1990. petitioner would also receive a share in the profits after completion of the project and that petitioner's services in excess of eight (8) hours on regular days and services rendered on weekends and legal holidays shall be compensable overtime at the rate of P27. INC. 2.) NESTOR A. petitioner. commission. private respondent. Other co-professionals and brothers in the profession are fully aware of these “watch out” lists and as such. Aquino rendered a decision. thus: WHEREFORE.” as termed by complainants. assailable by mere affidavits of denials to the effect that said Certificate was issued because of the insistence of the employee that it be made to include a period he did not work. her reputation was not only besmirched. Both her personal and professional reputation were damaged as a result of the unlawful acts of the respondents. QUISUMBING.[50] While petitioner does not deny the existence of such list. Merceditha’s Memorandum of Appeal: 3. VELASCO. TINGA. the dispositive portion of which reads as follows: WHEREFORE. in the alternative to claim payment of the differential of his undistorted salary or wage level when the promised incentive compensation is denied by his employer after the completion of the job for which he has employed? IV.[52] A word on the appellate court’s deletion of the award of attorney’s fees. respondents have circulated a so called “Watch List” to other hospitals. petitioner filed a complaint against private respondent for illegal dismissal. Allegedly. responsive to the foregoing. The object of the said list is precisely to harass Complainant and malign her good name and reputation. 5 On 14 April 1992.R. Delantar informing him of the termination of his services effective on 30 April 1991. The giving of the list was not a Board action. to top it all. In view of this. you are advised that your services are being terminated effective at the close of office hours on April 30. That the decision of the NLRC and its resolution denying the Motion for Reconsideration be set aside on grounds of grave abuse of discretion and. and she suffered social humiliation as it is of public knowledge that she was dismissed from work. SALAZAR.

therefore. not override substantial justice.May 1 to 15. although petitioner cannot strictly be classified as a managerial employee under Art. thus: Indeed. which are the ones the complainant-appellant was demanding from respondent. Separation pay of at least one month salary.000. his undistorted salary being P6. 18 On the issue of "whether supervisory employees. under the law. As previously determined. Xxx xxx xxx From the foregoing. (2) they customarily and regularly exercise discretion and independent judgment. 1991. Private respondent prays for the outright dismissal of the instant petition on grounds of wrong mode of appeal. duties which." 19 this Court ruled: A cursory perusal of the Job Value Contribution Statements of the union members will readily show that these supervisory employees are under the direct supervision of their respective department superintendents and that generally they assist the latter in planning. with his undistorted salary rate. the NLRC concurred with the Labor Arbiter's ruling that petitioner was a managerial employee and. (2) Customarily and regularly exercise discretion and independent judgment. Court of Appeals. experience. and (6) they do not devote more than 20% of their hours worked in a work-week to activities which are not directly and clearly related to the performance of their work hereinbefore described. and (4) who do not devote more than 20 percent of their hours worked in a work-week to activities which are not directly and closely related to the performance of the work described in paragraphs (1). the amount of P3. c. and (3) above. Consequently. stated differently. Although we agree with private respondent that appeals to the Supreme Court from decisions of the NLRC should be in the form of a special civil action for certiorari under Rule 65 of the Revised Rules of Court. the instant petition for review shall be treated as a special civil action on certiorari. If a technical and rigid enforcement of the rules is made. This petition should not be dismissed on a mere technicality however. (3) they regularly and directly assist the managerial employee whose primary duty consists of the management of a department of the establishment in which they are employed. 2(b). 93. It is an undisputed fact that appellant was a managerial employee and such.00. rest day and holiday pay. work along specialized or technical lines requiring special training. However. petitioner falls under the exemptions and therefore has no legal claim to the said benefits. The provisions of this Rule shall not apply to the following persons if they qualify for exemption under the condition set forth herein: xxx xxx xxx (c) Officers or members of a managerial staff if they perform the following duties and responsibilities: (1) The primary duty consists of the performance of work directly related to management policies of their employer. or [iii] execute under general supervision special assignments and tasks. . petitioner is of the view that field personnel may include managerial employees. under general supervision. rest day and holiday pay. staffing. or [ii] execute under general supervision work along specialized or technical lines requiring special training. likewise. he falls under the category of "field personnel. pursuant to Articles 87. petitioner stated that the nature of his work is "supervisory-engineering. premium pay for holidays and rest days and service incentive leave pay under the law. entitled to unpaid wages. 272 hours on Saturdays at 30%. as shown by the aforementioned disbursement vouchers. the premium pays for his overtime services of 368 hours on ordinary days at 25%. exempt from the coverage of Article 82.85 per hour of undistorted wage level. Petitioner. 17 nonetheless he is still not entitled to payment of the aforestated benefits because he falls squarely under another exempt category "officers or members of a managerial staff" as defined under sec. it is significant to note. and three days service incentive leave pay. under general supervision. as defined in Article 212 (m). . Book III of the same Code and hence not entitled to overtime. in his own petition and in other pleadings submitted to this Court. and to pay the costs. their aim would be defeated" (Tamayo v. that he agreed to a monthly salary of P4. premium pay for services rendered on rest days and holidays and service incentive leave pay. petitioner is clearly exempted therefrom. Book V of the Labor Code. Rule I. NLRC. claims that the NLRC failed to give due weight and consideration to the fact that private respondent compensated him for his overtime services as indicated in the various disbursement vouchers he submitted as evidence. Art. 93. 72 SCRA 120 [1976]). controlling. communicating and in making decisions in attaining the company's set goals and objectives. therefore. we are constrained to agree with petitioner that the union members should be considered as officers or members of the managerial staff and are. 3) Whether or not petitioner rendered services from 1 May to 15 May 1991 and is.00 reimbursement for what he paid his defense counsel in that criminal action which should have instead been against respondent's general manager. 87. The NLRC declared that: Book III on conditions of employment exempts managerial employees from its coverage on the grant of certain economic benefits.684. Under the facts obtaining in this case.184. organizing. 9 Before proceeding to the merits of the petition. directing. petitioner accentuates that his case constitutes the exception to the exception because his actual working hours can be determined as evidenced by the disbursement vouchers containing payments of petitioner's salaries and overtime services. Labor Standards | To digest (old cases) | Ajean Tuazon| 28 . Book III of the aforestated Rules to Implement the Labor Code. It is well and good that petitioner was compensated for his overtime services. 2. On the first issue. 522 [1992] citing Gregorio v. this Court has time and again declared that the only way by which a labor case may reach the Supreme Court is through a petition for certiorari under Rule 65 of the Rules of Court alleging lack or excess of jurisdiction or grave abuse of discretion (Pearl S." 14 Similarly. 2(c) of the abovementioned implementing rules: Sec. 10 this Court has resolved to treat as special civil actions for certiorari petitions erroneously captioned as petitions for review on certiorari "in the interest of justice. should be considered as officers or members of the managerial staff under Article 82.a. That petitioner was paid overtime benefits does not automatically and necessarily denote that petitioner is entitled to such benefits. petitioner states that payment of his overtime services. it being in the form of a petition for review on certiorari (Rule 45 of the Revised Rules of Court) and not a special civil action for certiorari (Rule 65 thereof) which is the correct mode of appeal from decisions of the NLRC. 11 we elaborated. 16 and sec. NLRC. 272 hours on Sundays plus 24 hours on legal holidays at 200% computed at the rate of P27. or knowledge. the issues for our resolution are the following: 1) Whether or not petitioner is entitled to overtime pay. "Dismissal of appeal purely on technical grounds is frowned upon where the policy of the courts is to encourage hearings of appeal on their merits. 2) Whether or not petitioner is entitled to a share in the profits of the construction project. 4) Whether or not private respondent is liable to reimburse petitioner's legal expenses and. Court of Appeals. 94 and 95 of the Labor Code and the exemptions thereto. this does not translate into a right on the part of petitioner to demand additional payment when. (2). It is because of this oral agreement. These supervisory employees are likewise responsible for the effective and efficient operation of their respective departments. The rules of procedure ought not to be applied in a very rigid technical sense.00 per month. 5) Whether or not petitioner is entitled to separation pay. (5) they execute. A case in point is National Sugar Refineries Corporation v. d. therefore. Petitioner's contention is unmeritorious. in the alternative." However. as defined in Section 2. viz. Book III of the Omnibus Rules Implementing the Labor Code. b. (3) [i] Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of the establishment in which he is employed or subdivision thereof. he having been terminated unreasonably without cause. Going to the second issue. NLRC." In People's Security. petitioner confirmed that his job was to supervise the laborers in the construction project 15 Hence. he was not entitled to the economic benefits he sought to recover. Exemption. petitioner insists that private respondent promised him a share in the profits after completion of the construction project.00 per month. or knowledge. we shall first resolve the procedural objection raised. Perforce. an amount which he claims is too low for a professional civil engineer like him with the rank of project engineer. (4) they execute. since April 17. 20 The aforequoted rationale equally applies to petitioner herein considering in the main his supervisory duties as private respondent's project engineer. special assignments and tasks. to pay at least one (1) percent of 4. this rule is not inflexible. Rule I. In a number of cases. proves the existence of this verbal agreement since payment of his overtime services constitutes part of this so-called understanding. Moving on to the merits.: (1) their primary duty consists of the performance of work directly related to management policies of their employer. it is apparent that the members of respondent union discharge duties and responsibilities which ineluctably qualify them as officers or members of the managerial staff. experience. petitioner does not dispute. 82 of the Labor Code. in the amount of P2. petitioner elucidates. Arguing further. in the interest of justice. they are not entitled to overtime. 12 Petitioner claims that since he performs his duties in the project site or away from the principal place of business of his employer (herein private respondent). Inc. 94 and 95 of the Labor Code. 209 SCRA 518. We are constrained to disagree with petitioner.500. 182 SCRA 446 [1990]). 1991. rules of procedure are used only to help secure. exempt from payment of overtime pay. and to pay his unpaid salary for 15 days . In his original complaint. Buck Foundation v. 82 of the Labor Code specifically delineates who are entitled to the overtime premiums and service incentive leave pay provided under Art. or the sum total of the differential of his salaries. . 13 Strangely. 1990 to April 30.. v.5 million pesos profit share.

Labor Standards | To digest (old cases) | Ajean Tuazon| 29 . respondents.000.. the owner thereof. G. were either dismissed. Inc. it was duly established that private respondent hired petitioner as project or construction engineer specifically for its Monte de Piedad building project. Inc. petitioner presented the certificate of service issued by Engr.00. Nowhere in the disbursement vouchers can we find even the remotest hint of a profit-sharing agreement between petitioner and private respondent. Engr. Xxx xxx xxx Department Order No. SAN MIGUEL BREWERY INC. the assailed decision is hereby MODIFIED as follows: 1) Private respondent is ordered to pay petitioner for services rendered from 1 May to 15 May 1991. 3. petitioner's services are deemed coterminous with the project. Quezon City. or more. we simply cannot grant the same on the mere basis of complainant's allegation that respondent verbally promised him that he is entitled to a share in the profits derive(d) from the projects.. The demands for the application of the Minimum Wage Law to workers paid on "pakiao" basis. In his own words. 25 In the case at bench. On this score. 23 In contrast. Specifically." thus: Art. the Democratic Labor Association filed a complaint against the San Miguel Brewery. by virtue of an oral agreement entered into with private respondent herein through its proprietor. and attorney's fees.We cannot accede to petitioner's demand. the impugned decision is hereby AFFIRMED. At the hearing held sometime in September. Mere denials and selfserving statements to the effect that petitioner allegedly promised not to use the certificate against private respondent are not sufficient to overturn the same. In all other respects. and. 29 Policy Instruction No. which affirmed the decision of the court a quo with few exceptions. night-shift differential pay. a criminal complaint for unjust vexation was filed by one Salvador Flores against the officers of the Monte de Piedad & Savings Bank.. thus. The moment these outside or field employees leave the plant and while in their sales routes they are on their own. J.. Padilla. sometimes 6 or 7 hours. or 8:00 a. that is. Honorio L. 19 of the Department of Labor and Employment (DOLE) entitled "Guidelines Governing the Employment of Workers in the Construction Industry" promulgated on 1 April 1993. to wit: . or on its claim for additional separation pay and sick and vacation leave compensation. payment of accumulated vacation and sick leave and attorney's fees. It further stressed that petitioner failed to prove he actually worked during the aforestated period..: On January 27. therefore. What is required of the company is a report to the nearest Public Employment Office for statistical purposes. although it was allowed to present evidence on service rendered during Sundays and holidays. Petitioner argues that private respondent's act of giving allowances to enable petitioner to attend the hearings. JJ. Carlos. we rule that petitioner is a project employee and. The company never require them to start their work as outside sales personnel earlier than the above schedule. besides complainant failed to (establish) that said benefits or privileges (have) been given to any of respondent('s) employees as a matter of practice or policy. petitioner. the disposition insofar as those points covered by this petition for review are concerned. Judge Bautista held that the provisions of the Eight-Hour Labor Law apply to the employees concerned for those working in the field or engaged in the sale of the company's products outside its premises and consequently they should be paid the extra compensation accorded them by said law in addition to the monthly salary and commission earned by them. the employees leave the plant of the company to go on their respective sales routes either at 7:00 a. who was commissioned to receive the evidence.m. 444 even if they had been paid a compensation on monthly salary basis. 1990. They do not have a daily time record. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties. ragardless of the meal allowance given to employees who work up to late at night. rendered decision expressing his disposition with regard to the points embodied in the complaint on which evidence was presented. Hence. Benefits or privileges of this nature (are) usually in writing. as affirmed by the Court of Industrial Relations. vs. to the effect that outside or field sales personnel are entitled to the benefits of the Eight-Hour Labor Law.. The company filed its answer to the complaint specifically denying its material averments and answering the demands point by point. private respondent is nonetheless obligated to defray petitioner's legal expenses. Its motion for reconsideration having been denied by the industrial court en banc. or set aside. at Cubao. as project employee. as well as the award of additional separation pay. on the following terms and conditions. Petitioner was included in the complaint not in his personal capacity but in his capacity as project engineer of private respondent and the case arose in connection with his work as such. During the construction of the Monte de Piedad building. No. regardless of the number of projects in which they have been employed by a particular construction company. Presiding Judge Jose S. Judge Bautista also decreed that the employees concerned be paid an additional compensation of 25% as provided for in Commonwealth Act No. petitioner is the representative of private respondent being its employee and he acts for and in behalf of private respondent. particularly. Although not directly implicated in the criminal complaint. premises considered. for constructing a bunkhouse in front of his (Flores) apartment and making it difficult for him to enter the same. The fact remains that private respondent knowingly and voluntarily issued the certificate. That complainant-petitioner herein. we rule for the petitioner. petitioner alleges that on 30 April 1991. 1949 with the present qualification: 25% on the basis of their salary to those who work from 6:00 to 12:00 p. Anent the finding of the court a quo. After the case had been submitted for decision.. an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. not entitled to separation pay. the inclusion of petitioner in the complaint for unjust vexation. 24 constitutes an admission of the aforestated obligation.. 2. as shown in the disbursement voucher submitted as evidence. 1963 July 31. Judge Bautista decreed that they be paid their corresponding salary differentials for work done at night prior to January 1. interposed the present petition for review. Petitioner himself stated that it took him and his assisting laborers until 15 May 1991 to complete the "finishing touches" on the said building. 21 Anent the third issue. private respondent argues that the abovementioned certificate was issued solely to accommodate petitioner who needed the same for his work application abroad. denied." 22 As proof of his extended service.m. On the last issue.00. private respondent is estopped from assailing the contents of its own certificate of service. the company is not required to obtain a clearance from the Secretary of Labor in connection with such termination. the union manifested its desire to confine its claim to its demands for overtime. 26 Accordingly. petitioner's services may be terminated as soon as the project for which he was hired is completed. DEMOCRATIC LABOR ORGANIZATION. for beer trucks. we concur with the ruling of the Labor Arbiter: As to the issue of profit sharing. Jr. before closing hours. the San Miguel Brewery. 27 There can be no dispute that petitioner's dismissal was due to the completion of the construction of the Monte de Piedad building. Vitug and Hermosisima. Petitioner avers that he was implicated in the complaint for the sole reason that he was the construction engineer of the project. Engineer Nestor Delantar advised him to continue supervising the "finishing touches on many parts of the building which took him and the assisting laborers until 15 May 1991. 280. ETC. ET AL. The purpose for which the said certificate was issued becomes irrelevant. Moreover. 1955. is obligated to pay petitioner's legal expenses. Hence. petitioner declared: xxx xxx xxx 2. is equivalent to inclusion of private respondent itself. SO ORDERED. is as follows: 1. began to work as a licensed Civil Engineer as construction or engineer of its contracted project. As to employees who work at night. private respondent's project manager. or that the employees could make their sales on their routes within such number of hours variable in the sense that sometimes they can be completed in less than 8 hours. En Banc DECISION BAUTISTA ANGELO. We agree with petitioner. With regard to overtime compensation. 28 Petitioner.000. except where the employment has been fixed for a specific period or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. L-18353. embodying 12 demands for the betterment of the conditions of employment of its members. reiterates the same rule. Bautista. and 75% to those who work from 12:01 to 6:00 in the morning.m. being the employer. 20 entitled "Stabilizing Employer-Employee Relations in the Construction Industry" explicitly mandates that: xxx xxx xxx Project employees are not entitled to termination pay if they are terminated as a result of the completion of the project or any phase thereof in which they are employed. 1953. 30 WHEREFORE. and often times when the sales are completed. . At the construction site. Bellosillo. the pertinent facts are as follows: After the morning roll call. Thus. The applicable provision is Article 280 of the Labor Code which defines the term "project employee. . reimbursement of the fees petitioner paid his counsel amounting to P3. the Monte de Piedad Bank Building. Regular and Casual Employment. With regard to work done during Sundays and holidays. which was work-related. Delantar attesting to petitioner's employment as project engineer from April 1990 to May 1991. The sales routes are so planned that they can be completed within 8 hours at most. 2) Private respondent is ordered to reimburse petitioner's legal expenses in the amount of P3. concur. president and general manager. Hence. has no legal right to demand separation pay. private respondent. for soft drinks trucks. on April 17.R. The company asked for the dismissal of the complaint. Petitioner's rationalization stretches the imagination way too far.

G. for in our opinion the Eight-Hour Labor Law only has application where an employee or laborer is paid in a monthly or daily basis. they go back to the plant. they can be considered as employees paid on piecework. plus commission. can be likened to an employee who is paid on piecework. The philosophy behind this exemption is that his earnings are in the form of commission based on the gross receipts of the day.. the strike fizzled out and the strikers were ordered to return to work with the understanding that the claim for night salary differentials should be settled in court. Barrera.. ET AL. or commission basis. P40.. No. Inc. P70. 1965. 1964 .' "Only the respondent management moved to reconsider the Order of March 24. 1964 which was subsequently amended on July 31. There is another action pending between the same parties. MERCURY DRUG CO. Concepcion.. 1 We are in accord with this view. Thus. Inc. It is contended that since the employees concerned are paid a commission on the sales they make outside of the required 8 hours besides the fixed salary that is paid to them. 'it can be safely said that. His situation. however. While on the other hand. Williams. he is not subject to the Eight Hours Labor Law. WHEREFORE. truck helpers. "4. "2. the company contends. they are paid sales commission that range from P30. 1 of management's motion to dismiss was denied for lack of merit. 1982 September 30. the Court held that 'petitioners' cause of action against the respondent. as follows: "The reasons for excluding an outside salesman are fairly apparent. Reyes. the Court of Industrial Relations erred in ordering that they be paid an overtime compensation as required by the Eight-Hour Labor Law for the reason that the commission they are paid already takes the place of such overtime compensation. . the industrial court found that claimants Magno Johnson and Jose Sanchez worked with the respondent company during the periods specified by them in their testimony and that watchmen Zoilo Lliga." We are. namely. P100 and P109 a month depending on the volume of their sales and their rate of commission per case. Ground No.. 1965 but the same was denied by the Court en banc in a resolution dated August 26. P70. 1993. The amount of compensation they receive is uncertain depending upon their individual efforts or industry. with respect to respondent corporation and its president and general manager: 1) payment of their unpaid back wages for work done on Sundays and legal holidays plus 26% additional compensation from date of their employment up to June 30. and/or Mariano Que and Nardo Dayao. 1926-V and the Resolution of the Court en banc dated July 6. J. and therefore. No costs. are not subject to the Eight-Hour Labor Law.A. the decision of the industrial court is hereby modified as follows. Employees Association praying. overtime compensation is an additional pay for work or service rendered in excess if 8 hours a day by an employee. Its second ground was found meritorious and. 1949 but never before that time. Such salesman. and make another round of sales. "III. called upon to implement the Eight-Hour Labor Law. JJ. the first on the ground that: "I. 444. a salesman. His participation depends upon his industry so that the more hours he employs in the work the greater are his gross returns and the higher his commission. firm or corporation may compel an employee or laborer to work during Sundays and legal holidays unless he is paid an additional sum of 25% of his regular compensation. concur. The remaining point to be determined refers to the claim for pay for Sundays and holidays for service performed by some claimants who were watchmen or security guards. and/or Mariano Que. No. The third ground was denied. respondent management and respondent union move to dismiss. technically speaking. and his employer has no way of knowing the number of hours he works per day. load again. as well as the award for night salary differentials is affirmed. 2d 202. such as Benjamin Sevilla. January 25. said official stated: ".. holding that there still exists the employer-employee relationship between Nardo Dayao and the management. to sometimes P90.. No. In so far as respondent union's motion is concerned. within the range of his ability. Besides the monthly salary. Moreover. "In separate motions. and P109 a month. The petition states no cause of action. "For reasons stated in the Order dated March 24.B. and.. has no application here for it appears that before the filing of the petition concerning this claim a similar one had already been filed long ago which had been the subject of negotiations between the union and the company which culminated in a strike in 1952. 1953. These employees receive monthly salaries and sales commission in variable amounts. Regala.. for its disestablishment and the refund of all monies it had collected from petitioners. or is paid a monthly or daily compensation. or commission basis. This ruling. but for their extra work they are paid a commission which is in lieu of the extra compensation to which they are entitled. In lieu of overtime he ordinarily receives commissions as extra compensation. . P125 each. It is now contended that this ruling is erroneous because an award for night shift differentials cannot be given retroactive effect but can only be entertained from the date of demand which was on January 27. the second alleges that this Court has no jurisdiction over the acts complained of against the respondent union. Section 4 of Commonwealth Act No. C. if he is made to work beyond the requisite period of 8 hours. The court found that the company started paying night differentials only in January. on this point. Mercury Drug Co." True it is that the employees concerned are paid a fixed salary for their month of service. P215.. Association should be dismissed without prejudice to the refiling of the same as an unfair labor practice case. to a great extent. It is contended that these employees are not entitled to extra pay for work done during these days because they are paid on a monthly basis and are given one day off which may take the place of the work they may perform either on Sunday or any holiday. as amended by R. is not subject to the personal supervision of his employer. The Department of Labor. With respect to the fourth ground. of the opinion that the industrial court erred in holding that the Eight-Hour Labor Law applies to the employees composing the outside service force and ordering that they be paid the corresponding additional compensation.' "5. a truck driver. Dizon. "II. The Court of Industrial Relations. and sometimes they work in excess of the required 8-hour period of work.. L-8896. 1968 denying two separate motions for reconsideration filed by petitioners and respondents. President & General Manager. With regard to the claim for night salary differentials. The record shows that these employees during the period of their employment were paid sales commission ranging from P30. it is claimed. therefore.m. P100. counting backward the three (3) year prescriptive period from the date of the filing of the instant petition . the Court held that on the basis of section 7-A of C. Inocentes Prescillas and Daniel Cauyca rendered night duties once every three weeks continuously during the period of their employment and that they were never given any additional compensation aside from their monthly regular salaries. and if the employee is already given extra compensation for labor performed in excess of 8 hours a day. The only exception is with regard to public utilities who perform some public service. Okl. Unfortunately. v. Labrador.. 1966.A. 118 F. The factual background of Case No. to the effect that field sales personnel receiving regular monthly salaries. works individually.or when making short trip deliveries only. This law has no application when the employee or laborer is paid on a piece-work. The rest of the decision insofar as work performed on Sundays and holidays covering watchmen and security guards. and 75% additional compensation for those who worked from 12:01 to 6:00 in the morning. It is perhaps for this reason that the court a quo granted this claim in spite of the objection of the company to the contrary. respondents. 1968 in Case No. at the rate of P. C.all of petitioners' claims have not yet prescribed. petitioner. is of this opinion when on December 9. thru the Director of the Bureau of Labor Standards. Indeed.R. the award with regard to extra work performed by those employed in the outside or field sales force is set aside. as follows: "1. and Makalintal. 1962. and Mercury Drug Co. regardless of the nature of compensation.March 20. 1957 it made the ruling on a query submitted to it. NARDO DAYAO. Inc. 1957. 2nd Division GUTIERREZ. sometimes P60. This Court has no jurisdiction over the subject of the claims of petitioners Januario Referente and Oscar Echalar..J. J. 2) payment of extra compensation on work done at night.. thereby classifying him as if he were on piecework basis. 1964 filed by Nardo Dayao and 70 others against Mercury Drug Co. Respondent submitted an answer to the amended petition Labor Standards | To digest (old cases) | Ajean Tuazon| 30 . 1926-V is summarized by the respondent Court of Industrial Relations as follows: "This is a verified petition dated March 17. He works away from his employer's place of business.01 to P. Alberto Alpaza and Alejandro Empleo. Bengzon. as his ambition dictates. however. And so. We disagree with this claim because it runs counter to law. JR. when a fieldman receives a regular monthly salary plus commission on percentage basis of his sales. vs. L-30452. he is not covered by the law.. to sometimes P90. "pakiao". "pakiao" or commission basis.: This is a petition for review on certiorari of the decision of the Court of Industrial Relations dated March 30. which is expressly excluded from the operation of the Eight-Hour Labor Law. 444 expressly provides that no person. accordingly Januario Referente and Oscar Echalar were dropped as party petitioners in this case. Mariano Ruedas. Paredes. regardless of the time employed. sometimes P60. This philosophy is better explained in Jewel Tea Co. citing in support thereof our ruling in Earnshaws Docks & Honolulu Iron Work v.01 1/2 per case. There are no restrictions respecting the time he shall work and he can earn as much or as little. this Court resolved the motions to dismiss. G. "pakiao". "3. P155. 3) reinstatement of Januario Referente and Oscar Echalar to their former positions with back salaries. as against the respondent union. it is also the established policy of the Office to consider his commission as payment for the extra time he renders in excess of eight hours. INC. et al.L.A. And so it ordered that the employees concerned be paid 25% additional compensation for those who worked from 6:00 to 12:00 p. insofar as the extra work they perform. P40. he should be paid the additional compensation prescribed by law. in which case. This proviso is mandatory.

pp. (Sgd. and "(b) Another additional sum or premium equivalent to 25% of their respective basic or regular salaries for nighttime services rendered from March 20. 444.. That this prohibition shall not apply to public utilities performing some public service such as supplying gas. ibid. it can be seen readily that the petitionercompany based its arguments in its first assignment of error on the wrong premise. rollo) From a perusal of the foregoing statements of the respondent court.which was subsequently amended on January 6. according to the pleadings and evidence. an example of which is that of private respondent Nardo Dayao quoted hereunder: "Mercury Drug Co. 110-112. Respondent Mercury Drug Company. water. "'Any agreement or contract between employer and the laborer or employee contrary to the provisions of this Act shall be null and void ab initio. THUS INFRINGING UPON THE CARDINAL RIGHTS OF THE PETITIONER. as it is hereby.) NARDO DAYAO'" (EXH." (Annex "P". (Section 2. This allegation is premised upon the following finding of the respondent court: "But the Court finds merit in the claim for the payment of additional compensation for work done on Sundays and holidays. 1968 decision reads: "IN VIEW OF THE FOREGOING. as amended known as the Eight Hour Labor Law. is hereby ordered to pay the sixty-nine (69) petitioners: "(a) An additional sum equivalent to 25% of their respective basic or regular salaries for services rendered on Sundays and legal holidays during the period from March 20. BUT ALSO BECAUSE OF THE WAIVER OF SAID CLAIMS AND THE TOTAL ABSENCE OF EVIDENCE THEREON. 1962. On the second issue. 1962. power.. III. Dear Mr. Respondent Mariano Que. because such agreement is contrary to public policy and is declared null and void by law. "'No person firm or corporation.' (Section 4 C. you will be required to perform work every day in a year as follows: 8 Hours work on regular days and all special Holidays that may be declared but with the 25 % additional compensation. 1966. and of fixing night differential wages. as amended.. 1961 up to June 30. and that petitioners' claims accruing before March 20. No. they are not barred nevertheless from claiming what is due them. The first issue refers to its allegation that the respondent Court erred in declaring the contracts of employment null and void and contrary to law. The contracts of employment signed by the private respondents are on a standard form. RESPONDENT CIR ERRED IN MAKING AWARDS IN FAVOR OF THE PRIVATE RESPONDENTS WHO NEITHER GAVE EVIDENCE NOR EVEN APPEARED TO SHOW THEIR INTEREST. effective July 1. electricity. 1959 and you shall receive an annual compensation the amount of Two Thousand four hundred pesos only P2. (Nardo Dayao. Exten.. RESPONDENT CIR ERRED IN SUSTAINING PRIVATE RESPONDENTS' CLAIMS FOR NIGHTTIME WORK PREMIUMS NOT ONLY BECAUSE OF THE DECLARE POLICY ON COLLECTIVE BARGAINING FREEDOM EXPRESSED IN REPUBLIC ACT 875 AND THE EXPRESS PROHIBITION IN SECTION 7 OF SAID STATUTE. 1961 to June 30. For any work performed in excess of the hours as above mentioned. Very truly yours. the respondents filed a motion for its reconsideration. in the Checking Department of MERCURY DRUG CO. like time records. was however. hours of employment or other conditions of employment to the extent of disregarding an agreement thereon between the respondent company and the petitioners. This appointment may be terminated without notice for cause and without cause upon thirty days written notice. respondents alleged that petitioners have no cause of action against Mariano Que because their employer is respondent Mercury Drug Company. 4 Hours work on every other Sundays of the month. MERCURY DRUG CO. Petitioners' petition to convert them to monthly employees should be. Dayao: You are hereby appointed as Checker. business establishment or place of center of labor shall compel an employee or laborer to work during Sundays and legal holidays unless he is paid an additional sum of at least twenty-five per centum of his regular remuneration. containing some admissions and some denials of the material averments of the amended petition. an existing corporation which has a separate and distinct personality from its incorporators. the respondent court rendered its decision." (Decision. II. INC. that the petition having been verified by only three of the petitioners without showing that the others authorized the inclusion of their names as petitioners does not confer jurisdiction to this Court. the subject 25% additional compensation had already been included in the latter's Labor Standards | To digest (old cases) | Ajean Tuazon| 31 . that the company being a service enterprise is excluded from the coverage of the Eight Hour Labor Law. the latter to make available to said employee its records. 1959. Three issues are discussed by the petitioner in its first assignment of error. denied for lack of merit.. Petitioner Mercury Drug Company. the petitioners are justified to receive additional amount equivalent to 25% of their respective basic or regular salaries for work done on Sundays and legal holidays for the period from March 20.. 444) Although a service enterprise. the Chief Court Examiner or his authorized representative is hereby directed to proceed to the office of the respondent corporation at Bambang Street. rollo) These contracts were not declared by the respondent court null and void in their entirety. pp. The dispositive portion of the March 30.) "The Court is not impressed by the argument that under the contracts of employment the petitioners are not entitled to such claim for the reason that the same are contrary to law. rates of pay. Cruz. Ernesto Talampas and Josias Federico) testimonies that the 25% additional compensation was not included in the private respondents' respective monthly salaries and 3) ruled that any agreement in a contract of employment which would exclude the 25% additional compensation for work done during Sundays and holidays is null and void as mandated by law. INC.400. Inc. NULL AND VOID AS BEING CONTRARY TO PUBLIC POLICY AND IN SUSTAINING. After hearing on the merits." Not satisfied with the decision. that there is no employer-employee relationship between management and petitioner Nardo Dayao and that his claim has been released and/or barred by another action. assigned the following errors in this petition: I. that no court has the power to set wages. pp. Nardo Dayao 1015 Sta. Manila.000. "3. "To expedite the computation of the money award. upon the completion thereof. the petitioner-company reiterated its stand that under the respective contracts of employment the private respondents. rollo).) MARIANO QUE General Manager ACCEPTED WITH FULL CONFORMITY: (Sgd.' "Under the cited statutory provision. payrolls and other pertinent papers. 1968. A. respondent company's employees are within the coverage of C. 119-120. 1961 have prescribed. stockholders and/or officers. Inc. RESPONDENT CIR ERRED IN DECLARING THE CONTRACTS OF EMPLOYMENT. Inc. Your firm being a Service Enterprise. "2. the Court hereby resolves that: "1. 1962. HOWEVER. Catalina Rizal Ave. The claim of the petitioners for payment of backwages corresponding to the first four hours work rendered on every other Sunday and first four hours on legal holidays should be denied for lack of merit. 1959 Mr. Payment of extra or additional pay for services rendered during Sundays and legal holidays is mandated by law. "A" and "1") (Decision.. for they do not fall within the category or class employees or laborers excluded from its provisions. Sta. the law nevertheless imposes upon him the obligation to pay his employees at least 25% additional of their basic or regular salaries. EXHIBITS "A" AND "B". PROVIDED. Inc. Inc. that the petitioners were fully paid for services rendered under the terms and conditions of the individual contracts of employment. is the Mercury Drug Company. While an employer may compel his employees to perform service on such days. that includes the additional compensation for work on Sundays and legal holidays. being an officer and acted only as an agent in behalf of the respondent corporation. should be absolved from the money claims of herein petitioners whose employer. on the basis of the conflicting evidence presented by the parties. denied by the Court en banc in its Resolution dated July 6. to submit his report as soon as possible for further disposition of the Court. 1580 Bambang. 114-115. By way of affirmative and special defenses. A. This supersedes your appointment of July 1. The respondent court. "4. AND ALSO BECAUSE THE VALIDITY OF SAID CONTRACTS OF EMPLOYMENT HAS NOT BEEN RAISED. and compute the money claims awarded in this decision and. in effect: 1) rejected the theory of the petitioner company that the 25% additional compensation claimed by the private respondents for the four-hour work they rendered during Sundays and legal holidays provided in their contracts of employment were covered by the private respondents' respective monthly salaries. No. Manila October 30. or providing means of transportation or communication. 1961 up to June 30. The motion for reconsideration. 2) gave credence to private respondents'. PRIVATE RESPONDENTS' CLAIMS FOR 25% SUNDAY AND LEGAL HOLIDAY PREMIUMS BECAUSE SUCH DECLARATION AND AWARD ARE NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.. ACCORDINGLY. yon shall be paid 25 % additional compensation per hour. Even assuming that the petitioners had agreed to work on Sundays and legal holidays without any further consideration than their monthly salaries.

Almin. No. The figures arrived at in each case did not tally with the annual salaries on the employees' contracts of employment.36 x 305 ordinary working days at the time or in the total amount of P2. the annual compensation of private respondent Nardo Dayao. 13. In this connection We restate our finding that the respondent court did not declare the contracts of employment null and void in their entirely. et al. 27 SCRA 490). 1958. Withal.' Again. Its position collides with our ruling in the Naric case [National Rice & Corn Corp. citing shell Co.36 plus 25% thereof or P1..'" xxx xxx xxx True. and that respondent court's authority to try the case cannot be implied from its 'general jurisdiction and broad powers' under Commonwealth Act 103 because Republic Act 875 precisely curbed such powers limiting them to certain specific litigations. Gaz. These amounts did not represent basic salary only. 1959] where we held: "'While it is true that this Court made the above comment in the aforementioned case. to hold that this case for extra compensation now falls beyond the powers of the industrial court to decides. 1959.144. L-16440.. Chief Justice Cesar Bengzon. The petitioner's defense consists of mathematical computations made after the filing of the case in order to explain a clear attempt to make its employees work without the extra compensation provided by law on Sundays and legal holidays. Felipe Guevara. 2 of the Department Labor demonstrated in Exhibits "6". Much less do We find any grave abuse of discretion on the part of the respondent court in its interpretation of the employment contract's provision on salaries. [Naric vs. vs. Ferrer. medical. This contention is based on the testimony of its lone witness. 444 (Eight-Hour Labor Law). "9". Mr. the respondent court sustained the private respondents' evidence to the effect that their 25% additional compensation for work done on Sundays and Legal Holidays were not included in their respective monthly salaries. 1959 to June 30.80. In Sanchez v.84) x 17. Petitioner says that this Act reduced the jurisdiction of respondent court and limited it to specific cases which this Court has defined as: '. therefore. The variance in the evidence is only with respect to the money claims. the CIR lost its jurisdiction over claims for additional compensation for regular night work. Inc. Hon. May 29. "We believe petitioner to be in error. We held that the broad powers conferred by Commonwealth Act 103 on the CIR may have been curtailed by Republic Act 875 which limited them to the four categories therein expressed in line with the public policy of allowing settlement of industrial disputes via the collective bargaining process. no extended discussion is necessary.respective monthly salaries.40 always against the interest of the employees. the record does not show that the employer-employee relation between the 64 respondents and the petitioner had ceased. May 29. It contends that the respondent court has no jurisdiction to award additional compensation for nighttime work because of the declared policy on freedom of collective bargaining expressed in Republic Act 875 and the express prohibition in Section 7 of the said statute. City Automotive Co. On the claim for night differentials. vs.20 to as much as P14. Jacinto Concepcion and pertinent exhibits. . pp. L-12075. stated: xxx xxx xxx "Moreover. The other issue raised in the second assignment of error is premised on the petitioner-company's contention that the respondent court's ruling on the additional compensation for nighttime work is not supported by substantial evidence. in Paflu. L-12075. 1960. hence.R. et al.. without regard to technicalities or legal forms and shall not be bound by any technical rules of legal evidence' informing its mind 'in such manner as it may deem just and equitable. [Paflu. et al. et al. 24. 81 Phil. G. Xxx xxx xxx "That the required minimum 25% Sunday and Legal Holiday additional compensation was paid to and received by the employees for the work they rendered on every other Sunday and on the eight Legal Holidays for the period October. Pertinent portions of the respondent court's decision read: xxx xxx xxx "There is no serious disagreement between the petitioners and respondent management on the facts recited above. 1959. now Chief Justice Enrique M. Besides. 1959 and Philippine Engineers' Syndicate v. Bautista. the industrial court has the power to determine the wages that night workers should receive under Commonwealth Act No. April 29. No. declared "'Only one issue is raised: whether or not upon the enactment of Republic Act 875.' [Luis Recato Dy. night work is not overtime but regular work. May 25. In view of the controlling doctrine that a grave abuse of discretion must be shown in order to warrant our disturbing the findings of the respondent court. 315]. (1) when the labor dispute affects an industry which is indispensable to the national interest and is so certified by the President to the industrial court (Sec. Court of Industrial Relations. the latter figure representing 13 Sundays and 4 Legal Holidays of 8 hours each. G. would amount to a further curtailment of the jurisdiction of said court to an extent which may defeat the purpose of the Magna Carta to the prejudice of labor.. speaking thru Mr. And this court in that case said that while there was no law actually requiring payment of additional compensation for night work. This contention is untenable. The aforesaid computations were not given credence by the respondent court.. et al. 1964." (Brief for the Petitioner. (2) when the controversy refers to minimum wage under the Minimum Wage Law (Republic Act 602). and so it justified the additional compensation in the Shell case for 'hygienic. (Sanchez vs. a re-examination of the decisions on nighttime pay differential was the focus of attention in Rheem of the Philippines. et al. No.R. G. The private respondents presented evidence through the testimonies of Nardo Dayao. Naric Workers Union. et al. vs. Inc. L9055.R. including the additional compensation for the work he renders during the first four (4) hours on every other Sunday and on the eight (8) Legal Holidays at the time was P2. So plus the amount of P156. No.R. and "9-A". (3) when it involves hours of employment under the Eight-Hour Labor Law (Commonwealth Act 444) and (4) when it involves an unfair labor practice [Sec. The last issue raised in the first assignment of error refers to a procedural matter. L-17788. the reversal of the court's findings on this matter is unwarranted. L-13806. miserably failed to show the exact and correct annual salary as stated in the respective contracts of employment of the respondent employees. CIR. The petitioner-company contends that the question as to whether or not the contracts of employment were null and void was not put in issue. November 28. and that if that work is done beyond the worker's regular hours of duty. Republic Act 875). CIR. 8. Jose S. May 31. Naric v.00 per month. Inc.20 basic rate of P7.. "7".R. where this Court. 103. petitioners appear to be oblivious of the statutory mandate that respondent Court in the hearing. Detective & Protective Bureau. he should also be paid additional compensation for overtime work. 27).R. . G. So it has been from the earliest case decided in 1939 to a 1967 decision. The computations. "Petitioner insists that respondents' case falls in none of these categories because as held in two previous cases. this Court has invariably accorded the most hospitable scope to the breadth and amplitude with which such provision is couched. 5 (a). the difference varying from P1. The petitioner-company's contention that the respondent court's conclusion on the issue of the 25% additional compensation for work done on Sundays and legal holidays during the first four hours that the private respondents had to work under their respective contracts of employment was not supported by substantial evidence is. "8". But even granting that the Court of Industrial Relations declared the contracts of employment wholly void. 10. Petitioner wants Us to reexamine Our rulings on the question of nighttime work. beyond which it is not permitted to act. In fact. vs. cultural and sociological reasons. The first hinges on the jurisdiction of the respondent court to award additional compensation for nighttime work. Naric Workers' Union. et al vs. 1960] or for payment of additional compensation for work rendered on Sundays and holidays and for night work [Nassco vs. G. it does not intend to convey the idea that work done at night cannot also be an overtime work. vs. 52 Off. Tan. .. Bautista. 9 and 9-A and the testimony of Mr. supposedly patterned after the WAS Interpretative Bulletin No. it could do so notwithstanding the procedural objection.R. Thus: "Exhibit A shows that for the period of October 30. et al. Only the objectionable features violative of law were nullified. Republic Act 875]'. February 29. In not giving weight to the evidence of the petitioner-company. this Court speaking through then Justice. 6. investigation and determination of any question or controversy and in the exercise of any of its duties or power is to act 'according to justice and equity and substantial merits of the case. No. No. The comment only served to emphasize that the demand which the Shell Company made upon its laborers is not merely overtime work but night work and so there was need to differentiate night from daytime work. Thus xxx xxx xxx "2. To be read as controlling here is Philippine Engineers' Syndicate. et al. National Labor Union. Court of Industrial Relations. Ernesto Talampas. supra. In fact the same computations were not even mentioned in the court's decision which shows that the court found such computations incredible. After the passage of Republic Act 875. 1957] but has also supported such court's ruling that work performed at night should be paid more than work done at daytime. G. 12075. Witnesses for petitioners declared they Labor Standards | To digest (old cases) | Ajean Tuazon| 32 . The earliest cases cited by the petitioner-company. L-11655. NARIC Workers' Union. . and Josias Federico who are themselves among the employees who filed the case for unfair labor practice in the respondent court and are private respondents herein. Jacinto Concepcion thereon. v. but they represented the basic daily wage of Nardo Dayao considered to be in the amount of P7. February 29..for extra compensation for night work falls outside the domain of the industrial court.40 which is the equivalent of the Sunday and Legal Holiday rate at P9. No.400. May 29. supra. 1962 is further corroborated by Exhibits 5. Fernando. 1962]" The petitioner-company's arguments on the respondent court's alleged lack of jurisdiction over additional compensation for work done at night by the respondents is without merit. May 23. Prisco vs. and in a series of cases thereafter. et al. 1964. et al. unfounded. the respondent court pursuant to the Rules of Court should have refrained from the ruling that such contracts of employment were null and void. but We find no cogent reason for concluding that a suit of this nature . G. were discussed lengthily. L-8738. the company contended that there was no law that required the payment of additional compensation for night work unlike an overtime work which is covered by Commonwealth Act No. . this Court has not only upheld the industrial court's assumption of jurisdiction over cases for salary differentials and overtime pay [Chua Workers Union (NLU) vs.." Two issues are raised in the second assignment of error by the petitioner-company. et al. Tan. moral. (NARIC) vs. et al (19 SCRA 130). L-16440. 5836]..00 or P200. No.

The first. Inc. Presented with contracts setting their compensation on an annual basis with an express waiver of extra compensation for work on Sundays and holidays. "We do not share the view taken in the resolution appealed from. maintains a chain of drugstores that are open every day of the week and. the petition is hereby dismissed. OSCO Workers Fraternity Labor Union would suffice by way of refutation. Court of Industrial Relations. vs. With respect to Zenaida Bustamante. HON. she failed to report for work despite the expiration of her suspension on October 23. L-0213 (May 27. in another decision. Ruth Corpuz. a statement by this Court in Ormoc Sugar Co. not without evidence. required the parties to submit their respective position papers. Nos. rollo) The respondent court's ruling on additional compensation for work done at night is. Petitioner's motion for reconsideration was denied by the Minister of Labor in an order 4 dated February 9. 1978. Luz Raymundo and Ruth Corpuz were the employees of Remerco Garments Manufacturing. 1979.R.R. . As the trial Judge correctly said. JJ. The third assignment of error is likewise without merit. like the two aforenamed co-respondents of hers. On March 6. Teehankee (Chairman). 1978 for alleged refusal to render overtime work. through the present Chief Justice. 1978. MOLE. against Ruth Corpuz filed on October 5. LUZ RAYMUNDO and RUTH CORPUZ. Sy Indong Company Rice & Corn Mill. rejected as untenable the theory of the Court of Industrial Relations concerning the imperative needs of all the claimants to testify personally and prove their charges in the complaint. 1978. The decision and resolution appealed from are affirmed with costs against the petitioner. she was treated by one Dr. on appeal. R4-STF-10-6695-78 and R4-STF-10-6670-78. 1978. Zenaida Bustamante opposed the clearance application by filing a complaint for illegal dismissal claiming that her alleged failure to report for work was due to illness. that for services rendered on Sundays and holidays they were not paid for the first four (4) hours and what they only received was the overtime compensation corresponding to the number of hours after or in excess of the first fort hours. Raymundo opposed said application by filing a complaint for illegal dismissal and for money claims. Private respondents appealed the order to the National Labor Relations Commission on March 22. G. the workers did not have much choice. Melencio-Herrera. up to very late at night because of the nature of the pharmaceutical retail business. Hence. Thereafter or more specifically on October 16. 1978. this Court. for abandonment for failing to report for work after the expiration of her suspension on October 23. The contention of petitioners on this point is therefore unfounded'.. on June 24. Private respondents Zenaida Bustamante. 'consequently. granting petitioner's clearance application to terminate the employment of its three (3) employees. . It is also claimed that their nighttime services could well be seen on their respective daily time records. 116. Moreover in Philippine Land-Air-Sea Labor Union (PLASLU) v. petitioner. On this matter. hence the same cannot be waived. issued an order granting petitioner's application for clearance to terminate the employment of private respondents and dismissing their complaints for lack of merit. respondents. petitioner filed a clearance application to dismiss her on grounds of insubordination.. The first. as in fact. a Sunday. 1957). toilets or any other company property. in his dissent from said resolution: xxx xxx xxx In the case of Sanchez v. Sy Indong Company Rice And Corn Mill (11 SCRA 277) We had occasion to re-examine the ruling in Dimayuga. Additional compensation for nighttime work is founded on public policy." The clearance application for her dismissal was filed only on October 5. that. The said employees sought to be dismissed opposed the clearance application by filing separate complaints for illegal dismissal docketed as Case Nos. Moreover. As tersely put: 'We do not share the view taken in the resolution appealed from.R.' Barely eight days later. the order 2 of Acting Director. August 30. IN Philippine Land-Air-Sea labor Union (PLASLU) v. Her request was disapproved. WHEREFORE. 1981. It is pursuant to these constitutional mandates that the courts are ever vigilant to protect the rights of workers who are places in contractually disadvantageous positions and who sign waivers or provisions contrary to law and public policy. 3 On January 20. dated March 6. In fact. MINISTER OF LABOR AND EMPLOYMENT and ZENAIDA BUSTAMANTE. the Acting Director of National Capital Region. no additional evidence was necessary to prove that the private respondents were entitled to additional compensation for whether or not they were entitled to the same is a question of law which the respondent court answered correctly. The ruling in Dimayuga v. 1980. Luz Raymundo and Ruth Corpuz. Workers in our country do not have the luxury or freedom of declining job openings or filing resignations even when some terms and conditions of employment are not only onerous and inequitous but illegal. then on July 24. the above statement was given concrete expression. her rest day. vs. they were penalized with one week's suspension effective October 16. Thus: 'This Court fully agrees with the respondent that quality and not quantity of witnesses should be the primordial consideration in the appraisal of evidence. 1978 for allegedly defacing company's property by placing a check mark on a jacket with a chalk. on October 15. which provides: "Employees are strictly prohibited from defacing or writing on walls of the factory. it is necessary and imperative that they should personally testify and prove the charges in the complaint'. (its employees) illegal. National Capital Region. . We believe that the respondent court acted according to justice and equity and the substantial merits of the case. was also given a warning for refusal to render overtime work on another date. and ordering their reinstatement to their former positions without loss of seniority rights and privileges and with full backwages. declaring the dismissal of Zenaida Bustamante. Plana. 1978 against Luz Raymundo for insubordination for refusal to work on her rest day. The "waiver rule" is not applicable in the case at bar. despite her request for exemption to work on that Sunday. (Article 6. L-0213. The fat that only three of the private respondents testified in court foes not adversely affect the interests of the other respondents in the case. 1985 Feb 28. this petition for certiorari. L-56176-77. Zenaida Bustamante and Ruth Corpuz to their former positions without loss of seniority rights and privileges and with full backwages. after which." The petitioner's contention that its employees fully understood what they signed when they entered into the contracts of employment and that they should be bound by their voluntary commitment's is anachronistic in this time and age. . J. the decision of the trial Judge in their favor is untenable under the rule laid down in Dimayuga vs. the Acting Director of National Capital Region. SO ORDERED. the petitioner-company did not deny that the private respondents rendered nighttime work. whereupon. We stated: "The latter reversed the decision of the trial Judge as regards the reinstatement with backwages of . Makasiar. 1978 for having written a chalk mark on a nylon jacket for export allegedly a violation of Rule 26 of petitioner's rules and regulations.. The case was submitted for conciliation proceedings. (p. the Minister of Labor rendered a decision reversing the appealed order and directed petitioner to reinstate private respondents Luz Raymundo. G. She was subsequently dismissed on October 4. The private respondents were at a disadvantage insofar as the contractual relationship was concerned.worked on regular days and on every other Sunday and also during all holidays. This case arose from three (3) applications for clearance to terminate employment filed by the petitioner on three (3) separate dates. Thus: 'The bases of the awards were not only the respective affidavits of the claimants but the testimonies of 24 witnesses (because 6 were not given credence by the court below) who identified the said 239 claimants. The antecedent facts appearing on record are as follows: During the period of their employment with petitioner. 2nd Division CUEVAS. 1979. Luz Raymundo and Zenaida Bustamante were given three consecutive warnings. filed on October 16.: Petitioner Remerco Garments Manufacturing seeks the nullification of the decision 1 of the Minister of Labor and Employment dated January 21. Civil Code). It is precisely because of this situation that the framers of the Constitution embodied the provisions on social justice (Section 6. MOLE. Inc. 1981. and that. Article II) and protection to labor (Section 9. a domestic corporation engaged in the business of manufacturing and exporting of men's. 1978. Labor Standards | To digest (old cases) | Ajean Tuazon| 33 . For failure to report for work despite denial of her request. concur. No. No. she was notified of her dismissal effective upon expiration of her suspension.. Lorenzo Yuson for fever and severe stomach ache on October 15. 1981. Article II) in the Declaration of Principles And State Policies. and the third one. therefore. and that such payment is being indicated in the overtime pay for work done in excess of eight hours on regular working days. Vasquez and Relova.. May 27. elevated the records of the case to the Labor Appeals and Review Staff. having failed to do so. for some stores. Like Raymundo. Finally. WEEKLY REST PERIOD REMERCO GARMENTS MANUFACTURING. Meanwhile. this Court stated: "To the reproach against the challenged order in the brief of petitioners in view of only two of the seven claimants testifying. supra. 1978. Office of the Minister of Labor on April 17. . It appears that Luz Raymundo was required to work on October 15. Petitioner contends that said failure constitutes abandonment which it later invoke as ground for clearance application to dismiss her from employment filed on November 10. the case was deemed submitted for resolution. and the third. Court of Industrial Relations. The said decision set aside. without regard to technicalities or legal forms and should be sustained. MOLE. 1978 which she also opposed by filing a complaint for illegal dismissal. 1957) has been abandoned in later rulings of this Court. against Zenaida Bustamante on November 10. the Acting Director of the National Capital Region. MOLE. the second. 1978. not as exceptions to the rule but a part of the regular course of employment. Court of Industrial Relations (G. ladies' and children's dresses. 1978. upon the theory that this is not a class suit. 1979. The respondents knew that they had to work Sundays and holidays and at night. but no settlement was arrived at. The Mercury Drug Co.

1981 a motion 5 which reads: "PETITIONER respectfully states that one of the private respondents. A copy of the affidavit is hereto attached and made integral part hereof. October 15. And petitioner did not insist on this alleged non-submission of evidence apparently because the Acting Director of the National Capital Region decided the case in its favor. October 15. 1978) . still. Fernando. Further. after failing to arrive at an amicable settlement. Even on the assumption that no documentary evidence was ever submitted by private respondents.is whether or not sufficient legal grounds exist under the relevant facts and applicable law to justify the dismissal of private respondents Luz Raymundo and Zenaida Bustamante. Ministry of Labor and striking out the comment of private respondents in this case as to her. It is a penalty out of proportion to the offense committed . it is a recognized principle that abandonment of work by an employee is inconsistent with the immediate filing of a complaint for illegal dismissal. 1978. becomes even more apparent in the light of the express provision of the Constitution.when after all. The dismissal came as an afterthought because private respondents were already suspended for one week. 11 In the case of Luz Raymundo. In fact." In a Resolution 6 dated November 4. not to work on that Sunday. The records show that the day before. Besides. Like Luz Raymundo. as well as the motion to dismiss 9 personally filed by Ruth Corpuz de Leon assisted by her husband Jesus de Leon and her complaint/claim which was confirmed by petitioner in its Comment 10 on said motion to dismiss. At that time. and does not justify dismissal of the appeal. Discretionary Justice. to quote from Bultmann. Zenaida Bustamante and Ruth Corpuz. 1978 to oppose the clearance application to dismiss her. final and executory. on the other hand. In support of the jurisdictional issue raised. labor law determinations. is too severe a penalty. Besides. Chief Justice Enrique M. WHEREFORE. and stating that she did not execute and sign the appeal to the respondent National Labor Relations Commission and had no intention of doing so and it was private respondent Luz Raymundo who signed her name on the appeal.After the Solicitor General and private respondents filed their respective COMMENTS on the petition in compliance with the resolution of this Court of March 16. Lorenzo Yuson for fever and severe stomach ache as shown by the medical certificate (Exhibit "C"). for what is at stake is not only private respondents' positions but also their means of livelihood. Ministry of Labor. the right of an employer to dismiss an employee differs from and should not be confused with the manner in which such right is exercised. decided the case on the merits. her one week suspension arose from her failure to report for work on a Sunday. it must be noted that Zenaida Bustamante filed a complaint for illegal dismissal on November 15. in the case of Zenaida Bustamante. Of course. GRANTED the dismissal of the complaint/claim of respondent Ruth Corpuz de Leon against petitioner. Villamor 15 that "technicality when it deserts its proper office as an aid to justice and becomes its great hindrance and chief enemy. Having failed to manifest its objection. 1981. and in lieu thereof. to provide each of his employees a rest period of not less than twenty four (24) hours after every six (6) consecutive normal work days. both as aspects of the protection accorded to labor. 18 Petitioner's belated claim of lack of jurisdiction on the ground that it was the Minister of Labor. petitioner. lacks merit. As herein earlier stated. Region 4. she allegedly abandoned her employment by failing to report for work after the expiration of her suspension on October 23." In a more forceful language. it is the contention of petitioner that it was denied due process of law because it was not given the opportunity to present evidence to rebut private respondents' documentary evidence allegedly submitted only on appeal." More recently. all the equities of the case must be accorded their due weight. sustain the order of the Acting Director of the National Capital Region. a motion for reconsideration filed by petitioner invoking due process cured the defect based on the alleged lack of procedural due process. 1981. Basically. even assuming petitioner's charges to be true. Stripped of procedural technicalities. 19 On its argument that it was denied the opportunity to rebut private respondents' documentary evidence allegedly submitted only on appeal. Surprisingly though. the exercise of such a prerogative. International Ceramics Manufacturing Co. Ruth Corpuz had withdrawn her complaint/claim against petitioner.." 13 The constitutional mandate of security of tenure and just and humane conditions of work. however. we held that in appeals in labor cases. Region 4. On the other hand. As regards the due process argument.failure to report for work on a Sunday (October 15. requiring the State to assure the workers "security of tenure" and "just and humane conditions of work. the entire record of the case was reviewed by the respondent Minister of Labor and in fact. she was ill and in fact treated by Dr. should be not only secundum retionem but also secundum caritatem. the employer is required to present evidence before the former can present any Labor Standards | To digest (old cases) | Ajean Tuazon| 34 . hence. While it is true that it is the sole prerogative of the management to dismiss or lay-off an employee. the two (2) remaining employees. petitioner filed on June 25. MOLE. It must not be oppressive and abusive since it affects one's person and property. Our answer is in the negative. subject matter of the petition. Meanwhile. At the inception of the case however. she requested exemption from work on that Sunday. acting on the aforequoted motion. R4STF-10-6695-78. On the consequent charge of abandonment. speaking for the Court. was not without reason because on that day. petitioner contends that private respondents' appeal from the order dated March 6. petitioner contend that it was denied the opportunity to cross-examine private respondents and rebut their documentary evidence allegedly submitted only on appeal. Mr. this Court. R4-STF-10-6695-78. We find the objections raised grounded on procedural technicalities devoid of merit. insofar as it orders reinstatement of Ruth Corpuz de Leon without loss of seniority right and privilege and with full backwages. Rule XIII of its Implementing Rules and Regulations. absolving petitioner from her complaint in Case No. agreed to submit their case for resolution on the basis of their respective position papers. The illegality of the dismissal of the herein private respondents. Office of the Minister of Labor in an order dated April 17. it was held that dismissal of an employee's appeal on a purely technical ground is inconsistent with the constitutional mandate on protection to labor. The disapproval of her request by top management reasonably creates the impression of a hostile attitude characterizing the efforts of petitioner (Management) of easing out with undue haste the services of private respondents. 1979 with the knowledge of petitioner. constitutes one of the just causes for termination under Article 283 of the New Labor Code. 1978. under the facts and circumstances disclosed. October 15. has executed a sworn statement manifesting her desire to withdraw the complaint against petitioner in Case No. the Comment 7 of private respondents Luz Raymundo and Zenaida Bustamante thereon. thus making the order appealed from. to follow Davis in his masterly work. suspension would suffice. therefore. 17 Likewise. The lack of sympathetic understanding of the underlying reasons for their absence aggravated by the indecent haste attendant to the efforts of petitioner to terminate the services of private respondents portray a total disregard of the constitutional mandate of "security of tenure" and "just and humane conditions of work" which the State is mandated to protect. 12 It would be illogical for Zenaida Bustamante to abandon her job and then immediately file an action seeking her reinstatement. granting the clearance application to dismiss Luz Raymundo. must be made without abuse of discretion. and the Reply 8 of petitioner thereto. that where a decision may be made to rest on informed judgment rather than rigid rules. We cannot countenance petitioner's stance of speculating on the possibility of a favorable decision from the Minister of Labor and later on question the latter's jurisdiction after an adverse decision. it is interesting to note that in the application for clearance to dismiss employees. no employee would recklessly abandon her job knowing fully well the acute unemployment problem then existing and the difficulty of looking for a means of livelihood. the petition was given due course. and not the National Labor Relations Commission. It is the duty of every employer. non-service of the copy of the appeal or appeal memorandum to the adverse party is not a jurisdictional defect. 14 Even if there really existed an urgency to require work on a rest day. The records of the case were forwarded by the Acting Director of the National Capital Region to the Labor Appeals and Review Staff. which acted on the appeal pursuant to Article 217 of the New Labor. and her failure to report that day can not be considered as gross insubordination. deserves scant consideration from court. she was charged of insubordination for allegedly refusing to work on a Sunday. Finally. on appeal. absolving petitioner from any and all of the charges contained in the complaint. Ruth Corpuz de Leon. more so when justifiable grounds exist for failure to report for work. Inc. The penalty of dismissal from the service. petitioner is now estopped from questioning the exercise of jurisdiction by the Minister of Labor after an adverse decision have been rendered against it. in Meracap vs. the decisive issue before Us . (which is not in the instant case) outright dismissal from employment is so severe a consequence. 1979 of the Acting Director of the National Capital Region granting the application for clearance to dismiss them was not perfected on time for failure to furnish petitioner a copy of the appeal pursuant to Article 223 of the New Labor Code and Section 9. We have consistently adhered to the principle clearly held in Alonso vs. 1978. she was granted a clearance slip (Exhibit "B") allowing her to be absent on that Sunday by her immediate supervisor (Department Head). it is only after the rendition of an adverse decision that petitioner now raised this matter of nonsubmission of documentary evidence. petitioner has not shown that Luz Raymundo's failure to report for work on that Sunday. From the other standpoint. 16 stated "for the strictly juridical standpoint. the resolution of the instant appeal applies only to Luz Raymundo and Zenaida Bustamante. militates against the severity of the sanction imposed on private respondents. claim otherwise. She had a valid ground. whether operating for profit or not. The New Labor Code is clear on this point. 1978 which as explained in her opposition to the clearance application. which was her rest day. it is respectfully prayed that an order issue vacating the decision of the respondent Minister of Labor and Employment. it cannot be too strongly stressed. both parties. Petitioner would want Us to annul the decision of the Minister of Labor assailed to have been rendered without and/or lack of jurisdiction. The mere failure to furnish copy of the appeal memorandum to adverse party is not a fatal defect. but chose instead to await the decision of the Minister of Labor. While private respondents insisted on its claim that they have submitted their documentary evidence together with their position papers.

m. INTERPHIL LABORATORIES. this Office hereby RESOLVES to APPROVE and ADOPT the same as the decision in this case.. petitioner union filed with the NCMB a Notice of Strike citing unfair labor practice allegedly committed by respondent company.. THE HONORABLE FIFTH DIVISION OF THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION.R. SECRETARY OF LABOR AND EMPLOYMENT.m. told Salazar that the employees would only return to their normal work schedule if the company would agree to their demands as to the effectivity and duration of the new CBA. the union president. hence: WHEREFORE. 1st Division) KAPUNAN. On 12 February 1994. respectively. On 14 February 1994. The appealed decision of the Minister of Labor and Employment dated January 21. the employees told him to "ask the union officers. petitioner union filed an “Urgent Manifestation and Motion to Consolidate the Instant Case and to Suspend Proceedings” seeking the consolidation of the case with the labor dispute pending before the Secretary of Labor. the present recourse where petitioner alleged: THE HONORABLE FIFTH DIVISION OF THE COURT OF APPEALS. 00-09-05529-93. the union staged a strike. In March 1993.”[5] On the other hand. They inquired once more about the CBA status and received the same reply from Salazar. The case.R. LIKE THE HONORABLE PUBLIC RESPONDENT IN THE PROCEEDINGS BELOW. THERE WAS ANY MISDEED COMMITTED. On 05 September 1995. The union’s motion for reconsideration was likewise denied. Prior to the expiration of the CBA or sometime in February 1993. Ocampo requested for a meeting to discuss the duration and effectivity of the CBA. In April 1993. Salazar told the union officers that the matter could be best discussed during the formal negotiations which would start soon.. no part. starting 01 August 1993. and judgment is hereby rendered: (1) Declaring the ‘overtime boycott’ and ‘work slowdown’ as illegal strike. Salazar acceded and a meeting was held on 15 April 1993 where the union officers asked whether Salazar would be amenable to make the new CBA effective for two (2) years. was approached by Nestor Ocampo. after a closer examination of the records. however.[2] On 14 May 1993.m. 1978. 1978. and from 6:00 p. DURING THE PENDENCY OF THE CASE. Petitioner Remerco Garments Manufacturing is hereby ordered to reinstate Luz Raymundo and Zenaida Bustamante to their former or substantially equivalent position without loss of seniority rights and privileges with three-year (3) backwages computed from October 23.m. thus substantially delaying the production of the company. Notwithstanding the foregoing. on 06 June 1994. that indeed there is no reasonable ground for the outright dismissal of Luz Raymundo and Zenaida Bustamante. AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION WHEN IT HELD THAT THE SECRETARY OF LABOR AND EMPLOYMENT HAS JURISDICTION OVER A CASE (A PETITION TO DECLARE STRIKE ILLEGAL) WHICH HAD LONG BEEN FILED AND PENDING BEFORE THE LABOR ARBITER.[3] The parties. INTERPHIL LABORATORIES EMPLOYEES UNION-FFW. a company engaged in the business of manufacturing and packaging pharmaceutical products. Quisumbing. concur. No costs. and Hernando Clemente. In the now questioned decision promulgated on 29 December 1999. petitioners. Caday. to have lost their employment status. was assigned to Labor Arbiter Manuel R. Petitioner union moved for the reconsideration of the order but its motion was denied. On the matter of the authority and jurisdiction of the Secretary of Labor and Employment to rule on the illegal strike committed by petitioner union. all the rank-and-file employees of the company refused to follow their regular two-shift work schedule of from 6:00 a. We are convinced. AND HONORABLE LEONARDO A. When Salazar inquired about the reason for their refusal to follow their normal work schedule. SO ORDERED.. promulgated on 29 December 1999. QUISUMBING. AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION. and the resolution. the employees stopped working and left their workplace without sealing the containers and securing the raw materials they were working on. Caday to be supported by substantial evidence. Secretary of Labor Nieves Confesor issued an assumption order[4] over the labor dispute. finding the said Report of Labor Arbiter Manuel R. INC. At 2:00 p.: Assailed in this petition for review on certiorari are the decision.”[6] The same order pronounced that “(a)ll pending cases which are direct offshoots of the instant labor dispute are hereby subsumed herewith. On 03 September 1993. declared that it would still be premature to discuss the matter and that the company could not make a decision at the moment. docketed NLRC-NCR Case No. the case before Labor Arbiter Caday continued. THERESA MONTEJO. On 24 January 1994. On 16 March 1994. the overtime boycott continued. respondent company filed with the National Labor Relations Commission (NLRC) a petition to declare illegal petitioner union’s “overtime boycott” and “work slowdown” which. directed the Labor Arbiters Caday and M. Brillantes. and (3) Finding the respondents guilty of unfair labor practice for violating the then existing CBA which prohibits the union or any employee during the existence of the CBA from staging a strike or engaging in slowdown or interruption of work and ordering them to cease and desist from further committing the aforesaid illegal acts. Secretary Confesor issued an order directing respondent company to “immediately accept all striking workers. IF INDEED. Petitioner therefore is under obligation to REINSTATE Luz Raymundo and Zenaida Bustamante to their former or substantially equivalent positions without loss of seniority rights and privileges with three-year (3) backwages 20 to be computed from October 23. ENRICO GONZALES and MA. Culled from the questioned decision.. WHEREFORE. Allesandro G. COMMITTED GRAVE ABUSE OF DISCRETION. They had a Collective Bargaining Agreement (CBA) effective from 01 August 1990 to 31 July 1993. J. The two union officers inquired about the stand of the company regarding the duration of the CBA which was set to expire in a few months. petitioner union submitted with respondent company its CBA proposal.. On 02 March 1994. amounted to illegal strike. Ocampo and Clemente again approached Salazar. promulgated on 05 April 2000. after finding that the issues raised would require a formal hearing and the presentation of evidentiary matters.. respondents. a union director.[1] Vice-President-Human Resources Department of respondent company. Salazar. to 6:00 p. AS TANTAMOUNT TO CONDONATION. Labor Arbiter Caday submitted his recommendation to the then Secretary of Labor Leonardo A. WHEN IT DID NOT DECLARE PRIVATE RESPONDENT’S ACT OF EXTENDING SUBSTANTIAL SEPARATION PACKAGE TO ALMOST ALL INVOLVED OFFICERS OF PETITIONER UNION.m.m. respondent company filed with the National Conciliation and Mediation Board (NCMB) an urgent request for preventive mediation aimed to help the parties in their CBA negotiations. the same is hereby DISMISSED.contrary evidence.. according to respondent company. Makasiar. The very next day. (2) Declaring the respondent union officers namely: Nestor Ocampo President Carmelo Santos Vice-President Marites Montejo Treasurer/Board Member Rico Gonzales Auditor Rod Abuan Director Segundino Flores Director Hernando Clemente Director who spearheaded and led the overtime boycott and work slowdown. shop stewards and union members back to work under the same terms and conditions prevailing prior to the strike. However. Acting Labor Secretary Jose S. Sol del Rosario to proceed with the hearing of the cases before them and to thereafter submit their report and recommendation to his office. THE HONORABLE FIFTH DIVISION OF THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION. Since the union was apparently unsatisfied with the answer of the company. Salazar immediately asked for a meeting with the union officers. or on 16 April 1993." To minimize the damage the overtime boycott was causing the company. including the fifty-three (53) terminated union officers.”[7] In the interim. finding the instant petition to be without merit. Salazar again told the union officers that the matter could be better discussed during the formal renegotiations of the CBA. of the Court of Appeals in CA-G. Enrico Gonzales. Aquino. the appellate court dismissed the petition. failed to arrive at an agreement and on 15 November 1993.[9] We sustain the questioned decision. Inc. the facts of the case are as follows: Interphil Laboratories Employees Union-FFW is the sole and exclusive bargaining agent of the rank-and-file employees of Interphil Laboratories. No. 50978. a union director. Despite objection by respondent company. it is undisputed that the petition to declare the strike illegal before Labor Arbiter Caday Labor Standards | To digest (old cases) | Ajean Tuazon| 35 . vs. On 22 October 1993. JJ. and the latter filed its counter-proposal. AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION WHEN IT COMPLETELY DISREGARDED “PAROL EVIDENCE RULE” IN THE EVALUATION AND APPRECIATION OF EVIDENCE PROFERRED BY THE PARTIES. J. the date of expiration of their suspension. and 2:00 a. dated 13 August 1997. and to pay all the unpaid accrued year end benefits of its employees in 1993. Hence. Salazar. SP No. In the meeting. The union went to the Court of Appeals via a petition for certiorari. 2001 Dec 19. petitioner union was directed to “strictly and immediately comply with the return to work orders issued by (the) Office x x x. Labor Arbiter Caday held in abeyance the proceedings before him. In addition. Concepcion Jr. the employees started to engage in a work slowdown campaign during the time they were working.[8] Then Secretary Quisumbing approved and adopted the report in his Order. 142824. respondent company filed with Office of the Secretary of Labor and Employment a petition for assumption of jurisdiction. 1981 is hereby AFFIRMED. G. to 6:00 a. Petitioner's technical objections pointedly create an impression of the weakness of its stand or the merits of the case. Abad Santos and Escolin. however.

1993. while in the overtime permits. Aside from the foregoing undisputed testimonies of Salazar. the testimonies of other Department Managers pointing to the union officers as the instigators of the overtime boycott and work slowdown. the rules of evidence prevailing in courts of law or equity are not controlling. The two-shift schedule effectively changed the working hours stipulated in the CBA.M.M.m.m. "P"). In early April. at the discretion of the company. this authority to assume jurisdiction over the said labor dispute must include and extend to all questions and controversies arising therefrom.M.M. ‘(i)t is fundamental that a statute is to be read in a manner that would breathe life into it. to 10:00 P.M. and 6:00 A. of the following day that has been going on since 1988. p. When he answered that it was still premature to discuss the matter. Acceding to the request.[18] As to the second issue of whether or not the respondents have engaged in "overtime boycott" and "work slowdown" from April 16. and decide the same accordingly. Secretary of Labor and Associated Labor Union (ALU)[10] where the Court declared: In the present case. union Director Enrico C. Alessandro G. he asked them why the regular work schedule was not being followed by the employees. However. testimony of Alessandro G.M.M. of the following day will be further shown in the discussion of the second issue. to 6:00 P.M. When answered that the management could not decide on the matter at the moment and to have it discussed and agreed upon during the formal renegotiations. This is evident from the opening proviso therein reading ‘(e)xcept as otherwise provided under this Code x x x.m. This query was followed up sometime in March.M.’ Plainly. to 6:00 A. na isang Direktor ng Unyon..s.M. Noon Pebrero 1993. the very next day. The regular working hours for the Company shall be from 7:30 A. respectively. wherein it is claimed that the company has not been computing correctly the night premium and overtime pay for work rendered between 2:00 A. the parties acceded and participated in the proceedings. Moreover. 1994). the report and recommendation of Labor Arbiter Caday was not only adopted by then Secretary of Labor Quisumbing but it was likewise affirmed by the Court of Appeals. 1993. the subsequent participation of petitioner union in the continuation of the hearing was in effect an affirmation of the jurisdiction of the Secretary of Labor. sinabi ni Rod Abuan.[11] Anent the alleged misappreciation of the evidence proffered by the parties. must be accorded due respect by the Supreme Court.M. 1994). Affidavit of Alessandro G.n. To hold the contrary may even lead to the absurd and undesirable result wherein the Secretary and the labor arbiter concerned may have diametrically opposed rulings. Otherwise. In fact.s. the Labor Arbiter is not precluded from accepting and evaluating evidence other than. Gonzales. they abruptly stopped working at 2:00 P. the evidence presented is equally crystal clear that the "overtime boycott" and "work slowdown" committed by the respondents amounted to illegal strike. Santos. Sa miting na iyon. he requested for a meeting with the union officers. and even contrary to. 1993. his name appeared but without his signatures. The schedule of shift work shall be maintained. April 16. both amounting to illegal strike. 26-31. when after the 8-hours work. its officers and members about the existence of the regular overtime schedule of 6:00 A.M. leaving their place of work without sealing the containers and securing the raw materials they were working on.[15] Rules of procedure and evidence are not applied in a very rigid and technical sense in labor cases.n.A normal workday shall consist of not more than eight (8) hours. In any event. 8. The employees are deemed to have waived the eight-hour schedule since they followed. to 6:00 p. when sufficiently supported by the evidence on record. hearing on August 9. to 4:30 P. should such change be necessary for its operations. at 2:00 P. and 6:00 P. which were passed around daily for the employees to sign. however the company may change the prevailing work time at its discretion.M. a meeting was held on April 15. exceptions thereto.M. As the employees assented by practice to this arrangement. The reliance on the parol evidence rule is misplaced. the issuance of the assailed orders is within the province of the Secretary as authorized by Article 263(g) of the Labor Code and Article 217(a) and (5) of the same Code. He answered that the matter could be best discussed during the formal renegotiations which anyway was to start soon. 1993. Salazar. it cannot be denied that the issues of “overtime boycott” and “work slowdown” amounting to illegal strike before Labor Arbiter Caday are intertwined with the labor dispute before the Labor Secretary. 1993. (tsn pp. and 6:00 P. to 6:00 A. Labor Arbiter Caday found that respondent company had to adopt a continuous 24-hour work daily schedule by reason of the nature of its business and the demands of its clients. but contemplates. As undisputably testified to by Mr. the Secretary would not be able to effectively and efficiently dispose of the primary dispute.s. is quoted hereunder: “2. the CBA. As the appellate court pointed out.M. and when on the 6 to 6 shifts. causing considerable delay in the production and complaints from the clients/customers (Exh.M. the union Vice-President Carmelo C. his schedule was sometime at 6:00 A. and sometime at 6:00 P. to 6:00 A. testified that when in 1992 he was still a Quality Control Inspector at the Sucat Plant of the company. Sinabihan rin ako ni Tessie Montejo na Labor Standards | To digest (old cases) | Ajean Tuazon| 36 . to 6:00 P. As Labor Arbiter Caday elucidated in his report: Respondents' attempt to deny the existence of such regular overtime schedule is belied by their own awareness of the existence of the regular overtime schedule of 6:00 A. and 6:00 P. sometime at 6:00 A. According to petitioner union. Likewise. to 6:00 a. 1993 wherein the union officers asked him if he would agree to make the new CBA effective on August 1. pp. vs. 1994)..M. Salazar during hearing on August 9. and 2:00 A. taken conjointly and rationally construed to subserve the objective of the jurisdiction vested in the Secretary. to 6:00 P. We see no reason to depart from their findings. all the rank and file employees of the company refused to follow their regular two-shift work schedule of 6:00 A.M. petitioner union even asked Labor Arbiter Caday to suspend the proceedings before him and consolidate the same with the case before the Secretary of Labor. 15.was filed long before the Secretary of Labor and Employment issued the assumption order on 14 February 1994. hearing of January 10. In fact. all employees will return to the normal work schedule of two 12-hour shifts. demanded that the company make a recomputation of the overtime records of the employees from 1987 (Exh.[17] It is evident from the foregoing provision that the working hours may be changed. Even their own witness. to 4:30 p. Article 217 of the Labor Code is not without.[16] Hence.m." Alarmed by the overtime boycott and the damage it was causing the company. hearing of January 10.M. subject to certain conditions. they cannot now be heard to claim that the overtime boycott is justified because they were not obliged to work beyond eight hours.M. As we have said. In the meeting. the company's Vice-President-Human Resources Department.. the union president requested for a meeting to discuss the duration and effectivity of the CBA. 1994. the two-shift schedule while their CBA was still in force and even prior thereto. it has become a habit to them to sign the overtime schedule weekly (t. In the case before us. to 2:00 P. the provisions of their CBA on working hours clearly stated that the normal working hours were “from 7:30 a. 6.M.. The appellate court also correctly held that the question of the Secretary of Labor and Employment’s jurisdiction over labor-related disputes was already settled in International Pharmaceutical. The awareness of the respondent union. Petitioner union maintained that the Labor Arbiter and the appellate court disregarded the “parol evidence rule”[13] when they upheld the allegation of respondent company that the work schedule of its employees was from 6:00 a. In labor cases pending before the Commission or the Labor Arbiter. and union Director Enrico Gonzales. Article 263(g) of the Labor Code was meant to make both the Secretary (or the various regional directors) and the labor arbiters share jurisdiction.M. told him that if management would agree to a two-year duration for the new CBA and an effectivity date of August 1. 1993. undisputed because the respondents' counsel waived his cross examination (t. 9 to 12.m. Hon. to 6:00 A. the Secretary was explicitly granted by Article 263(g) of the Labor Code the authority to assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest. ipinatawag ng Presidente ng Unyon na si Nestor Ocampo ang lahat ng taga-maintenance ng bawat departamento upang dumalo sa isang miting.M. 7-9. 1993 and the term thereof to be valid for only two (2) years. 1993 up to March 7. "Y") a union member at the time the concerted activities of the respondents took place. he was approached by the union President Nestor Ocampo and Union Director Hernando Clemente who asked him as to what was the stand of the company regarding the duration of the CBA between the company and which was set to expire on July 31. na mayroon ilalabas na memo ang Unyon na nag-uutos sa mga empleyado ng Kompanya na mag-imbento ng sari-saring dahilan para lang hindi sila makapagtrabaho ng "overtime". knowing fully well that there was also a directive for Labor Arbiter Caday to thereafter submit his report and recommendation to the Secretary. In fine.m. It further contended that the Labor Arbiter as well as the Court of Appeal should not have admitted any other evidence contrary to what was stated in the CBA. This testimonial narrations of Salazar was. the parties stipulated: Section 1. Salazar which formed part of his direct testimony). and from 6:00 p. the testimony of Epifanio Salumbides (Exh. pp. When he saw the workers leaving before the end of their shift. rather than defeat it.M. Regular Working Hours .M. 1994). the overtime boycott continued and the employees at the same time employed a work slowdown campaign during working hours. dated March 1. shift. and his answer was the same. 9-10. it is axiomatic that the factual findings of the Labor Arbiter. "O". what is stated in..n. as earlier said.”[14] Petitioner union underscored that the regular work hours for the company was only eight (8) hours. he received the commensurate pay (t. with the support of the other union officers. When Acting Labor Secretary Brillantes ordered Labor Arbiter Caday to continue with the hearing of the illegal strike case. sometime in February.M. It was established that the employees adhered to the said work schedule since 1988. to 6:00 P. Necessarily.M. of the 6:00 P.M. 1993. Proof of this is the case undisputedly filed by the union for and in behalf of its members. and that the employees shall observe such rules as have been laid down by the company. without any question or complaint. Inc.[12] Here. he however had rendered overtime during those dates and was paid because unlike in other departments. including cases over which the labor arbiter has exclusive jurisdiction. All employees shall observe such rules as have been laid down by the company for the purpose of effecting control over working hours. to 6:00 A. should such change be necessary in the operations of the Company. on 16 March 1994. he asked them why and their reply was "asked (sic) the union officers.

to use the words of Labor Arbiter Caday. pinilit mo pa ring pumasok. Noong umaga ng ika-15 ng Abril 1993." (Rollo. But undeniably. considering perhaps the financial hardships experienced by its employees and the economic situation prevailing.. vs. ako ay pinagmumura ng mga opisyales ng Unyon kaya't ako ay madaliang umalis. No. in relation to a labor dispute. therefore.Auditor Boy Alcantara ------.[24] Finally. x x x “3. Dahil dito wala ng empleyadong nag-overtime at sabay-sabay silang umalis. Rollo. as it is hereby dismissed. because while the employees “continue to work and remain at their positions and accept the wages paid to them. Tinanong niya muli kung bakit ako pumasok. NLRC. Evidently.Director Tess Montejo------. she was on union leave. has become the law of the case which can no longer be disturbed without doing violence to the time-honored principle of res-judicata. "WHEREFORE. 1993 up to March 7. concur.” What has just been said makes unnecessary resolution of SMC’s argument that the workers’ concerted refusal to adhere to the work schedule in force for the last several years. J. or statute or rule. The Court views the gesture of respondent company as an act of generosity for which it should not be punished. Pardo. 1993 up to March 7. and we are constrained to uphold the dismissal and closure of the case. ----------------------------------------------------------------------------------------------------------------------------------------------------------TEOFILO ARICA. nagsabi na si Danny Tansiongco ng "showtime". vs. JJ. This case stemmed from a complaint filed on April 9. from all the foregoing. 1985 (Annex "E". 1984 against private respondent Stanfilco for assembly time. as correctly called by petitioner company. JAIME BUGTAY. OSCAR BASAL. XI. dated 12 April 1999. in view of the foregoing considerations. for lack of merit. let the appeal be. NLRC. the thirty-minute assembly time long practiced cannot be considered waiting time or work time and. as well as in the petition before this Court. petitioners.” as a willful reduction in the rate of work by concerted action of workers for the purpose of restricting the output of the employer. as an activity by which workers. Dany Tansiongco at Vicky Baron. Sinabi ko na wala akong maibigay na dahilan para lang hindi pumasok at "mag-overtime. sa opisina ng Unyon. a Quality Control Analyst. 1986. and Ynares-Santiago. pp. "The Commission cannot ignore these hard facts. in extending substantial separation package to some officers of petitioner union during the pendency of this case.Bise-Presidente Nanding Clemente -. and STANDARD (PHILIPPINES) FRUIT CORPORATION. Hence. Labor Standards | To digest (old cases) | Ajean Tuazon| 37 .) Fruits Corporation (STANFILCO) which affirmed the decision of Labor Arbiter Pedro C. The Court is in substantial agreement with the petitioner’s concept of a slowdown as a “strike on the installment plan. Encarnacion as Members. Nakalipas ang dalawaang buwan at noong unang bahagi ng Abril 1993. 41-50). 1994. XI. an inherently illegal activity essentially illegal even in the absence of a no-strike clause in a collective bargaining contract. xxx[19] It is thus undisputed that members of the union by their own volition decided not to render overtime services in April 1993. the productivity reports she had earlier shown was not prepared by her since she had no personal knowledge of the reports (t. and 561 OTHERS." “4. Pagpasok ko. 1993 na Sabado at Linggo. More importantly. SAMUEL LABAJO.e. estopped complainants from pursuing this case. G. 78210. condoned the illegal acts they committed. they “work on their own terms. the instant complaint should therefore be. overtime boycott and work slowdown from April 16. As such. members of herein petitioner. the respondents' denial of having a hand in the work slowdown since there was no change in the performance and work efficiency for the year 1993 as compared to the previous year was even rebuffed by their witness M. Special Task Force. Sinabihan kami na huwag ng mag-ovetime pag nagbigay ng senyas ang Unyon ng "showtime. 2327 MC-XI-84 entitled Teofilo Arica et al. respondents' unjustified unilateral alteration of the 24-hour work schedule thru their concerted activities of "overtime boycott" and "work slowdown" from April 16. Standard (Phil. 30-40. Commissioner Conrado Maglaya.." "Management ka ba o Unyonista. DANILO BERNABE. sit-down strikes of any kind. filed with the Court of Appeals. BENJAMIN JUMAMOY. Theresa Montejo. SO ORDERED. because the higher production for the years previous to 1993 was reached when the employees regularly rendered overtime work. or any other interference with any of the operations of the COMPANY during the term of xxx (their collective bargaining) agreement. we cannot but agree with respondent that the pronouncement in that earlier case. i. RICARDO RICHA. DISMISSED. Commissioner Rosario D.s. secondary boycotts. upholding the Labor Arbiters' decision. huwag ka na lang pumasok sa Biyernes para hindi ka masabihan ng magtrabaho ng Sabado at Linggo' na siya namang araw ng "overtime" ko. C. sympathetic or general strikes. picketing. the customary functions referred to in the above-quoted provision of the agreement includes the longstanding practice and institutionalized non-compensable assembly time.R." Pagkatapos nito. x x x" Likewise. The Resolution's dispositive portion reads: "Surely. 1994 had resulted not only in financial losses to the company but also damaged its business reputation. Tinanong ako ni Rod Aguan kung bakit ako "nag-ovetime" gayong "Binigyan ka na namin ng instruction na huwag pumasok.” x x x. JOVENAL ENRIQUEZ.” in other words. WHEREFORE. After the submission by the parties of their respective position papers (Annex "C".[25] Respondent company could have withheld these benefits pending the final resolution of this case. HONORABLE ROSARIO B. can be classified as a strike on an installment basis. on their own volition and in keeping with the regular working hours in the Company x x x decided not to render overtime". "WHEREFORE.” they at the same time “select what part of their allotted tasks they care to perform of their own volition or refuse openly or secretly. promulgated its Resolution.Shop Steward Rod Abuan ----------. MELQUIADES DOHINO. Jr. the First Division of public respondent NLRC composed of Acting Presiding Commissioner Franklin Drilon. Ako ay pumasok rin noong Abril 17 at 18. Annex "D". 1989 February 28. Davao City dismissing the claim of petitioners. pp. in effect. For on cross-examination. 2nd Division) PARAS. the “overtime boycott” or “work slowdown” by the employees constituted a violation of their CBA. RAMON ACENA. Nadatnan ko doon ang halos lahat ng opisyales ng Unyon na sina: Nestor Ocampo ----...Presidente Carmelo Santos ----. not compensable. p. they were still considered employees of the company. maliban sa akin. pp. This. MAGLAYA. 32-35. J. Yet. “5. Puno. SO ORDERED. to do other work. with the aforementioned Regional Arbitration Branch No. moral damages and attorney's fees. without a complete stoppage of work.Director at marami pang iba na hindi ko na maala-ala. the Court cannot agree with the proposition that respondent company. is a slowdown.[21] Such admission confirmed the allegation of respondent company that petitioner engaged in “overtime boycott” and “work slowdown” which. miniting kami ng Shop Stewards namin na sina Ariel Abenoja. pp. after considering the appeal memorandum of complainant and the opposition of respondents. FERMIN DAAROL. to force the petitioner company to accede to their unreasonable demands. in effect. to stage a strike or engage in slowdown or interruption of work. ako'y pinaligiran ng mga opisyales ng Unyon. 1986 in NLRC Case No. she (Montejo) admitted that she could not answer how she was able to prepare the productivity reports from May 1993 to February 1994 because from April 1993 up to April 1994. RODOLFO CONCEPCION. Davide. Labor Arbiter Pedro C.[20] Petitioner union even admitted this in its Memorandum. HONORABLE CONRADO B. 1995).[22] In Ilaw at Buklod ng Manggagawa vs. respondents. NATIONAL LABOR RELATIONS COMMISSION.siya namang Treasurer ng Unyon na 'Manny. ENCARNACION. HEREIN REPRESENTED BY KORONADO B. Ramos." Sinagot ko na ako ay Unyonista. ALBERTO BALATRO. which prohibits the union or employee. NESTOR NORBE.n. (Chairman). Regional Arbitration Branch No.Director Enrico Gonzales ----. on official leave. Davao City. was taken as a means to coerce respondent company to yield to its unreasonable demands.[23] this Court ruled: x x x (T)he concerted activity in question would still be illicit because contrary to the workers’ explicit contractual commitment “that there shall be no strikes. HONORABLE FRANKLIN DRILON. boycotts. respondent company chose to let its employees avail of their separation benefits.: This is a petition for review on certiorari of the decision of the National Labor Relations Commission dated December 12. the petition is DENIED DUE COURSE and the 29 December 1999 decision of the Court of Appeals is AFFIRMED. GIL TANGIHAN. to the employer’s damage. Rollo. stoppage or slowdown of work. 51-58) in favor of private respondent STANFILCO. Aside from this admission. ABONDIO OMERTA. RODOLFO NENO. ako ay ipinatawag ni Ariel Abenoja Shop Steward. the comparison made by the respondents was of no moment. during the existence of the CBA. 58) On December 12. as it is hereby. refusal to handle any merchandise..Chief Steward Segundo Flores -----. which both stated that "(s)sometime in April 1993. APUZEN. Respondent company correctly postured that at the time these union officers obtained their separation benefits. the company was merely complying with its legal obligations. Noong ika-19 ng Abril 1993. The Court also agrees that such a slowdown is generally condemned as inherently illicit and unjustifiable. hearing of February 27. holding that: "Given these facts and circumstances.J. Ramos rendered a decision dated October 9. retard production or their performance of duties and functions to compel management to grant their demands. walkouts.

the record is also bare of any proof on this point. deceit. but were not. equipment and materials. NLRC Case No." (Vda. This Court has held: "In this connection account should be taken of the cognate principle that res judicata operates to bar not only the relitigation in a subsequent action of the issues squarely raised. "Furthermore. otherwise. even if new causes of action are asserted in the second action (e. As aptly observed by the Solicitor General that this petition is "clearly violative of the familiar principle of res judicata. Annex "J. litigating for the same thing and in the same capacity. they travel to the field bringing with them their tools. and no cogent reason can be found to disturb these findings nor of those of the National Labor Relations Commission which affirmed the same. the petition is DISMISSED for lack of merit and the decision of the National Labor Relations Commission is AFFIRMED. It is clear that herein petitioners are merely reiterating the very same claim which they fled through the ALU and which records show had already long been considered terminated and closed by this Court in G. they are not subject to the absolute control of the company during this period. p. 1978 in the aforecited case (Associated Labor Union vs. 127 SCRA 706 [1984]. respondent avers that the instant complaint is not new. of the Collective Bargaining Agreement cannot be considered as 'waiting time' within the purview of Section 5. 122 SCRA 557 [1983]. 57). Labor Alliance Council v. even if not passed upon in the first. and hence. on May 12. Noteworthy is the decision of the Minister of Labor. they can go back to their houses to attend to some chores. 86-89). it was held that the thirty-minute "waiting time" complained of was a mere "assembly time" and not a waiting time as the term is known in law. the findings of facts of quasi-judicial agencies which have acquired expertise because their jurisdiction is confined to specific matters are accorded not only respect but at times even finality if such findings are supported by substantial evidence (Special Events & Central Shipping Office Workers Union v. Contrary to this contention. National Federation of Labor Union (NAFLU) v. Be that as it may. STANFILCO (NLRC Case No. l987. petitioners' claim that there was a change in the factual scenario which are "substantial changes in the facts" makes respondent firm now liable for the same claim they earlier filed against respondent which was dismissed. 11). There will be no end to this controversy if the light of the Minister of Labor's decision dated May 12. the same issue can be re-litigated again. Ople. this would not preclude the operation of the doctrine of res judicata. Section 3. 26-LS-XI-76 which was filed way back April 27. pp. (b) Thereafter. concur. routinary practice of the employees. Petition) pointed out in detail the basis of his findings and conclusions. 2) Whether or not res judicata applies when the facts obtaining in the prior case and in the case at bar are significantly different from each other in that there is merit in the case at bar. Jr." Rollo. Inciong. Inc. In that case. All these activities take 30 minutes to accomplish (Rollo. and the proceedings attendant thereto are not infected with complexities as to deprive the workers the time to attend to other personal pursuits. their failure to report in the assembly time would justify the company to impose disciplinary measures. their failure to report in the assembly time would justify the company to impose disciplinary measures. It is thus axiomatic that the non-compensability of the claim having been earlier established. . Estate of the late Anita de Leon. 1979 that had long acquired the character of finality ---. fraud. 26-LS-XI-76) where significant findings of facts and conclusions had already been made on the matter." (Rollo. 97). they are not subject to the absolute control of the company during this period. 4) Whether or not estoppel and laches lie in decisions for the enforcement of labor standards (Rollo. therefore. Book III of the Rules and Regulations Implementing the Labor Code .and which already resolved that petitioners' thirty (30)-minute assembly time is not compensable. on January 30. Thus: The thirty (30)-minute assembly time long practiced and institutionalized by mutual consent of the parties under Article IV. such that after the roll call. 26-LS-XI-76) relied upon by the respondents as basis for claims of res judicata. such that after the roll call. 1976 when ALU was the bargaining agent of respondent's rank and file workers. 143 SCRA 124 [1986]. v." (Annex "H". In short. Rollo. p. Those issues are also barred. as the complainants purportedly were required to assemble at a designated area at least 30 minutes prior to the start of their scheduled working hours "to ascertain the work force available for the day by means of a roll call. Dangan v. . otherwise. 156 SCRA 352 [1987]). Rule I. The records show that the Labor Arbiters' decision dated October 9. therefore. Ople. but ultimately for the employees to indicate their availability or non-availability for work during every working day. 1987. of the Collective Bargaining Agreement cannot be considered as 'waiting time' within the purview of Section 5. issued resolution denying for lack of merit petitioners' motion for reconsideration (Annex "K". NLRC Case No. Melencio-Herrera (Chairman). Petition. the issues are reduced to the sole question as to whether public respondent National Labor Relations Commission committed a grave abuse of discretion in its resolution of December 17. JJ. Padilla and Regalado. The CBA does not contain any provision to this effect. Hence this petition for review on certiorari filed on May 7. They are not new employees as to require the company to deliver long briefings regarding their respective work assignments. Section 3. (c ) Then they go to the stockroom to get the working materials. demonstrates the Labor Standards | To digest (old cases) | Ajean Tuazon| 38 . the very same claim having been brought against herein respondent by the same group of rank and file employees in the case of Associated Labor Union and Standard Fruit Corporation. 90-91. The Minister of Labor held: "The thirty (30)-minute assembly time long practiced and institutionalized by mutual consent of the parties under Article IV. 3) Whether or not there is finality in the decision of Secretary Ople in view of the compromise agreement novating it and the withdrawal of the appeal. 183). which does not necessarily require the personal presence. they can go back to their houses to attend to some chores. Bureau of Labor Relations. Mamerto v. the NLRC can not be faulted for ruling that petitioners' claim is already barred by res judicata. They could have been. p. 75 SCRA 162 [1977]. Inc. demonstrates the indubitable fact that the thirty (30)-minute assembly time was not primarily intended for the interests of the employer.g. the record is also bare of any proof on this point.R. dissenting: It is my opinion that res judicata is not a bar. Public respondent NLRC. . Furthermore.) Fruit Corporation. Moreover. 1985 (Annex "E". (d) Lastly. The Court in the resolution of May 4. This. . This. as a rule. which does not necessarily require the personal presence. 92-96). they are individually required to accomplish the Laborer's Daily Accomplishment Report during which they are often made to explain about their reported accomplishment the following day. . Accordingly.. v. They are not new employees as to require the company to deliver long briefings regarding their respective work assignments. undue machinations in connection with their execution of the convenio de transaccion). 1988 gave due course to this petition. the thirty (30)-minute assembly is a deeply-rooted. Rollo. PREMISES CONSIDERED." (Annex "E". 118 SCRA 265 [1982]." (Rollo. the thirty (30)-minute assembly is a deeply-rooted. L-48510. passed upon and adjudicated in the first suit. Leogardo. and the proceedings attendant thereto are not infected with complexities as to deprive the workers the time to attend to other personal pursuits. Rollo. a controlling precedent. In short. 152 SCRA 453 [1987]. On January 15. This is followed by getting their individual work assignments from the foreman..' So. Petitioners contend that the preliminary activities as workers of respondents STANFILCO in the assembly area is compensable as working time (from 5:30 to 6:00 o'clock in the morning) since these preliminary activities are necessarily and primarily for private respondent's benefit. pp. 64-65). Edi-Staff Builders International. de Buncio v. p. constitute the controlling legal rule or decision between the parties and remains to be the law of the case making this petition without merit. to my mind. Therefore. Book III of the Rules and Regulations Implementing the Labor Code . NLRC. J. Petitioners assign the following issues: 1) Whether or not the 30-minute activity of the petitioners before the scheduled working time is compensable nder the Labor Code. petitioners filed a Motion for Reconsideration which was opposed by private respondent (Annex "I" Rollo. pp. SO ORDERED. 10). Standard (Phil. 1987. a compensable hour of work. Rule I. Their houses are situated right on the area where the farms are located. p. No. there raised. for the purpose of assignment or reassignment of employees to such areas in the plantation where they are most needed. is not. Their houses are situated right on the area where the farms are located. Phil. . routinary practice of the employees. The said case involved a claim for "waiting time". The decision penned by then Minister Blas Ople in ALU v. conclusive between the parties and their successors in interest by title subsequent to the commencement of the action . Asiaworld Publishing House. San Miguel Corporation. tools and equipment. Separate Opinions SARMIENTO. pp.. 1986. The facts on which this decision was predicated continue to be the facts of the case in this questioned resolution of the National Labor Relations Commission. but also the ventilation in said subsequent suit of any other issue which could have been raised in the first but was not The law provides that 'the judgment or order is. 152 SCRA 219 [1987]). The CBA does not contain any provision to this effect."SO ORDERED. with respect to the matter directly adjudged or as to any other matter that could have been raised in relation thereto. These preliminary activities of the workers are as follows: (a) First there is the roll call.

however.: Before us is a special civil action for certiorari with prayer for preliminary injunction and/or restraining order seeking the nullification of (1) the decision of public respondent in NLRC-NCR Case No. otherwise. it sustained losses in the millions of pesos from 1984 to 1988. the bank was placed under conservatorship but it still provided the traditional mid-year bonus. 4. According to petitioner. here are the bank’s violations: YEAR MID-YEAR BONUS CHRISTMAS BONUS 13TH MO. . by reason of their having been given for thirteen consecutive years. then. basic one-half mo. basic 1987 one-half mo. dispositive portion. shall be deemed purely acts of grace dependent upon the sole judgment and discretion of the BANK to grant. It is evident that the Ople decision was predicated on the absence of any insinuation of obligatoriness in the course or after the assembly activities on the part of the employees.R. 6 and non-payment of holiday pay.) As indicated. the Court granted petitioner’s prayer for a temporary restraining order enjoining respondents from executing the 30 April 1991 Decision and 18 June 1991 Resolution of the NLRC. On the alleged diminution of benefits. National Capital Region. basic 1986 one-half mo. 1984 and the corresponding adjustment thereof. NLRC. by reason of its long and regular concession. petitioner points out that the collective bargaining agreement of the parties does not provide for the payment of any mid-year or Christmas bonus.[7] Coming now to the merits of the petition. 02-00753-88. to grant the petition. the Ople decision was silent thereon. modify or withdraw. From 1981 up to 1983. basic one mo. petitioner. In addition. 6 for November 1. Furthermore. they travel to the field bringing with them their tools. 100 of the Labor Code. PAY previous years one mo. has prescribed (p. 100701. 1990. the NLRC[4] granted all of private respondent’s claims. and remarkably so. If this were so. Petition filed a Motion for Partial Reconsideration. NLRC Decision). 2. basic 1985 one-half mo.none one-half mo. recourse to this Court. Annex “H”). non-compliance with Wage Order No. On the alleged non-payment of legal holiday pay. (3) its ruling is contrary to the CBA. de Castro found private respondent’s claims to be unmeritorious and dismissed its complaint. 6 for November 1. even if now accorded or hereafter accorded to the employees. 2. it may become part of the employee’s regular compensation. things had since changed. a "waiting time" as contemplated by the Labor Code. 6. No. their failure to report in the assembly time would justify the company to impose disciplinary measures. the bank only gave a one-half (1/2) month basic pay as compliance of the 13th month pay and none for the Christmas bonus. 4-5.. Basic . 1566. basic one mo. Motion for Partial Reconsideration. 2. basic] . the bank continued giving one month basic pay as mid-year bonus. G. basic one mo. (". is exempted under Wage Order No.[1] respondents. In the early part of 1984. petitioner asserts that it cannot be compelled to pay the alleged bonus differentials due to its depressed financial condition. except for damages. an assertion which was affirmed by the labor arbiter. and 3. No. Annex “H”). HOLIDAYS PRODUCERS BANK OF THE PHILIPPINES. Wage differentials under Wage Order No. charging petitioner with diminution of benefits. 2. can no longer be unilaterally withdrawn by petitioner without violating Article 100 of Presidential Decree No. have ripened into a vested right and. premises considered. the instant case should be distinguished from the first case. STANFILCO. 1984 and the corresponding adjustment thereof” (par. Finally.indubitable fact that the thirty (30)-minute assembly time was not primarily intended for the interests of the employer. equipment and materials. Motion for Partial Reconsideration. I vote.R. Moreover. This is followed by getting their individual work assignments from the foreman. 3rd Division GONZAGA-REYES. 6. Annex “H”). thus: (a) First there is the roll call. On the alleged non-compliance with Wage Order No. as such. My considered opinion is that the thirty-minute assembly time had become.. reversing the Labor Arbiter’s dismissal of private respondent’s complaint and (2) public respondent’s resolution dated 18 June 1991 denying petitioner’s motion for partial reconsideration. basic Private respondent argues that the mid-year and Christmas bonuses. basic one-half mo. The Solicitor General relies solely on the decision of then Minister Ople. in truth and fact. Among the benefits it had been regularly giving is a mid-year bonus equivalent to an employee’s one-month basic pay and a Christmas bonus equivalent to an employee’s one whole month salary (basic pay plus allowance). the law granting a 13th month pay. The rest of the claims are dismissed for lack of merit. it is the petitioners' contention that the assembly time in question had since undergone dramatic changes. the basic pay previously being given as part of the Christmas bonus was applied as compliance to it (P.[5] The dispositive portion of the NLRC’s decision provides – WHEREFORE. 2. Holiday pay under Article 94 of the Labor Code. 6. 5. Motion for Partial Reconsideration. The private respondent on the other hand insists that these practices were the same practices taken into account in ALU v. G. the NLRC gravely abused its discretion when (1) it contravened the Supreme Court decision in Traders Royal Bank v.D. the NLRC again gravely abused its discretion when it patently and palpably erred in approving and adopting “the position of appellant (private respondent UNION)” without giving any reason or justification therefor which position does not squarely traverse or refute the Labor Arbiter’s correct finding and ruling (p. (Supra. but ultimately for the employees to indicate their availability or non-availability for work during every working day. (2) its ruling is not justified by law and Art. 12. On the contrary. J.) Precisely. the NLRC again gravely abused its discretion when it patently and palpably erred in holding that it is “more inclined to adopt the stance of appellant (private respondent UNION) in this issue since it is more in keeping with the law and its implementing provisions and the intendment of the parties as revealed in their CBA” without giving any reason or justification for such conclusions as the stance of appellant (private respondent UNION) does not traverse the clear and correct finding and conclusion of the Labor Arbiter. Any other benefits or privileges which are not expressly provided in this Agreement. Producers Bank of the Philippines.[11] A bonus is an amount granted and paid to an employee for his industry and loyalty which contributed to the success of the employer’s business and made possible the realization of profits. the Court shall discuss the issues ad seriatim. a banking institution. they are individually required to accomplish the Laborer's Daily Accomplishment Report during which they are often made to explain about their reported accomplishment the following day. promulgated on August 30. 851). The unpaid bonus (mid-year and Christmas bonus) and 13th month pay. private respondent declared in its position paper[8] filed with the NLRC that – 1.none one-half mo. (b) Thereafter. as evidenced by the fact that in 1984 it was placed under conservatorship by the Monetary Board.[10] On the other hand. Although private respondent concedes that the grant of a bonus is discretionary on the part of the employer. took effect. entitled “Producers Bank Employees Association v. Producers Bank of the Philippines.[3] In a complete reversal.) The petitioners have vehemently maintained that in view thereof. Petitioner contends that the NLRC gravely abused its discretion in ruling as it did for the succeeding reasons stated in its Petition – 1. 442[9] which prohibits the diminution or elimination of benefits already being enjoyed by the employees. at the working materials. SO ORDERED. When P. however. Hence. By virtue of an alleged Monetary Board Resolution No. basic one mo. 18. Bonuses As to the bonuses. Labor Arbiter Nieves V. SET ASIDE and another one issued ordering respondent-appellee to pay complainant-appellant: 1. the allowances remained as Christmas bonus. 2001 Mar 28. 88168. the petitioner. (d) Lastly. as it is hereby. 3. [T]hey are not subject to the absolute control of the company during this period. but not to exceed three (3) years. and the latter had since been placed under a number of restrictions. the decision the petitioners precisely reject in view of the changes in the conditions of the parties. 3.” promulgated on 30 April 1991. In a tabular form. and (4) the socalled “company practice invoked by it has no legal and moral bases” (p. the “wage differentials under Wage Order No. it argues that.[6] On 29 July 1991. private respondent prayed for damages. vs. The present petition originated from a complaint filed by private respondent on 11 February 1988 with the Arbitration Branch. section 4 of the collective bargaining agreement states that – Acts of Grace. National Labor Relations Commission (NLRC). which was denied by the NLRC in a Resolution issued on 18 June 1991. the appealed Decision is. basic 1984 [one mo. 851." supra.[2] On 31 March 1989. under conservatorship and distressed.D. by the petitioners. . one month basic pay as 13th month pay but the Christmas bonus was no longer based on the allowance but on the basic pay of the employees which is higher. It is an act of generosity granted by an Labor Standards | To digest (old cases) | Ajean Tuazon| 39 . 6. (Decision. has been providing several benefits to its employees since 1971 when it started its operation. And I do not believe that the respondents have successfully rebutted these allegations. (c ) Then they go to the stockroom to. NATIONAL LABOR RELATIONS COMMISSION and PRODUCERS BANK EMPLOYEES ASSOCIATION. et al. tools and equipment.

a “bonus” is a gratuity or act of liberality of the giver which the recipient has no right to demand as a matter of right. thus.[15] However.Whenever. In 1988. It is something given in addition to what is ordinarily received by or strictly due the recipient. [14] except when it is made part of the wage. this amount should be applied towards the satisfaction of the 13th month pay.940 1986 P 132. Our findings in the Central Bank case coincide with petitioner’s claims that it continuously suffered losses from 1984 to 1988 as follows YEAR NET LOSSES IN MILLIONS OF PESOS 1984 P 144. the contention of the Union that the granting of bonuses to the employees had ripened into a company practice that may not be adjusted to the prevailing financial condition of the Bank has no legal and moral bases.[23] the Court declared that the order placing petitioner herein under conservatorship had long become final and its validity could no longer be litigated upon. a bonus is an amount given ex gratia to an employee by an employer on account of success in business or realization of profits.[31] the term “equivalent” shall be construed to include Christmas bonus. if any.[22] which provides – Sec.[25] The NLRC held that the actions of the conservator ran counter to the provisions of PD 851.[28] PD 851. NLRC[17] wherein the Court made the following pronouncements – By definition. To hold otherwise would be to defeat the reason for the conservatorship which is to preserve the assets and restore the viability of the financially precarious bank.[12] The granting of a bonus is a management prerogative. the Monetary Board may place a bank under the control of a conservator when it finds that the bank is continuously unable or unwilling to maintain a condition of solvency or liquidity.271 These losses do not include the interest expenses on the overdraft loan of the petitioner to the Central Bank. xxx xxx xxx Clearly then. Also. The petitioner pointed out. the Central Bank placed petitioner bank under comptrollership in 1984 because of liquidity problems and excessive interbank borrowings. Court of Appeals. the bonuses were less because the income of the Bank had decreased. The granting of a bonus is basically a management prerogative which cannot be forced upon the employer who may not be obliged to assume the onerous burden of granting bonuses or other benefits aside from the employee’s basic salaries or wages. 1364. petitioner cannot be legally compelled to continue paying the same amount of bonuses to its employees. the Bank may not be forced to distribute bonuses which it can no longer afford to pay and. but the Bank still gave out the usual two (2) months basic mid-year and two months gross year-end bonuses. In its position paper. the income of the Bank was only 20. Under the Revised Guidelines on the Implementation of the 13th-Month Pay Law. 851 (PD 851). private respondent revised its claims as follows – YEAR MID-YEAR BONUS 13TH MO. holiday pay. requires all employers to pay their employees receiving a basic salary of not more than P1.955 million by 17 January 1984. any provision of law to the contrary notwithstanding. in Traders Royal Bank v. the problems commenced even before their discovery in 1984.[30] However. 1985 and 1986. The Labor Standards | To digest (old cases) | Ajean Tuazon| 40 . The matter of giving them bonuses over and above their lawful salaries and allowances is entirely dependent on the profits. which evidences petitioner’s continuing inability to maintain a condition of solvency and liquidity. 265.[16] we held that – It is clear x x x that the petitioner may not be obliged to pay bonuses to its employees. in effect. 13th Month Pay With regard to the 13th month pay. it was ordered liquidated.029 Million. mid-year bonus. In such a depressed financial condition. and as of 13 February 1990. which are provided by the Labor Code. but their jobs as well. the Central Bank found that Manilabank had been suffering financial losses. that the decrease in the mid-year and year-end bonuses constituted a diminution of the employees’ salaries.enlightened employer to spur the employee to greater efforts for the success of the business and realization of bigger profits. In Central Bank of the Philippines v. PAY CHRISTMAS BONUS 1984 1 month basic ½ month basic None 1985 ½ month basic ½ month basic None 1986 ½ month basic 1 month basic ½ month basic 1987 ½ month basic 1 month basic ½ month basic However. salary or compensation of the employee. as amended by Presidential Decree No. thus justifying the conservatorship. Its fiscal condition having declined. which was issued by President Marcos on 16 December 1975. 1987. Thus. it was placed under sequestration by the present administration and is now managed by the Presidential Commission on Good Government (PCGG).[24] Petitioner was not only experiencing a decline in its profits. therefore. in its Memorandum[27] filed before this Court. Thus. a 13th month pay. be penalized for its past generosity to its employees.632 Million as of March 16. resulting to its eventual closure in 1987 and liquidation in 1988. if not empty coffers. especially so if it is incapable of doing so. there was no success in business or realization of profits to speak of that would warrant the conferment of additional benefits sought by private respondents. Private respondent’s contention. for bonuses are not part of labor standards in the same class as salaries. some news items triggered a bank-run in petitioner which resulted in continuous overdrawings on petitioner’s demand deposit account with the Central Bank. that the Bank weakened considerably after 1986 on account of political developments in the country. it was placed under receivership and ordered to close operation. petitioner had over-drawings of up to P1. the Court found that sometime in August. pursuant to its authority under Section 28-A of Republic Act No. Suspected to be a Marcos-owned or controlled bank. amounted to P610. not later than December 24 of every year. PAY CHRISTMAS BONUS 1984 1 month basic None ½ month basic 1985 ½ month basic None ½ month basic 1986 ½ month basic ½ month basic 1 month basic 1987 ½ month basic ½ month basic 1 month basic 1988 ½ month basic ½ month basic 1 month basic Petitioner argues that it is not covered by PD 851 since the mid-year and Christmas bonuses it has been giving its employees from 1984 to 1988 exceeds the basic salary for one month (except for 1985 where a total of one month basic salary was given). The principal balance of the overdraft amounted to P971. realized by the Bank from its operations during the past year. Presumably. and leave benefits.182 January-February 1988 P 9. NLRC. the over-drawings reached P143. He shall have the power to overrule or revoke the actions of the previous management and board of directors of the bank. reorganize the management thereof and restore its viability. No company should be compelled to act liberally and confer upon its employees additional benefits over and above those mandated by law when it is plagued by economic difficulties and financial losses. collect all monies and debts due said bank and exercise all powers necessary to preserve the assets of the bank. something given in addition to what is ordinarily received by or strictly due the recipient.000 a month. the Monetary Board finds that a bank is in a state of continuing inability or unwillingness to maintain a condition of solvency and liquidity deemed adequate to protect the interest of depositors and creditors. In 1986. and such other powers as the Monetary Board shall deem necessary. Clearly. .065 Million.[26] private respondent claimed that petitioner made the following payments to its members – YEAR MID-YEAR BONUS 13TH MO. In 1987. It is evident. is not correct.233 billion.[29] regardless of the nature of the employment. on the basis of a report submitted by the appropriate supervising and examining department. Hence. employers already paying their employees a 13th month pay or its equivalent are not covered by the law. liabilities. 1988.[13] Thus. which interest as of July 31.[21] as amended by Presidential Decree No. but was reeling from tremendous losses triggered by a bank-run which began in 1983. Appointment of conservator. From 1979-1985. pursuant to Section 2 of PD 851. How then can an employer be made liable to pay additional benefits in the nature of bonuses to its employees when it has been operating on considerable net losses for a given period of time? Records bear out that petitioner Manilabank was already in dire financial straits in the mid-80’s. the Monetary Board may appoint a conservator to take charge of the assets. in the same case. cost of living allowances. cash bonuses and other payments amounting to not less than 1/12 of the basic salary. No act of enlightened generosity and self-interest can be exacted from near empty. however. This doctrine was reiterated in the more recent case of Manila Banking Corporation v. Ultimately. a bonus is not a demandable and enforceable obligation. the NLRC adopted the position taken by private respondent and held that the conservator was not justified in diminishing or not paying the 13th month pay and that petitioner should have instead applied for an exemption.418 1985 P 144. 72. xxx xxx xxx Under Section 28-A. but that it did not do so. that petitioner bank was operating on net losses from the years 1984. To hold otherwise would be to penalize the employer for his past generosity. 1983. 28-A. As early as 1984. the conservator was justified in reducing the mid-year and Christmas bonuses of petitioner’s employees. and the management of that banking institution. In light of these submissions of the petitioner.2 million pesos. in accordance with section 7 of Presidential Decree No. it is to the employees’ advantage that the conservatorship achieve its purposes for the alternative would be petitioner’s closure whereby employees would lose not only their benefits.940 1987 P 84. As earlier chronicled. It was established by the labor arbiter[18] and the NLRC[19] and admitted by both parties[20] that petitioner was placed under conservatorship by the Monetary Board. and penalties on reserve deficiencies which amounted to P89. an employer cannot be forced to distribute bonuses which it can no longer afford to pay.

It was not envisioned that a double burden would be imposed on the employer already paying his employees a 13th month pay or its equivalent – whether out of pure generosity or on the basis of a binding agreement. therefore. Petitioner asserts that although the collective bargaining agreement was signed by the parties on 16 November 1984. which took effect on June 16. prior to 18 August 1986. 6 for the fact remains that petitioner actually granted wage and allowance increases sufficient to cover the increases mandated by Wage Order No. NLRC[35] that – [t]o obliterate the creditability provisions in the Wage Orders through interpretation or otherwise. petitioner is justified in crediting the mid-year bonus and Christmas bonus as part of the 13th month pay. The Memorandum Circular issued by the Acting Conservator is clear. for each and every year involved. and the certainty of continued governmental or statutory actions adjusting employees’ minimum wages. 6 Wage Order No. (iii) Effective March 1. the balance remaining after applying the first year salary and allowance increase in the collective bargaining agreement to the increase mandated by Wage Order No. 6 because the former were not granted within the period of creditability provided for in such wage order.[37] This finding was not disputed by the NLRC. 16 November 1984 – the date when the collective bargaining agreement was signed by the parties and 1 March 1984 – the retroactive date of effectivity of the first year increases. Effective August 18. 1986 – P125. Proceeding from the unambiguous terms of the above quoted memorandum. petitioner has not complied with Wage Order No. by whatever name called. 5 and part of the increases mandated by Wage Order No. the divisor was reduced to 303 by virtue of an inter-office memorandum issued on 13 August 1986. Corollarily. 6 because the first year salary and allowance increase provided for under the collective bargaining agreement can be credited against the wage and allowance increase mandated by such wage order. In its Memorandum. 6. petitioner used a divisor of 314 in arriving at the daily wage rate of monthly-salaried employees. the significant dates with regard to the granting of the first year increases are 9 November 1984 – the date of issuance of the MOLE Resolution.00 per month as increase in allowance to employees within the bargaining unit on March 1.00 per month as increase in allowance to employees within the bargaining unit on March 1. during the next three (3) years of this Agreement: (i) Effective March 1. private respondent states that – 49. to wit To increase the rate of overtime pay for rank and filers. beginning from 1 March 1984 until 28 February 1985. 6 is based on important public policy. Thus.[34] The creditability provision in Wage Order No. The present Policy of 314 days as divisor used in the computation for cash conversion and determination of daily rate. after applying the first year increase to Wage Order No. The chargeability of the foregoing salary increases against government-ordered or legislated income adjustments subsequent to Wage Order No. To impose upon an employer already giving his employees the equivalent of a 13th month pay would be to penalize him for his liberality and in all probability. 1984 and the effectivity of this Order shall be credited as compliance with the minimum wage and allowance adjustments prescribed herein provided that where the increases are less than the applicable amount provided in this Order. 1984. 1986. mid-year bonus and Christmas bonus. 6 which is from 17 June 1984 to 1 November 1984. 1984 and Order dated October 24. the Acting Convservator also approved the increase of meal allowance from P25. Clearly. 1984. The facts germane to this issue are not debatable. According to private respondent. v. 5 shall be determined on the basis of the provisions of such government orders or legislation. Saturdays. (ii) Effective March 1. petitioner is willing to pay the difference. 6. and to compel employers simply to add on legislated increases in salaries or allowances without regard to what is already being paid. the collective bargaining agreement of the parties also included a provision on the chargeability of such salary or allowance increases against government-ordered or legislated income adjustments – Section 2. among others. 5. Holiday Pay Article 94 of the Labor Code provides that every worker shall be paid his regular daily wage during regular holidays[36] and that the employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate. Pursuant to the MOLE Decision dated October 2.00 per month as increase in allowance to employees within the bargaining unit on March 1. 1985. 1986. or at least be equal to. 6. 6 if.00 per month as salary increase plus P100. it is noted that. the parties entered into a collective bargaining agreement providing for the following salary adjustments – Article VIII. we are pleased to inform that effective August 18.intention of the law was to grant some relief – not to all workers – but only to those not actually paid a 13th month salary or what amounts to it. 1986. earnings. however. Private respondent points out that none of these dates fall within the period of creditability under Wage Order No. It would be inconsistent with the abovestated rationale underlying the creditability provision of Wage Order No. allowances. involves Section 4 thereof which reads All wage increase in wage and/or allowance granted by employers between June 17. the petitioner bank used a divisor of 314 days in arriving at the daily wage rate of the monthly-salaried employees. increased the statutory minimum wage of workers. On 16 November 1984. may be considered as an “equivalent” of the 13th month pay mandated by PD 851. 6. Thus. The creditability provisions in the Wage Orders prevent the penalizing of employers who are industry leaders and who do not wait for statutorily prescribed increases in salary or allowances and pay their workers more than what the law or regulations require. Under Wage Order No. during the next three (3) years of this Agreement…” The unequivocal wording of this provision manifests the clear intent of the parties to apply the wage and allowance increases stipulated in the collective bargaining agreement to any statutory wage and allowance adjustments issued during the effectivity of such agreement . with different increases being specified for agricultural plantation and non-agricultural workers. Thus. all increases in wages or allowances granted by the employer between 17 June 1984 and 1 November 1984 shall be credited as compliance with the wage and allowance adjustments prescribed therein. In addition. contrary to private respondent’s contentions.00.00 for a minimum of four (4) hours of work for Saturdays.00 to P30. Inc. even assuming the truth of private respondent’s claims as contained in its position paper or Memorandum regarding the payments received by its members in the form of 13th month pay. 6 and that. 5. this would be counter-productive so far as securing the interest of labor is concerned. the parties have formulated and agreed on the following highly substantial packaged increases in salary and allowance which take into account and cover (a) any deflation in income of employees because of such price increases and inflation and (b) the expected governmental response thereto in the form of statutory adjustments in wages. that is. bonuses and other fringe benefits. price increases of oil and other commodities on the employees’ wages and earnings.[38] However.[32] In the case at bar. private respondent contends that the first year salary and allowance increases under the collective bargaining agreement cannot be applied towards the satisfaction of the increases prescribed by Wage Order No. 1986. allowances and benefits. there is nothing in the wording of Section 2 of Article VIII of the collective bargaining agreement that would prevent petitioner from crediting the first year salary and allowance increases against the increases prescribed by Wage Order No. we held in Apex Mining Company. among others. the employer shall pay the difference. 1985 – P125.[33] On the other hand.00 per month as salary increase plus P100. and if not sufficient. the total amount given by petitioner would still exceed. still remain. one month basic salary and thus. 6. the first year salary and allowance increase was made to take effect retroactively. the acting Conservator approved the use of 303 days as divisor in the computation of Overtime pay. Wage Order No. are still considered paid rest days. Prior to August 18. the employer would react by withdrawing the bonuses or resist further voluntary grants for fear that if and when a law is passed giving the same benefits. Such increases shall not include anniversary wage increases provided in collective bargaining agreements unless the agreement expressly provide otherwise. Section 1 of Article VIII of the collective bargaining agreement of the parties states that “…the parties have formulated and agreed on the following highly substantial packaged increases in salary and allowance which take into account and cover (a) any deflation in income of employees because of such price increases and inflation and (b) the expected governmental response thereto in the form of statutory adjustments in wages. 6. The bone of contention. should be made chargeable against the increase prescribed by Wage Order No. 1984. 1984 – P225. allowances and benefits. which came into effect on 1 November 1984. the Labor Arbiter found that the divisor used by petitioner in arriving at the employees’ daily rate for the purpose of computing salary-related benefits is 314. this was changed. 5. Petitioner maintains that this period encompasses the period of creditability provided for under Wage Order No. his prior concessions might not be given due credit. Salary Adjustments. therefore.[39] Private respondent admits that. the encouragement of employers to grant wage and allowance increases to their employees higher than the minimum rates of increases prescribed by statute or administrative regulation. the Labor Arbiter observed that the reduction of the divisor to 303 was for the sole purpose of increasing the employees’ overtime pay and was not meant to replace the use of 314 as the divisor in the computation of the daily rate for salary-related benefits. In this case.00 per month as salary increase plus P100. the first-year salary and allowance increases shall be chargeable against adjustments under Wage Order No. Private respondent also concedes that the divisor was changed to 303 for purposes of computing overtime pay only. in the amount of P125. the balance was not made chargeable to the increases under Wage Order No. It adopted the following formula: Basic salary x 12 months = Daily Wage Rate 303 days Labor Standards | To digest (old cases) | Ajean Tuazon| 41 . – Cognizant of the effects of. Petitioner argues that it complied with Wage Order No. Section 1. Furthermore. would be to penalize employers who grant their workers more than the statutorily prescribed minimum rates of increases.from 1 March 1984 to 28 February 1987.

In her Position Paper.[4] Forest Hills claimed as follows: In July 2001.[11] faulting the Court of Appeals x x x IN DISMISSING THE PETITION ON THE GROUND OF TECHNICALITIES[.. however. Forest Hills submitted a list of faculty members and staff from School Year 1998-1999 up to School Year 2001 to 2002 which included her name. Despite petitioner’s undertaking to report “soon. and allowances. classes for the School Year 2002-2003 were already on-going.] x x x IN NOT DECIDING ON THE MERITS WHETHER OR NOT HONORABLE COMMISSIONERS OF THE 5TH DIVISION HAVE COMMITTED AN ACT OF GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION: A.. 02-00753-88. the 30 April 1991 Decision of public respondent in NLRC-NCR Case No. by her own admission. the company practice indicates that the monthly salaries of the employees are so computed as to include the holiday pay provided by law. the divisor of 314 is arrived at by subtracting all Sundays from the total number of calendar days in a year. Consequently. she has no more claims to hold and no more work to do. brushes aside this and the other technicalities cited by the Court of Appeals in its Resolution of December 15. petitioner filed a complaint[1] against respondent Forest Hills and its administrator respondent Naomi Cabaluna for illegal dismissal. CAGAYAN.[40] In Union of Filipro Employees v. SO ORDERED. for the reasons above stated. Labadan (petitioner) was hired by private respondent Forest Hills Mission Academy (Forest Hills) in July 1989 as an elementary school teacher.[3] Petitioner further alleged that since 1990.[2] petitioner alleged that she was allowed to go on leave from Forest Hills.[19] Petitioner argues. petitioner was permitted to go on leave for two weeks but did not return for work after the expiration of the period. Thus.[7] On petitioner’s Petition for Certiorari.[17] she was still considered a member of the Forest Hills faculty[18] which retained her in its payroll. judgment is hereby rendered: 1. Ople. finding the Labor Arbiter to have misappreciated the facts of the case. with the exception of public respondent’s ruling on damages. in the interest of substantial justice.501. The clear import of this document is that from the 365 days in a year. If the employees are already paid for all non-working days. PETITIONER WAIVED HER 13TH MONTH PAY AND SERVICE INCENTIVE LEAVES AS SHE FAILED TO STATE SUCH CLAIMS IN HER AFFIDAVIT THAT WAS ATTACHED [TO] HER POSITION PAPER. Nevertheless. 13th month pay. failed to refute Forest Hills’ claim that when she expressed her intention to resume teaching. The Labor Arbiter decided in favor of petitioner. LABADAN Petitioner. 2003. Finding respondents Forest Hills Academy and/or Naomi Cabaluna guilty of illegally dismissing the complainant. Directing respondent to pay complainant Lilia P. 1974 up to the present. and holiday pay. Damages As to private respondent’s claim for damages. however.[6] The National Labor Relations Commission (NLRC). the Inter-office Memorandum dated August 13.[10] she filed the present Petition for Review on Certiorari.[42] as follows – It is argued that even without the presumption found in the rules and in the policy instruction. its extension was impliedly approved by the school principal because she received no warning or reprimand and was in fact retained in the payroll up to 2002. it is bound to pay the salary differential of its employees effective November 1. and albeit she had exceeded her approved leave period. Petitioner’s Motion for Reconsideration having been denied. (Chairman). service incentive leave. holiday pay. Forest Hills claimed that the Seventh Day Adventist Church requires its members to pay tithes equivalent to 10% of their salaries. C.[8] the Court of Appeals. tithes to the Seventh Day Adventist church have been illegally deducted from her salary.R. G. SO ORDERED. and. xxx xxx xxx 54. petitioner was registrar and secondary school teacher. Thus. Labadan the total amount of P152. Respondents. the employee must first establish by substantial evidence the fact of dismissal. However. 172295. disposing as follows: WHEREFORE. the Court. entitled “Producers Bank Employees Association v. by Resolution[9] of December 15. holiday pay. we deduct 52 rest days which gives a total of 313 days. and she was not paid overtime pay for overtime service. and nonattachment of copies of the Complaint and the Answer filed before the Labor Arbiter.also referred to by private respondent in its pleadings . the NLRC was correct in ruling that there is no basis to support the same. now hereby decides the case on the merits. Now. 2005[15] and.] [12] (Italics and emphasis in the original) Non-payment of docket fee at the time of the filing of a petition does not automatically call for its dismissal as long as the fee is paid within the applicable prescriptive or reglementary period. 2. On August 18. illegal deductions. non-attachment of Affidavit of Service. COMMISSIONER PROCULO T. Panganiban. versus FOREST HILLS ACADEMY/NAOMI CABALUNA and PRESIDING COMISSIONER SALIC B. and petitioner never questioned the deduction of the tithe from her salary. this is not so in the case at bar.[16] The records do not show that petitioner was dismissed from the service. By utilizing this formula even up to the present. While in cases of illegal dismissal. the conclusion is inescapable that the petitioner bank is not actually paying its employees the regular holiday pay mandated by law.[5] With regard to the charge for illegal deduction. IN FINDING THAT BY A PROLONGED ABSENCE OF ONE YEAR MORE OR LESS. LILIA P.[41] the Court held that “[t]he divisor assumes an important role in determining whether or not holiday pay is already included in the monthly paid employee’s salary and in the computation of his daily rate. it is not paying its employees their corresponding holiday pay. J. No. Claiming that strained relations between her and Forest Hill have rendered reinstatement not feasible. reversed and set aside his decision and dismissed petitioner’s complaint by Resolution of June 30. the employer bears the burden of proving that the dismissal is for a valid or authorized cause. DUMARPA. if 313 days is the number of working days of the employees then. Vivar. allowances. and petitioner was hired on account of her being a member thereof. and was not meant to exclude holiday pay from the monthly salary of petitioner’s employees.that the divisor of 314 will still be used in the computation for cash conversion and in the determination of the daily rate.[13] While petitioner paid the P30 deficient amount of the docket fee on February 7. Sundays and the ten (10) legal holidays form the total number of calendar days in a year. based on the records of this case and the parties’ own admissions. It thus hired a temporary employee to accomplish the needed reports. Apparently.: Lilian L. Melo. concur. Forest Hills noted that petitioner proffered no evidence to support the same. Vitug.02 representing her monetary award x x x. With regard to the charge for non-payment of overtime pay. absence of written explanation why the petition was filed through registered mail instead of through personal service. When she finally returned for work. the use of 314 as a divisor leads to the inevitable conclusion that the ten legal holidays are already included therein. Producers Bank of the Philippines. Hence.” and its 18 June 1991 Resolution issued in the same case are hereby SET ASIDE. 2008 Dec 23. The bank uses 303 days as its divisor. To belie petitioner’s claim that she was dismissed. and that her SSS contributions have not been remitted. dismissed the petition for deficient amount of appellate docket fee. instead of remanding the case to the appellate court. as stated in the inter-office memorandum. there is a disputable presumption that the employees are paid their holiday pay. petitioner prayed for separation pay in lieu of reinstatement. Jr. IN REVERSING THE FINDINGS OF THE EXECUTIVE LABOR ARBITER THAT HEREIN PETITIONERCOMPLAINANT WAS NOT DISMISSED FROM HER WORK AS A TEACHER and AT THE SAME TIME THE REGISTRAR. In fact. 2006. The petitioner contends otherwise. the Court holds that petitioner has complied with the requirements of Article 94 of the Labor Code. SARMEN. 2nd Division CARPIO MORALES. non-payment of overtime pay. JJ.” she never did even until the end of School Year 2001-2002. classes were already ongoing for School Year 2002-2003. 13th month pay. Complainant’s other claim[s] are hereby dismissed for lack of merit and/or failure to substantiate. 2005. THAT THE DECISION/RESOLUTION RENDERED BY THE HONORABLE COMMISSIONERS OF THE 5TH DIVISION WAS TAINTED WITH GRAVE ABUSE OF DISCRETION AS IT WAS INCOMPLETE AND UNLAWFUL[. The 251 working days divisor is the result of subtracting all Saturdays. employs a “divisor” of 251 days. Since it is a question of fact. B.”[20] Petitioner. From 1990 up to 2002. it was expressly stated in the inter-office memorandum . and Sandoval-Gutierrez.50. and damages. In its Position Paper. the divisor should be 365 and not 251. since Saturdays are considered paid rest days. COMMISSIONER NOVITO C. 2005. that she was constructively dismissed when Forest Hills merged her class with another “so much that when she reported back to work. They in fact show that despite petitioner’s absence from July 2001 to March 2002 which. exceeded her approved leave. It bears noting that petitioner simultaneously held the Labor Standards | To digest (old cases) | Ajean Tuazon| 42 . 1986 (Annex “E”) provides for a divisor of 303 days in computing overtime pay. five days service incentive leave pay. One strong argument in favor of the petitioner’s stand is the fact that the Chartered Bank.” This was also our ruling in Chartered Bank Employees Association v.[14] it was beyond the 60-day period for filing the petition for certiorari. in computing overtime compensation for its employees. WHEREFORE. We agree with the labor arbiter that the reduction of the divisor to 303 was done for the sole purpose of increasing the employees’ overtime pay.

'(b) The term "holiday" as used in this chapter. directly or indirectly. and 13th month pay. 113. RB-IV-1561-76 entitled "Insular Bank of Asia and America Employees' Union (complainant-appellee). Deputy Minister. the ninth of April.] The provision that a worker is entitled to twice his regular rate if he is required to work on a holiday implies that the provision entitling a worker to his regular rate on holidays applies even if he does not work. those enjoying vacation leave with pay of at least five days and those employed in establishments regularly employing less than ten employees or in establishment exempted from granting this benefit by the Secretary of Labor after considering the viability or financial condition of such establishment. among others. she is not entitled to separation pay or backwages. Labor Arbiter Ricarte T. 10. Regional Office No.[23] As for petitioner’s claims for overtime pay. Good Friday. '(a) Every worker shall be paid his regular daily wage during regular holidays. This being the case. excluding the 52 Sundays and the 10 regular holidays.[27] WHEREFORE. rec. 1975 (p. No employer. respondents. Forest Hills contends that petitioner failed to prove that she actually worked during specific holidays.). The use of the factor 303 indicates the number of ordinary working days in a year (which normally has 365 calendar days). the deduction made by Forest Hills was illegal. on petitioner’s claim that Forest Hills did not remit her SSS contributions. Soriano by paying their holiday pay up to and including January. Ministry of Labor and INSULAR BANK OF ASIA AND AMERICA. 1975. and (c) In cases where the employer is authorized by law or regulations issued by the Secretary of Labor. it complied with the order of Arbiter Ricarte T. to pay her holiday pay. On December 16. (b) For union dues. Respecting petitioner’s claim for holiday pay. service incentive leave pay. Article 113 of the Labor Code instructs: ART. vs. that (a) Every worker shall be paid his regular daily wage during regular holidays. 1974" (pp. an award of attorney’s fees equivalent to 10% of the final judgment award is in order. PRESBITERO J. IV in Manila. Chairperson). 109. remittances and other similar documents – which will show that overtime. (b) This provision shall not apply to those who are already enjoying the benefit herein provided. Deductions from the wages of the employees may be made by the employer in any of the following cases: (a) When the deductions are authorized by law. On August 25. this gives rise to a presumption that the monthly rate does not include payments for unworked regular holidays. NLRC rec. The petitioner is likewise entitled to service incentive leave under Article 95 of the Labor Code which provides that (a) Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay. no proof to her entitlement thereto having been presented. . let the appealed Resolution en banc of the National Labor Relations Commission dated 20 June 1978 be. 18. BRION (Associate Justice) ENTITLEMENT OF MONTHLY PAID EMPLOYEES TO REGULAR HOLIDAY PAY INSULAR BANK OF ASIA AND AMERICA EMPLOYEES' UNION (IBAAEU). 1975. (Emphasis and underscoring supplied) In the absence then of petitioner’s written conformity to the deduction of the 10% tithe from her salary. (Associate Justice) ARTURO D. shall make any deduction from the wages of his employees. differentials. Maundy Thursday. 13th month pay. Right to holiday pay. rec. and non-remittance of SSS contributions are concerned. National Labor Relations Commission. and upon the request of both parties. AMADO G. the same must be granted. shall include: New Year's Day. The petition is GRANTED insofar as petitioner’s claims for illegal deductions.: This is a petition for certiorari to set aside the order dated November 10. except in retail and service establishments regularly employing less than ten (10) workers. Finally. 'xxx xxx xxx' "This conclusion is deduced from the fact that the daily rate of pay of the bank employees was computed in the past with the unworked regular holidays as excluded for purposes of determining the deductible amount for absences incurred 4 Thus. (b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate[. for other than the uncorroborated affidavits of her colleagues. except in retail and service establishments regularly employing less than 10 workers. 97-99. service incentive leave and other claims of workers have been paid – are not in the possession of the worker but in the custody and absolute control of the employer. if the employer uses the factor 303 days as a divisor in determining the daily rate of monthly paid employee. "(b) Ordering respondent to pay wages to all its employees fro all regular holidays since November 1. Soriano rendered a decision in the above-entitled case. Pertinent portions of the decision read: xxx xxx xxx "The records disclosed that employees of respondent bank were not paid their wages on unworked regular holidays as mandated by the Code. petitioner. Conciliation having failed. J. merely attested that she was dismissed from her job without valid cause. of respondent Deputy Minister of Labor. Article 94 of the Labor Code provides.). 208. granting petitioner's complaint for payment of holiday pay. except: (a) In cases where the worker is insured with his consent by the employer. "WHEREFORE. it must be denied. x x x x. National Labor Relations Commission[25] enlightens: x x x [T]he burden of proving payment of monetary claims rests on the employer. as it is hereby. records. from the transaction. 850 was promulgated amending. and to pay her attorney’s fees equivalent to 10% of the final judgment award. The case is accordingly REMANDED to the Labor Arbiter for computation of the amount of such money claims. holiday pay. JR. however. the thirtieth of November. the fourth of July. insofar as petitioner was compelled to litigate her money claims. .positions of secondary school teacher and registrar and. but gave no particulars on when and how she was dismissed. VELASCO. INCIONG.[26] nderscoring supplied) Forest Hills having glossed over this claim. as does Rule VIII. 2005 is SET ASIDE. the case was certified for arbitration on July 7. Section 10 of the Rules Implementing Book III of the Labor Code reading: SEC. judgment is hereby rendered: "(a) . The antecedent facts culled from the records are as follows: On June 20. Amado G. HON. vs. SO ORDERED. Respondents are accordingly ORDERED to refund to petitioner the amount of the illegal deductions from her salary. the provisions of the Labor Code on the right to holiday pay to read as follows: Labor Standards | To digest (old cases) | Ajean Tuazon| 43 . 851. it is not amiss to state with certainty that the instant claim for wages on regular unworked holidays is found to be tenable and meritorious. to wit: 'Art. in cases where the right of the worker or his union to check-off has been recognized by the employer or authorized in writing by the individual worker concerned. petitioner filed a complaint against the respondent bank for the payment of holiday pay before the then Department of Labor. including deductions for the insurance premiums advanced by the employer in behalf of the employee as well as union dues where the right to check-off has been recognized by the employer or authorized in writing by the individual employee himself. in his own behalf or in behalf of any person. On the deduction of 10% tithe. service incentive leave pay. Insular Bank of Asia and America" (respondent-appellant). The use of 251 as a factor (365 calendar days less 52 Saturdays. DANTE O. the twenty-fifth and thirtieth of December and the day designated by law for holding a general election. and 10 regular holidays) gives rise likewise to the same presumption that the unworked Saturdays. Villar v. Finally. particularly Article 208. Instead. provided that the latter does not receive any pecuniary benefit. 1976. payrolls. CONCHITA CARPIO MORALES (Associate Justice) WE CONCUR: LEONARDO A. as the NLRC noted.[24] And so must her claim for allowances.). x x x xxxx The reason for the rule is that the pertinent personnel files. the first of May. and to 13th month pay under Presidential Decree No. Sundays and regular holidays are unpaid. the Court of Appeals Resolution of December 15. the twelfth of June. QUISUMBING (Associate Justice. (b) When the deductions are with the written authorization of the employees for payment to a third person and the employer agrees to do so. Inciong. to remit her contributions to the SSS. Respondent bank did not appeal from the said decision. set aside and a new judgment promulgated dismissing the instant case for lack of merit" (p. 1979. and the deduction is to recompense the employer for the amount paid by him as premium on the insurance. Presidential Decree No. she could have resumed her work as registrar had she really wanted to continue working with Forest Hills. TINGA (Associate Justice). 1975. 52 Sundays. there is no concrete proof that she is entitled thereto.[21] Petitioner’s affidavit and those of her former colleagues.[22] which she attached to her Position Paper. There being no substantial proof that petitioner was dismissed. MAKASIAR. the dispositive portion of which reads as follows: "xxx xxx xxx "ALL THE FOREGOING CONSIDERED. in NLRC case No.

In the case of monthly. The controversial section thereof reads: "Sec. 1391. Respondent bank further alleged for the first time that the questioned order is not supported by evidence insofar as it finds that respondent bank discontinued payment of holiday pay beginning January. whereby the respondent bank was ordered to pay its employees their daily wage for the unworked regular holidays.D. . Good Friday. NLRC rec. the twenty-fifth and the thirtieth of December. to order the issuance of the proper writ of execution" (p. 1975" (p. Hence. among others. Status of employees paid by the month. 850 and Policy Instruction No.D. Inciong with abuse of discretion amounting to lack or excess of jurisdiction. amounting to lack of jurisdiction on the part of the National Labor Relations Commission. we hereby resolve to dismiss. NLRC rec.(a) Every worker shall be paid his regular daily wages during regular holidays. As explained in Policy Instruction No.00 and their monthly pay is uniform from January to December. 850 which took effect on December 16. this policy has been fully clarified to eliminate controversies on the entitlement of monthly paid employees. On February 21. and (b) that since the decision had been partially implemented by the respondent bank. set aside and a new judgment promulgated dismissing the instant case for lack of merit" (p. then he is still entitled to the ten (10) paid legal holidays. . while copies were served on the respondent bank on February 13. ". the National Labor Relations Commission promulgated its resolution en banc dismissing respondent bank's appeal. 244. The new determining rule is this: If the monthly paid employee is receiving not less than P240. whether for profit or not. as we hereby dismiss. Book III of the implementing rules. if deductions are made from his monthly salary on account of holidays in months where they occur. they in effect amended them by enlarging the scope of their exclusion (p. 'holiday' includes: New Year's Day. 1979. the maximum monthly minimum wage. 364.). On November 10. 11. respondent bank filed with the Office of the Minister of Labor a motion for reconsideration/appeal with urgent prayer to stay execution. respondent bank appealed from the above-cited order of Labor Arbiter Soriano to the National Labor Relations Commission. 'unworked' legal holidays are deemed paid insofar as monthly paid employees are concerned if (a) they are receiving not less than the statutory minimum wage. and (c) no deduction is made from their monthly salary on account of holidays in months where they occur. let the appealed Resolution en banc of the National Labor Relations Commission dated 20 June 1978 be.). and by said Policy Instruction No.). and (c) that the decision of the labor arbiter dated August 25. On June 20. The issue in this case is: whether or not the decision of a Labor Arbiter awarding payment of regular holiday pay can still be set aside on appeal by the Deputy Minister of Labor even though it has already become final and had been partially executed. NLRC rec. in accordance with the Decision of the Labor Arbiter dated August 25. that: (a) its refusal to pay the corresponding unworked holiday pay in accordance with the award of Labor Arbiter Ricarte T.D. the dispositive portion of which reads as follows: "In view of the foregoing. On July 30. the fourth of July. 1976. pertinent portions of which read: "xxx xxx xxx "The ten (10) paid legal holidays law. 2. and "(c) As used in this Article. irrespective of the number of working days therein. . On April 23. 1979. Right to holiday pay. stopped the payment of holiday pay to all its employees. 1975. as it is hereby. 850. the first of May. the National Labor Relations Commission issued an order which states: "The Chief.). 1975. 1976. WE find for the petitioner. (b) their monthly pay is uniform from January to December. members of the family of the employer who are dependent on him for support. field personnel. on the basis of an Implementing Rule and Policy Instruction promulgated by the Ministry of Labor long after the said decision had become final and executory. However. . Section 2.). to set aside Labor Arbiter Ricarte T. 82. 9 was issued by the then Secretary of Labor (now Minister) interpreting the above-quoted rule. the Department of Labor (now Ministry of Labor) promulgated the rules and regulations for the implementation of holidays with pay. 64-65. 1975 is supported by the law and the evidence in the case (p. "Under the rules implementing P. on February 16. "(b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate. 260-274. 1976. Labor Standards | To digest (old cases) | Ajean Tuazon| 44 . which provides that: "employees who are uniformly paid by the month. 1979. 1976. " The coverage and scope of exclusion of the Labor Code's holiday pay provisions is spelled out under Article 82 thereof which reads: "Art. Rule IV. issued an order." Public respondent maintains that " (T)he rules implementing P. the Office of the Minister of Labor. 850. and that no deductions are made from the monthly salaries of its employees on account of holidays in months where they occur (pp. the dispositive portion of which states: "ALL THE FOREGOING CONSIDERED. As interpreted. 9 which interpreted the rules implementing P. WE agree with the petitioner's contention that Section 2. with e salary of not less than the statutory or established minimum wage shall be presumed to be paid for all days in the month whether worked or not. . 436. under Rule IV. Book III of the implementing rules and Policy Instruction No. executory and unappealable. 850. rec. the ninth of April. is intended to benefit principally daily employees. From the above-cited provisions. However. NLRC rec. the monthly minimum wage shall not be less than the statutory minimum wage multiplied by 365 days divided by twelve". On March 19. 9. 1979. Soriano. 1979 or almost eight (8) months after it was promulgated. Labor Arbiter Ricarte T. 1975. and (b) that the resolution appealed from is contrary to the law and jurisprudence (pp. to start with. . is based on and justified by Policy Instruction No.). 1979. and the day designated by law for holding a general election. the twelfth of June. Respondent bank. petitioner filed a motion for a writ of execution to enforce the arbiter's decision of August 25.). instead of issuing a writ of execution. considering that its monthly paid employees are not receiving less than P240. Coverage. managerial employees. Copies of the above resolution were served on the petitioner only on February 9. respondent's appeal. persons in the personal service of another. D. (b) that the labor arbiter's decision being final. alleging therein the following: (a) that there is prima facie evidence of grave abuse of discretion. On September 10. as amended by P. Right to holiday pay.D. reiterating therein its contentions averred in its opposition to the motion for writ of execution.Employees who are uniformly paid by the month. with a salary of not less than the statutory or established minimum wage shall be presumed to be paid for all days in the month whether worked or not. NLRC rec. 94. except in retail and service establishments regularly employing less than ten (10) workers. provides: "Art. Inciong. the implementing rules on holiday pay promulgated by the then Secretary of Labor excludes monthly paid employees from the said benefits by inserting. and (b) that the said award is already repealed by P. execution is a matter of right for the petitioner."Art. he is presumed to be already paid the ten (10) paid legal holidays. rec." Accordingly. petitioner filed a second motion for execution pending appeal. D. 100-103. as prayed for by complainant. Maundy Thursday. .). Article 94 of the Labor Code.). issued an order enjoining the respondent bank to continue paying its employees their regular holiday pay on the following grounds: (a) that the judgment is already final and the findings which is found in the body of the decision as well as the dispositive portion thereof is res judicata or is the law of the case between the parties. On August 30. petitioner filed its opposition to the respondent bank's appeal and alleged the following grounds: (a) that the office of the Minister of Labor has no jurisdiction to entertain the instant appeal pursuant to the provisions of P. 1979. rec. 1976 (p. 1978. On November 17. irrespective of the number of working days therein. by authority of Article 5 of the same Code.The provision of this Title shall apply to employees in all establishments and undertakings. the thirtieth of November. 9 were issued to clarify the policy in the implementation of the ten (10) paid legal holidays. except in retail and service establishments regularly employing less than ten (10) workers. 9 of the Department of Labor. . NLRC rec. 1975. Research and Information Division of this Commission is hereby directed to designate a Socio-Economic Analyst to compute the holiday pay of the employees of the Insular Bank of Asia and America from April 1976 to the present. and his monthly pay is uniform from January to December. 84. but not to government employees. through Deputy Minister Amado G.(a) Every worker shall be paid his regular daily wage during regular holidays. 94. On August 13. 1976. Soriano's order of 18 October 1976 and. appeal from the said decision is no longer available (pp. 1979. "xxx xxx xxx". On October 18. . Respondent bank filed its opposition thereto on August 8. "For this purpose. respondent bank filed an opposition to the motion for a writ of execution alleging. Soriano dated August 25. praying that a writ of execution be issued by the National Labor Relations Commission pending appeal of the case with the Office of the Minister of Labor. domestic helpers. . I. this petition for certiorari charging public respondent Amado G. . only those whose monthly salary did not yet include payment for the ten (10) paid legal holidays are entitled to the benefit. in dismissing the respondent's appeal on pure technicalities without passing upon the merits of the appeal. 80. 9 issued by the then Secretary of Labor are null and void since in the guise of clarifying the Labor Code's provisions on holiday pay. Policy Instruction No. and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations. it is clear that monthly paid employees are not excluded from the benefits of holiday pay. the finality of which was affirmed by the National Labor Relations Commission sitting en banc. by reason of the ruling laid down by the aforecited rule implementing Article 94 of the Labor Code and by Policy Instruction No.

. . A.it provides for both the coverage of and exclusion from the benefits. Collector of Internal Revenue. Swisher.). So long. . 100 Phil. Ibid. July 31. rec. While it is true that the contemporaneous construction placed upon a statute by executive officers whose duty is to enforce it should be given great weight by the courts. only those whose monthly salary did not yet include payment for the ten (10) paid legal holidays are entitled to the benefit'" (pp. Tupasi Molina (29 Phil. as the regulations relate solely to carrying into effect the provisions of the law. 9 issued by the then Secretary of Labor must be declared null and void. 585. when the law clearly states that every worker shall be paid their regular holiday pay. National Labor Relations Commission (106 SCRA 444. 155. 342-343. On the question of whether or not a law or statute can annul or modify a judicial order issued prior to its promulgation. We reaffirmed such a doctrine in a 1951 decision. It is elementary in the rules of statutory construction that when the language of the law is clear and unequivocal the law must be taken to mean exactly what it says. et al. for. 'The ten (10) paid legal holidays law. when necessary. while in the instant case. Necessarily. 19 Phil. Xxx xxx xxx "Clearly. citing Teozon vs. Inc. . in fact. until the provisions of the Labor Code on holiday pay is amended by another law. even if the courts are not in agreement with the policy stated therein or its innate wisdom ." Moreover. it is patently unjust to deprive the members of petitioner union of their vested right acquired by virtue of a final judgment on the basis of a labor statute promulgated following the acquisition of the "right". the final judgment is partially executed. Barrios decided in 1908. Inciong had no basis at all to deny the members of petitioner union their regular holiday pay as directed by the Labor Code. the then Secretary of Labor went as far as to categorically state that the benefit is principally intended for daily paid employees. 850 on February 16. and was. as expressed by the Secretary of Labor in the case of Chartered Bank Employees Association v. is intended to benefit principally daily paid employees. Apparel Workers Union vs. administrative interpretation of the law is at best merely advisory. assert for itself a more extensive prerogative. supra. . Said order. It is the role of the Judiciary to refine and. shall be resolved in favor of labor.).D. However. monthly paid employees are definitely included in the benefits of regular holiday pay. Thus Article 4 of the Labor Code provides that. Jacinto & Fabros. public respondent Deputy Minister of Labor Amado G. No lesser administrative executive office or agency then can. and Article 1702 of the Civil Code provides that. except penal laws favorable to the accused have retroactive effect in the sense of annulling or modifying vested rights. it is bound to observe the constitutional mandate. in the sense of revoking or rendering it void and of no effect. . vs. Just as the court is ousted of its jurisdiction to annul or modify a judgment the moment it becomes final. As earlier stated.. the subsequent amendment or even repeal of said law or rule may not affect the final decision. through Associate Justice Claro M. the same must be declared as null and void. 43 Phil. Its terms must be followed. G. Respondent bank clearly manifested its voluntariness in complying with the decision of the labor arbiter by not appealing to the National Labor Labor Standards | To digest (old cases) | Ajean Tuazon| 45 . 93 Phil. all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer. Judge of First Instance of Manila. B. It is not disputed that the decision of Labor Arbiter Ricarte T. Social Security Commission. 1976). 119) delineation of the scope of such competence. . for it is the courts that finally determine what the law means. an administrative agency 'cannot amend an act of Congress.. contrary to the express language of the Constitution. This would certainly result in endless litigations thereby rendering inutile the rule of law. 138. speaking for the Court in Victorias Milling Inc.9. "'The recognition of the power of administrative officials to promulgate rules in the administration of the statute. 1975. PVA. 9 on April 23. unlike the instant case. to start with.' Respondents can be sustained.' "'It cannot be otherwise as the Constitution limits the authority of the President. Inc. and the issuance of Policy Instruction No. shall be resolved in favor of labor". This contention is untenable. Not even a law can validly annul final decisions (In re: Cunanan." Thus. this Court ruled that: ". . 1974. the inclusion of paragraph k contravenes the statutory authority granted to the Secretary of Labor. including its implementing rules and regulations. may be found in the early case of United States vs. Recto. March 24.. almost always in situations where some agency of the State has engaged in action that stems ultimately from some legitimate area of governmental power (The Supreme Court in Modern Role. This is a flagrant violation of the mandatory directive of Article 4 of the Labor Code.' In 1936. as in the instant case. 295. 1093. 1981) where the Secretary of Labor enlarged the scope of exemption from the coverage of a Presidential Decree granting increase in emergency allowance. and the same is therefore void. rec. By such regulations. 33 SCRA 585. (China Ins. p. Book III of the Rules to Implement the Labor Code) cannot be given retroactive effect as to modify final judgments. This ruling of the Court was recently reiterated in the case of American Wire & Cable Workers Union (TUPAS) vs. 259). 109 Phil. in People vs. the provisions of the Labor Code on the entitlement to the benefits of holiday pay are clear and explicit . however. became final on the date of its issuance and the parties who acquired rights thereunder cannot be deprived thereof by a constitutional provision enacted or promulgated subsequent thereto. in the case of Philippine Apparel Workers Union vs. where we again made clear that where an administrative order betrays inconsistency or repugnancy to the provisions of the Act. 340-341. 61 SCRA 49. rec. 1954.. 419. Hon. In Policy Instruction No. 63 Phil 324). 112. Haskell. as ruled by this Court in a long line of cases. this Court. On the other hand. November 13. when a court renders a decision or promulgates a resolution or order on the basis of and in accordance with a certain law or rule then in force. Public respondent vehemently argues that the intent and spirit of the holiday pay law. C. still if such construction is so erroneous.. necessarily limited to what is provided for in the legislative enactment. is to correct the disadvantages inherent in the daily compensation system of employment holiday pay is primarily intended to benefit the daily paid workers whose employment and income are circumscribed by the principle of "no work. et al. The Chartered Bank (NLRC Case No. 'the mandate of the Act must prevail and must be followed. Rule IV. the amendatory rule (Rule IV. WE find no merit in this argument. Hilado vs. & Surety Co. 1976 by the then Secretary of Labor are facts and circumstances that transpired subsequent to the promulgation of the decision of the labor arbiter. Santos. the facts of the case relied upon by the public respondent are not analogous to that of the case at bar. said: "xxx xxx xxx "We are decidedly of the opinion that they did not. Sy Man vs.R. which states that "All doubts in the implementation and interpretation of the provisions of this Code. in whom all executive power resides. In the case at bar. the court also loses its jurisdiction to annul or modify a writ of execution upon its service or execution. not departure from its provisions. it shall always be presumed that the legislature intended to enact a valid and permanent statute which would have the most beneficial effect that its language permits (Orlosky vs. 1984. negatively put. Kayanan. Aldanese and Trinidad. Respondent bank counters with the argument that its partial compliance was involuntary because it did so under pain of levy and execution of its assets (p. . To start with. order. The case of De Luna speaks of final and executory judgment.). 1958. citing Parker as well as Davis did tersely sum up the matter thus: 'A rule is binding on the Courts so long as the procedure fixed for its promulgation is followed and its scope is within the statutory authority granted by the legislature. the law itself cannot be extended. Thus." This argument may sound meritorious. but.' Justice Barrera. Accordingly. In view of the foregoing. There must be strict compliance with the legislative enactment. had already become final. Neither the Constitution nor the statutes. or resolution already promulgated.. partially executed by the respondent bank. . Book III of the Rules to implement the Labor Code and Policy Instruction No. Section 2. National Labor Relations Commission. 53337. et al." Consequently. Furthermore. Members of the Board of Administrators. Obviously. being unappealable. 464. the case of De Luna relied upon by the public respondent is not a labor case wherein the express mandate of the Constitution on the protection to labor is applied. the Secretary (Minister) of Labor had exceeded his statutory authority granted by Article 5 of the Labor Code authorizing him to promulgate the necessary implementing rules and regulations. No deviation is allowable. public respondent maintains that on the authority of De Luna vs. No. Then came in a 1914 decision. Estenzo. therefore. 9. 36). to take care that the laws be faithfully executed. In case of monthly. correct constitutional (and/or statutory) interpretation. see also Santos vs. II. in the context of the interactions of the three branches of the government. The statute requires adherence to. Thus: 'Of course the regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law. March 18. they are valid. he can annul the final decision of Labor Arbiter Soriano since the ensuing promulgation of the integrated implementing rules of the Labor Code pursuant to P. we will have a situation wherein a final and executed judgment can still be annulled or modified by the court upon mere motion of a party. vs. 1976. The National Labor Relations Commission and American Wire & Cable Co.). "In case of doubt. RB-178975. otherwise. 463. and for the sole purpose of carrying into effect its general provisions. "All doubts in the implementation and interpretation of the provisions of this Code. contrary to public respondent's allegations. which renders the execution of the said decision impossible and unjust on the part of herein respondent bank (pp. no pay. vs. Soriano dated August 25. Olsen & Co. In the case of In re: Cunanan. of course. including its implementing rules and regulations. this Court said: ". the Secretary of Labor has-exceeded his authority when he included paragraph (k) in Section 1 of the Rules implementing P. this Court expressed its disapproval of an administrative order that would amount to an excess of the regulatory power vested in an administrative official. United States vs. promulgated on June 29. only if it could be shown that the rules and regulations promulgated by them were in accordance with what the Veterans Bill of Rights provides'" (Phil. or altering contractual obligation. 1123. the presumption is always in favor of law. the Labor Code is always strictly construed against management. This contention is untenable. .D.). In the terse language of the present Chief Justice.

Relations Commission as provided for under the Labor Code under Article 223. A party who waives his right to appeal is deemed to have accepted the judgment, adverse or not, as correct, especially if such party readily acquiesced in the judgment by starting to execute said judgment even before a writ of execution was issued, as in this case. Under these circumstances, to permit a party to appeal from the said partially executed final judgment would make a mockery of the doctrine of finality of judgments long enshrined in this jurisdiction. Section 1 of Rule 39 of the Revised Rules of Court provides that ". . . execution shall issue as a matter of right upon the expiration of the period to appeal . . . or if no appeal has been duly perfected." This rule applies to decisions or orders of labor arbiters who are exercising quasi-judicial functions since; ". . . the rule of execution of judgments under the rules should govern all kinds of execution of judgment, unless it is otherwise provided in other laws" (Sagucio vs. Bulos, 5 SCRA 803) and Article 223 of the Labor Code provides that ". . . decisions, awards, or orders of the Labor Arbiter or compulsory arbitrators are final and executory unless appealed to the Commission by any or both of the parties within ten (10) days from receipt of such awards, orders, or decisions. . . . . " Thus, under the aforecited rule, the lapse of the appeal period deprives the courts of jurisdiction to alter the final judgment and the judgment becomes final ipso jure (Vega vs. WCC, 89 SCRA 143, citing Cruz vs. WCC, 2 PHILAJUR 436, 440, January 31, 1978; see also Soliven vs. WCC, 77 SCRA 621; Carrero vs. WCC and Regala vs. WCC, decided jointly, 77 SCRA 297; Vitug vs. Republic, 75 SCRA 436; Ramos vs. Republic, 69 SCRA 576). In Galvez vs. Philippine Long Distance Telephone Co., 3 SCRA 422, 423, October 31, 1961, where the lower court modified a final order, this Court ruled thus: "xxx xxx xxx "The lower court was thus aware of the fact that it was thereby altering or modifying its order of January 8,1959. Regardless of the excellence of the motive for acting as it did, we are constrained to hold, however, that the lower court had no authority to make said alteration or modification. . . . . "xxx xxx xxx "The equitable considerations that led the lower court to take the action complained of cannot offset the demands of public policy and public interest - which are also responsive to the tenets of equity - requiring that all issues passed upon in decisions or final orders that have become executory, be deemed conclusively disposed of and definitely closed, for, otherwise, there would be no end to litigations, thus setting at naught the main role of courts of justice, which is to assist in the enforcement of the rule of law and the maintenance of peace and order, by settling justiciable controversies with finality. "xxx xxx xxx In the recent case of Gabaya vs. Mendoza, 113 SCRA 405, 406, March 30, 1982, this Court said: "xxx xxx xxx "In Marasigan vs. Ronquillo (94 Phil. 237), it was categorically stated that the rule is absolute that after a judgment becomes final, by the expiration of the period provided by the rules within which it so becomes, no further amendment or correction can be made by the court except for clerical errors or mistakes. And such final judgment is conclusive not only as to every matter which was offered and received to sustain or defeat the claim or demand but as to any other admissible matter which must have been offered for that purpose (L-7044, 96 Phil. 526). In the earlier case of Contreras and Ginco vs. Felix and China Banking Corp., Inc. (44 O.G. 4306), it was stated that the rule must be adhered to regardless of any possible injustice in a particular case for '(W)e have to subordinate the equity of a particular situation to the overmastering need of certainty and immutability of judicial pronouncements.'. "xxx xxx xxx" III. The despotic manner by which public respondent Amado G. Inciong divested the members of the petitioner union of their rights acquired by virtue of a final judgment is tantamount to a deprivation of property without due process of law. Public respondent completely ignored the rights of the petitioner union's members in dismissing their complaint since he knew for a fact that the judgment of the labor arbiter had long become final and was even partially executed by the respondent bank. A final judgment vests in the prevailing party a right recognized and protected by law under the due process clause of the Constitution (China Ins. & Surety Co. vs. Judge of First Instance of Manila, 63 Phil. 324). A final judgment is "a vested interest which it is right and equitable that the government should recognize and protect, and of which the individual could not be deprived arbitrarily without injustice" (Rookledge v. Gariwood, 65 N.W. 2d 785, 791). It is by this guiding principle that the due process clause is interpreted. Thus, in the pithy language of then Justice, later Chief Justice, Concepcion: ". . . acts of Congress, as well as those of the Executive, can deny due process only under pain of nullity, and judicial proceedings suffering from the same flaw are subject to the same sanction, any statutory provision to the contrary notwithstanding" (Vda. de Cuaycong vs. Vda. de Sengbengco, 110 Phil. 118, talics supplied). And "(I)t has been likewise established that a violation of a constitutional right divests the court of jurisdiction; and as a consequence its judgment is null and void and confers no rights" (Phil. Blooming Mills Employees Organization vs. Phil. Blooming Mills Co., Inc., 51 SCRA 211, June 5, 1973).

Tested by and pitted against this broad concept of the constitutional guarantee of due process, the action of public respondent Amado G. Inciong is a clear example of deprivation of property without due process of law and constituted grave abuse of discretion, amounting to lack or excess of jurisdiction in issuing the order dated November 10, 1979. WHEREFORE, THE PETITION IS HEREBY GRANTED, THE ORDER OF PUBLIC RESPONDENT IS SET ASIDE, AND THE DECISION OF LABOR ARBITER RICARTE T. SORIANO DATED AUGUST 25, 1975, IS HEREBY REINSTATED. COSTS AGAINST PRIVATE RESPONDENT INSULAR BANK OF ASIA AND AMERICA. SO ORDERED. Guerrero, Escolin and Cuevas, JJ., concur. Aquino and Abad Santos, JJ., concur in the result. Concepcion, Jr., J., took no part. CEZAR ODANGO in his behalf and in behalf of 32 complainants, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and ANTIQUE ELECTRIC COOPERATIVE, INC., respondents., G.R. No. 147420, 2004 Jun 10, 1st Division CARPIO, J.: The Case Before the Court is a petition for review[1] assailing the Court of Appeals’ Resolutions of 27 September 2000[2] and 7 February 2001 in CA-G.R. SP No. 51519. The Court of Appeals upheld the Decision[3] dated 27 November 1997 and the Resolution dated 30 April 1998 of the National Labor Relations Commission ("NLRC") in NLRC Case No. V0048-97. The NLRC reversed the Labor Arbiter’s Decision of 29 November 1996, which found respondent Antique Electric Cooperative ("ANTECO") liable for petitioners’ wage differentials amounting to P1,017,507.73 plus attorney’s fees of 10%. Antecedent Facts Petitioners are monthly-paid employees of ANTECO whose workdays are from Monday to Friday and half of Saturday. After a routine inspection, the Regional Branch of the Department of Labor and Employment ("DOLE") found ANTECO liable for underpayment of the monthly salaries of its employees. On 10 September 1989, the DOLE directed ANTECO to pay its employees wage differentials amounting to P1,427,412.75. ANTECO failed to pay. Thus, on various dates in 1995, thirty-three (33) monthly-paid employees filed complaints with the NLRC SubRegional Branch VI, Iloilo City, praying for payment of wage differentials, damages and attorney’s fees. Labor Arbiter Rodolfo G. Lagoc ("Labor Arbiter") heard the consolidated complaints. On 29 November 1996, the Labor Arbiter rendered a Decision in favor of petitioners granting them wage differentials amounting to P1,017,507.73 and attorney’s fees of 10%. Florentino Tongson, whose case the Labor Arbiter dismissed, was the sole exception. ANTECO appealed the Decision to the NLRC on 24 December 1996. On 27 November 1997, the NLRC reversed the Labor Arbiter’s Decision. The NLRC denied petitioners’ motion for reconsideration in its Resolution dated 30 April 1998. Petitioners then elevated the case to this Court through a petition for certiorari, which the Court dismissed for petitioners’ failure to comply with Section 11, Rule 13 of the Rules of Court. On petitioners’ motion for reconsideration, the Court on 13 January 1999 set aside the dismissal. Following the doctrine in St. Martin Funeral Home v. NLRC,[4] the Court referred the case to the Court of Appeals. On 27 September 2000, the Court of Appeals issued a Resolution dismissing the petition for failure to comply with Section 3, Rule 46 of the Rules of Court. The Court of Appeals explained that petitioners failed to allege the specific instances where the NLRC abused its discretion. The appellate court denied petitioners’ motion for reconsideration on 7 February 2001. Hence, this petition. The Labor Arbiter’s Ruling The Labor Arbiter reasoned that ANTECO failed to refute petitioners’ argument that monthly-paid employees are considered paid for all the days in a month under Section 2, Rule IV of Book 3 of the Implementing Rules of the Labor Code (“Section 2”).[5] Petitioners claim that this includes not only the 10 legal holidays, but also their unworked half of Saturdays and all of Sundays. The Labor Arbiter gave credence to petitioners’ arguments on the computation of their wages based on the 304 divisor used by ANTECO in converting the leave credits of its employees. The Labor Arbiter agreed with petitioners that ANTECO’s use of 304 as divisor is an admission that it is paying its employees for only 304 days a year instead of the 365 days as specified in Section 2. The Labor Arbiter concluded that ANTECO owed its employees the wages for 61 days, the difference between 365 and 304, for every year. The NLRC’s Ruling Labor Standards | To digest (old cases) | Ajean Tuazon| 46

On appeal, the NLRC reversed the Labor Arbiter’s ruling that ANTECO underpaid its employees. The NLRC pointed out that the Labor Arbiter’s own computation showed that the daily wage rates of ANTECO’s employees were above the minimum daily wage of P124. The lowest paid employee of ANTECO was then receiving a monthly wage of P3,788. The NLRC applied the formula in Section 2 [(Daily Wage Rate = (Wage x 12)/365)] to the monthly wage of P3,788 to arrive at a daily wage rate of P124.54, an amount clearly above the minimum wage. The NLRC noted that while the reasoning in the body of the Labor Arbiter’s decision supported the view that ANTECO did not underpay, the conclusion arrived at was the opposite. Finally, the NLRC ruled that the use of 304 as a divisor in converting leave credits is more favorable to the employees since a lower divisor yields a higher rate of pay. The Ruling of the Court of Appeals The Court of Appeals held that the petition was insufficient in form and substance since it "does not allege the essential requirements of the extra-ordinary special action of certiorari." The Court of Appeals faulted petitioners for failing to recite "where and in what specific instance public respondent abused its discretion." The appellate court characterized the allegations in the petition as "sweeping" and clearly falling short of the requirement of Section 3, Rule 46 of the Rules of Court. The Issues Petitioners raise the following issues: I. WHETHER THE COURT OF APPEALS IS CORRECT IN DISMISSING THE CASE. II. WHETHER PETITIONERS ARE ENTITLED TO THEIR MONEY CLAIM.[6] The Ruling of the Court The petition has no merit. On the sufficiency of the petition Petitioners argue that the Court of Appeals erred in dismissing their petition because this Court had already ruled that their petition is sufficient in form and substance. They argue that this precludes any judgment to the contrary by the Court of Appeals. Petitioners cite this Court’s Resolution dated 13 January 1999 as their basis. This Resolution granted petitioners’ motion for reconsideration and set aside the dismissal of their petition for review. Petitioners’ reliance on our 16 September 1998 Resolution is misplaced. In our Resolution, we dismissed petitioners’ case for failure to comply with Section 11, Rule 13 of the Rules of Court.[7] The petition lacked a written explanation on why service was made through registered mail and not personally. The error petitioners committed before the Court of Appeals is different. The appellate court dismissed their petition for failure to comply with the first paragraph of Section 3 of Rule 46[8] in relation to Rule 65 of the Rules of Court, outlining the necessary contents of a petition for certiorari. This is an entirely different ground. The previous dismissal was due to petitioners’ failure to explain why they resorted to service by registered mail. This time the content of the petition itself is deficient. Petitioners failed to allege in their petition the specific instances where the actions of the NLRC amounted to grave abuse of discretion. There is nothing in this Court’s Resolution dated 13 January 1999 that remotely supports petitioners’ argument. What we resolved then was to reconsider the dismissal of the petition due to a procedural defect and to refer the case to the Court of Appeals for its proper disposition. We did not in any way rule that the petition is sufficient in form and substance. Petitioners also argue that their petition is clear and specific in its allegation of grave abuse of discretion. They maintain that they have sufficiently complied with the requirement in Section 3, Rule 46 of the Rules of Court. Again, petitioners are mistaken. We quote the relevant part of their petition: REASONS RELIED UPON FOR ALLOWANCE OF PETITION 12. This Honorable court can readily see from the facts and circumstances of this case, the petitioners were denied of their rights to be paid of 4 hours of each Saturday, 51 rest days and 10 legal holidays of every year since they started working with respondent ANTECO. 13. The respondent NLRC while with open eyes knew that the petitioners are entitled to salary differentials consisting of 4 hours pay on Saturdays, 51 rest days and 10 legal holidays plus 10% attorney’s fees as awarded by the Labor Arbiter in the above-mentioned decision, still contrary to law, contrary to existing jurisprudence issued arbitrary, without jurisdiction and in excess of jurisdiction the decision vacating and setting aside the said decision of the Labor Arbiter, to the irreparable damage and prejudice of the petitioners. 14. That the respondent NLRC in grave abuse of discretion in the exercise of its function, by way of evasion of positive duty in accordance with existing labor laws, illegally refused to reconsider its decision dismissing the petitioners’ complaints. 15. That there is no appeal, nor plain, speedy and adequate remedy in law from the above-mentioned decision and resolution of respondent NLRC except this petition for certiorari.[9]

These four paragraphs comprise the petitioners’ entire argument. In these four paragraphs petitioners ask that a writ of certiorari be issued in their favor. We find that the Court of Appeals did not err in dismissing the petition outright. Section 3, Rule 46 of the Rules of Court requires that a petition for certiorari must state the grounds relied on for the relief sought. A simple perusal of the petition readily shows that petitioners failed to meet this requirement. The appellate court’s jurisdiction to review a decision of the NLRC in a petition for certiorari is confined to issues of jurisdiction or grave abuse of discretion.[10] An extraordinary remedy, a petition for certiorari is available only and restrictively in truly exceptional cases. The sole office of the writ of certiorari is the correction of errors of jurisdiction including the commission of grave abuse of discretion amounting to lack or excess of jurisdiction.[11] It does not include correction of the NLRC’s evaluation of the evidence or of its factual findings. Such findings are generally accorded not only respect but also finality.[12] A party assailing such findings bears the burden of showing that the tribunal acted capriciously and whimsically or in total disregard of evidence material to the controversy, in order that the extraordinary writ of certiorari will lie.[13] We agree with the Court of Appeals that nowhere in the petition is there any acceptable demonstration that the NLRC acted either with grave abuse of discretion or without or in excess of its jurisdiction. Petitioners merely stated generalizations and conclusions of law. Rather than discussing how the NLRC acted capriciously, petitioners resorted to a litany of generalizations. Petitions that fail to comply with procedural requisites, or are unintelligible or clearly without legal basis, deserve scant consideration. Section 6, Rule 65 of the Rules of Court requires that every petition be sufficient in form and substance before a court may take further action. Lacking such sufficiency, the court may dismiss the petition outright. The insufficiency in substance of this petition provides enough reason to end our discussion here. However, we shall discuss the issues raised not so much to address the merit of the petition, for there is none, but to illustrate the extent by which petitioners have haphazardly pursued their claim. On the right of the petitioners to wage differentials Petitioners claim that the Court of Appeals gravely erred in denying their claim for wage differentials. Petitioners base their claim on Section 2, Rule IV of Book III of the Omnibus Rules Implementing the Labor Code. Petitioners argue that under this provision monthly-paid employees are considered paid for all days of the month including un-worked days. Petitioners assert that they should be paid for all the 365 days in a year. They argue that since in the computation of leave credits, ANTECO uses a divisor of 304, ANTECO is not paying them 61 days every year. Petitioners’ claim is without basis We have long ago declared void Section 2, Rule IV of Book III of the Omnibus Rules Implementing the Labor Code. In Insular Bank of Asia v. Inciong,[14] we ruled as follows: Section 2, Rule IV, Book III of the Implementing Rules and Policy Instructions No. 9 issued by the Secretary (then Minister) of Labor are null and void since in the guise of clarifying the Labor Code’s provisions on holiday pay, they in effect amended them by enlarging the scope of their exclusion. The Labor Code is clear that monthly-paid employees are not excluded from the benefits of holiday pay. However, the implementing rules on holiday pay promulgated by the then Secretary of Labor excludes monthly-paid employees from the said benefits by inserting, under Rule IV, Book III of the implementing rules, Section 2 which provides that monthly-paid employees are presumed to be paid for all days in the month whether worked or not. Thus, Section 2 cannot serve as basis of any right or claim. Absent any other legal basis, petitioners’ claim for wage differentials must fail. Even assuming that Section 2, Rule IV of Book III is valid, petitioners’ claim will still fail. The basic rule in this jurisdiction is “no work, no pay.” The right to be paid for un-worked days is generally limited to the ten legal holidays in a year.[15] Petitioners’ claim is based on a mistaken notion that Section 2, Rule IV of Book III gave rise to a right to be paid for un-worked days beyond the ten legal holidays. In effect, petitioners demand that ANTECO should pay them on Sundays, the un-worked half of Saturdays and other days that they do not work at all. Petitioners’ line of reasoning is not only a violation of the “no work, no pay” principle, it also gives rise to an invidious classification, a violation of the equal protection clause. Sustaining petitioners’ argument will make monthly-paid employees a privileged class who are paid even if they do not work. The use of a divisor less than 365 days cannot make ANTECO automatically liable for underpayment. The facts show that petitioners are required to work only from Monday to Friday and half of Saturday. Thus, the minimum allowable divisor is 287, which is the result of 365 days, less 52 Sundays and less 26 Saturdays (or 52 half Saturdays). Any divisor below 287 days means that ANTECO’s workers are deprived of their holiday pay for some or all of the ten legal holidays. The 304 days divisor used by ANTECO is clearly above the minimum of 287 days. Finally, petitioners cite Chartered Bank Employees Association v. Ople[16] as an analogous situation. Petitioners have misread this case. Labor Standards | To digest (old cases) | Ajean Tuazon| 47

In Chartered Bank, the workers sought payment for un-worked legal holidays as a right guaranteed by a valid law. In this case, petitioners seek payment of wages for un-worked non-legal holidays citing as basis a void implementing rule. The circumstances are also markedly different. In Chartered Bank, there was a collective bargaining agreement that prescribed the divisor. No CBA exists in this case. In Chartered Bank, the employer was liable for underpayment because the divisor it used was 251 days, a figure that clearly fails to account for the ten legal holidays the law requires to be paid. Here, the divisor ANTECO uses is 304 days. This figure does not deprive petitioners of their right to be paid on legal holidays. A final note. ANTECO’s defense is likewise based on Section 2, Rule IV of Book III of the Omnibus Rules Implementing the Labor Code although ANTECO’s interpretation of this provision is opposite that of petitioners. It is deplorable that both parties premised their arguments on an implementing rule that the Court had declared void twenty years ago in Insular Bank. This case is cited prominently in basic commentaries.[17] And yet, counsel for both parties failed to consider this. This does not speak well of the quality of representation they rendered to their clients. This controversy should have ended long ago had either counsel first checked the validity of the implementing rule on which they based their contentions. WHEREFORE, the petition is DENIED. The Resoution of the Court of Appeals DISMISSING CA-G.R. SP No. 51519 is AFFIRMED. SO ORDERED. Davide, Jr., C.J., (Chairman), Panganiban, Ynares-Santiago, and Azcuna, JJ., concur. RULE IN CASE TWO REGULAR HOLIDAYS FALLING ON THE SAME DAY ASIAN TRANSMISSION CORPORATION, Petitioner, versus The Hon. COURT OF APPEALS, Thirteenth Division, HON. FROILAN M. BACUNGAN as Voluntary Arbitrator, KISHIN A. LALWANI, Union, Union representative to the Panel Arbitrators; BISIG NG ASIAN TRANSMISSION LABOR UNION (BATLU); HON. BIENVENIDO T. LAGUESMA in his capacity as Secretary of Labor and Employment; and DIRECTOR CHITA G. CILINDRO in her capacity as Director of Bureau of Working Conditions, Respondents., G. R. No. 144664, 2004 Mar 15, 3rd Division CARPIO MORALES, J.: Petitioner, Asian Transmission Corporation, seeks via petition for certiorari under Rule 65 of the 1995 Rules of Civil Procedure the nullification of the March 28, 2000 Decision[1] of the Court of Appeals denying its petition to annul 1) the March 11, 1993 “Explanatory Bulletin”[2] of the Department of Labor and Employment (DOLE) entitled “Workers’ Entitlement to Holiday Pay on April 9, 1993, Araw ng Kagitingan and Good Friday”, which bulletin the DOLE reproduced on January 23, 1998, 2) the July 31, 1998 Decision[3] of the Panel of Voluntary Arbitrators ruling that the said explanatory bulletin applied as well to April 9, 1998, and 3) the September 18, 1998[4] Resolution of the Panel of Voluntary Arbitration denying its Motion for Reconsideration. The following facts, as found by the Court of Appeals, are undisputed: The Department of Labor and Employment (DOLE), through Undersecretary Cresenciano B. Trajano, issued an Explanatory Bulletin dated March 11, 1993 wherein it clarified, inter alia, that employees are entitled to 200% of their basic wage on April 9, 1993, whether unworked, which[,] apart from being Good Friday [and, therefore, a legal holiday], is also Araw ng Kagitingan [which is also a legal holiday]. The bulletin reads: “On the correct payment of holiday compensation on April 9, 1993 which apart from being Good Friday is also Araw ng Kagitingan, i.e., two regular holidays falling on the same day, this Department is of the view that the covered employees are entitled to at least two hundred percent (200%) of their basic wage even if said holiday is unworked. The first 100% represents the payment of holiday pay on April 9, 1993 as Good Friday and the second 100% is the payment of holiday pay for the same date as Araw ng Kagitingan. Said bulletin was reproduced on January 23, 1998, when April 9, 1998 was both Maundy Thursday and Araw ng Kagitingan x x x x Despite the explanatory bulletin, petitioner [Asian Transmission Corporation] opted to pay its daily paid employees only 100% of their basic pay on April 9, 1998. Respondent Bisig ng Asian Transmission Labor Union (BATLU) protested. In accordance with Step 6 of the grievance procedure of the Collective Bargaining Agreement (CBA) existing between petitioner and BATLU, the controversy was submitted for voluntary arbitration. x x x x On July 31, 1998, the Office of the Voluntary Arbitrator rendered a decision directing petitioner to pay its covered employees “200% and not just 100% of their regular daily wages for the unworked April 9, 1998 which covers two regular holidays, namely, Araw ng Kagitignan and Maundy Thursday.” (Emphasis and underscoring supplied) Subject of interpretation in the case at bar is Article 94 of the Labor Code which reads: ART. 94. Right to holiday pay. - (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers;

(b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate; and (c) As used in this Article, “holiday” includes: New Year’s Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and thirtieth of December and the day designated by law for holding a general election, which was amended by Executive Order No. 203 issued on June 30, 1987, such that the regular holidays are now: 1. New Year’s Day January 1 2. Maundy Thursday Movable Date 3. Good Friday Movable Date 4. Araw ng Kagitingan April 9 (Bataan and Corregidor Day) 5. Labor Day May 1 6. Independence Day June 12 7. National Heroes Day Last Sunday of August 8. Bonifacio Day November 30 9. Christmas Day December 25 10. Rizal Day December 30 In deciding in favor of the Bisig ng Asian Transmission Labor Union (BATLU), the Voluntary Arbitrator held that Article 94 of the Labor Code provides for holiday pay for every regular holiday, the computation of which is determined by a legal formula which is not changed by the fact that there are two holidays falling on one day, like on April 9, 1998 when it was Araw ng Kagitingan and at the same time was Maundy Thursday; and that that the law, as amended, enumerates ten regular holidays for every year should not be interpreted as authorizing a reduction to nine the number of paid regular holidays “just because April 9 (Araw ng Kagitingan) in certain years, like 1993 and 1998, is also Holy Friday or Maundy Thursday.” In the assailed decision, the Court of Appeals upheld the findings of the Voluntary Arbitrator, holding that the Collective Bargaining Agreement (CBA) between petitioner and BATLU, the law governing the relations between them, clearly recognizes their intent to consider Araw ng Kagitingan and Maundy Thursday, on whatever date they may fall in any calendar year, as paid legal holidays during the effectivity of the CBA and that “[t]here is no condition, qualification or exception for any variance from the clear intent that all holidays shall be compensated.”[5] The Court of Appeals further held that “in the absence of an explicit provision in law which provides for [a] reduction of holiday pay if two holidays happen to fall on the same day, any doubt in the interpretation and implementation of the Labor Code provisions on holiday pay must be resolved in favor of labor.” By the present petition, petitioners raise the following issues: I. WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN ERRONEOUSLY INTERPRETING THE TERMS OF THE COLLECTIVE BARGAINING AGREEMENT BETWEEN THE PARTIES AND SUBSTITUTING ITS OWN JUDGMENT IN PLACE OF THE AGREEMENTS MADE BY THE PARTIES THEMSELVES II. WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN HOLDING THAT ANY DOUBTS ABOUT THE VALIDITY OF THE POLICIES ENUNCIATED IN THE EXPLANATORY BULLETIN WAS LAID TO REST BY THE REISSUANCE OF THE SAID EXPLANATORY BULLETIN III. WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN UPHOLDING THE VALIDITY OF THE EXPLANATORY BULLETIN EVEN WHILE ADMITTING THAT THE SAID BULLEITN WAS NOT AN EXAMPLE OF A JUDICIAL, QUASI-JUDICIAL, OR ONE OF THE RULES AND REGULATIONS THAT [Department of Labor and Employment] DOLE MAY PROMULGATE IV. WHETHER OR NOT THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE) BY ISSUING EXPLANATORY BULLETIN DATED MARCH 11, 1993, IN THE GUISE OF PROVIDING GUIDELINES ON ART. 94 OF THE LABOR CODE, COMMITTED GRAVE ABUSE OF DISCRETION, AS IT LEGISLATED AND INTERPRETED LEGAL PROVISIONS IN SUCH A MANNER AS TO CREATE OBLIGATIONS WHERE NONE ARE INTENDED BY THE LAW V. WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN SUSTAINING THE SECRETARY OF THE DEPARTMENT OF LABOR IN REITERATING ITS EXPLANATORY BULLETIN DATED MARCH 11, 1993 AND IN ORDERING THAT THE SAME POLICY OBTAINED FOR APRIL 9, 1998 DESPITE THE RULINGS OF THE SUPREME COURT TO THE CONTRARY VI. WHETHER OR NOT RESPONDENTS’ ACTS WILL DEPRIVE PETITIONER OF PROPERTY WITHOUT DUE PROCESS BY THE “EXPLANATORY BULLETIN” AS WELL AS EQUAL PROTECTION OF LAWS The petition is devoid of merit. Labor Standards | To digest (old cases) | Ajean Tuazon| 48

”[8] It is also intended to enable the worker to participate in the national celebrations held during the days identified as with great historical and cultural significance.[6] The records of the case show that following petitioner’s receipt on August 18. including its implementing rules and regulations.551. the 15-day period to appeal it under Rule 45 having expired. Christmas Day (December 25th) 9. at which time the Court of Appeals decision had become final and executory. VITUG (Associate Justice. 3B hereof. his predicament being the effect of his deliberate inaction. petitioner had obligated itself to pay for the legal holidays as required by law. the employee will be paid according to Art. THE FACTS Since 24 May 1995. Nueva Vizcaya. Rule 45 is clear that the decisions. that is. A paid legal holiday occurring during the scheduled vacation leave will result in holiday payment in addition to normal vacation pay but will not entitle the employee to another vacation leave. affords a worker the enjoyment of ten paid regular holidays. respectively.[10] regardless of whether an employee is paid on a monthly or daily basis. observed that in fixing the monthly salary of its employees. INC. and the decision accordingly becomes final and executory. on a twice a month basis. SO ORDERED. if declared public non-working holiday 11. Fe. Rizal Day (December 30th) 10.. speedy and adequate” if it will promptly relieve the petitioner from the injurious effects of the judgment and the acts of the lower court or agency. he cannot avail himself of the writ of certiorari. Art. final orders or resolutions of the Court of Appeals in any case. Inc. When required to work on said days.[9] The provision is mandatory. although the worker is forced to take a rest. The NLRC ruling modified the Decision of the Labor Arbiter (finding respondent entitled to the award of 13th month pay and service incentive leave pay) by deleting the award of 13th month pay to respondent. [S]ince the Court of Appeals had jurisdiction over the petition under Rule 65. promote national identity. Araw ng Kagitingan (April 9). on 02 February 2000. and deepen the spirit of patriotism.R. Technicality aside. appeal was not only available but also a speedy and adequate remedy. while the religious holidays designated in Executive Order No.”[17] From the pertinent provisions of the CBA entered into by the parties. General Election designated by law. VI. as amended. Respondent further alleged that he was not allowed to work until he fully paid the amount of P75. RENATO C. J. Bonifacio Day [November 30] 8. No. while respondent was driving Autobus No. Isabela. the petition is hereby DISMISSED. Chairman). Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford protection to labor. Under similar circumstances. the bus he was driving accidentally bumped the rear portion of Autobus No. Respondent. Wellington took into account “every working day of the year including the holidays specified by law and excluding only Sunday. Respondent was paid on commission basis.” In the instant case.[13] In the case at bar. Thus. Holy Thursday (moveable) 3. the fact that two holidays fall on the same date should not operate to reduce to nine the ten holiday pay benefits a worker is entitled to receive.. 124. as driver-conductor with travel routes Manila-Tuguegarao via Baguio. there is nothing in the law which provides or indicates that the entitlement to ten days of holiday pay shall be reduced to nine when two holidays fall on the same day. Bonifacio Day (November 30) and Rizal Day (December 30) were declared national holidays to afford Filipinos with a recurring opportunity to commemorate the heroism of the Filipino people.[16] Moreover. If the aggrieved party fails to do so within the reglementary period. as he had just arrived in Manila from Roxas. versus ANTONIO BAUTISTA. On 03 January 2000. National Heroes Day (Last Sunday of August) Only an employee who works on the day immediately preceding or after a regular holiday shall be entitled to the holiday pay. seven percent (7%) of the total gross income per travel. 11. Labor Day (May 1) is a day traditionally reserved to celebrate the contributions of the working class to the development of the nation. 114 along Sta. In this case.[18] WHEREFORE. G. the 1997-1998 CBA incorporates the following provision: ARTICLE XIV PAID LEGAL HOLIDAYS The following legal holidays shall be paid by the COMPANY as required by law: 1. [11] Unlike a bonus. a petitioner must show that he has no plain. 156367. that when the language of the law is clear and unequivocal.[7] Its purpose is not merely “to prevent diminution of the monthly income of the workers on account of work interruptions. 2nd Division CHICO-NAZARIO.[12] holiday pay is a statutory benefit demandable under the law. the same was ignored by management. 2000 Resolution of the Court of Appeals denying its Motion for Reconsideration. CONCHITA CARPIO MORALES (Associate Justice) WE CONCUR: JOSE C. his holiday pay.At the outset. as the latter vehicle suddenly stopped at a sharp curve without giving any warning. management sent him a letter of termination. Good Friday (moveable) 4. 2005 May 16. Sec. which would be but a continuation of the appellate process over the original case. in answering the issue in the negative. which is a management prerogative. may be appealed to this Court by filing a petition for review. Labor Day (May 1st) 6.50. It is elementary. 1993 Explanatory Bulletin does not lie. under the rules of statutory construction. (Autobus). respondent Antonio Bautista has been employed by petitioner Auto Bus Transport Systems.e. Thus. Trajano[14] has “overruled” the DOLE March 11. A remedy is considered “plain. petitioner lodged the present petition for certiorari under Rule 65. Sec. Respondent averred that the accident happened because he was compelled by the management to go back to Roxas. it filed the present petition for certiorari on September 15. The appeal from a final disposition of the Court of Appeals is a petition for review under Rule 45 and not a special civil action under Rule 65 of the Rules of Court. i. it bears noting that instead of assailing the Court of Appeals Decision by petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure.[15] In any event. Under Rule 45 the reglementary period to appeal is fifteen (15) days from notice of judgment or denial of motion for reconsideration. Rule IV. New Year’s Day (January 1st) 2. the issue was whether monthly-paid employees are entitled to an additional day’s pay if a holiday falls on a Sunday. National Heroes Day (last Sunday of August).: Before Us is a Petition for Review on Certiorari assailing the Decision[1] and Resolution[2] of the Court of Appeals affirming the Decision[3] of the National Labor Relations Commission (NLRC). Araw ng Kagitingan (April 9th) 5. the COMPANY will give a day’s wage for November 1st and December 31st whenever declared a holiday. Isabela. Since a worker is entitled to the enjoyment of ten paid regular holidays. Baguio. Labor Standards | To digest (old cases) | Ajean Tuazon| 49 . xxx For the writ of certiorari under Rule 65 of the Rules of Court to issue. 203 allow the worker to celebrate his faith with his family. he earns what he should earn. Art. CORONA (Associate Justice) SERVICE INCENTIVE LEAVE AUTO BUS TRANSPORT SYSTEMS. Petitioner’s assertion that Wellington v. After a month. This Court. any alleged errors committed by it in the exercise of its jurisdiction would be errors of judgment which are reviewable by timely appeal and not by a special civil action of certiorari. Independence Day (June 12). of the 1997 Rules of Civil Procedure. Independence Day (June 12th) 7. representing thirty percent (30%) of the cost of repair of the damaged buses and that despite respondent’s pleas for reconsideration. ANGELINA SANDOVAL-GUTIERREZ (Associate Justice). In Wellington. For the working man’s welfare should be the primordial and paramount consideration. respondent instituted a Complaint for Illegal Dismissal with Money Claims for nonpayment of 13th month pay and service incentive leave pay against Autobus. now Rule 45 and Rule 65. Book III of the Omnibus Rules to Implement the Labor Code provides that “Nothing in the law or the rules shall justify an employer in withdrawing or reducing any benefits. shall be resolved in favor of labor.. 94 of the Labor Code. speedy and adequate remedy in the ordinary course of law against its perceived grievance. 2000 of a copy of the August 10. 4 of the Labor Code provides that all doubts in the implementation and interpretation of its provisions. this Court finds no ground to disturb the assailed decision.Tuguegarao via Manila and Manila-Tabuk via Baguio. Petitioner. the issue is whether daily-paid employees are entitled to be paid for two regular holidays which fall on the same day. As reflected above. although he had not slept for almost twenty-four (24) hours. supplements or payments for unworked regular holidays as provided in existing individual or collective agreement or employer practice or policy. 2000. regardless of the nature of the action or proceeding involved. the law must be taken to mean exactly what it says. In other words.

Petitioner further argues that the only criterion that should be considered is the nature of work of the employee in that. presently computed at P13.[6] In other words. an inquiry must be made as to whether or not the employee’s time and performance are constantly supervised by the employer. based on the pleadings and supporting evidence presented by the parties. and warrants of arrest pertaining to several incidents wherein respondent was involved. the decretal portion of which reads: [T]he Rules and Regulations Implementing Presidential Decree No.05. This definition is further elaborated in the Bureau of Working Conditions (BWC). irregularity reports. the punched tickets. These.” Said phrase should be related with “field personnel. exercises control over his employees. they fall under the classification of field personnel. as correctly concluded by the appellate court. the complainant herein.” Records show that complainant. The response to this query inevitably leads us to the correlative issue of whether or not the three (3)-year prescriptive period under Article 291 of the Labor Code is applicable to respondent’s claim of service incentive leave pay. “field personnel” shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. petitioner avers that in the exercise of its management prerogative. 851. particularly Sec. [field personnel] are those whose performance of their job/service is not supervised by the employer or his representative. the workplace being away from the principal office and whose hours and days of work cannot be determined with reasonable certainty. purely commission basis. admitted that he was paid on a commission basis. If required to be at specific places at specific times.” applying the rule on ejusdem generis that general and unlimited terms are restrained and limited by the particular terms that they follow. We are not persuaded. and the conductor’s reports. Rather. otherwise. As observed by the Labor Arbiter and concurred in by the Court of Appeals: It is of judicial notice that along the routes that are plied by these bus companies. they are paid specific amount for rendering specific service or performing specific work. Coverage.117. Tabingan promulgated a Decision.Petitioner. electrical. gross negligence.[4] the dispositive portion of which reads: WHEREFORE. 3 provides: “Section 3. On 29 September 2000. as they generally observe prompt departure and arrival from their point of origin to their point of destination. irrespective of the time consumed in the performance thereof. In each and every depot. respondent is not a field personnel but a regular employee who performs tasks usually necessary and desirable to the usual trade of petitioner’s business. respondent’s employment was terminated only after the latter was provided with an opportunity to explain his side regarding the accident on 03 January 2000. They too. in his position paper. on the other hand. employees engaged on task or contract basis or paid on purely commission basis are not automatically exempted from the grant of service incentive leave.” The phrase “other employees whose performance is unsupervised by the employer” must not be understood as a separate classification of employees to which service incentive leave shall not be granted. He cannot be considered a field personnel. was therefore under constant supervision while in the performance of this work. Furthermore. RIGHT TO SERVICE INCENTIVE LEAVE (a) Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay. the instant petition. the award of service incentive leave pay was maintained. As discussed above. and hydraulic aspects. we deem it just and equitable to modify the assailed Decision by deleting the award of 13th month pay to the complainant. Whether or not respondent is entitled to service incentive leave. unless. WHEREFORE. it is necessary to stress that the definition of a “field personnel” is not merely concerned with the location where the employee regularly performs his duties but also with the fact that the employee’s performance is unsupervised by the employer. the Petition is DISMISSED for lack of merit. According to the Implementing Rules. are present in the case at bar. it is also necessary to ascertain if actual hours of work in the field can be determined with reasonable certainty by the employer. 026584-2000 is hereby AFFIRMED in toto. premises considered. Labor Arbiter Monroe C. Therefore. no employee would ever be considered a field personnel because every employer. which was subsequently denied in a Resolution by the NLRC dated 31 October 2001. Service Incentive Leave shall not apply to employees classified as “field personnel. petitioner presented copies of letters. as amended. There is also the mandatory once-a-week car barn or shop day. where the bus is regularly checked as to its mechanical. is applicable to respondent’s claim of service incentive leave pay. the respondent must pay to the complainant the following: a. RULING OF THE COURT The disposition of the first issue revolves around the proper interpretation of Article 95 of the Labor Code vis-à-vis Section 1(D). hence. It is hereby ordered DISMISSED. Book III. . as it is hereby DISMISSED.”[8] The same is true with respect to the phrase “those who are engaged on task or contract basis. All other claims of both complainant and respondent are hereby dismissed for lack of merit. Thus. then he is inevitably a field personnel. the petitioner differs and postulates that under said advisory opinion. petitioner sought the review of said decision with the Court of Appeals which was subsequently denied by the appellate court in a Decision dated 06 May 2002. whether or not there are problems thereon as reported by the driver and/or conductor. Labor Standards | To digest (old cases) | Ajean Tuazon| 50 . boundary. petitioner appealed the decision to the NLRC which rendered its decision on 28 September 2001. .[9] Hence. and the assailed Decision of respondent Commission in NLRC NCR CA No. However. performing a specific work. still based on the above-discussed premises. Petitioner thus sought a reconsideration of this aspect.[5] Not satisfied with the decision of the Labor Arbiter. . it serves as an amplification of the interpretation of the definition of field personnel under the Labor Code as those “whose actual hours of work in the field cannot be determined with reasonable certainty. the pivotal question to be answered is when does the cause of action for money claims accrue in order to determine the reckoning date of the three-year prescriptive period. The question now that must be addressed is up to what amount of service incentive leave pay respondent is entitled to. In the application of this section of the Labor Code. or task basis. 2. To support its claim. all premises considered. What must be ascertained in order to resolve the issue of propriety of the grant of service incentive leave to respondent is whether or not he is a field personnel. must be at specific place as [sic] specified time. No costs. purely commission basis. employees including drivers cannot be said to be field personnel despite the fact that they are performing work away from the principal office of the employee. Rule V. if the employee’s job requires that he works away from the principal office like that of a messenger or a bus driver. The other findings are AFFIRMED. his 13th month pay from the date of his hiring to the date of his dismissal. petitioner’s contention that respondent is not entitled to the grant of service incentive leave just because he was paid on purely commission basis is misplaced. his service incentive leave pay for all the years he had been in service with the respondent. According to Article 82 of the Labor Code. [Emphasis ours] To this discussion by the BWC. field personnel are those who regularly perform their duties away from the principal place of business of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. Therefore. it is hereby found that the complaint for Illegal Dismissal has no leg to stand on. respondent is entitled to the grant of service incentive leave. The driver. and dishonesty.788. In so doing. – This rule shall apply to all employees except: (d) Field personnel and other employees whose performance is unsupervised by the employer including those who are engaged on task or contract basis. the dispositive portion of which reads: WHEREFORE. Whether or not the three (3)-year prescriptive period provided under Article 291 of the Labor Code. there are its inspectors assigned at strategic places who board the bus and inspect the passengers.[7] Hence. b. – The Decree shall apply to all employers except to: xxx xxx xxx e) employers of those who are paid on purely commission. Accordingly. At this point. in one way or another. in order to conclude whether an employee is a field employee. ISSUES 1. they shall be forever barred. Employers covered. Displeased with only the partial grant of its appeal to the NLRC. In view of the foregoing. or those who are paid in a fixed amount for performing work irrespective of the time consumed in the performance thereof. xxx. Article 291 of the Labor Code states that all money claims arising from employer-employee relationship shall be filed within three (3) years from the time the cause of action accrued. Advisory Opinion to Philippine Technical-Clerical Commercial Employees Association[10] which states that: As a general rule. A careful perusal of said provisions of law will result in the conclusion that the grant of service incentive leave has been delimited by the Implementing Rules and Regulations of the Labor Code to apply only to those employees not explicitly excluded by Section 1 of Rule V. there is always the Dispatcher whose function is precisely to see to it that the bus and its crew leave the premises at specific times and arrive at the estimated proper time.[11] We agree in the above disquisition. 95. presently computed at P78. the Decision dated 29 September 2000 is MODIFIED by deleting the award of 13th month pay. memos.87. maintained that respondent’s employment was replete with offenses involving reckless imprudence. Rule V: SERVICE INCENTIVE LEAVE SECTION 1. Book III of the Implementing Rules and Regulations of the Labor Code which provides: Art.

56429. commuted 58 days of his sick leave credits. one month from the time of his dismissal. The assailed Decision of the Court of Appeals in CA-G. as senior vice president for finance. in cases of nonpayment of allowances and other monetary benefits. No Costs. premises considered.500. which is in consonance with the avowed policy of the State to give maximum aid and protection to labor. a determination must be made as to the period when the act constituting a violation of the workers’ right to the benefits being claimed was committed. Respondents. As enunciated by the Court in Fernandez v. the instant petition is hereby DENIED. 291. It was only upon his filing of a complaint for illegal dismissal. Subject to defined qualifications. Paloma and Philippine Airlines. but from the time when the employer refuses to pay its monetary equivalent after demand of commutation or upon termination of the employee’s services.000. For if the cause of action accrued more than three (3) years before the filing of the money claim. the sum of Six Hundred Seventy Five Thousand Pesos (P675. CALLEJO. that respondent demanded from his former employer commutation of his accumulated leave credits.[19] In the case at bar. He anchored his entitlement on Executive Order No. Since respondent had filed his money claim after only one month from the time of his dismissal. G.00.163. DANTE O. 2001 of the Court of Appeals (CA) in CA-G. For the benefits thus received. Paloma added. is less than 12 months. SR. if the employee wishes to accumulate his leave credits and opts for its commutation upon his resignation or separation from employment. those having rendered at least 25 years of service being entitled to 20 days of sick leave for every year of service. INC. PALOMA. PAL was privatized. The above construal of Art. JR.” Service incentive leave is a right which accrues to every employee who has served “within 12 months. without limit. SO ORDERED. his cause of action to claim the whole amount of his accumulated service incentive leave shall arise when the employer fails to pay such amount at the time of his resignation or separation from employment. the employee may choose to either use his leave credits or commute it to its monetary equivalent if not exhausted at the end of the year. SP No. all his accrued vacation and sick leave credits. (Associate Justice). leaving him a balance of 392 days of accrued sick leave credits for commutation. after 35 years of continuous service. In the case of service incentive leave.” In other words. Inc. an employee is entitled to accumulate sick leave with pay only up to a maximum of 230 days. 1995 a Decision[9] dispositively reading: WHEREFORE. premises considered. Paloma.R. He may use it as leave days or he may collect its monetary value. vis-à-vis the rules on service incentive leave. however.[8] the labor arbiter rendered on June 30.[5] Answering Paloma’s written demands for conversion to cash of his accrued sick leave credits. rising from the ranks to retire. Ruling of the Labor Arbiter Issues having been joined with the filing by the parties of their respective position papers.R. J. 68395 is hereby AFFIRMED. 00-08-05792-94. Petitioner.[17] [ talics supplied] Correspondingly. 1992.64 which represented his separation/retirement gratuity and accrued vacation leave pay. (PAL) to nullify and set aside the Amended Decision[1] dated May 31.00. Roberto Anonas covered by my 27 Nov.. No. as the case may be. said cause of action has already prescribed in accordance with Article 291. (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created. TINGA (Associate Justice) RICARDO G. MINITA V. Accordingly.[15] Furthermore. The amount that can only be demanded by the aggrieved employee shall be limited to the amount of the benefits withheld within three (3) years before the filing of the complaint. And of the 450-day credit. or a total sum of P742.” It is also “commutable to its money equivalent if not used or exhausted at the end of the year. it can be conscientiously deduced that the cause of action of an entitled employee to claim his service incentive leave pay accrues from the moment the employer refuses to remunerate its monetary equivalent if the employee did not make use of said leave credits but instead chose to avail of its commutation. ALICIA AUSTRIA-MARTINEZ (Associate Justice). 2003. 1992 letter x x x. as effectively reiterated in its Resolution[2] of January 14. Rule V. WHEREFORE. and THE NATIONAL LABOR RELATIONS COMMISSION. Book III of the Implementing Rules and Regulations provides that “[e]very employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay. or some nine (9) months before Paloma retired on November 30. as acknowledged in a letter of Alvia R. under the policy. to wit. your sick leave credits would have totaled 450 days to date. By way of post-employment benefits. plus ten (10%) percent attorney’s fees of P67. Therefore. His cause of action to claim the payment of his accumulated service incentive leave thus accrued from the time when his employer dismissed him and failed to pay his accumulated leave credits. docketed as NLRCNCR-Case No. is in keeping with the rudimentary principle that in the implementation and interpretation of the provisions of the Labor Code and its implementing regulations. Subsequently. In the complaint. Paloma alleged having accrued sick leave credits of 450 days commutable upon his retirement pursuant to EO 1077 which allows retiring government employees to commute. versus PHILIPPINE AIRLINES. respondent PHILIPPINE AIRLINE[S]. The Facts Paloma worked with PAL from September 1957. and his having accumulated a certain number of days of sick leave credits. we are pleased to confirm herewith the balance of your sick leave credits as they appear in our records: 230 days. he had commuted only 58 days. it is essential to ascertain the time when the third element of a cause of action transpired. he is entitled upon his resignation or separation from work to the commutation of his accrued service incentive leave. in the computation of the three-year prescriptive period. PAL asserted having paid all of Paloma’s commutable sick leave credits due him pursuant to company policy made applicable to PAL officers starting 1990. NLRC:[16] The clear policy of the Labor Code is to grant service incentive leave pay to workers in all establishments. or that provided in the employment contracts. 2nd Division VELASCO. an employee who has served for one year is entitled to it. may accumulate sick leaves with pay up to 230 days. 1986. SP. MA. In March 1992.500. (2) an obligation on the part of the named defendant to respect or not to violate such right. To limit the award to three years. whether continuous or broken reckoned from the date the employee started working.. ROMEO J.It is settled jurisprudence that a cause of action has three elements. then an administrative assistant in PAL.[14] It is essential at this point. Stated differently. we can conclude that the three (3)-year prescriptive period commences. Leaño’s letter dated November 12. subject to a few exceptions. is hereby ordered to pay within ten (10) days from receipt hereof herein complainant Ricardo G. No. the amount pertaining to the period beyond the three-year prescriptive period is therefore barred by prescription. Labor Standards | To digest (old cases) | Ajean Tuazon| 51 . (EO) 1077[4] dated January 9. and (3) an act or omission on the part of such defendant violative of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff. Chairman). PUNO (Associate Justice. 148415. not at the end of the year when the employee becomes entitled to the commutation of his service incentive leave. PAL paid Paloma the total amount of PhP 5. if the employee entitled to service incentive leave does not use or commute the same. According to our existing policy.[18] The policy is to extend the applicability of the decree to a greater number of employees who can avail of the benefits under the law. Paloma appears to have.00) representing his one Hundred sixty two days [162] accumulated sick leave credits.[6] Per PAL’s records. 2008 Jul 14. Had there been no ceiling as mandated by Company policy.” The leave benefits Paloma claimed being entitled to refer to his 450-day accrued sick leave credits which PAL allegedly only paid the equivalent of 18 days. broken down as follows: 20 days each in 1990 and 1991 and 18 days in 1992.: The Case Before us are these two consolidated petitions for review under Rule 45 separately interposed by Ricardo G. necessarily. INC. including authorized absences and paid regular holidays unless the working days in the establishment as a matter of practice or policy. CHICO-NAZARIO (Associate Justice) WE CONCUR: REYNATO S. respondent had not made use of his service incentive leave nor demanded for its commutation until his employment was terminated by petitioner. sick leave credits in excess of 230 days shall be commutable to cash at the employee’s option and shall be paid in lump sum on or before May 31st of the following year they were earned. Neither did petitioner compensate his accumulated service incentive leave pay at the time of his dismissal.[12] To properly construe Article 291 of the Labor Code. in which case said period shall be considered as one year. The company leave policy adverted to grants PAL’s regular ground personnel a graduated sick leave benefits. 1992 pertinently reads: At your request.325. Paloma signed a document denominated Release and Quitclaim[3] but inscribed the following reservation therein: “Without prejudice to my claim for further leave benefits embodied in my aide memoire transmitted to Mr. Applying Article 291 of the Labor Code in light of this peculiarity of the service incentive leave. the prescriptive period with respect to his claim for service incentive leave pay only commenced from the time the employer failed to compensate his accumulated service incentive leave pay at the time of his dismissal. as the solicitor general recommends. An employee. the workingman’s welfare should be the primordial and paramount consideration. Leaño. is to unduly restrict such right. to recognize that the service incentive leave is a curious animal in relation to other benefits granted by the law to every employee. Paloma filed before the Arbitration Branch of the National Labor Relations Commission (NLRC) a Complaint[7] for Commutation of Accrued Sick Leaves Totaling 392 days. his money claim was filed within the prescriptive period provided for by Article 291 of the Labor Code. Section 2. for the period from 1990 to 1992. if it is established that the benefits being claimed have been withheld from the employee for a period longer than three (3) years.[13] Consequently.R.

156764. as a preliminary consideration. 2003 Resolution. by special law. 1986. disposing as follows: In view of all the foregoing. Incongruously. the provisions of EO 1077 shall serve as a retirement program for Paloma who had meanwhile acquired vested rights under the EO pursuant to Arts. No. it decreed the implementation of the labor arbiter’s Decision dated June 30. had been considered as a government-controlled corporation—is covered by and subject to the limitations peculiar under the civil service system. denied the desired reconsideration. Garduque II dated June 30. was still a GOCC and that Paloma had already 29 years of service at that time. and holidays. including every [GOCC] x x x. set aside. coming to us after the CA. and at a time when the applicable constitutional provision on the coverage of the civil service made no distinction between GOCCs with original charters and those without. the Amended Decision still deferred to PAL’s existing policy on the 230-day limit for accrued sick leave with pay that may be credited to its employees. both appeals are DISMISSED. and corollarily. the recourse docketed as CA-G. the grant of commutation for 162 accrued leave credits. the CA stated that EO 1077 applies to PAL and necessarily to Paloma on the following rationale: Section 2(1) of Article IX(B) of the 1987 Constitution applies prospectively and. The late Blas Ople. 156764. the NLRC. Any officer [or] employee of the government who retires or voluntary resigns or is separated from the service through no fault of his own and whose leave benefits are not covered by special law. despite affirmatively positing the applicability of EO 1077. about PAL having been incorporated as a private corporation whose controlling stocks were later acquired by the GSIS. On the other hand. provides: WHEREAS. without limitation as to the number of days of vacation and sick leaves that he may accumulate. allowed a 230-day sick leave commutation. subdivision and instrumentality of the Government. 2001 Amended Decision On May 31. 00-08-05792-94) On November 26. IN HOLDING THAT E. Subsumed to the main issue because EO 1077 applies only to government employees subject to civil service law is the question of whether or not PAL—which.”[23] The Court’s Ruling Considering the applicable law and jurisprudence in the light of the undisputed factual milieu of the instant case. 100[16] and 287[17] of the Labor Code. 1999 Resolution. thus: WHEREFORE. whether or not Paloma is entitled to a commutation of his accrued sick leave credits. as early as 1960 until its privatization. Ruling of the NLRC in NLRC NCR CA No.O. its employees. Air Lines. before PAL’s privatization.R. while the CA reinstated the November 10.[14] The May 31. up from the 162 days granted under the June 30. Ruling of the CA in its April 28. As may be recalled. the number of days of vacation and sick leaves creditable to a government officer or employee is limited to 300 days. Phil. 1999. under existing law and civil service regulations.[18] In G. 2000. Paloma immediately appealed the CA’s Amended Decision via a Petition for Review on Certiorari under Rule 45. as we said as much in Phil. dated 28 April 2000 is hereby vacated and. 148415. do hereby order and direct the following: Section 1. members of the judiciary are not subject to such restriction. PAL first sought reconsideration of the Amended Decision. 009652-95 (NLRC-NCR-Case No. WHEREAS. thus: WHEREFORE. dated 10 November 1999. 00-08-05792-94. 1999 Resolution is set aside. Paloma sought reconsideration. (Art. In its Resolution of November 10. WHEREAS. commutable accumulated sick leave credits of 230 days. The labor arbiter held that PAL is not covered by the civil service system and.”[21] Before the coming into force of the 1973 Constitution. There can be no quibbling. under company policy is non-commutable?[19] The issues submitted boil down to the question of whether or not EO 1077. This executive issuance. in its November 10. Sundays.”[22] Then came the 1987 Constitution which contextually delimited the coverage of the civil service only to a GOCC “with original charter. thus. entitled Ricardo G. However. at the time of the issuance of EO 1077. Paloma v. President of the Philippines. Inc. accordingly. modified its earlier decision. like Paloma. Following the ratification of the 1973 Constitution. exclusive of the members of the judiciary whose leave and retirement system is covered by a special law. In net effect then. the setting aside of the assailed amended decision and resolution of the CA is indicated. New Civil Code). docketed as G. 2000 Decision. exclusive of Saturdays. as recommended. shall earn legal interest from the date of the institution of the complaint until fully paid/discharged. NO. DECIDED A QUESTION OF SUBSTANCE IN A MANNER CONTRARY TO LAW AND APPLICABLE JURISPRUDENCE. it is the continuing policy of the government to institute to the extent possible a uniform and equitable system of compensation and benefits and to enhance the morale and performance in the civil service.R. Paloma raises the sole issue of: WHETHER OR NOT THE [CA]. [20] a case commenced in August 1958 and finally resolved by the Court in 1964. Core Issue: Applicability of EO 1077 Insofar as relevant. Thus. and another one entered reinstating the Resolution. 1995 Decision of the labor arbiter.R. 2001. 1995.500. ( mphasis supplied. 1999 Resolution of the NLRC. PAL raises the following issues for our consideration: 1. Can a judicial body modify or alter a company policy by ordering the commutation of sick leave credits which. Marcos issued on January 9. shall be entitled to the commutation of all the accumulated vacation and/or sick leaves to his credit. No. 2212. No. SO ORDERED. described PAL and other like entities spun off from the GSIS as “second generation corporations functioning as private subsidiaries. the labor arbiter ruled that Paloma is entitled to a commutation of his alternative claim for 202 accrued sick leave credits less 40 days for 1990 and 1991.. And the complaint of Ricardo Paloma is hereby DISMISSED. applies to its employees. the First Division of the NLRC rendered a Decision affirming that of the labor arbiter.[15] Justifying its amendatory action. the same having been issued in 1986. Significantly. Garduque II (P742. SO ORDERED. premises considered. I. 1997. v. xxxx NOW. 148415. by virtue of the powers vested in me by the Constitution. docketed as G. upon his retirement. 1077 IS APPLICABLE TO PETITIONER AND YET APPLYING COMPANY POLICY BY AWARDING THE CASH EQUIVALENT OF ONLY 162 DAYS SICK LEAVE CREDITS INSTEAD OF THE 450 DAYS SICK LEAVE CREDITS PETITIONER IS ENTITLED TO UNDER E. solely for the benefit of government officers and employees covered by the civil service? 2. Both parties appealed[10] the decision of the labor arbiter to the NLRC. 2000 Decision By a Decision dated April 28. as affirmed by public respondent National Labor Relations Commission. Air Lines Employees’ Assn. a subsidiary of a wholly government-owned corporation or a government corporation with original charter was covered by the Labor Code. SO ORDERED.[12] From the above modificatory resolution of the NLRC. Without costs.[13] In time. 1997.R. Incorporated.R. PAL went to the CA on a petition for certiorari under Rule 65. the CA issued the assailed Amended Decision reversing its April 28. First Division. the CA added. The decision of Labor Arbiter Felipe T. The fallo of the Amended Decision reads: WHEREFORE. entitled Revising the Computation of Creditable Vacation and Sick Leaves of Government Officers and Employees. Philippine Airlines. Through the years before GSIS divested itself of its controlling interests over the airline. inclusive of the ten percent (10%) attorney’s fees). cannot avail themselves of the beneficent provision of EO 1077. 00-08-05792-94 [NLRC NCR CA No. in said NLRC Case No. NO. finding Paloma to have.) \Paloma maintains that he comes within the coverage of EO 1077.00. our decision dated November 26. 009652-95]. which is wholly owned by the government.O. agency. 56429. PAL’s Petition for Review on Certiorari. becomes all the more pressing considering that PAL. before he severed official relations with PAL. issued by the public respondent National Labor Relations Commission in NLRC NCR Case No. FERDINAND E. the CA found for PAL. assails both the Amended Decision and Resolution of the CA. with the only modification that the total sums granted by Labor Arbiter Felipe T. THEREFORE. the expressed limitation therein on the applicability of the civil service law only to government-owned and controlled corporations (GOCCs) with original charters does not preclude the applicability of EO 1077 to PAL and its then employees. Public respondent’s November 10.SO ORDERED. 1986. 1995 is AFFIRMED. our Judgment. The Issues In G. these subsidiaries theoretically came within the pale of the civil service on the strength of this provision: “[T]he civil service embraces every branch. EO 1077 dated January 9. No.[11] Both parties moved for reconsideration. the NLRC. This conclusion. be modified by increasing the sick leave benefits of complainant to be commuted to cash from 162 days to 230 days. The appellate court also stated that since PAL had then no existing retirement program. the petition is granted. SP No. PAL was considered a government-controlled corporation. MARCOS. SO ORDERED. May an employee of a non-government corporation [invoke EO] 1077 which the then President Ferdinand E. former Labor Secretary and a member of the 1986 Constitutional Commission. applies only to government officers and employees covered by the civil service. like PAL which was Labor Standards | To digest (old cases) | Ajean Tuazon| 52 . 1077. per the labor arbiter’s decision. per its January 14.

one for the ground crew. Paloma cannot plausibly be accorded the benefits of EO 1077 which. on one hand. As PAL’s senior vice-president for finance upon his retirement. It appears that Paloma had. The Amended Decision dated May 31. while the petition under G.. disputes involving discipline. among them PAL. An employee may accumulate sick leave with pay up to Two Hundred Thirty (230) days.[32] In fine. SO ORDERED. the exact number of days to be determined on the basis of the employee’s category and length of service in the company. as a matter of enforceable right. Paloma knew or at least ought to have known the company policy on accrued sick leave credits and how it was being implemented. PAL functioned as a private corporation and managed as such for profit. there were three (3) CBAs in PAL. personnel movements.[31] (Emphasis ours. at a time. while seemingly affirming the NLRC’s grant of 230 days commutation. which does not distinguish between a GOCC with or without an original charter. were commutable to cash to the extent of 75% of the employee’s current entitlement. the NLRC and the CA. at his option. hence. that should govern this case because it is the Constitution in place at the time the case was decided. 148415 is hereby DISMISSED for lack of merit. An employee who has accumulated seventy-five (75) days sick leave credit at the end of each year may. The labor arbiter granted 162 days commutation. remains: Through the years. 2003 are hereby ANNULLED and SET ASIDE. and was not subjected to the Civil Service Law The Court can allow that PAL. incidentally. San Miguel Brewery. unused sick leave may be accumulated up to a maximum of six months. To borrow from the 1988 NASECO ruling. 56429 and its Resolution of January 14. instead of the civil service law and rules. as found below. it is undisputed that he earned additional accrued sick leave credits of 20 days in 1990 and 1991 and 18 days in 1992. PAL never ceased to be operated as a private corporation. L-64313 entitled National Housing Corporation v. to the jurisdiction of the Civil Service Commission or the NLRC. In our view.incorporated under the Corporation Code. PAL. This has been the consistent holding of the Court in subsequent cases involving GOCCs without original charters. The seventy-five percent (75%) commutable to cash as above provided. one for the flight attendants.[27] Not to be overlooked of course is the 1964 case of Phil.”[28] Given the foregoing considerations. SP No. Juco. None of such medium presently obtains and it would be incongruous if the Court fills up the vacuum. then. but PAL’s company policy on the matter which. he did not acquire any vested rights on the retirement benefits accorded by EO 1077.R. Their personnel were never considered government employees. Those earned after 1990. resolves itself into the question of which between the 1973 Constitution. come within the embrace of the civil service by virtue of the 1973 Constitution is of little moment at this juncture. Sick leave credits in excess of two hundred thirty (230) days shall be commutable to cash at the employee’s option. and the 1987 Constitution. by their act of allowing commutation to cash. was a government-controlled corporation in the sense that the GSIS owned a controlling interest over its stocks. and payable on or before May 31st of the following year. took effect in 1990. PRESBITERO J. WHEREFORE. In fact. and the CA Decision dated April 28. We cannot sustain any of the dispositions thus reached for lack of legal basis. As held in National Service Corporation v. Welfare and Retirement Plan (Exhibit 3). In all. while with PAL. regular employment shall be deemed to have begun on the date of the employee’s conversion as a regular employee. necessarily implying that the privilege to commute is time-bound. it is the 1987 Constitution.[30] It cannot be overemphasized that when Paloma filed his complaint for commutation of sick leave credits. That PAL and Paloma may have. xxxx 3. which he duly commuted pursuant to company policy and received with the corresponding cash value. and the authority of the NLRC to exercise jurisdiction over. shall be paid up in lump sum on or before May 31st of the following year. Be this as it may. but still subject to the 230-day threshold rule. and one for the pilots. Commutation is allowed by way of voluntary endowment by an employer through a company policy or by a CBA. was issued to narrow the gap between the leave privileges between the members of the judiciary. absent any provision in the applicable company policy authorizing the commutation of the 230 days accrued sick leave credits existing upon retirement. Air Lines Employees’ Assn. 2000 is accordingly REINSTATED. specifically the 58 days commutation for 1990. Ople rhetorically asked how PAL can be covered by the civil service law when. if earned before 1990 when the above policy took effect. which does.R. 1985 of the decision in No. entitled to the benefits attached to civil service employment. and shall be paid in lump sum on or before May 31st of the following year it was earned. [25] (b) Company policy and collective bargaining agreements (CBAs). Paloma. DANTE O. As such. the only meaning and import of said rule and regulation is that if an employee does not choose to enjoy his yearly sick leave of thirty days. existing company policy on the matter applies What governs Paloma’s entitlement to sick leave benefits and the computation and commutation of creditable benefits is not EO 1077. VELASCO. [24] the Court no less recognized the applicability of the Labor Code to. actually decreed a 162-day commutation. No commutation of 230 days accrued sick leave credits The query that comes next is how the 230 days accrued sick leave credits Paloma undoubtedly had when he retired are to be treated. 1991. it appears that while under the last paragraph of Article 5 of appellant’s Rules and Regulations of the Health. the Court. Is this otherwise earned credits commutable to cash? These should be answered in the negative. In case of direct conversion from temporary/daily/project/contract to regular status. wherein the Court stated that “the Civil Service Law has not been actually applied to PAL. RULES A. Hence. declared as follows: In connection with the question of whether or not appellee is entitled to the cash value of six months accumulated sick leave. on the other. cannot even assert being covered by the civil service and. he may accumulate such sick leave up to a maximum of six months and enjoy this six months sick leave at the end of the sixth year but may not commute it to cash. erred as they virtually read in the policy something not written or intended therein. to stress. which delimits the coverage of the civil service. JR. private interests already controlled. even if. and 1992. CONCHITA CARPIO MORALES (Associate Justice). Paloma was deemed to have forfeited the monetary value of his leave credits in excess of the 230-day ceiling. Following company policy.[26] and (c) When public sector unionism was just an abstract concept. was never a government employee covered by the civil service law.. when he filed said complaint. Sick leave shall be granted only upon certification by a company physician that an employee is incapable of discharging his duties due to illness or injury x x x. PAL is correct in contending that Paloma had received whatever was due on the commutation of his accrued sick leave credits in excess of the 230 days limit. the same is not commutable or payable in cash upon the employee’s option. and other government officers and employees in the civil service. Chairperson). Inc. It may perhaps not be amiss for the Court to take judicial notice of the fact that the civil service law and rules and regulations have not actually been made to apply to PAL and its employees. if not owned. as the labor arbiter and originally the NLRC correctly held. Of governing application to them was the Labor Code. commute seventy-five percent (75%) of his current sick leave entitlement to cash and the other twenty-five percent (25%) to be added to his accrued sick leave credits up to two hundred thirty (230) calendar days. Had he acted on that knowledge in utmost good faith. at one time. more than 230 days of accrued sick leave credits. Indeed. Paloma. in Baltazar v. Now. Therefore. no law provides for commutation of unused or accrued sick leave credits in the private sector. ARTURO D. BRION (Associate Justice) Labor Standards | To digest (old cases) | Ajean Tuazon| 53 . Sick leave entitlement accrues from the date of an employee’s regular employment x x x.) As may be gathered from the records. for PAL’s company policy upon which either disposition was predicated did not provide for a commutation of the first 230 days accrued sick leave credits employees may have upon their retirement. such as the right under EO 1077 to accumulate and commute leave credits without limit.[29] the issue of whether or not a given GOCC falls within the ambit of the civil service subject. The contention is without merit. One stubborn fact. Paloma may not. xxxx 4. TINGA (Associate Justice). No. Costs against Ricardo G. insist on the commutation of his sick leave credits to cash. Paloma not entitled to the benefits granted in EO 1077. No. these proceedings would have not come to pass. The text of the policy is reproduced in the CA’s April 28. National Labor Relations Commission (NASECO). Implicit in Paloma’s contention is the submission that he earned the bulk of his sick leave credits under the aegis of the 1973 Constitution when PAL. as the case may be. the petition under G. was under civil service coverage. The CA. being then a government-controlled corporation. is in place. however. they were simply forfeited.R. accrued sick leave credits in excess of 230 days were not. 2001 of the CA in CAG. during the period material. govern the terms and conditions of employment in PAL. commutable to cash. 156764 is hereby GIVEN DUE COURSE. 2000 Decision and sets out the following pertinent rules: POLICY Regular employees shall be entitled to a yearly period of sick leave with pay. labor unions in PAL with the right to engage in strike and other concerted activities were already active. the cause of action accrued during the effectivity of the 1973 Constitution. as of 1990. while the NLRC allowed the commutation of the maximum 230 days. For ground personnel 2. then. vis-à-vis disputes respecting terms and conditions of employment. (Associate Justice) WE CONCUR: LEONARDO A. Confronted with a similar situation as depicted above. Consider: (a) Even during the effectivity of the 1973 Constitution but prior to the promulgation on January 17. Paloma. QUISUMBING (Associate Justice. and dismissal in GOCCs.

the original and exclusive jurisdiction to review a decision or Labor Standards | To digest (old cases) | Ajean Tuazon| 54 . Nicerio and Alamares were entitled to their retirement pay. thus disregarding the certificate of registration of the business establishment ISSUED by the local government. Gregorio Nicerio . a re-examination of the factual findings to ascertain which opinion should be sustained.Technician 12..Waiter 8. as an appellate agency reviewing decisions of Labor Arbiters. Po. WENEFREDO LOVERES. Eduardo Alamares . nonpayment of holiday and rest day pay and SILP. Amado Macandog and Jose Atractivo for illegal dismissal. 2000. did not err in reviewing the records to determine which opinion was supported by substantial evidence. premium pay for holiday and rest day. Were respondents Loveres. SILP and nightshift differential pay.. while waiting for the construction of a new Mayon Hotel & Restaurant at Peñaranda Street. Chona Bumalay . IV.[15] it is non sequitur that the CA should re-examine the factual findings of both the NLRC and the Labor Arbiter. Macandog and Llarena were entitled to separation pay. Luis Guades. 2nd Division PUNO. the hotel operations of the business were suspended on March 31. Was it correct for petitioner Josefa Po Lam to be held liable as the owner of petitioner Mayon Hotel & Restaurant. The Honorable Court of Appeals erred in upholding the award of monetary benefits by the labor arbiter in his joint decision in favor of the private respondentS. Paterno Llarena and Gregorio Nicerio for illegal dismissal with claims for underpayment of wages. Teodoro Laurenaria . No.[7] The hotel and restaurant employed about sixteen (16) employees.Roomboy/Waiter 9.[13] and Teodoro Laurenaria for underpayment of wages. Jr. the 16 employees filed complaints for underpayment of wages and other money claims against petitioners.[16] But it stands to reason that the NLRC should state an acceptable cause therefore. Mayon Hotel & Restaurant/Pacita O. Lourdes Camigla . SILP. with the following jobs:[8] 1. underpayment of wages. subject to invalidation by the extraordinary writ of certiorari. Roger Burce and Amado Alamares for underpayment of wages.[9] The operation of the restaurant was continued in its new location at Elizondo Street. which is a public document. rendered a Joint Decision in favor of the employees. Amado Macandog .Cook 14. [6] whose mother. Miguel Torrefranca.Cook Due to the expiration and non-renewal of the lease contract for the rented space occupied by the said hotel and restaurant at Rizal Street.Supervisory Waiter 4. As a rule. vs. The Honorable Court of Appeals erred in upholding the joint decision of the labor arbiter which ruled that private respondents were illegally dismissed from their employment. Are respondents entitled to their money claims due to underpayment of wages. EDUARDO ALAMARES. overtime. necessarily. 157634. especially as in this case the NLRC’s findings are allegedly supported by substantial evidence. the petition calls for a review of the following issues: 1. GREGORIO NICERIO. Wenefredo Loveres. overtime pay. JOSE ATRACTIVO. nonpayment of COLA. 1997. II. and night shift differential pay? It is petitioners’ contention that the above issues have already been threshed out sufficiently and definitively by the NLRC. rest day pay.” and the Resolution[2] denying petitioners’ motion for reconsideration. holiday pay. They therefore assail the CA’s reversal of the NLRC decision. As stated in Castillo: [A]buse of discretion does not necessarily follow from a reversal by the NLRC of a decision of a Labor Arbiter. capricious. despite the fact that the private respondents have not proven by substantial evidence their entitlement thereto and especially the fact that they were not illegally dismissed by the petitioners. Mere variance in evidentiary assessment between the NLRC and the Labor Arbiter does not automatically call for a full review of the facts by this Court. holiday. the decision of the Labor Arbiter was reversed.[11] On various dates of April and May 1997. After their motion for reconsideration was denied.: This is a petition for certiorari to reverse and set aside the Decision issued by the Court of Appeals (CA)[1] in CAG. petitioner Mayon Hotel and Restaurant. TEODORO LAURENARIA. oppressive. EDGARDO TORREFRANCA.Cashier 10. Po. Wenefredo Loveres . nonpayment of cost of living allowance (COLA) and overtime pay. ROGER BURCE. AMADO MACANDOG. NLRC[21] that factual findings of administrative bodies like the NLRC are affirmed only if they are supported by substantial evidence that is manifest in the decision and on the records. Chona Bumalay and Lourdes Camigla for underpayment of wages. Atractivo. PATERNO LLARENA. LOURDES CAMIGLA. despite the fact that the reason why private respondents were out of work was not due to the fault of petitioners but to causes beyond the control of petitioners. overtime pay. Edgardo Torrefranca . SILP.Roomboy 7. The NLRC’s decision. Llarena and Nicerio illegally dismissed? 3. 2005 May 16. deserves respect from this Court. Petitioners. Respondents.SERVICE CHARGES MAYON HOTEL & RESTAURANT. otherwise it would be a whimsical. Santos Broñola . Executive Labor Arbiter Gelacio L. The Honorable Court of Appeals erred in holding that Pacita Ong Po is the owner of the business establishment.[20] The CA. and the unqualified admissions of complainants-private respondents. including the award of damages to six (6) of the private respondents. versus ROLANDO ADANA. illogical. are as follows:[5] Petitioner Mayon Hotel & Restaurant is a single proprietor business registered in the name of petitioner Pacita O.[17] And when the factual findings of the Labor Arbiter and the NLRC are diametrically opposed and this disparity of findings is called into question. G. as follows:[12] Wenefredo Loveres. LUIS GUADES. rest day and SILP and night shift differential pay. Paterno Llarena .[18] As ruled in Asuncion v. al. A disharmony between the factual findings of the Labor Arbiter and those of the NLRC opens the door to a review thereof by this Court. Records show that on various dates starting in 1981. nonpayment of holiday and rest day pay. et. On July 14. COLA. entitled “Rolando Adana.Cook 16.R.Front Desk Clerk 3. There is no denying that it is within the NLRC’s competence. and SANTOS BROñOLA. Miguel Torrefranca . service incentive leave pay (SILP) and claims for separation pay plus damages. nonpayment of holiday. Josefa Po Lam is the owner/proprietor of Mayon Hotel & Restaurant and the proper respondent in these cases.R. Guades.Roomboy 5. therefore. SILP. premium pay for holiday and rest day. Legazpi City. rest day premium. et al.[14] In essence. CHONA BUMALAY. Jose Atractivo . manages the establishment. and damages. Amado Alamares . On appeal to the NLRC. seeking the reversal of the CA decision on the following grounds: I. Rivera. Luis Guades . and held that respondents Loveres. PO and/or JOSEFA PO LAM. nonpayment of COLA and overtime pay. 68642. We do not agree. nightshift differential pay and separation pay plus damages. Legazpi City. Santos Broñola for illegal dismissal. Moreover.Waiter 15. petitioners now come to this Court. Respondents filed a motion for reconsideration with the NLRC and when this was denied.[3] and reinstated the Joint Decision of the Labor Arbiter[4] which ruled that respondents were illegally dismissed and entitled to their money claims. Macandog. AMADO ALAMARES. SP No. NLRC. J. Roger Burce . it is explicit in Castillo v.Cashier 11. claiming that based on the ruling in Castillo v. so long as it is not bereft of substantial support from the records.Dishwasher and Kitchen Helper 13. and SILP. The Labor Arbiter also held that based on the evidence presented. Rolando Adana. National Labor Relations Commission (NLRC). The Honorable Court of Appeals erred in reversing the decision of the National Labor Relations Commission (Second Division) by holding that the findings of fact of the NLRC were not supported by substantial evidence despite ample and sufficient evidence showing that the NLRC decision is indeed supported by substantial evidence. unreasonable exercise of quasi-judicial prerogative. The facts. and nonpayment of holiday pay. culled from the records. The Labor Arbiter awarded substantially all of respondents’ money claims.Utility/Maintenance Worker 6. and all the complaints were dismissed. we are constrained to take a second look at the facts before us because of the diversity in the opinions of the Labor Arbiter and the NLRC. The assailed CA decision reversed the NLRC Decision which had dismissed all of respondents’ complaints. while respondents Guades. they filed a petition for certiorari with the CA which rendered the now assailed decision. petitioner Josefa Po Lam. and the proper respondent in this case? 2. underpayment of wages. NLRC. MIGUEL TORREFRANCA. Eduardo Alamares for underpayment of wages. III. all respondents in this case.[19] Although. Rolando Adana .[10] Only nine (9) of the sixteen (16) employees continued working in the Mayon Restaurant at its new site. it is a legal tenet that factual findings of administrative bodies are entitled to great weight and respect. rest day. there is.Accountant and Officer-in-charge 2. to disagree with and set aside the latter’s findings. PACITA O. petitioner hotel and restaurant hired the following people.

petitioner Pacita Po failed to appear in any of the proceedings with the Labor Arbiter in these cases. and granted separation pay to respondents Loveres. who owns the hotel and restaurant when the latter purchased the same from one Palanos in 1981. only the following filed a case for illegal dismissal: respondents Loveres. and support the case of his adversary. petitioner Josefa Po Lam is. When the conclusions of the labor arbiter are sufficiently corroborated by evidence on record. Notwithstanding the certificate of registration. we sustain the Labor Arbiter and the CA because even when the case was on appeal with the NLRC. all in the interest of due process. the same should be respected by appellate tribunals.[31] Similarly. other notices and Orders. Moreover. are entitled to great respect and even finality. Indeed. (citations omitted)[22] After careful review. the testimonies of [respondents] and Josefa as well as her demeanor during the trial in these cases proves (sic) that Josefa Po Lam owns Mayon Hotel and Restaurant. 468 to 469. and the proper respondent in the complaints filed by the employees. They protest the reliance the Labor Arbiter and the CA placed on their failure to submit additional documents to clearly establish ownership of the hotel and restaurant. particularly Josefa. While several documentary evidences were submitted by Josefa wherein Pacita was named therein as owner of the hotel and restaurant (pp. the NLRC’s factual findings. Atractivo and Broñola. 2. considering the testimonies given by the [respondents] and the non-appearance and failure to submit her own position paper by Pacita Po. was directed to submit evidence as to the ownership of Pacita of the hotel and restaurant. as they were given sufficient opportunity to be heard on the issue of ownership. and he refuses to produce such evidence. and Pacita Po as the owner. Nicerio. Nicerio and Alamares were already 79. it is most telling that they continue to withhold evidence which would shed more light on this issue. Guades. but awarded him damages. The records of the case belie petitioner Josefa Po Lam’s claim that she is merely an overseer. draws money for payment of payables and for marketing.[27] The apathy shown by petitioner Pacita Po is contrary to human experience as one would think that the owner of an establishment would naturally be concerned when all her employees file complaints against her. August 13. Second. While [petitioner] Josefa Po Lam claims that it is her daughter. We therefore consider and hold Josefa Po Lam as the owner/proprietor of Mayon Hotel and Restaurant and the proper respondent in these cases. agreed with the Labor Arbiter that notwithstanding the certificate of registration in the name of Pacita Po. nothing in the record shows any circumstance or manifestation that Pacita Po is the owner of Mayon Hotel and Restaurant.[38] The Labor Arbiter found that there was illegal dismissal. We have scrutinized the records and find the claim that petitioner Josefa Po Lam is merely the overseer is not borne out by the evidence. The findings of the Labor Arbiter on this question were based on credible. competent and substantial evidence. Josefa failed to submit the document of sale from said Palanos to Pacita as allegedly the sale was only verbal although the license to operate said hotel and restaurant is in the name of Pacita which.[30] Labor laws mandate the speedy administration of justice. (b) receiving the month-to-month and/or year-to-year financial reports prepared and submitted by respondent Loveres.[23] (citations omitted) Petitioners insist that it was error for the Labor Arbiter and the CA to have ruled that petitioner Josefa Po Lam is the owner of Mayon Hotel & Restaurant. considering the testimonies of [respondents]. unless petitioner is able to show that it simply and arbitrarily disregarded the evidence before it or had misappreciated the evidence to such an extent as to compel a contrary conclusion if such evidence had been properly appreciated. she failed to comply (p. Assuming this to be true. rollo)[. 1998).] there were documentary evidences also that were submitted by Josefa showing her ownership of said enterprise (pp. petitioner Josefa Po Lam.] if produced. and he has it in his power to produce evidence which from its very nature must overthrow the case made against him if it is not founded on fact.[26] It was only on appeal with the NLRC that Pacita Po signed the pleadings.[36] But more significantly. and (c) visitation of the premises. They allege that the documents they submitted to the Labor Arbiter sufficiently and clearly establish the fact of ownership by petitioner Pacita Po.[35] Obviously. identifying petitioner Josefa Po Lam as the manager. It is significant that only Josefa Po Lam appeared in the proceedings with the Labor Arbiter. i. no such evidence was submitted in the proceedings with the CA nor with this Court. with least attention to technicalities but without sacrificing the fundamental requisites of due process.[39] The Labor Arbiter ruled that respondent Atractivo was not entitled to separation pay because he had been transferred to work in the restaurant operations in Elizondo Street. we cannot fault the labor arbiter in ruling that Josefa Po Lam is the owner of the subject hotel and restaurant. She was ordered to submit additional documents to clearly establish ownership of the hotel and restaurant. doubts were cast as to the true nature of petitioner Josefa Po Lam’s involvement in the enterprise. the fact that the respondents’ complaints contained no allegation that petitioner Josefa Po Lam is the owner is of no moment. I. We disagree with petitioners. We are not surprised why some employers employ schemes to mislead Us in order to evade liabilities. 67 to 69. It was therefore within his jurisdiction to require the additional documents to ascertain who was the real owner of petitioner Mayon Hotel & Restaurant. Llarena. and was well within his jurisdiction. the former should [have] submitted the lease contract between the owner of the building where Mayon Hotel and Restaurant was located at Rizal St. is misplaced. Pacita Po. Considering that petitioners vehemently deny ownership by petitioner Josefa Po Lam. the choice not to present evidence was made by petitioners themselves. the labor arbiter relied also on the testimonies of the witnesses. and the application of technical rules of procedure may be relaxed in labor cases to serve the demand of substantial justice.[28] Petitioners’ reliance on the rules of evidence.[33] The essence of due process in administrative proceedings is simply an opportunity to explain one’s side or an opportunity to seek reconsideration of the action or ruling complained of. the issue of ownership was an issue that arose only during the course of the proceedings with the Labor Arbiter. First. during the hearing of the instant case. As respondents Guades. But Josefa did not comply with the directive of the Labor Arbiter. Thus. despite our Order to Josefa to present the same. the owner of Mayon Hotel & Restaurant. Macandog and Llarena. Macandog and Guades were also awarded damages. the CA. in fact.. Legazpi City and Pacita Po to clearly establish ownership by the latter of said enterprise.. attending (sic) to Labor Inspectors during ocular inspections. is a judicial admission and is binding on respondents. on review.[29] The rule of evidence prevailing in court of law or equity shall not be controlling in labor cases and it is the spirit and intention of the Labor Code that the Labor Arbiter shall use every and all reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law or procedure. in ruling that Josefa Po Lam is the real owner of the hotel and restaurant. if supported by substantial evidence. Furthermore. nor file her position paper. Ownership by Josefa Po Lam The Labor Arbiter ruled that as regards the claims of the employees. rollo). 1. The least that can be said is that it is absurd for a person to purchase a hotel and restaurant in the very heart of the City of Legazpi verbally. Court of Appeals applies to Josefa Po Lam which is stated in this wise: When the evidence tends to prove a material fact which imposes a liability on a party. Except for documents whereby Pacita Po appears as the owner of Mayon Hotel and Restaurant.[34] And there is nothing in the records which would suggest that petitioners had absolute lack of opportunity to be heard. as an incident of determining respondents’ claims. 64. it is Josefa Po Lam who is the owner/proprietor of Mayon Hotel & Restaurant. The ruling of the Supreme Court in Metropolitan Bank and Trust Company v. To apply the concept of judicial admissions to respondents — who are but lowly employees would be to exact compliance with technicalities of law that is contrary to the demands of substantial justice. we find that there is substantial evidence to rule that petitioner Josefa Po Lam is the owner of petitioner Mayon Hotel & Restaurant. nothing was submitted to negate the Labor Arbiter’s finding that Pacita Po is not the real owner of the subject hotel and restaurant. vol. and the Labor Arbiter had the authority to resolve this issue. 66 and 65 years old respectively at the time of the dismissal. The CA decision states in part: [Despite] the existence of the Certificate of Registration in the name of Pacita Po. Article 221 of the Labor Code is clear: technical rules are not binding. Nicerio. Llarena. since he is in a better position to assess and evaluate the credibility of the contending parties. Respondents Loveres.e.[40] Labor Standards | To digest (old cases) | Ajean Tuazon| 55 .[32] Petitioners were also not denied due process. 38. We again quote the Joint Decision on this matter: Mayon Hotel and Restaurant is a [business name] of an enterprise.[37] Thus. claiming that there was no need for petitioner Josefa Po Lam to submit additional documents considering that the Certificate of Registration is the best and primary evidence of ownership. vol. Macandog. the certificate of registration being the best proof of ownership.[24] They also put emphasis on the admission of the respondents in their position paper submitted to the Labor Arbiter. would operate to his prejudice. tsn. We therefore agree with the CA that the failure to submit could only mean that if produced. 65. There were conflicting documents submitted by Josefa herself. Although the NLRC reversed this decision. it is Josefa to whom the employees submits (sic) reports. it would have been adverse to petitioners’ case. the presumption arises that the evidence[. and not her mother.resolution of respondent NLRC in a petition for certiorari under Rule 65 of the Rules of Court does not include a correction of its evaluation of the evidence but is confined to issues of jurisdiction or grave abuse of discretion. II. the Labor Arbiter granted retirement benefits pursuant to Article 287 of the Labor Code as amended.[25] This. Despite receipt of the Labor Arbiter’s notice and summons. when [petitioners]. we find that the reversal of the NLRC’s decision was in order precisely because it was not supported by substantial evidence. Josefa failed. Illegal Dismissal: claim for separation pay Of the sixteen employees. they claim. They contend that petitioner Josefa Po Lam’s participation was limited to merely (a) being the overseer. [Respondents] testified that it was Josefa who exercises all the acts and manifestation of ownership of the hotel and restaurant like transferring employees from the Greatwall Palace Restaurant which she and her husband Roy Po Lam previously owned. While Josefa explained her participation and interest in the business as merely to help and assist her daughter as the hotel and restaurant was near the former’s store.

”[59] And yet. more than six months had lapsed without [petitioner] having resumed operation of the hotel. Macandog. finding that “no clear act of termination is attendant in the case at bar” and that respondents “did not submit any evidence to that effect. Macandog. but most especially due to Loveres’s mismanagement and abuse of petitioners’ trust and confidence. 1998 was/were recalled by [petitioner] to continue their services. they also assert that: (a) the separation of respondents was due to severe financial losses and reverses leading to the closure of the business. pending construction of the new building at Peñaranda Street.[43] We do not agree. Llarena.[55] Even the petition filed in this court made reference to the separation of the respondents due to “severe financial losses and reverses. they are not entitled to their money claims against the petitioners. [52] While the closure of the hotel operations in April of 1997 may have been temporary. Second. According to petitioners. 1998. even after the construction of the new premises at Peñaranda Street and the reopening of the hotel operations with the restaurant in this new site. as responsible for mismanagement of the establishment and for abuse of trust and confidence.[58] i. that the temporary suspension of the operations of the establishment arising from the non-renewal of the lease contract did not result in the termination of employment of private respondents and. because the Labor Arbiter had ruled that there was already illegal dismissal when the lay-off had exceeded the six-month period provided for in Article 286. in their position paper submitted to the Labor Arbiter. Respondent Alamares. when hotel operations were suspended due to the termination of the lease of the old premises. 1997. the NLRC was reversed by the CA. Whether respondents are still working for petitioners is a factual question. It confounds us. in the proceedings with the Labor Arbiter. petitioners’ memorandum on appeal also averred that the case was filed “not because of the business being operated by them or that they were supposedly not receiving benefits from the Labor Code which is true. specifically Loveres. to wit: It is the firm but respectful submission of petitioners that reliance on Article 286 of the Labor Code is misplaced.. petitioners humbly submit that even if they invoke Article 286 of the Labor Code.[42] Petitioners also claim that since the validity of respondents’ dismissal is a factual question. how the NLRC could have so cavalierly treated this uncontroverted factual finding by ruling that respondents have not introduced any evidence to show that they were illegally dismissed. in effect. Nicerio and Guades have not been permitted to work. Bumalay and Camigla. respondents Loveres. is inconsistent with the desire to recall them to work. but when taken together. According to the CA and the Labor Arbiter. Nicerio and Alamares filed the complaint for illegal dismissal immediately after the closure of the hotel operations in Rizal Street. and that is. and that the Labor Arbiter’s finding was based on conjecture. considering that the reason why private respondents were out of work was not due to the fault of petitioners. the petitioners cannot be faulted if said private respondents were out of work. for example...[50] It is confounding how petitioners have fashioned their arguments. when the owner of the building terminated the Lease Contract. notwithstanding the alleged temporary nature of the closure of the hotel operations. Petitioners therefore conclude that the filing by respondents of the illegal dismissal case was premature and should have been dismissed outright by the Labor Arbiter. After having admitted. And the records are unequivocal that since April 1997.”[54] Again. the Labor Arbiter even found that as of the time when he rendered his Joint Decision on July 2000 — or more than three (3) years after the supposed “temporary lay-off. Fourth. Macandog. that respondents have been laid-off since April 1997. even after six months of what should have been just a temporary lay-off.The NLRC reversed the Labor Arbiter. they lead us to conclude that petitioners really intended to dismiss all respondents and merely used the termination of the lease (on Rizal Street premises) as a means by which they could terminate their employees. we are not impressed by any of petitioners’ attempts to exculpate themselves from the charges. or entitled to separation or retirement pay. squarely blamed respondents. they would have this Court excuse their refusal to reinstate respondents or grant them separation pay because these same respondents purportedly have not proven the illegality of their dismissal.[48] Moreover. they had as yet no cause of action. Guades. As stated by the Joint Decision of the Labor Arbiter on July 2000. notwithstanding that the new premises had been completed and the same operated as a hotel with bar and restaurant. Guades and Nicerio have not been permitted to work for petitioners. and this bears stress and emphasis. petitioners make the same allegation in their memorandum on appeal with the NLRC.e. Labor Standards | To digest (old cases) | Ajean Tuazon| 56 . This is clearly dismissal — or the permanent severance or complete separation of the worker from the service on the initiative of the employer regardless of the reasons therefor. Llarena. CA and with this Court) in referring to the closure.[61] Indeed. petitioners referred to all respondents as “former employees of Mayon Hotel & Restaurant.” She then asserts that respondents “are not entitled to separation pay for they were not terminated and if ever the business ceased to operate it was because of losses. First. The failure of petitioners to reinstate the private respondents to their former positions should not likewise be attributable to said petitioners as the private respondents did not submit any evidence to prove their alleged illegal dismissal. they claimed that it could not be illegal dismissal because the lay-off was merely temporary (and due to the expiration of the lease contract over the old premises of the hotel). petitioners raise this novel argument. especially against Loveres. we hold that the evidence on record belie any claim of petitioners that the lay-off of respondents on that same date was merely temporary. and therefore the claim for separation pay was premature and without legal or factual basis. the non-renewal of the lease contract. particularly Loveres. It is petitioners contention that the CA should have sustained the NLRC finding that none of the above-named respondents were illegally dismissed. in the petition filed with this court. the various pleadings on record show that petitioners held respondents. First. as were all the other respondents. Article 286 of the Labor Code is clear — there is termination of employment when an otherwise bona fide suspension of work exceeds six (6) months. by not employing them when the Hotel and Restaurant transferred to its new site on Peñaranda Street.[49] Then. 1997. They specifically invoked Article 286 of the Labor Code to argue that the claim for separation pay was premature and without legal and factual basis. the operation of the Hotel had been sustaining consistent losses. Llarena.. Since then. and finally. Private respondents. was also laid-off when the Elizondo Street operations closed.[51] On this point. was stopped on March 31. it is not for the reviewing court to weigh the conflicting evidence. even the Labor Arbiter and the CA admit that when the illegal dismissal case was filed by respondents on April 1997. First. and (b) petitioner Pacita Po had to close shop and was bankrupt and has no liquidity to put up her own building to house Mayon Hotel & Restaurant. the lay-off of the respondents was merely temporary.[45] The above factual finding of the Labor Arbiter was never refuted by petitioners in their appeal with the NLRC. but because of the fact that the source of their livelihood. Second. the Labor Arbiter did not grant separation pay to the other respondents as they had not filed an amended complaint to question the cessation of their employment after the closure of Mayon Hotel & Restaurant on March 31. where they alleged that three (3) years prior to the expiration of the lease in 1997. Petitioner Josefa Po Lam’s affidavit on July 21. respondents have not been permitted to work nor recalled. whether legal or immoral.[53] But they made no mention of any intent to recall these respondents to work upon completion of the new premises. none of [respondents] herein who were employed at Mayon Hotel and Restaurant which was also closed on April 30. or more than three (3) years after the complaint was filed:[44] [F]rom the records. they assert that there is no illegal dismissal because there was “only a temporary cessation or suspension of operations of the hotel and restaurant due to circumstances beyond the control of petitioners. in this same memorandum.” again imputing it to respondents’ mismanagement. the building which [petitioner] Josefa allege[d] w[h]ere the hotel and restaurant will be transferred has been finally constructed and the same is operated as a hotel with bar and restaurant nevertheless. which are the termination and non-renewal of the lease contract over the subject premises. respondents Loveres. On the contrary. we find substantial evidence that petitioners intended the termination to be permanent.[60] Sixth. in the same petition. Third. the uncontroverted finding of the Labor Arbiter that petitioners terminated all the other respondents. respondents Loveres. and these were solely attributed to respondents. respondents had no cause of action to file the case for illegal dismissal.[46] It was a serious error that the NLRC did not inquire as to the legality of the cessation of employment. The petitioners cannot discern why they should be made liable to the private respondents for their failure to be reinstated considering that the fact that they were out of work was not due to the fault of petitioners but due to circumstances beyond the control of petitioners. Parenthetically.” the employment of all of the respondents with petitioners had ceased. and petitioners’ allegations that the employees assigned to the hotel operations knew about this beforehand. on the other hand. petitioners admit that since April 1997.. still the fact remains. and consequently. when petitioner Mayon Hotel & Restaurant suspended its hotel operations and transferred its restaurant operations in Elizondo Street. petitioners had inconsistencies in their pleadings (with the NLRC.[56] The vehemence of petitioners’ accusation of mismanagement against respondents.[47] The cessation of employment for more than six months was patent and the employer has the burden of proving that the termination was for a just or authorized cause. but the finding and conclusion of the Labor Arbiter [are] merely based on his own surmises and conjectures.”[41] In turn. argue in their Comment that petitioners themselves sought the application of Article 286 of the Labor Code in their case in their Position Paper filed before the Labor Arbiter.”[57] Fifth. Petitioners’ arguments reflect their lack of candor and the blatant attempt to use technicalities to muddle the issues and defeat the lawful claims of their employees.”[62] These factors may be inconclusive individually. In refutation. therefore. After more than one year from the temporary closure of Mayon Hotel and the temporary transfer to another site of Mayon Restaurant. therefore. for abusing her leniency and causing petitioner Mayon Hotel & Restaurant to sustain “continuous losses until it is closed. petitioners invoked Article 286 of the Labor Code to assert that the employer-employee relationship was merely suspended. As a matter of fact. however. the same respondents were still not recalled to work. we note that the Labor Arbiter and the CA are in accord that at the time of the filing of the complaint.

especially since they claimed that they have been experiencing losses in the three years before 1997. who applied for evaluation of the facility (food) given to [respondents]. good customs or public policy. or was done in a manner contrary to morals.[89] Considering the failure to comply with the above-mentioned legal requirements. Macandog. II. Guades. [Respondents] were not interviewed by the DOLE as to the quality and quantity of food appearing in the applications of [petitioners] for facility evaluation prior to its approval to determine whether or not [respondents] were indeed given such kind and quantity of food. (b) the provision of deductible facilities is voluntarily accepted in writing by the employee. if produced.] vol. gives rise to the presumption that their presentation is prejudicial to its cause. affidavits and other documents the labor standard benefits they are entitled to.e.] August 13. Atractivo. and which they alleged that petitioners have failed to pay them.[63] In the absence of justifying circumstances. remittances and other similar documents which would show that respondents rendered work entitling them to payment for overtime work. which is in consonance with the avowed policy of the State to give maximum aid and protection of labor. records. but confusing and confused — entitlement to labor standard benefits is a separate and distinct concept from payment of separation pay arising from illegal dismissal. are not sufficient to prove payment. To say the least.[80] As aptly quoted by the CA: [W]hen the evidence tends to prove a material fact which imposes a liability on a party. 100. on the ground that respondents have availed themselves of the food given by petitioners. Llarena. they invoked Sections 5 and 6. vol. 379[. p. pursuant to Article 286 of the Labor Code. 34. tsn[.[83] Specifically. and he has it in his power to produce evidence which from its very nature must overthrow the case made against him if it is not founded on fact. the law considers the case a matter of illegal dismissal. (Santos Broñola cannot be granted separation pay as he made no such claim). This runs counter to notions of fair play. affidavits executed by some of respondents during an ocular inspection conducted by an inspector of the DOLE. 1998). including damages. even assuming arguendo that the cessation of employment on April 1997 was merely temporary. Nicerio. rather than on the plaintiff to prove non payment. As a rule. Money claims The CA held that contrary to the NLRC’s ruling. testified that she did not inform [respondents] concerning said Facility Evaluation Orders (p. and even where the employees must allege nonpayment.[90] The law is clear that mere availment is not sufficient to allow deductions from employees’ wages. the presumption arises that the evidence. Petitioners assail this ruling by repeating their long and convoluted argument that as there was no illegal dismissal. premium pay for work on holidays and rest day. We cannot consider the cost of meals in the Orders as applicable to [respondents]. II. We also agree with the Labor Arbiter and the CA that the documents petitioners submitted. the award of damages was proper. More important.[82] They claim that these benefits make up for whatever inadequacies there may be in compensation.[65] While we recognize the right of the employer to terminate the services of an employee for a just or authorized cause. who at the time of dismissal were entitled to their retirement benefits pursuant to Article 287 of the Labor Code as amended. repetitive and unconvincing. but more importantly. position paper.[84] Petitioners also aver that they give five (5) percent of the gross income each month as incentives. As stated in Mabeza v.[81] Petitioners next claim that the cost of the food and snacks provided to respondents as facilities should have been included in reckoning the payment of respondents’ wages. to give the Department of Labor and Employment (DOLE) the opportunity to ascertain the verity of the alleged authorized cause of termination. The criterion in making a distinction between a Labor Standards | To digest (old cases) | Ajean Tuazon| 57 . 40. while some [of the respondents] admitted that they were given meals and merienda. rollo) issued by the DOLE Regional Office whereby the cost of meals given by [petitioners] to [respondents] were specified for purposes of considering the same as part of their wages. doubts reasonably arising from the evidence. On the contrary.[73] and (c) Damages for respondents Loveres.[64] And even assuming that the closure was due to a reason beyond the control of the employer. such facilities could not be deducted without compliance with certain legal requirements. Macandog and Llarena. 3.[72] We therefore reinstate the Labor Arbiter’s decision with the following modifications: (a) Separation pay for the illegal dismissal of respondents Loveres. As proof of compliance of payment of minimum wages. the quality of food served to them was not what was provided for in the Facility Evaluation Orders and it was only when they filed the cases that they came to know of this supposed Facility Evaluation Orders. valid and legal cause for termination of employment. Nicerio. and (c) the facilities are charged at fair and reasonable value. inspite of orders to do so. It was therefore petitioners’ burden to prove that they have paid these money claims. the Labor Arbiter therefore erred when he ruled that the cost of the meals actually provided to respondents should be deducted as part of their salaries.[67] Where there is no showing of a clear. if it were true that the lay-off was temporary but then serious business losses prevented the reinstatement of respondents.[79] Indeed. (b) Retirement pay for respondents Guades.[68] Under these circumstances.[71] The policy is to extend the doctrine to a greater number of employees who can avail of the benefits under the law.[78] By choosing not to fully and completely disclose information and present the necessary documents to prove payment of labor standard benefits due to respondents. rollo.[85] The cost of meals and snacks purportedly provided to respondents cannot be deducted as part of respondents’ minimum wage. petitioners failed to discharge the burden of proof.[77] petitioners failed to submit the pertinent employee files. Even granting that meals and snacks were provided and indeed constituted facilities. petitioners’ failure to submit the necessary documents which as employers are in their possession. we note the uncontroverted testimony of respondents on record that they were required to eat in the hotel and restaurant so that they will not go home and there is no interruption in the services of Mayon Hotel & Restaurant. We are not impressed by petitioners’ claim that severe business losses justified their failure to reinstate respondents. moral damages are recoverable where the dismissal of the employee was attended by bad faith or fraud or constituted an act oppressive to labor. substantial justice and the constitutional mandate that labor rights should be respected. the burden of proof is always on the employer to prove that the dismissal was for a just or authorized cause. One who pleads payment has the burden of proving it. night shift differential.[70] It is a time-honored rule that in controversies between a laborer and his master. 1998). and Broñola. There was no proof of respondents’ written authorization. notices of inspection result and Facility Evaluation Orders issued by DOLE. the Labor Arbiter found that while the respondents admitted that they were given meals and merienda. tsn[.[87] the employer simply cannot deduct the value from the employee's wages without satisfying the following: (a) proof that such facilities are customarily furnished by the trade. and payment of these as well as the COLA and the SILP – documents which are not in respondents’ possession but in the custody and absolute control of petitioners. The records are clear that petitioners failed to comply with these requirements. Indeed. then petitioners should have complied with the requirements of written notice. Also. NLRC. there was no evidence that the quality and quantity of food in the Orders were voluntarily accepted by [respondents]. Respondents have set out with particularity in their complaint.. which allow the deduction of facilities provided by the employer through an appropriate Facility Evaluation Order issued by the Regional Director of the DOLE. But more important. As stated in the Labor Arbiter’s decision:[86] While [petitioners] submitted Facility Evaluation Orders (pp. the quality of food serve[d] to them were not what were provided for in the Orders and that it was only when they filed these cases that they came to know about said Facility Evaluation Orders (pp.[76] Despite repeated orders from the Labor Arbiter.[66] And in termination disputes.[74] The CA thus reinstated the Labor Arbiter’s grant of respondents’ monetary claims. i. serious business losses do not excuse the employer from complying with the clearance or report required under Article 283 of the Labor Code and its implementing rules before terminating the employment of its workers. They state that although on the surface respondents appeared to receive minimal wages. and are governed by different provisions of the Labor Code. and he refuses to produce such evidence. but without legal redress. The requirement of law mandating the giving of notices was intended not only to enable the employees to look for another employment and therefore ease the impact of the loss of their jobs and the corresponding income. or in the interpretation of agreements and writing should be resolved in the former’s favor. 469. and Alamares. would operate to his prejudice.Moreover. petitioners had not discharged the burden of proving that the monetary claims of the respondents have been paid. We agree with the CA and the Labor Arbiter. the dismissal of employees must be made within the parameters of law and pursuant to the tenets of fair play. the failure of petitioners to observe the procedural requirements set out under Article 284. As ruled in Mabeza. it still has to accord its employees some relief in the form of severance pay. petitioners submitted the Notice of Inspection Results issued in 1995 and 1997 by the DOLE Regional Office. it became dismissal by operation of law when petitioners failed to reinstate respondents after the lapse of six (6) months. 468. [Petitioner] Josefa herself. petitioners had granted respondents other benefits which are considered part and parcel of their wages and are allowed under existing laws.[88] Petitioner Josefa Po Lam herself admitted that she did not inform the respondents of the facilities she had applied for. To rule otherwise would lead to the anomaly of respondents being terminated from employment in 1997 as a matter of fact. If doubts exist between the evidence presented by the employer and the employee.] June 19. Rule VII-A. food or snacks or other convenience provided by the employers are deemed as supplements if they are granted for the convenience of the employer. payrolls. The evidence to prove this fact is inconclusive. the scales of justice must be tilted in favor of the latter — the employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause. taints their actuations with bad faith. the general rule is that the burden rests on the defendant to prove nonpayment.[75] This petitioners failed to do. and support the case of his adversary. Petitioners’ arguments are not only tiring. then respondents are not entitled to their monetary claims or separation pay and damages.[69] We believe that the dismissal of the respondents was attended with bad faith and meant to evade the lawful obligations imposed upon an employer.

After the submission of the parties’ respective position papers and rejoinders/supplemental position papers. 2005 Aug 25.[96] Nevertheless. 2000 with modification. PUNO (Associate Justice) WE CONCUR: MA. Guades. Macandog and Llarena. It appears.295 a month only. We also do not agree with petitioners that the five (5) percent of the gross income of the establishment can be considered as part of the respondents’ wages. 103. PAMPLIEGA. he is entitled to an award of attorney's fees. INC. The case is REMANDED to the Labor Arbiter for the RECOMPUTATION of the total monetary benefits awarded and due to the employees concerned in accordance with the decision. vol. Incorporated (“Philex Gold”). IN VIEW WHEREOF. Llarena. Profits are realized after expenses are deducted from the gross income. in view of all the FOREGOING. JOINTLY and SEVERALLY to: 1. ANIEVAS.00 from all respondents except Loveres. a gold mining company with mine site at Vista Alegre. BRIMO/LEONARD P. therefore. As regards the supervisors’ wage rates[3] which was submitted by Philex Gold. 2003 of the Court of Appeals in CA-G.R. and (6) Granting attorney’s fees of P10.000. we cannot agree with the Labor Arbiter in granting exemplary damages of P10. This is shown by the fact that the maximum rate for S-4 at P18. Macandog.00 each to all respondents. 2001./GERARD H.000. Llarena. represented by its President.[95] and public policy requires that these acts must be suppressed and discouraged. rollo). 1st Division AZCUNA.”[93] therefore they are estopped from claiming that the applicable minimum wage should be for service establishments employing 15 employees or less. such as petitioners’ business. Further. Nabulao. 2000 of the Labor Arbiter in RAB V Case Nos. assailing the Decision of the Court of Appeals in CA-G. Nicerio. When Philex Gold was incorporated in 1996 to exclusively handle gold mining. [sjgs1] Finally. we reinstate the award of monetary claims granted by the Labor Arbiter. REYNATO S. oppressive or malevolent manner. No. then only they are entitled to exemplary damages. 68642 upholding the Joint Decision of July 14. This condition is not an ideal labor relation but a situation which will surely ignite labor conflicts and disputes in the work place.. 57701 promulgated on April 23. however. DANTE O. MINITA V. The employer cannot exempt himself from liability to pay minimum wages because of poor financial condition of the company. The Decision of January 17. receiving a different set of benefits and higher salaries compared to the locally hired supervisors of similar rank and classification doing parallel duties and functions. Nicerio. the highest category at P13. and Alamares. The payment of minimum wages is not dependent on the employer’s ability to pay. Simply stated. judgment is hereby decreed ORDERING the respondent PHILEX GOLD PHILIPPINES.: This is a petition for review on certiorari. 2000 in favor of respondent Union. (4) Awarding moral damages of P20. While it is true that other forms of damages under the Civil Code may be awarded to illegally dismissed employees. We note that petitioners themselves have admitted that the establishment employs “more or less sixteen (16) employees.000. It turned out that the ex-Padcal supervisors were maintained under a confidential payroll. respondent union entered into a Collective Bargaining Agreement (CBA) with petitioner company effective August 1. JOSE D. ALICIA AUSTRIA-MARTINEZ (Associate Justice). it took over the operations of the Bulawan mines and absorbed some of the ex-Padcal employees. (Associate Justice). and Broñola. with the following MODIFICATIONS: (1) Granting separation pay of one-half (1/2) month for every year of service to respondents Loveres. Philex Gold conveyed to Philex Supervisors Union the status of the ex-Padcal supervisors in November 1997 upon the insistence of the union to be informed of their standing.] such is in the nature of share from service charges charged by the hotel. 93. Llarena. 104. Benguet. for the payment of wage differential and damages and the rectification of the discriminatory salary structure and benefits between the ex-Padcal supervisors and the local-hires. J. TINGA (Associate Justice). the circumstances of this case would have called for exemplary damages. suffice to say that this is not a defense to payment of labor standard benefits. Readjust the MONTHLY RATES OF PAY of locally hired SUPERVISORS in the categories of S-1 to S5 RANKS in the same level/or amount with that of PADCAL SUPERVISORS of the same RANKS namely: Labor Standards | To digest (old cases) | Ajean Tuazon| 58 .[100] This case undoubtedly falls within this rule. temperate or compensatory damages. SP No. Tuba. 55. an S-4 employee getting the maximum salary of P18. They have also forced respondents to unnecessary hardship and financial expense.000. how can the amounts receive[d] by [respondents] be considered as profit share when the same [are] based on the gross receipt of the hotel[?] No profit can as yet be determined out of the gross receipt of an enterprise. On July 2. the Voluntary Arbitrator held: The Wage rates of the employers as classified and classed by them are not also reasonable and undiscriminatory. It is settled that in actions for recovery of wages or where an employee was forced to litigate and incur expenses to protect his rights and interest. Guades. G. Negros Occidental. JOSEF/JOSE B. Nicerio. Atractivo. promulgated on August 29. should be removed. GERARDO H. 1997. 0400079-97 and 04-00080-97 is AFFIRMED. Also. the maximum rate of S-4 being higher than the minimum rate of S-5. 4.[91] Considering. 2001 and its Resolution. Philex Supervisors Union filed a Complaint[2] against Philex Gold with the National Conciliation and Mediation Board (NCMB). JOSEF. 94. and Broñola. Petitioners. that hotel workers are required to work different shifts and are expected to be available at various odd hours. as the dismissal was effected in a wanton. We quote with approval the Labor Arbiter on this matter. INC. Indeed. who were employed in the hotel.[98] And the law is clear that exemplary damages can only be awarded if plaintiff shows proof that he is entitled to moral.[92] The deduction of the cost of meals from respondents’ wages. versus PHILEX BULAWAN SUPERVISORS UNION. They have terminated the respondents’ employment in an underhanded manner. The Labor Arbiter is ORDERED to submit his compliance thereon within thirty (30) days from notice of this decision.295 upon his promotion to S-5. CALLEJO. the Voluntary Arbitrator rendered a decision on January 14. the petition is hereby DENIED.R.supplement and a facility does not so much lie in the kind (food. 2000 of the Voluntary Arbitrator and reinstated the Voluntary Arbitrator’s Resolution dated January 14. Bacolod City. its regular supervisory employees effective July 1. 1997. we rule that attorney’s fees in the amount to P10. with prayer for the issuance of a temporary restraining and/or status quo order. thereby protracting this case and causing the unnecessary clogging of dockets of the Court.00 each for respondents Loveres. BRIMO.R. The said Decision of the Court of Appeals reversed and set aside the Resolution dated February 29.. (2) Granting retirement pay for respondents Guades. SR. Atractivo. SP No. denying petitioner’s Motion for Reconsideration. 1996 up to July 31. Macandog. therefore. receive[d] various amounts as profit share. The antecedents[1] of the case are as follows: Respondent Philex Bulawan Supervisors Union (“Philex Supervisors Union”) is the sole and exclusive bargaining representative of all supervisors of petitioner Philex Gold Philippines. Guades.000. and have used and abused the quasi-judicial and judicial processes to resist payment of their employees’ rightful claims.065 a month will merely get a reduced or diminished salary of P13. CHICO-NAZARIO (Associate Justice) WAGES PHILEX GOLD PHILIPPINES. Respondents.065 per month is higher than the minimum rate for S5.00 each to all respondents.[94] Thus. their ready availability is a necessary matter in the operations of a small hotel. Conclusion There is no denying that the actuations of petitioners in this case have been reprehensible. This is more explained by [respondents] when they testified that what they received are not fixed amounts and the same are paid not on a monthly basis (pp. Nicerio. In whatever shade or color that we shall look upon the issue of whether or not the herein employer can be held liable to pay the wage differential pay to the LOCALLY HIRED SUPERVISORS due to its obvious discriminatory wage policy. [petitioners] failed to submit evidence that the amounts received by [respondents] as profit share are to be considered part of their wages and had been agreed by them prior to their employment. Although called profit share[. (5) Deleting the award of exemplary damages of P10. that after the signing of the CBA.[4] The dispositive portion of the Decision reads: WHEREFORE. 2001. the highest class or category of supervisors upon his promotion. the same cannot be considered as part of their wages in determining their claims for violation of labor standard benefits. LEONARD P. II. Atractivo and Broñola specifically claimed damages from petitioners. one thing stands out—supervisors of the same ranks are not paid the same rates of pay. (3) Removing the deductions for food facility from the amounts due to all respondents. we sustain the Labor Arbiter. Sipalay.[99] As only respondents Loveres.00 should be granted to each respondent. As for petitioners repeated invocation of serious business losses. The rate difference between the maximum rate of S-4 and the minimum rate for S-5 is P4. Macandog. ANIEVAS. 149758. On the issue of the proper minimum wage applicable to respondents. This inequitable rates of pay being implemented by respondents result naturally into the herein employers’ discriminatory wage policy which Article 248 (e) of the LABOR CODE prohibits and defines as UNFAIR LABOR PRACTICE OF EMPLOYERS. ROMEO J. Some of the so-called “exPadcal” supervisors began to work in the Bulawan mines of Philex Mining Corporation in 1992 as ordinary rank-andfile workers. with copies furnished to the parties.[97] any award of moral damages by the Labor Arbiter cannot be based on the Labor Code but should be grounded on the Civil Code. to wit: While complainants. Philex Gold made the employees of Philex Mining Corporation from Padcal. SO ORDERED. and JOSE B. lodging) but the purpose.770.

Association of Luzon Development Bank Employees.[8] The dispositive portion of the Decision reads: WHEREFORE.501. it unduly favored the “ex-Padcal” supervisors over the local-hires through a system of confidential salary structure. and the ATTORNEY’S FEE which is 5% of the total wage differential pay also within ten (10) days from receipt of this decision. pp. it has complied with the Resolution dated February 29. That would be adding insult to injury. respondent Union filed a petition for review before the Court of Appeals raising the following issues: (1) whether or not the Voluntary Arbitrator erred in admitting petitioner’s motion for reconsideration which was filed beyond the reglementary period.209.000) provided by the Amendments and Supplement to the CBA. 57701 was pending. S2. The employer has discriminated against that employee. the Decision dated January 14. Each classification is further divided in terms of wage rates into minimum. 1999 “to erase the shadows of inequities among the various grades of supervisors.979. P5. “persons who work with substantially equal qualification. The Voluntary Arbitrator. specialized skills. in CA-G.R. On June 29.00 a month each effective October 1. 2. the modification of the effectivity of the readjustment of the monthly rates of pay of the locally hired supervisors and of the computation of their wage differential from November 1.065. Granting arguendo that Philex Gold had only a period of 10 days within which to seek reconsideration of the Sitjar Decision.46 per supervisor per month for S-5.[9] Petitioners’ motion for reconsideration was denied by the appellate court in its Resolution dated August 29. Finally. 36-37. the Voluntary Arbitrator issued the assailed Resolution modifying his earlier Decision dated January 14. medium. did the Court of Appeals commit an error in law by stating that the Decision dated 14 January 2000 of VA Sitjar became “final and executory” after eleven days from notice? 2. The long honored legal truism of “equal pay for equal work.S-1 ----------------P13. It presented a salary structure for supervisors classified into five categories. In a Resolution dated April 4.00 effective November 1.” has been institutionalized in our jurisdiction.081. On January 25. SO ORDERED. the Voluntary Arbitrator issued a Writ of Execution enforcing the Resolution dated February 29.472. And finally. S-3. Quisumbing. and. effort and responsibility. did the period begin to run upon service of said Decision at an address which is not theaddress on record or upon the actual receipt thereof by Philex Gold’s counsel? Labor Standards | To digest (old cases) | Ajean Tuazon| 59 . 1997 although the discrimination in wages started upon the regularization of the ex-Padcal supervisors on July 1. 3. Such that “if an employer accords employees the same position and rank. 1997. the minimum wage rate for a higher category happened to be lesser than the maximum rate of a lower category such that a supervisor with a rank of “S-1” maximum would get less upon his promotion to “S-2” minimum (Rollo.75 per supervisor per month for S-4 and P8. In an Order dated June 27. SP No.[5] Philex Supervisors Union filed a Motion for Partial Reconsideration dated January 20. 2000. 1998 to August 1. 2000. While CA-G. 1998 and to pay Wage differential pay from November 1. The respondent is further ordered to deposit with the cashier of the NCMB the sum which is equivalent to the wage differential pay computed at a differential of P5. 2000 a Motion for Issuance of Writ of Execution of the Resolution dated February 29. it is for the employer to explain why the employee is treated unfairly. Philex Gold also filed a motion for reconsideration. Petitioners raise the following issues: 1. 128845. among others. 2000.00 a month effective October 1. under similar conditions. the original decision dated 14 January 2000 of the voluntary arbitrator as the same is duly supported by the pleadings filed before Us. SP No. 2000). This explanation is fraught with inconsistencies. et al. 2000. premises considered. the assailed resolution of 29 February 2000 is REVERSED and SET ASIDE and a new one entered REINSTATING the 14 January 2000 decision subject to the MODIFICATION that the readjustment of the monthly rates of pay of locally hired supervisors as well as their wage differential pay be made effective 1 August 1997 up to the finality of this decision. Section 4. 2000. 2001. the CBA between the parties did not disclose this multi-tiered classification of supervisors (Rollo.60 S-4 ----------------P17. presumably because of seniority in employment.24 per month per supervisor. To revise or modify its existing wage rates per supervisory ranking.R. pp. which was not acted upon by the Voluntary Arbitrator.00 S-5 ----------------P20. and to compute and pay their differential pay from October 1. that is. 90). 41).” (International School Alliance of Educators v. and S-5” with different rates of pay. however. S-4.R. finding that petitioners failed to prove that they did not discriminate against the locally hired supervisors in paying them lower salaries than the ex-Padcal supervisors. contending that it was denied due process as the Voluntary Arbitrator decided the case without its supplemental position paper.” meaning.663. 2. No. These factors only accentuate the fact which Philex Gold tried to hide. petitioners filed a Manifestation of Compliance with the Voluntary Arbitrator alleging that on account of its payment to respondent union members of monetary benefits (in the amount of P1. for S-1. to wit: 1. June 1. SO ORDERED. thus: Philex Gold’s attempt to explain the disparity in the salary rates between “ex-Padcal” supervisors and the local-hires failed to convince Us. P7. 1999. for S-2. and the “dislocation factor”. 2000. While the “ex-Padcal” supervisors received the maximum for each category. that the decision undermined the collective bargaining process between the parties relative to wage differentials. 2001 and its Resolution dated August 29. albeit with modification. Said petition was denied for lack of merit. longer work experience in gold mining. 1998 up to the date of this decision. skill. Rule 43 and Luzon Development Bank [v. G. [6] On March 13. 2000. the Court of Appeals rendered the assailed Decision. readjusted the amount of wages of local supervisors by adding or increasing their wages in the uniform sum of P800. 46-74).300. P5. 249 SCRA 162 (1995)] provide that the decision of a voluntary arbitrator becomes final after 15 days from notice of the award. making the maximum rate of a lower category lower than the minimum rate of the next higher category.” The dispositive portion of the Decision reads: WHEREFORE. (2) whether or not the Voluntary Arbitrator erred in modifying his decision by finding petitioner to be liable to its locally hired members in the sum of P800 per month as wage adjustment effective October 1999. this pay structure was kept from the knowledge of the union and was only revealed in the course of the proceedings before the voluntary arbitrator. No costs. First. The respondent employer is hereby ordered to re-adjust the wage rates of S-1 to S-5 supervisors by adding or increasing their wages in the uniform sum of P800. respondent Union filed on April 8. On February 29. the local-hires received the minimum. 2000.24 per supervisor per month. 2000. On April 23.R. IN VIEW of the foregoing.” The ramification is that “(i)f the employer pays one employee less than the rest. 60065. 2000. it is not for that employee to explain why he receives less or why the others receive more.893. It held. this time finding that there was no discrimination in the determination of the rates of pay of the supervisors. SP No. 2000. The respondent is further ordered to pay Attorney’s Fee to the Union’s lawyer at 5% of the total amount of WAGE DIFFERENTIAL PAY. 1998 up to the date of the Decision to all affected locally hired supervisors.428. SO ORDERED. 2000. 2000.60 S-2 ----------------P13. the respondent employer is ordered to deposit to the cashier of the NCMB the WAGE DIFFERENTIAL PAY and the Attorney’s Fee adjudged within 10 days from receipt of this Resolution. Third.24 per person/supervisor per month from November 1. Second. the local-hires actually received salaries less than those they were supposed to be entitled (Rollo. p. as found by the voluntary arbitrator in his original decision. docketed as CA-G. and that there was neither unlawful discrimination nor wage distortion between the ex-Padcal supervisors and the locally hired supervisors. 2001 after petitioners posted a cash bond. 1999 up to the time it is paid and implemented. On July 10. The Court issued a temporary restraining order enjoining the execution of the Decision of the Court of Appeals dated April 23.60 S-3 ----------------P15. Philex Gold filed a Motion to Lift Writ of Execution. 57701. 3. Philex Gold having failed to discharge this burden. the Voluntary Arbitrator denied[7] said Manifestation of Compliance for lack of merit. seeking. questioning the propriety and validity of the Voluntary Arbitrator’s Order granting execution pending appeal. namely: “S-1. should be paid similar salaries. We opt therefore to reinstate. On March 2.. Petitioners thus filed this petition with a prayer for the issuance of a temporary restraining order. 2000 is hereby modified in the following manner. for S-3. instead of its counsel’s address on record. This case is REMANDED to the voluntary arbitrator for the proper computation of wage differential and attorney’s fees. Assuming the validity of service on Philex Gold’s liaison office. 2001. the presumption is that these employees perform equal work” as “borne by logic and human experience. which was allegedly filed a day late. and maximum. 38-39. Pay to the UNION ATTORNEY’S FEES at 5% of the total sum of the Wage differential pay awarded within ten (10) days from receipt of this Decision. Philex Gold filed a petition for review before the Court of Appeals. and (3) whether or not the Voluntary Arbitrator erred in failing to grant 10 percent attorney’s fees on the total awards.

(2) Whether the petitioners-corporate officers are solidarily liable with Philex Gold in any liability to respondent Union. v.[17] Hence. GERARDO BRIMO. 2000 was filed out of time. To reiterate the ruling of Philippine-Singapore Transport Services. and other persons. Petitioners explained that the ex-Padcal supervisors were paid higher because of their longer years of service. A corporation is a juridical entity with legal personality separate and distinct from those acting for and in its behalf and. malicious or discriminatory but justified by the circumstances of their relocation and integration in the new mining operation in Bulawan. experience and other valid factors in the same class of workers doing the same kind of work?[10] The relevant issues in this case are as follows: (1) Whether the notice sent through petitioner company’s Liaison Office can be considered as notice to counsel. experience. it was filed within the 10-day reglementary period under Article 262-A of the Labor Code. or gross negligence? 4. Petitioners argue that the service of the Voluntary Arbitrator’s Decision on Philex Gold’s Liaison Office at Libertad St. Nabulao.” Said service on Philex Gold’s Liaison Office or on the petitioners themselves cannot be considered as notice in law to petitioners’ counsel. (3) Whether the doctrine of “equal pay for equal work” should not remove management prerogative to institute difference in salary on the basis of seniority. skill. they cannot be held solidarily liable with the company in the payment of any liability. . The contention is meritorious. They failed to differentiate this basic salary from any kind of salary increase or additional benefit which may have been given to the ex-Padcal supervisors due to their seniority. Deogracias G..[18] In this case. First Issue : Whether the notice sent through petitioner company’s Liaison Office can be considered as notice to counsel Petitioners contend that the Court of Appeals erred in holding that their motion for reconsideration of the Decision of the Voluntary Arbitrator dated January 14. 2000 was sent through the Liaison Office of Philex Gold. p. petitioner failed to prove with satisfactory evidence that it has not discriminated against the locally hired supervisor in view of the unequal salary.[11] In this case. experience and the dislocation factor in the same class of supervisory workers doing the same kind of work. The Court of Appeals. the decision was received by the respondents on 14 January 2000. Sipalay. Notices and Awards. 2000. 2000. LEONARD P.” This means that an ex-Padcal supervisor and a locally hired supervisor of equal rank do the same kind of work. They assert that the differential treatment of the ex-Padcal supervisors is not arbitrary. Indeed. personally liable for his corporate action. 2000 was delivered to their counsel the next day or on January 15. in their capacity as corporate officers. skill. and Weldy U. NLRC. Petitioners now contend that the doctrine of “equal pay for equal work” should not remove management prerogative to institute difference in salary on the basis of seniority. Therefore. Petitioners admit that the “same class of workers [are] doing the same kind of work. Under the circumstances. reliance may be placed on the assertion of petitioners that a copy of the Decision of the Voluntary Arbitrator dated January 14. trustee or officer has contractually agreed or stipulated to hold himself personally and solidarily liable with the Corporation. and that the Voluntary Arbitrator erred in admitting petitioners’ motion for reconsideration. Negros Occidental. In leveling the wages of the Padcal Supervisors and the Locally-Hired Supervisors. 123). The Court noted that in petitioners’ Position Paper and Supplemental Position Paper filed with the Voluntary Arbitrator. their training and skill in the underground mining method wanting in the local supervisors. JOSE B. under the NCMB Guidelines. trustee or officer to be held solidarily liable with the corporation in the following instances: 1. the Court of Appeals found that “[b]ased on the certification issued by the voluntary arbitrator himself. therefore. The contention is meritorious. its stockholders or members. the decision was received by the respondents (petitioners herein) on 14 January 2000 (Rollo. having knowledge thereof. erred in holding that said motion for reconsideration was filed out of time. Hence. Quisumbing. The records only show that an ex-Padcal supervisor is paid a higher salary than a locally hired supervisor of the same rank. the Court of Appeals applied the egalitarian doctrine of “equal pay for equal work” in International School Alliance of Educators v.[12] Hence. Labor Standards | To digest (old cases) | Ajean Tuazon| 60 .[14] However. hence. Did the Court of Appeals commit an error in law in affirming VA Sitjar when the latter disposed of an issue not submitted to him for arbitration and in directing solidary liability between Philex Gold and its top officers despite the absence of any finding of malice.[19] which was cited by the Court of Appeals in its Decision: . Negros Occidental. are its sole liabilities.” The appellate court ruled that the late filing rendered the decision final and executory as regards the petitioners. 2. Libertad St. Second Issue : Whether the petitioners-corporate officers are solidarily liable with Philex Gold in any liability to respondent Union Petitioners officers contend that they should not be adjudged solidarily liable with Philex Gold. 6113. thus: ATTY. Manlong. If an employer accords employees the same position and rank. notices and awards should be made on petitioners’ counsel. When a director.[16] which the Court of Appeals cited to support its Decision should be narrowly construed to apply to a situation where invidious discrimination exists by reason of race or ethnicity. However. and their relocation to Bulawan. 4. WENDY U. Negros Occidental 6113. or on the eleventh day from receipt of the decision. the Court cannot agree because petitioners failed to adduce evidence to show that an ex-Padcal supervisor and a locally hired supervisor of the same rank are initially paid the same basic salary for doing the same kind of work. the presumption is that these employees perform equal work. which must be deemed as the date of notice to counsel of said Decision. . When a director or officer has consented to the issuance of watered stocks or who. Nabulao. the Decision of the Voluntary Arbitrator dated January 14. VA Sitjar found petitioners Brimo. the doctrine of “equal pay for equal work” in International School Alliance of Educators was correctly applied by the Court of Appeals. and they filed their motion for reconsideration on 25 January 2000. petitioners were represented before the Voluntary Arbitrator by Attys. that where a party is represented by counsel or authorized representative. MANLONG Counsel for the Respondents PHILEX GOLD PHILIPPINES. Does “equal pay for equal work” unqualifiedly remove management prerogative to institute qualitative difference in pay and benefits on the basis of seniority. 2000. the address of petitioners’ counsel was indicated as Vista Alegre.. – Copies of pleadings. (c) are guilty of conflict of interest to the prejudice of the corporation. it is possible for a corporate director. When directors and trustees or. When a director. did not forthwith file with the corporate secretary his written objection thereto. Bacolod City Even the Court of Appeals stated that “based on the certification issued by the voluntary arbitrator himself. which should be the date of notice to counsel and the basis for computation of the period to file a motion for reconsideration of said Decision.. service shall be made on the latter. officers and employees. Inc. Rule III of the NCMB Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings states: Section 4. . experience and other factors. Contreras Jr. the officers of a corporation-(a) vote for or assent to patently unlawful acts of the corporation. in appropriate cases. The Court is not persuaded by petitioners’ contention. Josef and Jose B. Anievas. Sipalay. acting through its directors. Quisumbing. Service of Pleadings. INC. from the people comprising it. experience and the dislocation factor in the same class of supervisory workers doing the same kind of work. notices or copies of [an] award may be served through personal service or by registered mails on the parties to the dispute: Provided. in general. Service by registered mail is complete upon receipt by the addressee or his agents. Section 4. when petitioners’ motion for reconsideration was filed on January 25. 3. JOSEF. 2000 was improper since their counsel’s address of record was at Vista Alegre. jointly and severally liable for the alleged obligation of Philex Gold to pay wage differentials to PBSU. Third Issue : Whether the doctrine of “equal pay for equal work” should not remove management prerogative to institute difference in salary within the same supervisory level Petitioners submit that the “equal pay for equal work” doctrine in International School Alliance of Educators v.[15] The corporate officers in this case have not been proven to fall under any of the aforecited instances.3. skill. but not where valid factors exist to justify distinctive treatment of employees even if they do the same work. service of pleadings. trustee or officer is made. Petitioners state that Philex Gold’s Liaison Office forwarded said Decision to their counsel only the next day or on January 15. (b) act in bad faith or with gross negligence in directing the corporate affairs. ANIEVAS C/O Liaison Office. Bacolod City on January 14. bad faith. by specific provision of law.[13] The rule is that obligations incurred by the corporation.

178 was promulgated mandating the integration of the cost of living allowance under Wage Orders Nos. Xxx xxx xxx It is expressly understood that this wage increase shall be exclusive of increase in the minimum wage and/or mandatory living allowance that may be promulgated during the life of this Agreement. transfer of employees. PUBLIC RESPONDENT NLRC ACTED WITH GRAVE ABUSE OF DISCRETION IN AFFIRMING THE DECISION OF LABOR ARBITER JOAQUIN TANODRA DIRECTING MARCOPPER TO PAY WAGE DIFFERENTIALS DUE ITS RANK-AND-FILE EMPLOYEES RETROACTIVE TO 1 MAY 1987 CONSIDERING THAT SANS E. were modified as follows: 1. In the present petition. SO ORDERED. The company’s prerogative must be exercised in good faith and with due regard to the rights of labor. 2. Executive Order (E. to which the Marcopper Employees Union (the exclusive bargaining agent of all rank-and-file workers of petitioner) is affiliated. Art. This ushers us to the inner sanctum of what really was the intention of the parties to the contract. 5 and 6 into the basic wage of workers. they should be viewed in the light of the State's avowed policy to protect labor. OTHERWISE INTENDED BY THE PARTIES DURING THE TIME THE CBA WAS EXECUTED. 57701 and in its Resolution promulgated on August 29.: Social justice and full protection to labor guaranteed by the fundamental law of this land is not some romantic notion. 1. working regulations. the petition is hereby DENIED. 1986. G. And while this upward trend may not be a welcome phenomenon. 1986. Of course. II. AZCUNA (Associate Justice) WE CONCUR: HILARIO G. AS AMENDED BY THE MEMORANDUM OF AGREEMENT DATED 25 JULY 1986. Article V of the collective agreement. The dispositive portion states: WHEREFORE in view of the foregoing. J. THE LABOR ARBITER AND PUBLIC RESPONDENT NLRC'S RELIANCE ON THE LAST PARAGRAPH OF SECTION 1. on 15 December 1988. The COMPANY agrees to grant general wage increase to all employees within the bargaining unit as follows: Increase per day on Effectivity the Basic Wage May 1. CONSUELO YNARES-SANTIAGO (Associate Justice). however. The Temporary Restraining Order issued by the Court is LIFTED. A priori. 8 Consequently. 1. It is in this sense of fairness that we cannot allow this "one (1) day" to be an insulating medium to deny the workers the benediction endowed by Executive Order No. effective on 1 May 1987. That the parties therefore were consciously aware at the time of the conclusion of the agreement of the never-ending rise in the cost of living is a logical corollary.R. and the resolution issued by the said tribunal dated 20 December 1991 denying petitioner's motion for reconsideration.O. (Meycauayan College v.00 to P100. high in rhetoric but low in substance. having entered into an agreement with its employees. a corporation duly organized and existing under the laws of the Philippines. 103525.O 178. and to expansion and growth. The dispositive part reads. a labor federation duly organized and registered with the Department of Labor and Employment (DOLE). PUBLIC RESPONDENTS READING OF THE CBA. specifically on matters of wage increase and facilities allowance. NATIONAL LABOR RELATIONS COMMISSION and NATIONAL MINES AND ALLIED WORKERS' UNION (NAMAWU-MIF). It argued that the COLA should first be integrated into the basic wage before the 5% wage increase is computed. the union filed a complaint for underpayment of wages before the Regional Arbitration Branch IV. 2 Prior to the expiration of the aforestated Agreement. exploration and extraction. ADOLFO S. Quezon City. 1986. ANTONIO T. 185 SCRA 50). supervision of workers. (a) 5% effective May 1. While the law recognizes and safeguards this right of an employer to exercise what are clearly management prerogatives. 1. JR. 5 Consequently. be they in the form of salary increases or changes in the salary scale are aimed at one thing improvement of the economic predicament of the laborers.. 4 On 1 June 1987. place and manner of work. ARTICLE V OF THE CBA WHICH STATES: "IT IS EXPRESSLY UNDERSTOOD THAT THIS WAGE Labor Standards | To digest (old cases) | Ajean Tuazon| 61 . AND DOES NOT INCLUDE THE COLA AT THE TIME THE CBA WAS ENTERED INTO. (Chief Justice. The case at bench provides yet another example of harmonizing and balancing the "right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns on investments. Thus. (b) 5% effective May 1. and private respondent NAMAWU-MIF. time. it becomes readily discernible that this portion of the contract is the "stop-lock" gate or known in its technical term as the "non-chargeability" clause. lay-off of workers. respondents. No. . dismissal and recall of work. 10 Petitioner appealed the Labor Arbiter's decision and on 18 November 1991 the NLRC rendered its decision sustaining the Labor Arbiter's ruling. ULTIMATELY DISREGARDED THE ORDINARY MEANING OF THE PHRASE "BASIC WAGE". Increments to the laborers' financial gratification. such right should not be abused and used as a tool of oppression against labor. No reversible error was committed by the Court of Appeals in its Decision in CA-G. 1985 5% May 1. DAVIDE. the Decision of the Labor Arbiter is hereby AFFIRMED and the appeal filed is hereby DISMISSED for lack of merit.) WHEREFORE. There can be no quibbling that on the strength of this provision. which includes hiring.00 per day. work assignments. LEONARDO A. according to his own discretion and judgment.00 per month effective May 1. Hen. there cannot likewise be any rivalry that if the Executive Order were to retroact to 2 May 1987 or a day after the last contractual increase. the wage/allowance granted under this accord cannot be credited to similar form of benefit that may be thereafter ordained by the government through legislation. judgment is rendered directing respondent company to pay the wage differentials due its rank-and-file workers retroactive to 1 May 1987. 2001. Drilon.) No. working methods. 3. petitioner. 11 The NLRC declared: . The COMPANY hereby grants an increase of the facilities allowance from P50.R. The foregoing phrase albeit innocuously framed offers the cue. we conjure to sharp focus the provision embossed in Section 1. SP No. THUS." 1 In this petition for certiorari and prohibition under Rule 65 of the Revised Rules of Court. No costs. the written instrument and the intention of the parties must be brought to the fore. collective bargaining agreements and the general principles of fair play and justice. 1986 5% It is expressly understood that this wage increase shall be exclusive of any increase in the minimum wage and/or mandatory living allowance that may be promulgated during the life of this Agreement. the basic wage rate of petitioner's laborers categorized as nonagricultural workers was increased by P9. As such. Sec. Treading along its lines. on 25 July 1986. QUISUMBING (Associate Justice). vs. 178. 12 Petitioner's motion for reconsideration was denied by the NLRC in its resolution dated 20 December 1991. Franklin N. engaged in the business of mineral prospecting. an employer may not be allowed to renege on its obligation under a collective bargaining agreement should. The COMPANY hereby grants a wage increase of 10% of the basic rate to all employees and workers within the bargaining units (sic) as follows. SO ORDERED. this question will not arise. viz:. This will mean that the members of the bargaining unit will get an effective increase of 10% from May 1. petitioner implemented the initial 5% wage increase due on 1 May 1986. assailed the manner in which the second wage increase was effected. Marcopper Mining Corporation. they are not absolute prerogatives but are subject to legal limits. and the discipline. there was the intention to yield and comply in the event of an imposition. at the same time. the Labor Arbiter promulgated a decision in favor of the union. thus: WHEREFORE consistent with the tenor hereof. entered into a Collective Bargaining Agreement (CBA) effective from 1 May 1984 until 30 April 1987. its effectivity retroactive to 1 May 1987.It is noteworthy to state that an employer is free to manage and regulate. V of the said Collective Bargaining Agreement provides: Sec. 1987. 2. CARPIO (Associate Justice) MARCOPPER MINING CORPORATION. 9 The Labor Arbiter ruled in this wise: First and foremost. And talking of intention. 3 In compliance with the amended CBA. On 24 July 1989.[20] ( mphasis supplied. all phases of employment. Marcopper challenges the NLRC decision on the following grounds: I. There is no disagreement as to the following facts: On 23 August 1984. the law grants the employees the same or better terms and conditions of employment. Chairman). Marcopper Mining Corporation impugns the decision rendered by the National Labor Relations Commission (NLRC) on 18 November 1991 in RAB-IV-12-258888 dismissing petitioner's appeal. petitioner and private respondent executed a Memorandum of Agreement (MOA) wherein the terms of the CBA. 1996 Mar 29. 1st Division) KAPUNAN. Employee benefits derived from law are exclusive of benefits arrived at through negotiation and agreement unless otherwise provided by the agreement itself or by law. THE FUNDAMENTAL MEANING OF THE BASIC WAGE IS CLEARLY DIFFERENT FROM. 6 Petitioner implemented the second five percent (5%) wage increase due on 1 May 1987 and thereafter added the integrated COLA. 7 Private respondent. . SO ORDERED.

would violate the "exclusiveness" of the benefits granted under the CBA and under E. A CBA. the same must be stilled in favor of labor.O. 178 did was exactly to integrate the COLA under Wage Orders Nos. 178. Consequently. When it thereafter integrated the COLA into the basic wage. profit-sharing payments. 178 was enacted even though their effectivity dates coincide. made the following assertions: . No. We are bound to ensure its fruition. Thus. employee benefits derived from either the law or a contract should be treated as distinct and separate from each other. This is. however. What E. 17 However. 21 we categorically stated that: When conflicting interests of labor and capital are to be weighed on the scales of social justice. concur. Philippine Telegraph & Telephone Corporation v. the rationale for the integration of the COLA with the basic wage was primarily to increase the base wage for purposes of computation of such items as overtime and premium pay. we are still guided by our ruling in Davao Integrated Port Stevedoring Services v. Padilla.. Petitioner. The purpose of E. As such it must be construed liberally rather than narrowly and technically. 13th month pay. More importantly.(Meycauayan College vs. 22 we declared: Any doubt concerning the rights of labor should be resolved in its favor pursuant to the social justice policy. . Petitioner maintains that the rules on interpretation of contracts. 178 is to improve the lot of the workers covered by the said statute. a policy. As of said date. Petitioner's arguments eventually lose steam in the light of the fact that compliance with the law is mandatory and beyond contractual stipulation by and between the parties. particularly Art. The terms and conditions of a CBA constitute the law between the parties. it must yield to the common good. then. PETITIONER COMPUTED THE 5% WAGE INCREASE BASED ON THE UNINTEGRATED BASIC WAGE IN ACCORDANCE WITH THE INTENT AND TERMS OF THE CBA.O. Definition of Terms. which filed its own comment. III. when petitioner computed the 5% wage increase based on the unintegrated basic wage. Thus. and other monetary benefits which are not considered as part of or integrated into the regular salary of the employee on the date the Order became effective. Drilon. Therefore.O. Jr. petitioner misinterprets the declaration of the Labor Arbiter in the assailed decision that "when the pendulum of judgment swings to and fro and the forces are equal on both sides. retroactively took effect on the same date the CBA increase became effective. 178.. enshrined in our Constitution. Finally. petitioner is not guilty of underpayment. by some uncanny coincidence. No. Amount to be Integrated. which in the final analysis was solely for the purpose of alleviating their plight due to the continuous undue hardship they suffer caused by the ever escalating prices of prime commodities. likewise. 3.O. 178. 15 Private respondent counters by asserting that the purpose.. should govern. THIS WAS IN FULL ACCORD AND IN FAITHFUL COMPLIANCE WITH E. Section 2 of the Rules is quite explicit: Sec. to accord utmost protection and justice to labor. the heavier influence of the latter should be counter-balanced by sympathy and compassion the law must accord the underprivileged worker. 20 it insists that what is involved here is the amended CBA which is essentially a contract between private persons. 5 and 6 into the basic pay so as to increase the statutory daily minimum wage. it is not. IV. 1. NLRC.O 178. 178. The principle that the CBA is the law between the contracting parties stands strong and true. He explains thus: A collective bargaining agreement is a contractual obligation. Definition of Terms and Coverage. It is unnecessary to delve too much on the intention of the parties as to what they allegedly meant by the term "basic wage" at the time the CBA and MOA were executed because there is no question that as of 1 May 1987. it requires a determination of the effect of an executive order on the terms and the conditions of the CBA. as a labor contract within the contemplation of Article 1700 of the Civil Code of the Philippines which governs the relations between labor and capital. the situation "contemporaneous" to the execution of the amendatory MOA was that there was yet no law requiring the integration of the COLA into the basic wage. that is to integrate first the COLA into the basic wage and thereafter compute the 5% wage increase therefrom. 18 But even so. there cannot be any doubt that the computation of the CBA increase on the basis of the "integrated" wage does not constitute a violation of the CBA. premises considered. To follow the theory of private respondent. This is what the law ordains and to which the collective bargaining agreement of the parties must conform. the CBA and E. includes the COLA. the definition of the term "basic wage" has remained unchanged is off the mark since said definition expressly allows integration of monetary benefits into the regular pay of employees: Chapter 1. Abarquez. whether or not petitioner intended the basic wage to include the COLA becomes immaterial. as mandated by E. 1371 of the New Civil Code which states that: Art. 16 We rule for the respondents. 2. the basic wage without the COLA or the so-called "integrated" basic wage which. JJ. 1371. in Terminal Facilities and Services Corporation v. Effective on the dates specified. premium payments. NLRC. and the courts must place a practical and realistic construction upon it.O. the basic rate of covered workers shall be increased by the following amounts: Integration of monetary benefits into the basic pay of workers is not a new method of increasing the minimum wage. The NLRC. therefore." While petitioner acknowledges that all doubts in the interpretation of the Labor Code shall be resolved in favor of labor.) xxx xxx xxx Very clearly. AS AMENDED BY THE MEMORANDUM OF AGREEMENT. it complied also with the mandate of E. the term "basic wage" includes the COLA. THE DOCTRINE OF LIBERAL INTERPRETATION IN FAVOR OF LABOR IN CASE OF DOUBT IS NOT APPLICABLE TO THE INSTANT CASE.O. Bellosillo. Petitioner's contention that under the Rules Implementing E. Evidently. No. SO ORDERED. PETITIONER DID NOT COMMIT ANY UNDERPAYMENT. an ordinary contract to which is applied the principles of law governing ordinary contracts. Unfortunately for petitioner. Accordingly. as a result of the integration. therefore. applying the aforequoted provision in the case at bench. we are. to state outright that the parties intended the basic wage to remain invariable even after the advent of EO 178 is unfounded and presumptuous a claim as such inevitably works to the utmost disadvantage of the workers and runs counter to the constitutional guarantee of affording protection to labor. 178. No.O. likewise. 1. complied with its contractual obligations in the CBA as well as with the legal mandate of the law. No. cannot be compelled to undertake an obligation it never assumed or contemplated under the CBA or MOA. said law. WHEREFORE. the Solicitor General opines that for the purpose of complying with the obligations imposed by the CBA. nature and essence of CBA negotiation is to obtain wage increases and benefits over and above what the law provides and that the principle of non-diminution of benefits should prevail. the petition is hereby DISMISSED. No. 2. or the statutory minimum wage. the integrated COLA should not be considered due to the exclusivity of the benefits under the said CBA and E. It is petitioner's contention that the basic wage referred to in the CBA pertains to the "unintegrated" basic wage. their contemporaneous and subsequent acts shall be principally considered. was increased with the integration of the COLA. thus. giving due consideration to the context in which it is negotiated and purpose which it is intended to serve. 178.O. supra. Sec. HENCE. There is evidently nothing to construe and interpret because the law is clear and unambiguous. the focus of the instant case. consequently. . it complied with its contractual obligations under the CBA.O. by mandate of E. Labor Standards | To digest (old cases) | Ajean Tuazon| 62 . the basic wage of workers. is not merely contractual in nature but impressed with public interest.O. No. It is distinct from an obligation imposed by law. petitioner concludes that it was clearly not the intention of the parties (petitioner and private respondent) to include the COLA in computing the CBA/MOA mandated increase since the MOA was entered into a year before E. Siding with the petitioner. In order to judge the intention of the contracting parties. the present controversy involves not merely an interpretation of CBA provisions.INCREASE SHALL BE EXCLUSIVE OF ANY INCREASE IN THE MINIMUM WAGE AND/OR MANDATORY LIVING ALLOWANCE THAT MAY BE PROMULGATED DURING THE LIFE OF THIS AGREEMENT" IS MISPLACED AND WITHOUT BASIS BECAUSE SAID PROVISION HARDLY OFFERS A HINT AS TO WHAT BASIC WAGE THE PARTIES HAD IN MIND AT THE TIME THEY EXECUTED THE CBA AS AMENDED BY THE MEMORANDUM OF AGREEMENT. 13 Stripped of the non-essentials. sworn to uphold. 14 Petitioner. Vitug and Hermosisima. Likewise. What petitioner has lost sight of is the avowed policy of the State. 19 which we herein reiterate: While the terms and conditions of the CBA constitute the law between the parties. fringe benefits. and should be. Xxx xxx xxx (j) "Basic Wage" means all regular remuneration or earnings paid by an employer for services rendered on normal working days and hours but does not include cost-of-living allowances. etc. However. To adopt the statement and claim of the petitioner would then redound to depriving the workers of the full benefits the law intended for them. In other words. 178 provided for the exclusiveness of the benefits to be given or awarded to the employees of petitioner.. the question for our resolution is what should be the basis for the computation of the CBA increase.

R. petitioner Sevilla Trading Company (Sevilla Trading. It must exclude those non-basic benefits which. for short) of the National Conciliation and Mediation Board.D. Instead. Insurance Commission. for consideration and resolution. 2004 Apr 28. It maintained that. IF SUCH BE THE CASE. a duly organized and registered union. J. final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions. On the other hand. National Electrification Administration. e) Union leave pay. premium pay for special holidays. d) Bereavement leave pay. Semana. bereavement leave and other leave with pay in the CBA. Civil Aeronautics Board. (e) Union leave pay. It received a copy of the decision of A. the reversal to the old computation can only be made to the extent of including nonbasic benefits actually included by petitioner in the base figure in the computation of their 13th-month pay in the prior years. Energy Regulatory Board. legal and special holidays. a domestic corporation engaged in trading business. (c) Night premium. No. in the case at bar) of the Rules of Court. 2nd Division) PUNO. added to the base figure. as amended. and cannot be a substitute for an appeal. Construction Industry Arbitration Commission. for short). it filed a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure. (d) Bereavement leave pay. Agricultural Inventions Board. it allegedly discovered the error of including nonbasic pay or other benefits in the base figure used in the computation of the 13th-month pay of its employees. where the latter remedy is available. as follows: 13th-month pay = net basic pay 12 months where: net basic pay = gross pay – (non-basic pay or other benefits) Now excluded from the base figure used in the computation of the thirteenth month pay are the following: a) Overtime premium for regular overtime. premium pay for special holidays. 2000. vacation leave. 174. 2001 a “Manifestation and Motion for Time to File Petition for Certiorari. as it was in this case. premium for work done on rest days and special holidays.D. f) Maternity leave pay. this appeal. National Telecommunications Commission. for short). a “Manifestation and Motion for Time to File Petition for Certiorari” on January 19. 2000. The appellate court denied due course to. Petitioner then effected a change in the computation of the thirteenth month pay. The parties failed to resolve the issue. organized and existing under Philippine laws.: On appeal is the Decision[1] of the Court of Appeals in CA-G. 2001.A. Petitioner Sevilla Trading failed to file an appeal within the fifteen-day reglementary period from its notice of the adverse decision of A. h) Company vacation and sick leave pay. 2(b) which stated that: “Basic salary” shall include all remunerations or earnings paid by an employer to an employee for services rendered but may not include cost-of-living allowances granted pursuant to P. Social Security Commission. g) Paternity leave pay. we uphold the Court of Appeals in ruling that the proper remedy from the adverse decision of the arbitrator is a petition for review under Rule 43 of the 1997 Rules of Civil Procedure.13th MONTH PAY SEVILLA TRADING COMPANY. and should have filed its appeal under Rule 43 of the 1997 Rules of Civil Procedure on or before January 4. in its computation of the 13th-month pay of its employees.[5] Labor Standards | To digest (old cases) | Ajean Tuazon| 63 . 1975. profitsharing payments. The company is hereby ordered to pay corresponding backwages to all covered and entitled employees arising from the exclusion of said benefits in the computation of 13th-month pay for the year 1999. Semana (A. They claimed that paid leaves. No. Petitioner Sevilla Trading enumerates the grounds of its appeal. petitioner insisted that the computation of the 13th-month pay is based on basic salary. Securities and Exchange Commission. Petitioner received a copy of the Decision of the Arbitrator on December 20. the amount of other benefits received by the employees which are beyond the basic pay. (g) Paternity leave pay. Hence. excluding benefits such as leaves with pay. Trademarks and Technology Transfer. Scope.V. including that under Rule 45 (Rule 43. 6657. like sick leave. These benefits included: (a) Overtime premium for regular overtime.D.A. and dismissed the petition. Sec. Semana. including the computation and payment of the 13th-month pay and other benefits. and (i) Cash conversion of unused company vacation and sick leave.A.V. Government Service Insurance System. legal and special holidays.[4] First. 2001.R. [ mphasis supplied. 2001. in adjusting its computation of the 13th-month pay. the new computation reduced the employees’ thirteenth month pay. A special civil action under Rule 65 of the Rules of Court will not be a cure for failure to timely file a petition for review on certiorari under Rule 45 (Rule 43. Clearly. this Voluntary Arbitrator hereby declared that: 1. Semana on December 20. 152456. it filed its Petition for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure for the nullification of the Decision of the Arbitrator. petitioner. as follows: 1.A. Section 1 of Rule 43 states: RULE 43 Appeals from the Court of Tax Appeals and Quasi-Judicial Agencies to the Court of Appeals SECTION 1. G. respondents. as well as its subsequent Resolution[3] dated 06 March 2002 denying petitioner’s Motion for Reconsideration. Office of the President. on February 19. petitioner claimed that assuming the old computation will be upheld. judgments. and all allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary of the employee at the time of the promulgation of the Decree on December 16. 100 of the Labor Code. Board of Investments. When it changed its person in charge of the payroll in the process of computerizing its payroll. in the first place. (f) Maternity leave pay. union leave. In addition to its earlier allegations. 851. paternity leave. through the Grievance Machinery in their Collective Bargaining Agreement. Petitioner claimed that it entrusted the preparation of the payroll to its office staff. especially if such loss or lapse was occasioned by one’s own neglect or error in the choice of remedies. 2. No. COMPANIES HAVE NO MEANS TO CORRECT ERRORS IN COMPUTATION WHICH WILL CAUSE GRAVE AND IRREPARABLE DAMAGE TO EMPLOYERS. premises considered. — This Rule shall apply to appeals from judgments or final orders of the Court of Tax Appeals and from awards. A. The dispositive portion of his Decision reads as follows: WHEREFORE. No. Hence. Philippine Atomic Energy Commission. and after audit was conducted. contested the new computation and reduction of their thirteenth month pay.V. Among these agencies are the Civil Service Commission. Land Registration Authority. Semana dated 13 November 2000. union leave. (h) Company vacation and sick leave pay.. On March 24. Semana decided in favor of the Union. SP No. 525 or Letter of Instruction No. A. petitioner filed on January 19.V. the parties submitted the issue of “whether or not the exclusion of leaves and other related benefits in the computation of 13th-month pay is valid” to respondent Accredited Voluntary Arbitrator Tomas E. It cited the Rules and Regulations Implementing P. and pay for regular holidays in the computation of the 13th-month pay to all covered and entitled employees. Employees Compensation Commission. bereavement leave. holiday pay and other leaves with pay in the CBA should be included in the base figure in the computation of their 13th-month pay. and i) Cash conversion of unused vacation/sick leave. in the case at bar). 851 (13th-Month Pay Law). 63086 dated 27 November 2001 sustaining the Decision[2] of Accredited Voluntary Arbitrator Tomas E.SUPER. The daily piece-rate workers represented by private respondent Sevilla Trading Workers Union – SUPER (Union. The Union alleged that petitioner violated the rule prohibiting the elimination or diminution of employees’ benefits as provided for in Art. Bureau of Patents. Central Board of Assessment Appeals. 1975. SEVILLA TRADING WORKERS UNION . THE DECISION OF THE RESPONDENT COURT TO REVERT TO THE OLD COMPUTATION OF THE 13THMONTH PAY ON THE BASIS THAT THE OLD COMPUTATION HAD RIPENED INTO PRACTICE IS WITHOUT LEGAL BASIS. b) Legal holiday pay.] It is elementary that the special civil action of certiorari under Rule 65 is not.V.A. c) Night premium. SEMANA. as per P. Rule 65 is an independent action that cannot be availed of as a substitute for the lost remedy of an ordinary appeal. effective December 22. as amended. TOMAS E. and voluntary arbitrators authorized by law. 2. 2000. 2001. (b) Legal holiday pay. were not included in the original computation. it merely rectified the mistake its personnel committed in the previous years. petitioner Sevilla Trading had a remedy of appeal but failed to use it. Department of Agrarian Reform under Republic Act No. not a petition for certiorari under Rule 65. The facts of the case are as follows: For two to three years prior to 1999. vs. paternity leave. A month later. The company is hereby ordered to include sick leave and vacation leave. It filed before the Court of Appeals.” and on February 19.

V. Petitioner Corporation cannot be faulted for erroneous application of the law .[10] the company practice lasted for six (6) years. 851 and its Implementing Rules. Even assuming that the present petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure is a proper action. A cursory perusal of the two sets of Rules indicates that what has hitherto been the subject of a broad inclusion is now a subject of broad exclusion. 1976. 174 and profit sharing payments indicate the intention to strip basic salary of other payments which are properly considered as “fringe” benefits. 4. We upheld the contention of the petitioner corporation. the catch-all exclusionary phrase “all allowances and monetary benefits which are not considered or integrated as part of the basic salary” shows also the intention to strip basic salary of any and all additions which may be in the form of allowances or “fringe” benefits. From 1975 to 1981. . Associated Labor Unions. among others in the computation of the 13th-month pay. Leogardo. this cloud is dissipated in the later and more controlling Supplementary Rules and Regulations which categorically. cash equivalent of unused vacation and sick leave. Hence.[11] the employer. by virtue of Sec. when petitioner purportedly “discovered” its mistake. pay for regular holidays and night differentials.V. ripened into benefits enjoyed by them. valid. No. increased the COLA of its monthly-paid employees by multiplying the P3. It was only when the Rules Implementing Wage Order No. In the case at bar. Petitioner Corporation. . petitioner computed and paid the thirteenth month pay. or three (3) years and four (4) months.V. Respondent Company agreed to continue giving holiday pay knowing fully well that said employees are not covered by the law requiring payment of holiday pay. And yet. “Grave abuse of discretion” has been interpreted to mean “such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. we still find no grave abuse of discretion amounting to lack or excess of jurisdiction committed by A. When petitioner Sevilla Trading still included over the years non-basic benefits of its employees. To answer the Union’s contention of company practice. As such they are deemed not part of the basic salary and shall not be considered in the computation of the 13th-month pay. we find the decision of A. A company practice favorable to the employees had indeed been established and the payments made pursuant thereto. thus no reason for any mistake in the construction or application of the law. or. and pay for regular holidays. which has been the practice of the company for several years. 174.V. If they were not so excluded. More particularly. it is hard to find any “earnings and other remunerations” expressly excluded in the computation of the 13th-month pay. sufficient in itself to negate any claim of mistake.D. 851. should not be construed as constitutive of voluntary employer practice. In the above quoted case. No. premium for work done on rest days and special holidays.” (Oceanic Pharmacal Employees Union [FFW] vs.Thus. 94 SCRA 270 [1979]) Moreover. Associated Labor Unions. petitioner Sevilla Trading kept the practice of including non-basic benefits such as paid leaves for Labor Standards | To digest (old cases) | Ajean Tuazon| 64 .D. 1 (26 March 1981) to 5 (11 June 1984). petitioner failed to adduce any other relevant evidence to support its contention. the Supplementary Rules and Regulations Implementing Presidential Decree 851 is even more empathic in declaring that earnings and other remunerations which are not part of the basic salary shall not be included in the computation of the 13th-month pay. and must be shown to have been consistent and deliberate . Petitioner continued its practice in December 1981. 6 (effective 30 October 1984). or on January 5. there is. the basic salary of an employee is used as the basis in the determination of his 13th-month pay. Inciong[8] that: Under Presidential Decree 851 and its implementing rules. despite the clarity of statute and jurisprudence at that time. 122 SCRA 267 (1983)] 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. diminished.V. Semana.. or maternity leaves. The test of long practice has been enunciated thus: . was issued by the Secretary of Labor as early as January 16. Moreover. or much less. In the case at bar. such as maternity leave pay. In another case. The Union disagreed with the computation.A. the following compensations are deemed not part of the basic salary: a) Cost-of-living allowances granted pursuant to Presidential Decree 525 and Letter of Instruction No. the decision of A. In the above quoted case of Davao Fruits Corporation vs. after promulgation of the aforequoted San Miguel decision on February 24. Such is not the case now. this may only be construed as a voluntary act on its part. barely one month after the effectivity of P. [Tiangco vs. 10 of the Rules and Regulations Implementing P. before Wage Order No.V. Under a later set of Supplementary Rules and Regulations Implementing Presidential Decree 851 issued by the then Labor Secretary Blas Ople. 851” which put to rest all doubts in the computation of the thirteenth month pay. Any compensations or remunerations which are deemed not part of the basic pay is excluded as basis in the computation of the mandatory bonus. The exclusion of cost-of-living allowances under Presidential Decree 525 and Letter of Instruction No. The considerable length of time the questioned items had been included by petitioner indicates a unilateral and voluntary act on its part. pursuant to Wage Order No. The all-embracing phrase “earnings and other remunerations” which are deemed not part of the basic salary includes within its meaning payments for sick. 1981. Then the exclusionary provision would prove to be idle and with no purpose. And any benefit and supplement being enjoyed by the employees cannot be reduced. Aside from its bare claim of mistake or error in the computation of the thirteenth month pay.A. this Court has held in San Miguel Corporation vs. No. While doubt may have been created by the prior Rules and Regulations Implementing Presidential Decree 851 which defines basic salary to include all remunerations or earnings paid by an employer to an employee. There was no explanation whatsoever why its inclusion of nonbasic benefits in the base figure in the computation of their 13th-month pay in the prior years was made by mistake. 1975. Davao Integrated Port Stevedoring Services vs. b) Profit sharing payments.A. we hold that jurisprudence has not laid down any rule requiring a specific minimum number of years. . vacation. petitioner merely appended to its petition a copy of the 1997-2002 Collective Bargaining Agreement and an alleged “corrected” computation of the thirteenth month pay. Petitioner’s submission of financial statements every year requires the services of a certified public accountant to audit its finances. petitioner had freely. we likewise held that:[9] The “Supplementary Rules and Regulations Implementing P. 2001.. earnings and other remunerations are excluded as part of the basic salary and in the computation of the 13th-month pay. 4 were issued on 21 May 1984 that a formula for the conversion of the daily allowance to its monthly equivalent was laid down.[7] which petitioner Sevilla Trading invokes. It is quite impossible to suggest that they have discovered the alleged error in the payroll only in 1999. which cannot now be unilaterally withdrawn by petitioner. Putting the blame on the petitioner’s payroll personnel is inexcusable. The Supplementary Rules and Regulations cure the seeming tendency of the former rules to include all remunerations and earnings within the definition of basic salary.A. there was lack of administrative guidelines for the implementation of the Wage Orders. In that case. 100 of the Labor Code of the Philippines which prohibit the diminution or elimination by the employer of the employees’ existing benefits. overtime pay. the Court of Appeals is correct in holding that it no longer had appellate jurisdiction to alter. Abarquez. the decision of A. this Court held that the grant of these benefits has ripened into company practice or policy which cannot be peremptorily withdrawn.00 daily COLA by 22 days. To be considered as such.”[6] We find nothing of that sort in the case at bar. Inciong. voluntarily and continuously included in the computation of its employees’ thirteenth month pay. Jr. and in accord with law and jurisprudence. discontinued or eliminated by the employer. Semana is correct in holding that petitioner’s stance of mistake or error in the computation of the thirteenth month pay is unmeritorious. A. NLRC. c) All allowances and monetary benefits which are not considered or integrated as part of the regular basic salary of the employee at the time of the promulgation of the Decree on December 16. without excluding the subject items therein until 1981. without the payments for sick. nullify the decision of A. Semana. While in Tiangco vs. and Art. In all these cases.A. Semana had become final and executory when petitioner Sevilla Trading filed its petition for certiorari on February 19. in other words where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility. This implies that in previous years it does not know its cost of labor and operations. 2001. claiming that the daily COLA rate of P3. In Davao Fruits Corporation vs. Absent clear administrative guidelines. Also. Jr. Semana to be sound. .A. we ruled that: Payment in full by Petitioner Corporation of the COLA before the execution of the CBA in 1982 and in compliance with Wage Orders Nos. and it must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. this Court decided on the proper computation of the cost-of-living allowance (COLA) for monthly-paid employees.D. Under the Rules and Regulations Implementing Presidential Decree 851. This is merely basic cost accounting. premium for works performed on rest days and special holidays. the Court of Appeals is correct when it pointed out that as early as 1981. vs. Likewise. On the contrary. approved the commutation to cash of the unenjoyed portion of the sick leave with pay benefits of its intermittent workers. Semana became final and executory upon the lapse of the fifteen-day reglementary period to appeal. exclude from the definition of basic salary earnings and other remunerations paid by employer to an employee. The instant case needs to be distinguished from Globe Mackay Cable and Radio Corp.00 should be multiplied by 30 days. vacation and maternity leave. for three (3) years and nine (9) months. the grant by the employer of benefits through an erroneous application of the law due to absence of clear administrative guidelines is not considered a voluntary act which cannot be unilaterally discontinued. In the light of the clear ruling of this Court. . . which is the number of working days in the company.[12] the employer carried on the practice of giving a fixed monthly emergency allowance from November 1976 to February 1980. it should have been practiced over a long period of time. Leogardo.

[23] Additionally. Art. imputing grave abuse of discretion on the part of the NLRC. IN VIEW WHEREOF.[7] The Labor Arbiter held that it was incumbent upon private respondents to wait until they were reassigned by JPL. the computation thereof should only be from their first day of employment with JPL up to 15 August 1996. Private respondents were simply not dismissed at all. or is sanctioned by established practice or policy of the employer.[26] They allege that they were deprived of due process because the notice of termination was sent to them only two (2) days before the actual termination. retrenchment or closing or cessation of business operation. separation pay shall be allowed as a measure of social justice in those cases where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character.[18] or illegal dismissal of an employee but reinstatement is no longer feasible.[9] Private respondents appealed to the NLRC. More importantly.. Second Division. JPL claims that the Court of Appeals committed reversible error in rendering the assailed Decision and Resolution. and if after six months they were not reassigned. and not up to the finality of the 27 July 2000 resolution of the NLRC.1 hereof. 151966. Separation pay. The Decision of the Court of Appeals in CA-G. 13th month pay. Petitioner. and 13th month pay. without even the courtesy of informing JPL that they were leaving for good. et al.[6] The Labor Arbiter found that Gonzales and Abesa applied with and were employed by the store where they were originally assigned by JPL even before the lapse of the six (6)-month period given by law to JPL to provide private respondents a new assignment. NOEL GONZALES. On 13 August 1996. the most that JPL offered to them by way of settlement was the payment of separation pay of seven (7) days for every year of service. In its Resolution. SP No. the date of termination of CMC’s contract. but only when he was illegally dismissed. 2. hence.. 2005 Jul 8. versus COURT OF APPEALS. what should be the reckoning point for computing said awards. and that they will be transferred to other clients. NATIONAL LABOR RELATIONS COMMISSION. Jr. private respondents maintain that they are entitled to the benefits being claimed as per the ruling of this Court in Serrano v. 283 and 284 of the Labor Code. we rule likewise constitutes voluntary employer practice which cannot be unilaterally withdrawn by the employer without violating Art.[30] In addition. dismissed the complaints for lack of merit. to wit: whether or not private respondents are entitled to separation pay. even assuming arguendo that private respondents are entitled to the benefits awarded. the complaints were consolidated and submitted for resolution. and Tinga. they can file an action for separation pay but not for illegal dismissal.” When that “floating status” of an employee lasts for more than six months. It claimed that private respondents are not by law entitled to separation pay. SO ORDERED. they were advised that they were to be reassigned. Service Incentive Leave pay. J.[19] Meanwhile. However. The Court of Appeals dismissed the petition and affirmed in toto the NLRC resolution. However.[31] The case thus presents two major issues.[25] They claim that their dismissal. redundancy. wherein an employee/employees are placed on the so-called “floating status. the petition is DENIED. service incentive leave pay. or other employee benefits being enjoyed at the time of promulgation of this Code. but the same was denied on 25 January 2002. [14] Notwithstanding the absence of a contractual agreement on the grant of 13th month pay. Camarines Norte as attendants to the display of California Marketing Corporation (CMC). praying for separation pay. 100 of the Labor Code: Art. and (e) when the employee is suffering from a disease and his continued employment is prohibited by law or is prejudicial to his health and to the health of his co-employees. there was no dismissal to speak of. (d) cessation of the employer's business. the offer of seven (7) days per year of service as separation pay was merely an act of magnanimity on its part. 13th month pay. The said memo merely notified them of the end of merchandising for CMC.R. service incentive leave pay should be counted from the second year of service.: This is a petition for review of the Decision[1] of the Court of Appeals in CA-G.[11] Setting aside the Labor Arbiter’s decision. NLRC. JPL Marketing and Promotions (hereinafter referred to as “JPL”) is a domestic corporation engaged in the business of recruitment and placement of workers. to wit: installation of labor-saving devices.[8] The claims for 13th month pay and service incentive leave pay was also denied since private respondents were paid way above the applicable minimum wage during their employment. separation pay is authorized only in cases of dismissals due to any of these reasons: (a) installation of labor saving devices. awarding separation pay.unused sick leave and vacation leave in the computation of their 13th-month pay for at least two (2) years. while not illegal. Furthermore. J. JPL notified private respondents that CMC would stop its direct merchandising activity in the Bicol Region. Quisumbing. JPL is not bound to observe the thirty (30)-day notice rule as there was no dismissal to speak of.[21] In addition. While conceding that there was no illegal dismissal. (b) redundancy. Moreover.. Sr.[29] Moreover.[28] Replying to private respondents’ allegations. whether legally or illegally. Respondents. but a memo informing them of the termination of CMC’s contract with JPL. affirming the Resolution of the National Labor Relations Commission (NLRC). 2nd Division) Tinga. JPL MARKETING PROMOTIONS. the NLRC ordered the payment of: 1. JPL filed a petition for certiorari under Rule 65 of the Rules of Court with the Court of Appeals. are not enough to warrant the award of separation pay. and Cagayan Valley effective 15 August 1996.[15] In the instant petition for review. and hence they are entitled to separation pay. on 17 October 1996. JPL filed a motion for reconsideration of the said resolution. JPL claims that such short period could not have shown their worth to JPL so as to reward them with payment of separation pay.[10] the Second Division of the NLRC agreed with the Labor Arbiter’s finding that when private respondents filed their complaints. No. he may be considered to Labor Standards | To digest (old cases) | Ajean Tuazon| 65 . Isabela. and that CMC’s decision to stop its operations in the areas was beyond the control of JPL. Thus. After the submission of pertinent pleadings by all of the parties and after some clarificatory hearings. it justified the award of separation pay on the grounds of equity and social justice. it would be erroneous to compute service incentive leave pay from the first day of their employment up to the finality of the NLRC resolution since an employee has to render at least one (1) year of service before he is entitled to the same. Under Arts. while Abesa rendered his services for more than two (2) years. JPL disagrees that the notice it sent to them was a notice of actual termination. Prohibition against elimination or diminution of benefits. they were not illegally dismissed. On the other hand. Callejo. computed as in No. no part. RAMON ABESA III and FAUSTINO ANINIPOT. JPL counters that it was private respondents who acted in bad faith when they sought employment with another establishment.[22] To compute separation pay. Rivera. Rule I. was tainted with bad faith. an employee who voluntarily resigns is not entitled to separation unless stipulated in the employment contract. What they received from JPL was not a notice of termination of employment. they may be considered to have unilaterally severed their relation with JPL. The common denominator of the instances where payment of separation pay is warranted is that the employee was dismissed by the employer.[12] Aggrieved. there was no severance of employment to speak of. Ramon Abesa III and Faustino Aninipot were employed by JPL as merchandisers on separate dates and assigned at different establishments in Naga City and Daet.[13] The Court of Appeals rejected JPL’s argument that the difference in the amounts of private respondents’ salaries and the minimum wage in the region should be considered as payment for their service incentive leave and 13th month pay. This. JJ. 63086 dated 27 November 2001 and its Resolution dated 06 March 2002 are hereby AFFIRMED. Austria-Martinez. concur. and 13th month pay to private respondents. it found that despite JPL’s effort to look for clients to which private respondents may be reassigned it was unable to do so.[27] Likewise.[16] The instant case does not fall under any of the instances where separation pay is due. and granting that they are so entitled. one of petitioner’s clients. However.[5] Aninipot filed a similar case thereafter. 4(b). as well as the social justice precept. SP No. private respondents Noel Gonzales.[4] private respondents Abesa and Gonzales filed before the National Labor Relations Commission Regional Arbitration Branch (NLRC) Sub V complaints for illegal dismissal. (c) retrenchment. much less tender their resignation. Gonzales and Aninipot were employed by JPL for more than four (4) years.[20] It argues that private respondents’ good record and length of service. the six-month period had not yet expired. even if private respondents are not entitled to a single centavo of separation pay. based on their last salary rate and counted from the first day of their employment with the respondent JPL up to the finality of this judgment. or the collective bargaining agreement. G. dated 27 July 2000. and cannot charge JPL with illegal dismissal.[32] In addition.[17] or disease of an employee whose continued employment is prejudicial to him or coemployees.[33] In the instant case. JPL failed to show that it was exempt from paying service incentive leave pay. compliance with the same is mandatory under the law. Executive Labor Arbiter Gelacio L.[3] They were advised to wait for further notice as they would be transferred to other clients. Book VI of the Implementing Rules to Implement the Labor Code provides for the payment of separation pay to an employee entitled to reinstatement but the establishment where he is to be reinstated has closed or has ceased operations or his present position no longer exists at the time of reinstatement for reasons not attributable to the employer. service incentive leave pay and 13th month pay. Thus.R. 13th month pay and service incentive leave pay. 62631 dated 03 October 2001 and its Resolution[2] dated 25 January 2002 denying petitioner’s Motion for Reconsideration. 286 of the Labor Code allows the bona fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months..[24] On the other hand. – Nothing in this Book shall be construed to eliminate or in any way diminish supplements. thus. service incentive leave pay and payment for moral damages. At that time. 100. and service incentive leave pay up to 27 July 2000 would negate the findings of both the Court of Appeals and the NLRC that private respondents were not unlawfully terminated.R. Sec.

This has resulted in the diminution of the compensation of faculty members. DANTE O. Said cases involved employees who were actually dismissed by their employers. However. as properly held by the Court of Appeals and by the NLRC. 6) The salary increases due the non-academic personnel as a result of job grading has not been given. 156225. pending resolution of NLRC Case No. 2008 Jan 29. 851. service incentive leave.R. respondent filed with Regional Arbitration Branch No. The Court rules that the difference between the minimum wage and the actual salary received by private respondents cannot be deemed as their 13th month pay and service incentive leave pay as such difference is not equivalent to or of the same import as the said benefits contemplated by law.[40] On the other hand. SP No. 2002. RAB-IV-11-4624-92-L. IV of the NLRC a petition to declare as illegal a strike staged by petitioner in January 1994. 7) Respondent has not paid to its employees the balances of seventy (70%) percent of the tuition fee increases for the years 1990. IV of the National Labor Relations Commission (NLRC) a Complaint[3] against Colegio de San Juan de Letran.R. the Court disagrees with the Court of Appeals’ ruling that the 13th month pay and service incentive leave pay should be computed from the start of employment up to the finality of the NLRC resolution. 1993.. CALLEJO.. which is not the case in this instance. MA. The case for money claims originally filed by petitioner with the DOLE was later docketed as NLRC Case No. is a yearly leave benefit of five (5) days with pay. Petitioner is ordered to pay private respondents their 13th month pay commencing from the date of employment up to 15 August 1996. No. The Court of Appeals relied on the cases[36] wherein the Court awarded separation pay to legally dismissed employees on the grounds of equity and social consideration.: Assailed in the present Petition for Review on Certiorari under Rule 45 of the Rules of Court is the Decision[1] of the Court of Appeals (CA) promulgated on May 14. 1989 in the computation of the compensation per unit of excess load or overload of faculty members. whether for cause or not. Unless specifically excepted. J. 4) Respondent has not paid the wage increases required by Wage Order No. Petitioner. Justitia nemini neganda est (Justice is to be denied to none). private respondents are entitled to the 13th month pay and service incentive leave pay. 5 to its employees who qualify thereunder. On March 10. JPL cannot escape the payment of 13th month pay and service incentive leave pay to private respondents. 95 of the Labor Code. as provided in Art. On September 28.R. or to be more precise. 9) Respondent has refused without justifiable reasons and despite repeated demands to pay its obligations mentioned in paragraphs 3 to 7 hereof.”[42] Admittedly. 62631 are hereby MODIFIED. cash bonuses and other payment amounting to not less than 1/12 of the basic salary but shall not include cash and stock dividends. Said benefits are mandated by law and should be given to employees as a matter of right. is granted as a motivation for the employee to stay longer with the employer. 1998. the computation for both benefits should only be up to 15 August 1996.[41] The Court has held in several instances that “service incentive leave is clearly demandable after one year of service. respondent filed its Position Paper denying all the allegations of petitioner. In seeking and obtaining employment elsewhere. IV of the Department of Labor and Employment (DOLE). in effecting such dismissal. the doctrine enunciated in the case of Serrano[37] cited by private respondents has already been abandoned by our ruling in Agabon v. 3rd Division AUSTRIA-MARTINEZ. Calamba. all three of them applied for and were employed by another establishment after they received the notice from JPL. INC. enjoyed by an employee who has rendered at least one year of service. these three cases were consolidated. The facts of the case are as follows: On October 8. RAB-IV-3-6555-94-L. private respondents sought employment from other establishments even before the expiration of the six (6)-month period provided by law. and in the particular case of the service incentive leave. the want of dismissal in this case. Chairman). PUNO (Associate Justice. x x x x[4] The complaint was docketed as NLRC Case No. they are not entitled to separation pay. private respondents were not given their 13th month pay and service incentive leave pay while they were under the employ of JPL. the Letran Calamba Faculty and Employees Association (petitioner) filed with Regional Arbitration Branch No. The term “at least one year of service” shall mean service within twelve (12) months. These benefits are given by law on the basis of the service actually rendered by the employee. While computation for the 13th month pay should properly begin from the first day of employment. Thus. SO ORDERED. employers not paying their employees a 13th month pay or its equivalent are not covered by said law. petitioner filed a separate complaint against the respondent for money claims with Regional Office No. 1991 and 1992. In addition. or the last day that private respondents worked for JPL.have been illegally dismissed from the service. Nonetheless. SP No. CHICO-NAZARIO (Associate Justice) LETRAN CALAMBA FACULTY and EMPLOYEES ASSOCIATION. Prior to the filing of the above-mentioned complaint. The award of separation pay is deleted. TINGA (Associate Justice) WE CONCUR: REYNATO S.[43] WHEREFORE. as well as non-monetary benefits. As they admitted in their comment. the service incentive leave pay should start a year after commencement of service. private respondents effectively terminated their employment with JPL. it is but recognition of the inherent economic inequality between labor and management. the Labor Arbiter (LA) handling the consolidated cases rendered a Decision with the following dispositive portion: Labor Standards | To digest (old cases) | Ajean Tuazon| 66 . petitioner filed its Reply. Job grading has been an annual practice of the school since 1980. respondent does not include as basis therefor their compensation for overloads.[34] As clearly borne out by the records of this case. ROMEO J. The thirty (30)-day notice rule does not apply. No pronouncement as to costs. 61552 dismissing the special civil action for certiorari filed before it. 8) Respondent has not also paid its employees the holiday pay for the ten (10) regular holidays as provided for in Article 94 of the Labor Code. Respondents. Thus. and this would apply to suspension either of the entire business or of a specific component thereof. The law in protecting the rights of the employees authorizes neither oppression nor self-destruction of the employer. Petitioner alleged in its Position Paper that: xxxx 2) [It] has filed this complaint in behalf of its members whose names and positions appear in the list hereto attached as Annex “A”.[35] JPL did not terminate their employment. it would be unfair to require JPL to pay private respondents the said benefits beyond 15 August 1996 when they did not render any service to JPL beyond that date. 1993. denying petitioner's Motion for Reconsideration. The Decision and Resolution of the Court of Appeals in CAG. requires an employer to pay its rank and file employees a 13th month pay not later than 24 December of every year. It should be made clear that when the law tilts the scale of justice in favor of labor. However.[38] There we ruled that an employer is liable to pay indemnity in the form of nominal damages to a dismissed employee if. 5) Respondent has not followed the formula prescribed by DECS Memorandum Circular No. to put the two parties on relatively equal positions. Besides. whether continuous or broken reckoned from the date the employee started working. Inc. as well as service incentive leave pay from the second year of employment up to 15 August 1996. Presidential Decree No. RAB-IV-10-4560-92-L. To extend the period to the date of finality of the NLRC resolution would negate the absence of illegal dismissal. Subsequently. ALICIA AUSTRIA-MARTINEZ (Associate Justice). National Labor Relations Commission. The teaching overloads are rendered within eight (8) hours a day.[39] The term “its equivalent” was defined by the law’s implementing guidelines as including Christmas bonus. MINITA V. Clearly. It only takes into account the pay the faculty members receive for their teaching loads not exceeding eighteen (18) units. versus NATIONAL LABOR RELATIONS COMMISSION and COLEGIO DE SAN JUAN DE LETRAN CALAMBA. On the other hand. JPL provided salaries which were over and above the minimum wage. they themselves severed their relations with JPL. but a mere note informing private respondents of the termination of CMC’s contract and their re-assignment to other clients. 2002 in CA-G. SR. as amended. RAB-IV-10-4560-92-L. for it is only then that the employee is entitled to said benefit. (respondent) for collection of various monetary claims due its members. 2 dated March 10. mid-year bonus. Instead. he is entitled to the corresponding benefits for his separation. 3) In the computation of the thirteenth month pay of its academic personnel. private respondents are not entitled to the payment of damages considering that there was no violation of due process in this case. On January 29. cost-of-living-allowances and all other allowances regularly enjoyed by the employee. and the Resolution[2] dated November 28. JPL’s memo dated 13 August 1996 to private respondents is not a notice of termination. Thus. However. There may be cases where the circumstances warrant favoring labor over the interests of management but never should the scale be so tilted if the result is an injustice to the employer. while the petition to declare the subject strike illegal filed by respondent was docketed as NLRC Case No. The Court is not inclined in this case to award separation pay even on the ground of compassionate justice. the employer failed to comply with the requirements of due process. the same is done for the purpose of increasing the salaries of non-academic personnel and as the counterpart of the ranking systems of faculty members. the principle applies only when the employee is dismissed by the employer. (Associate Justice). all establishments are required to grant service incentive leave to their employees. There is no cause for granting said incentive to one who has already terminated his relationship with the employer. G. The intent is to balance the scale of justice. 1992. the petition is GRANTED IN PART. On the other hand.

also Exhibit “6-x-1”). Respondent avers that the DOLE Order is an administrative regulation which interprets the 13th-Month Pay Law (P. identified and offered in evidence in these cases (Exhibits “1-C” and 1-D”). therefore. should be resolved in favor of labor. Hence. [12] that remunerations for teaching in excess of the regular load. in any case. III. night differential. Ms. Sr. respondent contends that the findings of the LA regarding these matters. 6) beginning June 16. and that excluded therefrom are the cash equivalents of unused vacation and sick leave credits. petitioner failed to present valid arguments to warrant the reversal of the assailed decision. in the computation of his 13th-month pay. but the officers of the Union. in concluding that the NLRC Decision was supported by substantial evidence.[5] Both parties appealed to the NLRC. Petitioner then filed a special civil action for certiorari with the CA assailing the above-mentioned NLRC Decision and Resolution. the discretionary power to review factual findings of the NLRC rests upon the CA. may not be included as part of the basic salary in the computation of the 13th-month pay unless this has been included by company practice or policy. “2-A” up to “2-G”). conformably with the agreement reached during the management-employees meeting of June 26. 5. that the general rule is that in a petition for certiorari. the NLRC promulgated its Decision[6] dismissing both appeals. respondent claims that. Moreover. The petition to declare strike illegal (NLRC Case No. the samples from the payroll journal of the School. 1985 (Exhibits “4-B” up to “4-D”. II. Edmundo F. 1985 was signed by Mr. promulgated by the Secretary of Labor on November 16.WHEREFORE. On July 28. overtime. With respect to the alleged non-payment of benefits under Wage Order No. Series of 1996 (DOLE Order) which was relied upon by the LA and the NLRC in their respective Decisions cannot be applied to the instant case because the DOLE Order was issued long after the commencement of petitioner's complaints for monetary claims. arbitrary or despotic manner. judgment is hereby rendered. holiday pay and cost-of-living allowances. including implementing rules and regulations.[11] Petitioner further contends that DOLE-DECS-CHED-TESDA Order No. respondent contends that the ruling in Agustilo is an exception rather than the general rule. that to give retroactive application to the DOLE Order issued in 1996 is to deprive workers of benefits which have become vested and is a clear violation of the constitutional mandate on protection of labor. The Union has presented no evidence that the settlement reached during the June 26. and the reports extrapolated from the journals and general ledgers of the School (Exhibits “2”. NLRC and the LA may be reviewed in the present case. Marifosque. The evidence Labor Standards | To digest (old cases) | Ajean Tuazon| 67 . petitioner cites the opinion of the Bureau of Working Conditions of the DOLE that payment of teaching overload performed within eight hours of work a day shall be considered in the computation of the 13thmonth pay. Under the circumstances obtaining. 1992. the grant of the writ of certiorari is not warranted. which is akin to overtime. the prevailing rule is to exclude excess teaching load. Court of Appeals. the basic pay of an employee includes remunerations or earnings paid by his employer for services rendered. and that the DOLE Order is an affirmation of the opinion rendered by the said Office of the DOLE. judicial review by this Court or by the CA in labor cases does not go so far as to evaluate the sufficiency of the evidence upon which the proper labor officer or office based his or its determination but is limited only to issues of jurisdiction or grave abuse of discretion amounting to lack of jurisdiction. petitioner avers that the CA. that petitioner intentionally omitted any reference to the above-mentioned opinion of the Legal Services Office of the DOLE because it is fatal to its cause. evaluation and grading of the position held by an employee. respondent contends that the Legal Services Office of the DOLE issued an opinion dated March 4. As to the first and third assigned errors. Since the Job Grading exercises of the School were neither consistent nor for a considerable period of time. 2002. ultimately. and that. herein petition for review based on the following assignment of errors: I. premises considered. THE COURT OF APPEALS GRAVELY ERRED IN REFUSING TO RULE SQUARELY ON THE ISSUE OF WHETHER OR NOT THE PAY OF FACULTY MEMBERS FOR TEACHING OVERLOADS SHOULD BE INCLUDED AS BASIS IN THE COMPUTATION OF THEIR THIRTEENTH MONTH PAY. to wit. 02. On May 14. SO ORDERED. as such.[9] Citing Agustilo v. the School settled its obligations to its employees. To support its argument. Respondent argues that Agustilo is not applicable to the present case because in the former case. 5 (and even Wage Order No. Respondent also avers that in a special civil action for certiorari. have clear and convincing factual and legal bases to stand on. Petitioner filed a Motion for Reconsideration but the CA denied it in its Resolution promulgated on November 28. it only follows that the overloads should be included in the computation of the faculty members' 13th-month pay. 1999. just before the first of the two money claims was filed. shows that the School paid its employees the benefits under Wage Order No. petitioner asserts that the CA acted arbitrarily in affirming the Decision of the NLRC. 1985 meeting was the result of coercion. prior to the issuance of the DOLE Order. Mr. 2002. the claim of the Union on this point must likewise fail. whimsical. This fact was not refuted by the Union. and that absent any findings by the CA of the need to resolve any unclear or ambiguous factual findings of the NLRC. Petitioner filed a Motion for Reconsideration[7] but the same was denied by the NLRC in its Resolution[8] dated June 21. The claim of the Union that its members were not given their full share in the tuition fee increases for the Schoolyears 1989-1990. that before a party may ask that the CA or this Court review the factual findings of the NLRC. No. Moreover. The system of Job Grading was initiated by the School in Schoolyear 1989-1990. As to respondent's alleged non-payment of petitioner's consolidated money claims. in the computation of a teacher's basic salary and. the findings of fact and conclusions of law of the LA and the NLRC are the same. The money claims cases (RAB-IV-10-4560-92-L and RAB-IV-11-4624-92-L) are hereby dismissed for lack of merit. premium. 2. 1987. contrary to the asseveration of petitioner. Furthermore. that the prevailing rule at the time of the commencement of petitioner's complaints was to include compensations for overloads in determining a faculty member's 13th-month pay. petitioner would have this Court review the factual findings of the LA as affirmed by the NLRC and the CA. the findings of fact of the LA and the NLRC are at variance with each other. Lastly.. which includes overload pay for work performed within an eight-hour work day. Since extra load should be paid only when actually performed by the employees. the CA rendered the presently assailed judgment dismissing the petition. 1990-1991 and 1991-1992 is belied by the evidence presented by the School which consists of the unrefuted testimony of its Accounting Coordinator. what is significant is that the agreement of June 26. Indeed. all doubts in the implementation and interpretation of labor laws. In its Comment. this Office is convinced that after the lapse of the one-year period of exemption from compliance with Wage Order No. The Court’s Ruling The Court finds the petition bereft of merit. Further. particularly its President. the appellate court can review the factual findings and the legal conclusions of the NLRC. a new Job Grading process was initiated by the School. RAB-IV-3-6555-94-L) is hereby dismissed. there must first be a convincing argument that the NLRC acted in a capricious. Thus. 5 (Exhibit “1-B). respondent contends that even granting that the factual findings of the CA. Rosario Manlapaz. petitioner argues that under the Revised Guidelines on the Implementation of the 13th-Month Pay Law. THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE FACTUAL FINDINGS OF THE NATIONAL LABOR RELATIONS COMMISSION CANNOT BE REVIEWED IN CERTIORARI PROCEEDINGS. 2000. 851) and. and that in its petition for certiorari filed with the CA. the monetary claims attendant to an increase in job grade are non-existent. while in the present case. are hereby reprimanded and sternly warned that future conduct similar to what was displayed in this case will warrant a more severe sanction from this Office. As to the inclusion of the overloads of respondent's faculty members in the computation of their 13th-month pay. From the records it appears that “Job Grading” is a system adopted by the School by which positions are classified and evaluated according to the prescribed qualifications therefor. The non-academic members of the Union cannot legally insist on wage increases due to “Job Grading”. it is mandatory for the LA to apply the same to the present case.D. Porferio Ferrer. as follows: 1. which exemption was granted by then Labor Minister Blas Ople. it cannot be argued that there were repeated grants of salary increases due to Job Grading to warrant the conclusion that some benefit was granted in favor of the non-academic personnel that could no longer be eliminated or banished under Article 100 of the Labor Code.[10] petitioner contends that in a special civil action for certiorari brought before the CA. which were affirmed by the NLRC and the CA. failed to specify what constituted said evidence. THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION IS SUPPORTED BY SUBSTANTIAL EVIDENCE AND IN NOT GRANTING PETITIONER'S MONETARY CLAIMS. then Faculty President and an officer of the complaining Union. no salary differentials are due the Union members. The claim of the Union for salary differentials due to the improper computation of compensation per unit of excess load cannot hold water for the simple reason that during the Schoolyears in point there were no classes from June 114 and October 17-31. Petitioner claims that since the pay for excess loads or overloads does not fall under any of the enumerated exclusions and considering that the said overloads are being performed within the normal working period of eight hours a day. 1985. Under the circumstances. herein petitioner failed to prove that the NLRC acted without or in excess of jurisdiction or with grave abuse of discretion. It is akin to a merit system whereby salary increases are made dependent upon the classification. In 1992.

in order that the extraordinary writ of certiorari will lie. the NLRC and the CA.[20] They are binding upon this Court unless there is a showing of grave abuse of discretion or where it is clearly shown that they were arrived at arbitrarily or in utter disregard of the evidence on record. overload work may or may not be overtime work. additional work in excess of the regular teaching load is overload work. company practice or policy. In resolving the issue of the inclusion or exclusion of overload pay in the computation of a teacher's 13th-month pay. of the increments in the tuition fees collected. 87. while the DOLE Order may not be applicable. which have acquired expertise because their jurisdiction is confined to specific matters. 851. it is decisive to determine what “basic salary” includes and excludes. Considering that overload work may be performed either within or outside eight hours in a day. are binding on the Supreme Court. This is because teaching may also require the teacher to do additional work such as handling an advisory class. while in Schoolyears 1990-1991 and 1991-1992. the individual pay records of the School's employees. Overload performed beyond the eight-hour daily work is overtime work.indubitably shows that in Schoolyear 1989-1990. The normal hours of work of teaching or academic personnel shall be based on their normal or regular teaching loads. rules and standards prescribed by the Department of Education. In short. 3. Culture and Sports. the Court's disquisition in San Miguel Corporation v. Rosario Manlapaz (Exhibit “3”). “Overload work” is sometimes misunderstood as synonymous to “overtime work” as this term is used and understood in the Labor Code.942. The basic wage of an employee shall include: “x x x all remunerations or earnings paid by his employer for services rendered but do not include allowances or monetary benefits which are not considered or integrated as part of the regular or basic salary. Such normal or regular teaching loads shall be in accordance with the policies.25. These two terms are not the same because overtime work is work rendered in excess of normal working hours of eight in a day (Art. this Court’s jurisdiction is limited to reviewing errors of law in the absence of any showing that the factual findings complained of are devoid of support in the records or are glaringly erroneous. the Court is confronted with conflicting interpretations by different government agencies. Culture and Sports (DECS) or the policies. 1993 under then Acting DOLE Secretary Cresenciano B. the Legal Services Department of the DOLE holds in its opinion of March 4.[27] Nevertheless. In this respect.[16] It is not the function of the Supreme Court to analyze or weigh all over again the evidence already considered in the proceedings below.[23] This opinion is affirmed by the Explanatory Bulletin on the Inclusion of Teachers' Overload Pay in the 13th-Month Pay Determination issued by the DOLE on December 3. and this applies with greater force in labor cases. Settled is the rule that the findings of the LA. including payments for overload work within eight hours. An extraordinary remedy. 3. Inciong[29] is instructive. if any. existing DECS and School Policies and Regulations for different levels of instructions prescribe a regular teaching load. the School paid out. In resolving this issue. Where. Concluding Statement In the light of the foregoing discussions. a sample of which was identified and explained by Ms. 1992 and November 19. which indicates that their regular monthly salary includes payment of wages during all legal holidays. the Commission on Higher Education and the Technical Education and Skills Development Authority. the normal hours of work of school academic personnel shall not exceed eight (8) hours a day. such overload compensation shall be considered part of the basic pay for the purpose of computing the teacher's 13th-month pay. pertinent portions of which are quoted below: xxx 2. evaluation of students and other related activities. It does not include correction of the NLRC’s evaluation of the evidence or of its factual findings. the total actual teaching or classroom hours of which a teacher can generally perform in less than eight (8) hours per working day.” Basic wage is defined by the Implementing Rules of RA 6727 as follows: “Basic Wage” means all remuneration or earnings paid by an employer to a worker for services rendered on normal working days and hours but does not include cost of living allowances. Basis of the 13th-month pay computation The Revised Implementing Guidelines of the 13th-Month Pay Law (P. Such findings are generally accorded not only respect but also finality. Trajano. these salary-related benefits should be included as part of the basic salary in the computation of the 13th month pay if by individual or collective agreement. The sole office of the writ of certiorari is the correction of errors of jurisdiction including the commission of grave abuse of discretion amounting to lack or excess of jurisdiction. 2. Labor Code). The general rule is that administrative rulings and circulars shall not be given retroactive effect.” This means that the basic salary of an employee for the purpose of computing the 13th-month pay shall include all remunerations or earnings paid by an employer for services rendered during normal working hours. unless patently erroneous. to wit: Labor Standards | To digest (old cases) | Ajean Tuazon| 68 .[24] nderscoring supplied) On the other hand. the remuneration that the teacher will get from the additional teaching load will form part of the basic wage. 1991. form part of basic wage and therefore are to be included in the computation of 13th-month pay mandated by PD 851. the same are considered as part of the basic salary of the qualified teachers. it is a settled rule that when an administrative or executive agency renders an opinion or issues a statement of policy. the appellate court has no reason to look into the correctness of the evaluation of evidence which supports the labor tribunals' findings of fact. are generally accorded not only great respect but even finality. On one hand is the opinion of the Bureau of Working Conditions of the DOLE dated December 9. Where a teacher is required to perform such overload within the eight (8) hours normal working day. the factor used in computing the salaries of the employees is 365. as amended. as amended) provides that an employee shall be entitled to not less than 1/12 of the total basic salary earned within a calendar year for the purpose of computing such entitlement. it merely interprets a pre-existing law and the administrative interpretation is at best advisory for it is the courts that finally determine what the law means. shows that said School employees are paid for all days worked in the year. however a teacher is engaged to undertake actual additional teaching work after completing his/her regular teaching load. In petitions for review on certiorari like the instant case.[15] In the instant case. a petition for certiorari is available only and restrictively in truly exceptional cases.[28] In the present case.[19] Findings of fact of administrative agencies and quasijudicial bodies. Overload partakes of the nature of temporary extra assignment and compensation therefore shall be considered as an overload honorarium if performed within the 8-hour work period and does not form part of the regular or basic pay. and costof-living allowances. the Court finds no error in the ruling of the CA that since nowhere in the petition is there any acceptable demonstration that the LA or the NLRC acted either with grave abuse of discretion or without or in excess of its jurisdiction.[22] The second assigned error properly raises a question of law as it involves the determination of whether or not a teacher's overload pay should be considered in the computation of his or her 13th-month pay. approximately four years after the present case was initiated before the Regional Arbitration Branch of the NLRC. as amended. Any work done in addition to the eight (8) hours daily work shall constitute overtime work. February 28. night differential and holiday pay. Regular teaching load and overload work. the Court invariably sustains the unanimous factual findings of the LA. 91% and 77%. 13th-month pay or other monetary benefits which are not considered as part of or integrated into the regular salary of the workers xxx. premium. when affirmed by the NLRC and the CA. the same are treated as part of the basic salary of the employees.[21] We find none of these exceptions in the present case. Overload work/pay Overload on the other hand means “the load in excess of the normal load of private school teachers as prescribed by the Department of Education. such as the cash equivalent of unused vacation and sick leave credits. Stated differently. The petitioner’s claim that the DOLE Order should not be made to apply to the present case because said Order was issued only in 1996. As regards the issue of non-payment of holiday pay.[25] This opinion is later affirmed by the DOLE Order. by school policy. 1992 that remunerations for teaching in excess of the regular load shall be excluded in the computation of the 13th-month pay unless. However. as in this case. the School incurred a deficit of P445.[26] mphasis supplied) It was the above-quoted DOLE Order which was used by the LA as basis for ruling against herein petitioner. In accordance with Article 83 of the Labor Code of the Philippines. the Court finds that overload pay should be excluded from the computation of the 13th-month pay of petitioner's members. respectively.[18] Firm is the doctrine that this Court is not a trier of facts. preparation of lesson plans and teaching aids.[13] This Court held in Odango v.D. may constitute a teacher's working day. specially when such findings are supported by substantial evidence and there is no cogent basis to reverse the same. is not without basis. 1992 to the effect that if overload is performed within a teacher's normal eight-hour work per day. Any teaching load in excess of the normal or regular teaching load shall be considered as overload. National Labor Relations Commission[14] that: The appellate court’s jurisdiction to review a decision of the NLRC in a petition for certiorari is confined to issues of jurisdiction or grave abuse of discretion. The foregoing definition was based on Article 83 of the Labor Code which provides that “the normal hours of work of any employee shall not exceed eight (8) hours a day. A party assailing such findings bears the burden of showing that the tribunal acted capriciously and whimsically or in total disregard of evidence material to the controversy. overtime. it is the position of this Department that all basic salary/wage representing payments earned for actual work performed during or within the eight hours in a day.” In recognition of the peculiarities of the teaching profession. Pertinent portions of the said Bulletin read as follows: 1. rules and standards of particular private schools.[17] In a petition for review on certiorari. such additional work is generally referred to as overload.

The all-embracing phrase “earnings and other remunerations” which are deemed not part of the basic salary includes within its meaning payments for sick. Rollo. The latter causes us to hire your agency's services.) Labor Standards | To digest (old cases) | Ajean Tuazon| 69 . as it is dependent upon the availability of extra teaching loads. 1988. Then the exclusionary provision would prove to be idle and with no purpose. paragraph “c." (p. the following compensations are deemed not part of the basic salary: a) Cost-of-living allowances granted pursuant to Presidential Decree 525 and Letter of Instruction No. Private respondent Nemesio Decierdo was a security guard of the petitioner since February 1981. the Executive Labor Arbiter rendered a decision. February 10. because it is being paid for additional work performed in excess of the regular teaching load. viz: "Refused to accept assignment he is going to rest for a while. We do extend our gratitude to your immediate services in response to or request in the past. 13th month pay differentials and service incentive leave pay. and "2. Verily. Hence.) On February 11.. the Supplementary Rules and Regulations Implementing Presidential Decree 851 is even more emphatic in declaring that earnings and other remunerations which are not part of the basic salary shall not be included in the computation of the 13th-month pay. and likewise Commando Security Service Agency assures Aldevinco the same. overtime pay and night premium for lack of merit.) work performed on any special holiday shall be paid an additional compensation of at least thirty percent (30%) of the regular wage of the employee. in its explanatory bulletin. this cloud is dissipated in the later and more controlling Supplementary Rules and Regulations which categorically. in consideration of all the foregoing. underpayment of wages. 1988 served the following recall order on Decierdo: "Report to this HQs for instruction. SO ORDERED. If they were not so excluded. 45-A-46. As such. petitioner.. 13th month pay. additional compensation equivalent to his regular wage plus at least twenty-five (25%) percent thereof. 1988. it is hard to find any “earnings and other remunerations” expressly excluded in the computation of the 13th-month pay. REYES (Associate Justice) PROHIBITION REGARDING WAGES ([1992V551] COMMANDO SECURITY AGENCY. affirming with modification the decision of the Labor Arbiter in NLRC Case No. This is the only reason why the DOLE. ANTONIO EDUARDO B. Davao City. and that the assignment of overload is subject to the availability of teaching loads." (p. Rollo. petitioner on February 10. as per Rotation Policy Order by the management effective 11 February 1988. You are hereby recalled from your present post at Aldevinco Bldg. For similar reason it shall not be considered in the computation of the 13th -month pay. 1988. unfair labor practice. rest day pay and incentive leave pay." (pp.877." (pp. Davao City. or maternity leaves. 1989 and September 25. exclude from the definition of basic salary earnings and other remunerations paid by employer to an employee. It is therefore clearly understood that Aldevinco assures tenants of security of their properties found in Aldevinco's compound.Under Presidential Decree 851 and its implementing rules. Likewise. which was the effective date of the detail order. While doubt may have been created by the prior Rules and Regulations Implementing Presidential Decree 851 which defines basic salary to include all remunerations or earnings paid by an employer to an employee. ALICIA AUSTRIA-MARTINEZ (Associate Justice) WE CONCUR: CONSUELO YNARES-SANTIAGO (Associate Justice. vacation. finds it proper to include a teacher's overload pay in the determination of his or her 13th-month pay.: Petitioner assails the resolutions of the National Labor Relations Commission dated May 26. In addition. petitioner entered into a contract to provide guarding services to the Alsons Development and Investment Corporation (ALSONS for brevity) at its Aldevinco Building on Claro M. 1987 to April 10. A cursory perusal of the two sets of Rules indicates that what has hitherto been the subject of a broad inclusion is now a subject of broad exclusion. 1st Division) GRIÑO-AQUINO. Detail Order 02-016 was issued to Decierdo assigning him to the Pacific Oil Company in Bunawan. b) Profit sharing payments. 1992 July 20. Maria Mila D. vs. an overload is still an additional or extra teaching work which is performed after the regular teaching load has been completed. and sometimes four (4) guards.” It is likewise clear that premium for special holiday which is at least 30% of the regular wage is an additional compensation other than and added to the regular wage or basic salary. Ordering respondent Commando Security Agency to pay complaint Security Agency to pay complainant Nemesio Decierdo the total amount of THIRTY-THREE THOUSAND EIGHT HUNDRED SEVENTY-SEVEN AND 92/100 PESOS (P33. i. the DOLE loses sight of the fact that even if it is performed within the normal eight-hour working day. an overload pay. Moreover. but Decierdo refused to accept the assignment as shown by the annotation at the bottom of the Order. holiday and rest day pay differentials. Rollo. The exclusion of cost-of-living allowances under Presidential Decree 525 and Letter of Instruction No. This only goes to show that overload pay is not integrated with a teacher's basic salary for his or her regular teaching load. 46. Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work.) On the same date. 174 and profit sharing payments indicate the intention to strip basic salary of other payments which are properly considered as “fringe” benefits. Chairperson). NATIONAL LABOR RELATIONS COMMISSION and NEMESIO DECIERDO. premium for works performed on rest days and special holidays. overload varies from one semester to another. the instant petition is DENIED.e. The assailed Decision and Resolution of the Court of Appeals are AFFIRMED. sometimes two (2) guards on a daily shift. 174. requested the petitioner for a "periodic reshuffling" of guards.R. Samonte. 1975. it is not legally feasible to consider payments for such overload as part of a teacher's regular or basic salary. The number of guards to be assigned by the petitioner would depend on ALSON's demand. the dispositive portion of which reads as follows: "WHEREFORE. 54. may not be considered as part of a teacher's regular or basic salary. Under a later set of Supplementary Rules and Regulations Implementing Presidential Decree 851 issued by the then Labor Secretary Blas Ople. as salary. The Supplementary Rules and Regulations cure the seeming tendency of the former rules to include all remunerations and earnings within the definition of basic salary. respondent. Decierdo was one of the guards assigned to the Aldevinco Building by the petitioner. In Article 93 of the same Code. 19-20. Any compensations or remunerations which are deemed not part of the basic pay is excluded as basis in the computation of the mandatory bonus. from April 11. Moreover. c) All allowances and monetary benefits which are not considered or integrated as part of the regular basic salary of the employee at the time of the promulgation of the Decree on December 16. for a period of one year. earnings and other remunerations are excluded as part of the basic salary and in the computation of the 13th-month pay. Decierdo filed a complaint for illegal dismissal. CORONA (Associate Justice). RENATO C. unfair labor practice. The peculiarity of an overload lies in the fact that it may be performed within the normal eight-hour working day. 87 – Overtime work. 11-0200075-88. 1990. To cite a few provisions: “Art. 1988. pay for regular holidays and night differentials. J. Rollo. However. overtime pay. the catch-all exclusionary phrase “all allowances and monetary benefits which are not considered or integrated as part of the basic salary” shows also the intention to strip basic salary of any and all additions which may be in the form of allowances or “fringe” benefits.) Pursuant to that reasonable request of its client. 1988. No. In April 1987. judgment is hereby rendered: "1. unless renewed under such terms and conditions as may be mutually acceptance.” It is clear that overtime pay is an additional compensation other than and added to the regular wage or basic salary. any pay given as compensation for such additional work should be considered as extra and not deemed as part of the regular or basic salary. overtime pay. we requested for a period reshuffling. night premium. petitioner failed to refute private respondent's contention that excess teaching load is paid by the hour. This conclusion finds strong support under the Labor Code of the Philippines.[30] In the same manner that payment for overtime work and work performed during special holidays is considered as additional compensation apart and distinct from an employee's regular wage or basic salary. The pertinent portion of her letter reads: "Our corporation offers spaces to tenants including services of maintenance and security. MA. Properties Administration Head on ALSONS. As such they are deemed not part of the basic salary and shall not be considered in the computation of the 13th-month pay. for reason of which such is categorically excluded from the definition of basic salary under the Supplementary Rules and Regulations Implementing Presidential Decree 851. while the regular teaching load is being paid on a monthly basis. the basic salary of an employee is used as the basis in the determination of his 13th month pay. holiday pay. owing to its very nature and definition. overload pay may not be included as basis for determining a teacher's 13th-month pay. "We hope that the above shall be clearly explained to the incoming guards.92). On June 28. G. Under the Rules and Regulations Implementing Presidential Decree 851. WHEREFORE. 95844. On February 9. Recto Avenue. NACHURA (Associate Justice) RUBEN T. with instruction to report to the manager. Dismissing the complaint for illegal dismissal.

it should have been complainant himself and not respondent. It was aware of the nature and specifics of the charges against it but failed to refute them expecting that a hearing would be called. record). public respondent.R. all that respondent had to do was present its payrolls and other records which it is required to keep and maintain (see Sec. encouraging for this purpose the submission by the parties of admissions and stipulations of fact to abbreviate the proceedings.) The NLRC correctly held that: ". 31 SCRA 764) which the petitioner was given when it filed its position paper. JOEL ORDENIZA and AMADO CENTENO. 003883-92. or a right to be heard. finding no abuse of discretion on the part of the National Labor Relations Commission in rendering the assailed decision. dispense with a hearing and require. and on succeeding days. Records) on the basis of respondent's records which was secured by virtue of a subpoena duces tecum (p. in its decision5 [Id. and its resolution2 [Id. Article II) and protection to labor (Sec.. to their former positions without loss of seniority and other privileges appertaining thereto.) Petitioner's contention that Decierdo is estopped from complaining about the 25% deduction from his salary representing petitioner's share in procuring job placement for him.) WHEREFORE. Upon learning about the plan of petitioners. "Sec. Lustado. Respondent should have met head-on the accuracy of correctness of the computations and not skirt the issue by dwelling merely on technicalities by complaining that the records were irregularly procured. vs. SO ORDERED. 3. JJ. Under Section 3 of the same rule as above-cited. and. affidavits and other documents. 119268. we have time and again pointed out that procedural due process merely requires notice and opportunity to be heard (Var Orient Shipping Company vs. NATIONAL LABOR RELATIONS COMMISSION (NLRC) and GOODMAN TAXI (PHILJAMA INTERNATIONAL. Philjama International Inc. the records submitted by petitioner. Demetrio L. and 4.. the facts of the case. their dismissal must be for just cause and after due process. accompanied by all supporting documents then available to them and the affidavits of their witnesses which shall take the place of their direct. 117 SCRA 99. which provide: "Sec. petitioners decided to form a labor union to protect their rights and interests. or present evidence to prove. 6-12. 56. the Labor Arbiter proceeded to decide the case based on the parties' position papers." (pp. illegal dismissal and illegal deduction of washing fees. . affirmed with modification the decision of the Labor Arbiter. DEMETRIO CALAGOS. the NLRC dismissed the charge of illegal dismissal and unfair labor practice against the petitioner and denied Decierdo's claim for separation pay. 30432. 43. vs.) As a result. elicit pertinent facts or information. 2. in a decision dated April 28. "Anent the first issue. in failing to make a clear pronouncement that Decierdo had abandoned his employment as he went on AWOL and therefore is considered resigned. the Executive Labor Arbiter did not err when she dispensed with a full blown hearing there being no necessity for one. in his sound discretion. However. to pay the complainants full backwages and other benefits. a domestic corporation engaged in the operation of "Goodman Taxi. 57-58. and to reimburse the drivers the amount paid as washing charges. Clariza. Barrios. the NLRC (public respondent herein). Believing that the deduction is illegal.) Hence. Rollo.R. G. Declaring the respondent company guilty of illegal dismissal and accordingly it is directed to reinstate the complainants. We affirm the NLRC's ruling that: "It goes without saying that respondent may not deduct its so-called 'share' from the salaries of its guards without the latter's express consent and if such deductions are not allowed by law. the Labor Arbiter shall require the parties to simultaneously submit to him their respective verified position papers. Cruz (Chairman). Morato. Angel Jardin. If there was anyone who should have been interested in being recalled to work. Gavino Panahon. 16-22.] Private respondent’s first motion for reconsideration was denied. Article II) in the declaration of Principles and State Policies. Bermejo vs. 1994. the labor arbiter dismissed said complaint for lack of merit. private respondent refused to let petitioners drive their taxicabs when they reported for work on August 6. Sonny M. Aggrieved. the petition for certiorari is DISMISSED for lack of merit. 116). is not well taken. private respondent admittedly regularly deducts from petitioners’ daily earnings the amount of P30. Urbano Marcos. in NLRC NCR CA No. pp. 1982). besides. in view of all the foregoing considerations. The petitioner was properly notified and even took part in the conciliation conference for the amicable settlement of the case. It disposed of the case as follows: "WHEREFORE." Petitioners used to drive private respondent’s taxicabs every other day on a 24-hour work schedule under the boundary system. facts not referred to and any cause or causes of action not included in their complaint or position papers. Facts or information so elicited may serve as basis for his clarification or simplication and limitation of the issues in the case. . together with the supporting affidavits and documents submitted by them. to wit: "WHEREFORE. Inc. null and void.." (p. URBANO MARCOS. and for the purpose of making such determination. . making suggestions on what facts the parties need not prove. The parties shall thereafter not be allowed to allege. Any such agreement or contract is void ab initio being contrary to law and public policy (Mercury Drug Co.] dated December 13. SO ORDERED. Rule X. Joel T.] of public respondent promulgated on October 28. 1989. Rollo.] dated August 31. Petitioners were drivers of private respondent. 3. 1992. The first ground of the petition is not well taken for the NLRC did find that Decierdo had given up his job and chose separation pay in lieu or reinstatement. at 25-32.39 representing complainant's accountability with (sic) respondent is hereby ordered deducted from the total award. Dayao. Why respondent had begrudged the Labor Arbiter's 'failure' to fix a return-to-work period escapes us considering that the Labor Arbiter practically found complainant to have abandoned his job and. the appealed Decision is hereby AFFIRMED with the modification that the amount of P1. particularly Sections 2 and 3. It ruled that it lacks jurisdiction over the case as petitioners and Labor Standards | To digest (old cases) | Ajean Tuazon| 70 . as such. Medialdea and Bellosillo."4 [Id. 161 SCRA 732. Romeo Q. LUIS DE LOS ANGELES. at 41. INC. . . 63. in not considering that Decierdo is in estoppel. the decision of the Labor Arbiter appealed from is hereby SET ASIDE and another one entered: 1. the Labor Arbiter may. less earnings elsewhere.00 supposedly for the washing of the taxi units. 1994. During the immediately thereafter.498.. No. Amado Centino. 54-55. instead. vs. and 2.: This special civil action for certiorari seeks to annul the decision1 [Rollo." ( nderscoring supplied. impose upon the courts the duty to be ever vigilant in protecting the rights of workers who are placed in a contractually disadvantaged position and who sign waivers or provisions contrary to law and public policy (Mercury Drug Co. This time. granted aforesaid second motion for reconsideration. At this state. reversed and set aside the judgment of the labor arbiter. if any. concur. ROSENDO MARCOS. The petition for certiorari is without merit. Submission of position papers. . 58. Remaining hopeful.] dated October 28.Petitioner appealed to the NLRC which on May 26. J. 2nd Division) QUISUMBING. The parties shall furnish each other with copies of the position papers. The constitutional provisions on social justice (Sections 9 and 10. 2000 Feb 23.00 daily. as far as possible. and Joel Ordeniza. from any party or witness to complete. Alberto A. including documentary evidence. He shall participate actively in the preparation of such stipulations. This is notwithstanding any previous agreement or understanding between them. this petition for certiorari alleging that the NLRC gravely abused its discretion: 1. Achacoso. Nevertheless. at 16-22. Calagos. Immediately after the submission by the parties of their position papers and supporting proofs. in his discretion. in not holding that petitioner is entitled to a 25% share of his monthly salary as agreed between them. testimony. Gonzales. 1994. namely. the parties to file their respective position papers together with all the supporting proofs. 1991. in denying petitioner due process of law. In a decision3 [Id. private respondent filed another motion for reconsideration. ANGEL JARDIN. the Labor Arbiter shall determine whether there is a need for a formal hearing or investigation. and the report and the computations made by the Corporate Auditing Examiner regarding the sums which Decierdo was entitled to recover. . complainant's entitlements were computed by the Corporate Auditing Examiner (p. Rosendo Marcos. petitioners." (p. On appeal. . Regarding the petitioner's allegation that it was denied due process. Book III of Omnibus Rules Implementing the Labor Code) and it could already be determined on the face thereof if complainant's monetary claims had actually been paid or not. No. hence. respondents. Jr.. G. That provision of the employment contract was illegal and inequitous. petitioners filed with the labor arbiter a complaint against private respondent for unfair labor practice. at 23. 18. 2. 1994 which denied petitioners motion for reconsideration. Under this arrangement. The labor tribunal declared that petitioners are employees of private respondent.). he may. September 30." (pp. Luis de los Angeles. which shall cover only the issues raised in the complaint. Petitioners suspected that they were singled out because they were the leaders and active members of the proposed union. Determination of necessity of hearing. suffice it to state that there was no need for the Executive Labor Arbiter to fix a period within which to require complainant to report for work considering that the latter is no longer interested in his job and had claimed for separation benefits in lieu of reinstatement. Rollo. Nardo Dayao. complainant's claims for separation pay was not granted. the petitioners earned an average of P400. Rollo. Dismissing the charge of unfair [labor] practice for insufficiency of evidence. That procedure complied with the Revised Rules of the NLRC.

In Mañebo vs. once they are out plying their trade. In Garcia vs. the Motion under reconsideration is hereby given due course. 583-584 (1996). No. no such relationship exists. public respondent gravely abused its discretion in taking cognizance and granting private respondent’s second motion for reconsideration as it wrecks the orderly procedure in seeking reliefs in labor cases.15 [Mañebo vs. 18-20. the parties have already filed their position papers and even agreed to consider the case submitted for decision. In Philippine Airlines Inc. Agarrado.] Thus. and by taking into consideration. public respondent should have forthwith denied it in accordance with Rule 7. are free to choose whatever manner they conduct their trade and are beyond the physical control of the owner/operator. 26 October 1988) has applied the following four-fold test: ‘(1) the selection and engagement of the employee. and. the alleged facts adduced therein and the documents attached thereto.12 [229 SCRA 240. Llamas. and (4) the power of control the employees conduct. p. SO ORDERED. this Court has declared in several instances that disregarding rules it is bound to observe constitutes grave abuse of discretion on the part of labor tribunal. 14. et al. NLRC. Rule VI of the New Rules of Procedure of NLRC.] private respondent therein. Clearly. provided that the motion is under oath and filed within ten (10) calendar days from receipt of the order. pp. at 21.] Hence. Section 14 of its New Rules of Procedure which allows only one motion for reconsideration from the same party. vs. Workmen’s Compensation Commission. 248 (1994). 248 (1994). or with grave abuse of discretion in rendering the assailed decision. IN ANY CASE. Lantaco. the Resolution of August 10. all the foregoing attributes signify that the relationship of the parties is more of a leasehold or one that is covered by a charter agreement under the Civil Code rather than the Labor Code. The labor tribunal reasoned out as follows: "On the issue of whether or not employer-employee relationship exists. when private respondent filed a second motion for reconsideration. 8. The dispute may involve no less than the livelihood of an employee and that of his loved ones who are dependent upon him for food. that only one such motion from the same party shall be entertained.’ (Ibid.] As correctly pointed out by petitioner. The phrase "grave abuse of discretion amounting to lack or excess of jurisdiction" has settled meaning in the jurisprudence of procedure. It may as well involve the survival of a business or an industry.11 [261 SCRA 573.] we held that public respondent gravely abused its discretion in treating the motion to set aside judgment and writ of execution as a petition for relief of judgment. THE EXISTENCE OF AN EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN THE PARTIES IS ALREADY A SETTLED ISSUE CONSTITUTING RES JUDICATA. On the matter of control. the former exercise supervision and control over the latter. 1994 judgment is not in accord with the applicable decisions of this Court. Magboo vs. September 8.] we ruled that the relationship between jeepney owners/operators on one hand and jeepney drivers on the other under the boundary system is that of employer-employee and not of lessor-lessee."6 [Id. THE NLRC HAS NO JURISDICTION TO ENTERTAIN RESPONDENT’S SECOND MOTION FOR RECONSIDERATION WHICH IS ADMITTEDLY A PLEADING PROHIBITED UNDER THE NLRC RULES."7 [Id. II.20 [Doce vs. the drivers. Under this system the driver takes out his unit and pays the owner/operator a fee commonly called ‘boundary’ for the use of the unit. admitted is the fact that complainants are taxi drivers purely on the ‘boundary system’.] we held that the NLRC gravely abused its discretion by allowing and deciding an appeal without an appeal bond having been filed as required under Article 223 of the Labor Code. they likewise shoulder the cost of repairs on damages sustained by the vehicles they are driving. vs. Under the control test. shelter. In Unicane Workers Union-CLUP vs. Hence. et al. In the case of jeepney owners/operators and jeepney drivers. medicine. which public respondent denied. resolution or decision of the Commission shall not be entertained except when based on palpable or patent errors. 98 Phil. --. Now. Verily. Bernardo. private respondent exhausted administrative remedy available to it by seeking reconsideration of public respondent’s decision dated April 28. In our view. In a certiorari action before this Court. WHICH THE NLRC HAS NO MORE JURISDICTION TO REVERSE. wrote the labor arbiter who rendered the decision and expressed dismay over the judgment. more significantly aside from the fact that they pay for the gasoline they consume. 267 (1996).] Expectedly petitioners sought reconsideration of the labor tribunal’s latest decision which was denied. For obvious reasons.9 [264 SCRA 261. the Supreme Court stresses that ‘control is deemed the most important that the other requisites may even be disregarded’. 104 Phil.R. NLRC.Motions for reconsideration of any order. clothing. In this case. petitioners allege that public respondent acted without or in excess of jurisdiction. 294 (1997). in the determination the existence of employeremployee relationship. Dinglasan. 649. Public respondent cannot just disregard its own rules on the pretext of "satisfying the ends of justice". Motions for Reconsideration. an employer-employee relationship exists if the ‘employer’ has reserved the right to control the ‘employee’ not only as to the result of the work done but also as to the means and methods by which the same is to be accomplished. the fact that the drivers do not receive fixed wages but get only that in excess of the so-called "boundary" they pay to the owner/operator is not sufficient to withdraw the relationship between them from that of employer and employee. their wages.) Applying the foregoing parameters to the case herein obtaining."18 [Rollo. 18 SCRA 71.] The petition is impressed with merit. 277 SCRA 268. the second motion for reconsideration filed by private respondent is indubitably a prohibited pleading16 [Rollo. In doing so. With this motion for reconsideration. As mentioned earlier. NLRC. 566 (1993). NLRC. The management of the business is in the owner’s hands. 946. Accordingly. thus: "SEC.] we declared that the labor arbiter gravely abused its discretion in disregarding the rule governing position papers. Sr. the labor tribunal took cognizance of the letter from private respondent and treated said letter as private respondent’s appeal. otherwise he would be responsible for the damages to the lessor. (G. disregarding a settled legal doctrine enunciated by this Court is not a way of rectifying an error or mistake. 1994. without sufficient basis. the drivers pay a certain fee for the use of the vehicle. In a number of cases decided by this Court. NLRC.’ ‘Among the four (4) requisites’.] and recently between taxi owners/operators and taxi drivers. EXISTING JURISPRUDENCE ON THE MATTER SUPPORTS THE VIEW THAT PETITIONERSTAXI DRIVERS ARE EMPLOYEES OF RESPONDENT TAXI COMPANY. we ruled that the labor tribunal acted with grave abuse of discretion in treating a mere letter from private respondent as private respondent’s appeal in clear violation of the rules on appeal prescribed under Section 3(a). and disposed of the case as follows: "VIEWED IN THE LIGHT OF ALL THE FOREGOING.8 [Arroyo vs. 6. 229 SCRA 240. NLRC. the Supreme Court in the case of Sara. 514 (1981). delays cannot be countenanced in the resolution of labor disputes. Instead. The Decision of the Labor Arbiter subject of the appeal is likewise SET ASIDE and a NEW ONE ENTERED dismissing the complaint for lack of jurisdiction. (2) the payment of wages. after receiving a copy of the labor arbiter’s decision.21 [Citizens’ League of Freeworkers vs. 1994 are hereby SET ASIDE.] The foregoing ratiocination goes against prevailing jurisprudence.] we held that the labor arbiter committed grave abuse of discretion when he failed to resolve immediately by written order a motion to dismiss on the ground of lack of jurisdiction and the supplemental motion to dismiss as mandated by Section 15 of Rule V of the New Rules of Procedure of the NLRC. p. 954 (1963). But. NLRC.17 [Id. and education.] In labor cases. In Gesulgon vs. arguing that: "I. (3) the power of dismissal. It held that the relationship of the parties is leasehold which is covered by the Civil Code rather than the Labor Code. Labor Standards | To digest (old cases) | Ajean Tuazon| 71 . Now. 948 (1958). 122725. III. there is another compelling reason why we cannot leave untouched the flip-flopping decisions of the public respondent. ALTER OR MODIFY.19 [National Labor Union vs. and the Decision of April 28. It means such capricious and whimsical exercise of judgment by the tribunal exercising judicial or quasi-judicial power as to amount to lack of power.private respondent have no employer-employee relationship. De Venecia. 657 (1996). the lessor loses complete control over the chattel leased although the lessee cannot be reckless in the use thereof.13 [219 SCRA 561. public respondent had. 73199. Otherwise. vs. it is clear that the respondent does not pay the drivers. the labor tribunal had ample opportunity to rectify errors or mistakes it may have committed before resort to courts of justice can be had. vs. NLRC. 1999. at 17. 800 (1997). extended the reglementary period for filing petition for relief from judgment contrary to prevailing rule and case law.14 [Biogenerics Marketing and Research Corp. the complainants herein. We have applied by analogy the abovestated doctrine to the relationships between bus owner/operator and bus conductor. No costs." [ mphasis supplied] The rationale for allowing only one motion for reconsideration from the same party is to assist the parties in obtaining an expeditious and inexpensive settlement of labor cases. 652 (1956). its October 28.] especially when its disposition of a legal controversy ran afoul with a clear and long standing jurisprudence in this jurisdiction as elucidated in the subsequent discussion. resolution or decision with proof of service that a copy of the same has been furnished within the reglementary period the adverse party and provided further. as basis for his decision.10 [263 SCRA 638. 73 (1966). Abbas. 272 SCRA 793. at 3.22 [Martinez vs. 1994. they themselves determine the amount of revenue they would want to earn in a day’s driving. 108 SCRA 502. the instant petition. 7 SCRA 952. yet the labor arbiter still admitted a supplemental position paper and memorandum. Neither notice of appeal was filed nor cash or surety bond was posted by private respondent. We explained that in the lease of chattels. Nevertheless.] auto-calesa owner/operator and driver.] which should have not been entertained at all. The owner as holder of the certificate of public convenience must see to it that the driver follows the route prescribed by the franchising authority and the rules promulgated as regards its operation. In this recourse. In this case before us. AND TO GRANT THE SAME ON GROUNDS NOT EVEN INVOKED THEREIN..

The requirement of notice and hearing is set-out in Article 277 (b) of the said Code. The benefits conferred to complainant under the May 1994 Agreement are certainly very much higher than those generally given to employees. which affirmed the Labor Arbiter’s dismissal of the case for lack of jurisdiction. 1999. Sundays. On 10 July 1996. Car washing after a tour of duty is indeed a practice in the taxi industry and is in fact dictated by fair play. ABS-CBN would pay the talent fees on the 10th and 25th days of the month. as EVP and Treasurer. concur. vs. ABS-CBN continued to remit SONZA’s monthly talent fees through his account at PCIBank. 293 SCRA 350. vs. p. 1989. Likewise. It behooves upon it the duty to prove that there really is no employer-employee relationship between it and the complainant. p.e. JOSE Y. ABS-CBN filed a Motion to Dismiss on the ground that no employer-employee relationship existed between the parties. ABS-CBN was represented by its corporate officers while MJMDC was represented by SONZA. Mr. In the instant case. Very truly yours. as follows: a. For one. Mendoza. These lack of valid cause and failure on the part of private respondent to comply with the twin-notice requirement underscored the illegality surrounding petitioners’ dismissal. the order of public respondent that petitioners be reimbursed the amount paid as washing charges is deleted. are hereby REINSTATED subject to MODIFICATION. Sonza irrevocably resigned in view of recent events concerning his programs and career. the instant petition is GRANTED. the drivers are not entitled to reimbursement of washing charges. Manager[4] On 30 April 1996. they are entitled to full backwages on the basis of their last daily earnings. SP No. being employees of private respondent. vs. Meanwhile. inclusive of allowances. and after affording them notice and hearing prior to termination. Lopez. private respondent had no valid cause to terminate the employment of petitioners. WHEREFORE. J.] Hence. Co-host for Mel & Jay radio program. With regard to the amount deducted daily by private respondent from petitioners for washing of the taxi units.000 for the first year and P317. NLRC. The assailed DECISION of public respondent dated October 28. GR-76272. and its RESOLUTION dated December 13. SONZA . It must be noted that complainant was engaged by respondent by reason of his peculiar skills and talent as a TV host and a radio broadcaster. On 11 March 1997. the respondent’s plea of lack of employer-employee relationship may be pleaded only as a matter of defense. We note that after a tour of duty. to be computed from the date of dismissal until their actual reinstatement. Labor Code.m. (Sgd. July 28. NLRC. petitioner. are entitled to backwages up to three (3) years without deduction or qualification.” it stands to reason that a “talent” as above-described cannot be considered as an employee by reason of the peculiar circumstances surrounding the engagement of his services. on official leave. Quezon Avenue Branch. Thus.. separation pay.. 235 SCRA 556. Referred to in the Agreement as “AGENT. Cruz. and those whose illegal dismissals were effected after such date. SONZA filed a Reply to Respondent’s Position Paper with Motion to Expunge Respondent’s Annex 4 and Annex 5 from the Records. 2004 Jun 10. 49190 dismissing the petition filed by Jose Y. as President and General Manager. As consistently held by this Court. These witnesses stated in their affidavits that the prevailing practice in the television and broadcast industry is to treat talents like SONZA as independent contractors. The parties submitted their position papers on 24 February 1997. 8.] It must be emphasized. Private respondent is likewise ordered to pay petitioners their full backwages. In his Order dated 2 December 1996. signing bonus. we view the same as not illegal in the context of the law. NLRC.000. The Labor Arbiter rendered his Decision dated 8 July 1997 dismissing the complaint for lack of jurisdiction. Buena. respondent. respondent ABS-CBN Broadcasting Corporation (“ABS-CBN”) signed an Agreement (“Agreement”) with the Mel and Jay Management and Development Corporation (“MJMDC”).25 [Five J Taxi vs. GR-121324. which reads: Dear Mr. September 30. while those illegally dismissed after that date are granted full backwages inclusive of allowances and other benefits or their monetary equivalent from the time their actual compensation was withheld from them up to the time of their actual reinstatement. G. 265 SCRA 61. Co-host for Mel & Jay television program. Unlike an ordinary employee.R.] distinguish between employees illegally dismissed prior to the effectivity of Republic Act No.m. Jr. 1991. is hereby SET ASIDE. The Agreement listed the services SONZA would render to ABS-CBN. and Carmela Tiangco (“TIANGCO”). In July 1996.petitioners are undoubtedly employees of private respondent because as taxi drivers they perform activities which are usually necessary or desirable in the usual business or trade of their employer. Mr. SONZA.R. touched on the “true nature of the contract of a talent. The Facts In May 1994. Eugenio Lopez III.000 for the second and third year of the Agreement. Bellosillo. and De Leon. Moreover.. Pepsi-Cola Products Philippines Inc. SONZA filed a complaint against ABS-CBN before the Department of Labor and Employment. he was not bound to render eight (8) hours of work per day as he worked only for such number of hours as may be necessary. 8:00 to 10:00 a.[6] The pertinent parts of the decision read as follows: xxx While Philippine jurisprudence has not yet. though. In this connection. the Labor Arbiter[5] denied the motion to dismiss and directed the parties to file their respective position papers. employees illegally dismissed prior to March 21. NLRC. Private respondent is directed to reinstate petitioners to their positions held at the time of the complained dismissal. complainant for having invoked a claim that he was an employee of respondent company until April 15. Sonza (“SONZA”). Hence. 1996 and that he was not paid certain claims. SONZA. Neither were there two (2) written notices sent by private respondent informing each of the petitioners that they had been dismissed from work. SONZA complained that ABS-CBN did not pay his salaries. No. The Labor Arbiter then considered the case submitted for resolution. complainant Sonza’s monthly talent fees amount to a staggering P317. his engagement as a talent was covered by a specific contract. Considering that petitioners were terminated from work on August 1. The just and authorized causes for termination of employment are enumerated under Articles 282. (Chairman). 5:30 to 7:00 p. LABOR ONLY CONTRACTING AND JOB CONTRACTING JOSE Y. J. that recent judicial pronouncements24 [Bustamante vs.. 69-70 (1996). SONZA wrote a letter to ABS-CBN’s President. Thank you for your attention. As you are well aware. JJ. 283 and 284 of the Labor Code. without deducting from backwages the earnings derived elsewhere by the concerned employee during the period of his illegal dismissal. 562 (1994). with certainty. we hereby serve notice of rescission of said Agreement at our instance effective as of date. SO ORDERED.23 [Article 279. 1994. and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. it is sufficient enough as to confer jurisdiction over the instant case in this Office. SONZA filed an Opposition to the motion on 19 July 1996. Highway Copra Traders vs. 6715 on March 21. Quezon City. National Capital Region in Quezon City. service incentive leave pay. On 1 April 1996.. i. Annexes 4 and 5 are affidavits of ABS-CBN’s witnesses Soccoro Vidanes and Rolando V.[3] ABS-CBN agreed to pay for SONZA’s services a monthly talent fee of P310. 9. 1st Division CARPIO. Costs against private respondents. Jardine Davies Inc. However. an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages. ABS-CBN BROADCASTING CORPORATION. The DECISION of public respondent dated April 28.” MJMDC agreed to provide SONZA’s services exclusively to ABS-CBN as talent for radio and television. We would like to call your attention to the Agreement dated May 1994 entered into by your goodself on behalf of ABS-CBN with our company relative to our talent JOSE Y. petitioners.President and Gen. The Labor Arbiter ruled: In this instant case. Mondays to Fridays. it is incumbent upon the driver to restore the unit he has driven to the same clean condition when he took it out.: The Case Before this Court is a petition for review on certiorari[1] assailing the 26 March 1999 Decision[2] of the Court of Appeals in CA-G. Labor Standards | To digest (old cases) | Ajean Tuazon| 72 . ABS-CBN opened a new account with the same bank where ABS-CBN deposited SONZA’s talent fees and other payments due him under the Agreement. NLRC. 1994.. Under the law. And as to whether or not such claim would entitle complainant to recover upon the causes of action asserted is a matter to be resolved only after and as a result of a hearing. Thus. 1999. We consider these acts of the station violative of the Agreement and the station as in breach thereof. can be dismissed only for just and authorized cause. 1994. 356 (1998). 138051. 13th month pay. The Court of Appeals affirmed the findings of the National Labor Relations Commission (“NLRC”). 1989.. The legislative policy behind Republic Act No. 6715 points to "full backwages" as meaning exactly that. b. termination of employment must be effected in accordance with law. Sonza informed us that he is waiving and renouncing recovery of the remaining amount stipulated in paragraph 7 of the Agreement but reserves the right to seek recovery of the other benefits under said Agreement. travel allowance and amounts due under the Employees Stock Option Plan (“ESOP”). he was free to perform the services he undertook to render in accordance with his own style.

On the other hand. ‘13th month pay’. “All these benefits are merely talent fees and other contractual benefits and should not be deemed as ‘salaries. And it is only in the May 1994 Agreement. and ABS-CBN. Adopting the NLRC’s decision. SONZA filed a special civil action for certiorari before the Court of Appeals assailing the decision and resolution of the NLRC. The instant case involves big names in the broadcast industry. it was MJMDC which issued the notice of rescission in behalf of Mr.’ (Annex 3 of the respondent ABS-CBN’s Motion to Dismiss dated July 10. x x x Emphasis supplied)[7] SONZA appealed to the NLRC. G. SONZA filed a motion for reconsideration.[13] The Issue In assailing the decision of the Court of Appeals. talent and celebrity status. (b) the payment of wages. the NLRC rendered a Decision affirming the Labor Arbiter’s decision. Sonza. Sonza and ABS-CBN reveal the fact that historically. this is the first time that the Court will resolve the nature of the relationship between a television and radio station and one of its “talents. a known television and radio personality. ABS-CBN insists that the Labor Arbiter has no jurisdiction because SONZA was an independent contractor. that instead of merely resigning from ABS-CBN. If SONZA did not possess such unique skills. the principal.[14] The Court’s Ruling We affirm the assailed decision.00). It may not be amiss to state that jurisdiction over the instant controversy indeed belongs to the regular courts.[17] SONZA maintains that all essential elements of an employer-employee relationship are present in this case. As squarely apparent from complainant-appellant’s Position Paper. that MJMDC is an agent. it is precisely by reason of the alleged violation of the May 1994 Agreement and/or the Stock Purchase Agreement by respondent-appellee that complainant-appellant filed his complaint. complainant is also entitled to be paid 13th month pay based on an amount not lower than the amount he was receiving prior to effectivity of (the) Agreement’. A portion of the Position Paper of complainant-appellant bears perusal: ‘Under [the May 1994 Agreement] with respondent ABS-CBN. which is the latest Agreement executed between ABS-CBN and Mr. The present controversy is one of first impression. complainant is entitled to a commutable travel benefit amounting to at least One Hundred Fifty Thousand Pesos (P150. On 26 March 1999. Similarly.00) per year. because of his unique skills. NLRC. Ltd.” (Insular Life Assurance Co. On 24 February 1998. (c) the power of dismissal. On the contrary. talent and celebrity status. the relations of principal and agent only accrues between complainant Sonza and MJMDC. Whatever benefits complainant enjoyed arose from specific agreement by the parties and not by reason of employer-employee relationship. Villarama.R. does not detract from the absence of employer-employee relationship. As a matter of fact.[16] A party cannot prove the absence of substantial evidence by simply pointing out that there is contrary evidence on record. an action for breach of contractual obligation is intrinsically a civil dispute. one of the biggest television and radio networks in the country. As held by the Supreme Court.’ (Opposition to Motion to Dismiss) Clearly. create no employeremployee relationship unlike the second. [15] Substantial evidence means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. but the intent of the parties to the Agreement conferring such benefit. SONZA contends that the “discretion used by respondent in specifically selecting and hiring complainant over other broadcasters of possibly similar experience and qualification as complainant belies respondent’s claim of independent contractorship. the appellate court quoted the following findings of the NLRC: x x x the May 1994 Agreement will readily reveal that MJMDC entered into the contract merely as an agent of complainant Sonza. Under paragraph 9 of (the May 1994 Agreement). Sonza.000. and not between ABS-CBN and MJMDC. SONZA contends that: THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE NLRC’S DECISION AND REFUSING TO FIND THAT AN EMPLOYER-EMPLOYEE RELATIONSHIP EXISTED BETWEEN SONZA AND ABS-CBN. previous contracts between Mr. No convincing reason exists to warrant a reversal of the decision of the Court of Appeals affirming the NLRC ruling which upheld the Labor Arbiter’s dismissal of the case for lack of jurisdiction. “The line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired result without dictating the means or methods to be employed in attaining it. Sonza. Carmela C..[19] A. JURISPRUDENCE AND EVIDENCE TO SUPPORT SUCH A FINDING. his claims for compensation for services. 1996). the parties to the said agreements are ABS-CBN and Mr. is a circumstance indicative. the same being in the nature of an action for alleged breach of contractual obligation on the part of respondent-appellee.” The fact that complainant was made subject to respondent’s Rules and Regulations.[9] Emphasis supplied) The Court of Appeals ruled that the existence of an employer-employee relationship between SONZA and ABS-CBN is a factual question that is within the jurisdiction of the NLRC to resolve. and (d) the employer’s power to control the employee on the means and methods by which the work is accomplished. this petition. ABSLabor Standards | To digest (old cases) | Ajean Tuazon| 73 . ‘he is waiving and renouncing recovery of the remaining amount stipulated in paragraph 7 of the Agreement but reserves the right to such recovery of the other benefits under said Agreement.. Sonza. the socalled “control test”. Mrs. Tiangco.[11] Such action cannot cover an inquiry into the correctness of the evaluation of the evidence which served as basis of the NLRC’s conclusion. Although Philippine labor laws and jurisprudence define clearly the elements of an employer-employee relationship. This is clear from the provisions of the May 1994 Agreement which specifically referred to MJMDC as the ‘AGENT’. DESPITE THE WEIGHT OF CONTROLLING LAW. The first. Selection and Engagement of Employee ABS-CBN engaged SONZA’s services to co-host its television and radio programs because of SONZA’s peculiar skills. the Court of Appeals rendered a Decision dismissing the case.[12] The Court of Appeals added that it could not re-examine the parties’ evidence and substitute the factual findings of the NLRC with its own. of an independent contractual relationship. per his letter dated April 1. the latter contractually bound itself to pay complainant a signing bonus consisting of shares of stocks…with FIVE HUNDRED THOUSAND PESOS (P500. 238 SCRA 267. 1996.’ Thus. the act of the agent is the act of the principal itself. direct or circumstantial. complainant-appellant served upon the latter a ‘notice of rescission’ of Agreement with the station. Apropos to this is the rule that the term or nomenclature given to a stipulated benefit is not controlling. who himself signed the same in his capacity as President.[18] The last element. thus. lie with the regular courts.The fact that per the May 1994 Agreement complainant was accorded some benefits normally given to an employee is inconsequential. notwithstanding the nomenclature appended to these benefits. as admittedly MJMDC ‘is a management company devoted exclusively to managing the careers of Mr. Sonza. The Rulings of the NLRC and Court of Appeals The Court of Appeals affirmed the NLRC’s finding that no employer-employee relationship existed between SONZA and ABS-CBN. which asserted that instead of referring to unpaid employee benefits. et al. 1989). The Court does not substitute its own judgment for that of the tribunal in determining where the weight of evidence lies or what evidence is credible. No.[8] Hence. namely Jose “Jay” Sonza. 21 November 1994. rather than the Labor Code. but not conclusive. The specific selection and hiring of SONZA. We find it erroneous to assert that MJMDC is a mere ‘labor-only’ contractor of ABS-CBN such that there exist[s] employer-employee relationship between the latter and Mr. and those that control or fix the methodology and bind or restrict the party hired to the use of such means. but of the talent/contractor Mr. it is precisely because of complainant-appellant’s own recognition of the fact that his contractual relations with ABS-CBN are founded on the New Civil Code. the same can be resolved by reference to civil law and not to labor law. Complainant-appellant’s claims being anchored on the alleged breach of contract on the part of respondent-appellee. Case law has consistently held that the elements of an employer-employee relationship are: (a) the selection and engagement of the employee. By all indication and as the law puts it. November 15. likewise. they are within the realm of civil law and. As correctly put by the respondent. This fact is made particularly true in this case. As held in the case of Dai-Chi Electronics Manufacturing vs. while his claims for proceeds under Stock Purchase Agreement are based on the latter. We find it indubitable. that MJMDC figured in the said Agreement as the agent of Mr.000. signing bonus and travel allowance against respondent-appellee are not based on the Labor Code but rather on the provisions of the May 1994 Agreement. which address both the result and the means to achieve it. vs. as expressly admitted by the latter and MJMDC in the May 1994 Agreement. 84484. expertise or talent to distinguish them from ordinary employees. Sonza. Evidently. which aim only to promote the result. wages and/or other remuneration’ accorded to an employee. Moreover. when complainant herein unilaterally rescinded said May 1994 Agreement. On 6 October 1998. Consequently. Employee or Independent Contractor? The existence of an employer-employee relationship is a question of fact. not of ABS-CBN.[10] A special civil action for certiorari extends only to issues of want or excess of jurisdiction of the NLRC. SONZA contends that the Labor Arbiter has jurisdiction over the case because he was an employee of ABS-CBN. which the NLRC denied in its Resolution dated 3 July 1998.” There is no case law stating that a radio and television program host is an employee of the broadcast station. Appellate courts accord the factual findings of the Labor Arbiter and the NLRC not only respect but also finality when supported by substantial evidence. is the most important element. talent and celebrity status not possessed by ordinary employees.” Independent contractors often present themselves to possess unique skills. Sonza and his broadcast partner.

C. did not amount to control over the means and methods of the performance of SONZA’s work. What SONZA principally needed were his talent or skills and the costumes necessary for his appearance. appeared on television. To perform his work. but not conclusive. ABS-CBN engaged SONZA’s services specifically to co-host the “Mel & Jay” programs. Others provided equipment for filming and producing the show. and modeling.CBN would not have entered into the Agreement with SONZA but would have hired him through its personnel department just like any other employee. a television actress is a skilled position requiring talent and training not available on-the-job. instead.[32] The clear implication is that SONZA had a free hand on what to say or discuss in his shows provided he did not attack ABS-CBN or its interests. Whether SONZA rescinded the Agreement or resigned from work does not determine his status as employee or independent contractor.S.[39] A radio broadcast specialist who works under minimal supervision is an independent contractor. No doubt.[33] ABS-CBN did not instruct SONZA how to perform his job. the more likely the worker is considered an independent contractor. there would be no need for the parties to stipulate on benefits such as “SSS. The control test is the most important test our courts apply in distinguishing an employee from an independent contractor. The parties expressly agreed on such mode of payment. he would merely resign. Thus. Obviously.[21] Whatever benefits SONZA enjoyed arose from contract and not because of an employer-employee relationship. ABS-CBN agreed to pay SONZA’s talent fees as long as “AGENT and Jay Sonza shall faithfully and completely perform each condition of this Agreement. singing. and sounded on radio were outside ABS-CBN’s control. Since the management did not have control over the manner of performance of the skills of the artists. the manner by which SONZA terminated his relationship with ABS-CBN is immaterial.. is trained in dance. are so huge and out of the ordinary that they indicate more an independent contractual relationship rather than an employer-employee relationship.. SONZA contends that ABS-CBN exercised control over the means and methods of his work. ABS-CBN did not assign any other work to SONZA.how he delivered his lines and appeared on television . and acted in several theater and television productions prior to her affiliation with “Desde Mi Pueblo. WIPR could not assign Alberty work in addition to filming “Desde Mi Pueblo. she provided. SONZA acting alone possessed enough bargaining power to demand and receive such huge talent fees for his services.” Alberty’s argument is misplaced. the equipment. In either case. et al. v. Second.[37] SONZA further contends that ABS-CBN exercised control over his work by supplying all equipment and crew.” SONZA did actually resign from ABS-CBN but he also. In Vaughan. ABS-CBN agreed to pay SONZA such huge talent fees precisely because of SONZA’s unique skills.” All the talent fees and benefits paid to SONZA were the result of negotiations that led to the Agreement. jewelry. Under the Agreement. which SONZA admittedly possesses.[35] Clearly. SONZA claims that ABS-CBN’s power not to broadcast his shows proves ABS-CBN’s power over the means and methods of the performance of his work. crew and airtime are not the “tools and instrumentalities” SONZA needed to perform his job. If SONZA were ABS-CBN’s employee. ABS-CBN adhered to its undertaking in the Agreement to continue paying SONZA’s talent fees during the remaining life of the Agreement even if ABS-CBN cancelled SONZA’s programs through no fault of SONZA. ABS-CBN still paid him his talent fees. or obtained sponsors to provide. In any event. SONZA also points out that ABS-CBN granted him benefits and privileges “which he would not have enjoyed if he were truly the subject of a valid job contract. The converse holds true as well – the less control the hirer exercises. amounting to P317. Alberty provided the “tools and instrumentalities” necessary for her to perform. However. but these were not the primary tools that Alberty used to perform her particular function. recently held in Alberty-Vélez v. This circumstance indicates an independent contractual relationship between SONZA and ABS-CBN. either party may terminate their relationship. the costumes.” Alberty’s contracts with WIPR specifically provided that WIPR hired her “professional services as Hostess for the Program Desde Mi Pueblo. ABS-CBN could not terminate or discipline SONZA even if the means and methods of performance of his work .” Second. Payment of Wages ABS-CBN directly paid SONZA his monthly talent fees with no part of his fees going to MJMDC.[25] SONZA assails the Labor Arbiter’s interpretation of his rescission of the Agreement as an admission that he is not an employee of ABS-CBN. ABS-CBN could not retrench SONZA because ABS-CBN remained obligated to pay SONZA’s talent fees during the life of the Agreement. This proves that ABS-CBN’s control was limited only to the result of SONZA’s work.[40] SONZA’s work as television and radio program host required special skills and talent. SONZA urges us to rule that he was ABS-CBN’s employee because ABS-CBN subjected him to its rules and standards of performance. The United States Court of Appeals.000 monthly in the second and third year.”[34] ABS-CBN’s sole concern was the quality of the shows and their standing in the ratings. such as retrenchment to prevent losses as provided under labor laws. to whom MJMDC would have to turn over any talent fee accruing under the Agreement. The greater the supervision and control the hirer exercises. The Agreement required SONZA to attend only rehearsals and tapings of the shows. Warner. et al. We find that ABS-CBN was not involved in the actual performance that produced the finished product of SONZA’s work. ABS-CBN’s right not to broadcast SONZA’s show. Corporación De Puerto Rico Para La Difusión Pública (“WIPR”)[27] that a television program host is an independent contractor. or even with the quality or product of his work.did not meet ABS-CBN’s approval. The equipment necessary for Alberty to conduct her job as host of “Desde Mi Pueblo” related to her appearance on the show. SONZA’s letter clearly bears this out. SONZA admits that even after ABS-CBN ceased broadcasting his programs. court: Several factors favor classifying Alberty as an independent contractor. as president of MJMDC.. it could only control the result of the work by deleting objectionable features.[29] This test is based on the extent of control the hirer exercises over a worker. and other image-related supplies and services necessary for her appearance. SONZA asserts that this mode of fee payment shows that he was an employee of ABS-CBN. rescinded the Agreement.[23] During the life of the Agreement. D. Specifically. How SONZA delivered his lines.and post-production staff meetings. ABS-CBN supplied the equipment. However. We must consider all the circumstances of the relationship. x x x and 13th month pay”[20] which the law automatically incorporates into every employer-employee contract. of an independent contractual relationship. ABS-CBN must still pay SONZA’s talent fees in full until the expiry of the Agreement. The payment of talent fees directly to SONZA and not to MJMDC does not negate the status of SONZA as an independent contractor. All that ABS-CBN could do is not to broadcast SONZA’s show but ABS-CBN must still pay his talent fees in full. Alberty disputes that this factor favors independent contractor status because WIPR provided the “equipment necessary to tape the show. taught with the drama department at the University of Puerto Rico. with the control test being the most important element.[22] SONZA’s talent fees.[26] However. The power to bargain talent fees way above the salary scales of ordinary employees is a circumstance indicative. whether to broadcast the final product or not. The records do not show that ABS-CBN exercised any supervision and control over how SONZA utilized his skills and talent in his shows.”[24] Even if it suffered severe business losses. the more likely the worker is deemed an employee. as well as pre. we find that SONZA is not an employee but an independent contractor. x x x Third. SONZA did not have to render eight hours of work per day. talent and celebrity status not possessed by ordinary employees. x x x[28] Emphasis supplied) Applying the control test to the present case. the method of selecting and engaging SONZA does not conclusively determine his status. the Agreement prohibited SONZA from criticizing in his shows ABS-CBN or its interests. [30] First. ABS-CBN did not exercise control over the means and methods of performance of SONZA’s work. SONZA’s argument is misplaced. MJMDC is the AGENT of SONZA. SONZA only needed his skills and talent. Alberty possesses a master’s degree in public communications and journalism. ABS-CBN’s sole concern was for SONZA to display his talent during the airing of the programs. Medicare. Power of Dismissal For violation of any provision of the Agreement. ABS-CBN merely reserved the right to modify the program format and airtime schedule “for more effective programming. independent contractors could never work on collaborative projects because other individuals often provide the equipment required for different aspects of the collaboration.” There is no evidence that WIPR assigned Alberty tasks in addition to work related to these tapings. Clearly. ABSCBN could not dismiss or even discipline SONZA. SONZA failed to show that ABS-CBN could terminate his services on grounds other than breach of contract. ABS-CBN was still obligated to pay SONZA’s talent fees. First. burdened as it was by the obligation to continue paying in full SONZA’s talent fees. crew and airtime needed to broadcast the “Mel & Jay” programs. x x x In this regard. even if ABS-CBN was completely dissatisfied with the means and methods of SONZA’s performance of his work. [38] Even though ABS-CBN provided SONZA with the place of work and the necessary equipment.[31] ABS-CBN could not dictate the contents of SONZA’s script. First Circuit. Plainly. B. Power of Control Since there is no local precedent on whether a radio and television program host is an employee or an independent contractor. SONZA was still an independent contractor since ABS-CBN did not supervise and control his work. SONZA claims that this indicates ABS-CBN’s control “not only [over] his manner of work but also the quality of his work. We quote the following findings of the U. we refer to foreign case law in analyzing the present case. Although ABS-CBN did have the option not to broadcast SONZA’s show.” Labor Standards | To digest (old cases) | Ajean Tuazon| 74 .[36] the United States Circuit Court of Appeals ruled that vaudeville performers were independent contractors although the management reserved the right to delete objectionable features in their shows. The Labor Arbiter stated that “if it were true that complainant was really an employee. If we accepted this argument.

headed and managed by SONZA. Being an exclusive talent does not by itself mean that SONZA is an employee of ABS-CBN. the technicalities of law and the rules obtaining in the courts of law do not strictly apply in proceedings before a Labor Arbiter. Policy Instruction No. The President and General Manager of MJMDC is SONZA himself. Exempted from the VAT are those under an employer-employee relationship. MJMDC. The Agreement expressly states that MJMDC acted as the “AGENT” of SONZA. The hirer. which is owned. In short. While SONZA failed to cross-examine ABS-CBN’s witnesses. but simply to protect the investment of the broadcast station. MJMDC is a management company devoted exclusively to managing the careers of SONZA and his broadcast partner. not to employees of radio and television stations. This argument is futile. Submission of Position Papers/Memorandum xxx These verified position papers shall cover only those claims and causes of action raised in the complaint excluding those that may have been amicably settled. television and radio broadcasters differently.[50] The Labor Arbiter can decide a case based solely on the position papers and the supporting documents without a formal trial. which are top-rating television and radio programs that comply with standards of the industry. which stands for Mel and Jay Management and Development Corporation. The right of labor to security of tenure as guaranteed in the Constitution[53] arises only if there is an employeremployee relationship under labor laws. An individual like an artist or talent has a right to render his services without any one controlling the means and methods by which he performs his art or craft. 40 is a mere executive issuance which does not have the force and effect of law. if any from any party or witness. To hold that every person who renders services to another for a fee is an employee . including but not limited to the subpoena of relevant documentary evidence. Clearly. MJMDC as Agent of SONZA SONZA protests the Labor Arbiter’s finding that he is a talent of MJMDC. vs. Not every performance of services for a fee creates an employer-employee relationship. The law makes the principal responsible to the employees of the “labor-only contractor” as if the principal itself directly hired or employed the employees.[46] This practice is not designed to control the means and methods of work of the talent. At this stage. In the broadcast industry. the rules and standards of performance referred to in the Agreement are those applicable to talents and not to employees of ABS-CBN. Determination of Necessity of Hearing. expertise and talent. time and effort “in building up its talents as well as the programs they appear in and thus expects that said talents remain exclusive with the station for a commensurate period of time. As SONZA admits. 40 determines SONZA’s status. There is no legal presumption that Policy Instruction No. The right of labor to security of tenure cannot operate to deprive an individual. 40 issued by then Minister of Labor Blas Ople on 8 January 1979 finally settled the status of workers in the broadcast industry. Subject to the requirements of due process. the Labor Arbiter shall motu propio determine whether there is need for a formal trial or hearing. It is absurd to hold that MJMDC. 8241.”[42] The KBP code applies to broadcasters. This is not conducive to freedom of the press.. The Labor Arbiter has the discretion whether to conduct a formal (trial-type) hearing after the submission of the position papers of the parties.[55] as amended by Republic Act No. (2) the employee who is ostensibly under the employ of the “labor-only” contractor. and shall be accompanied by all supporting documents including the affidavits of their respective witnesses which shall take the place of the latter’s direct testimony. SONZA failed to show that these rules controlled his performance. the “labor-only” contractor is the agent of the principal. not even job contracting. he may. Under the NIRC. not all rules imposed by the hiring party on the hired party indicate that the latter is an employee of the former. 40 is not binding on this Court. is a corporation organized and owned by SONZA and TIANGCO. possessed with special skills. which has been adopted by the COMPANY (ABS-CBN) as its Code of Ethics. and those that control or fix the methodology and bind or restrict the party hired to the use of such means. MJMDC does not have any other function apart from acting as agent of SONZA or TIANGCO to promote their careers in the broadcast and television industry. SONZA views the affidavits of these witnesses as misleading and irrelevant. which contracted out his services to ABSCBN. Under this scheme. The broadcast station normally spends substantial amounts of money. expertise or talent enjoy the freedom to offer their services as independent contractors. not every form of control that a party reserves to himself over the conduct of the other party in relation to the services being rendered may be accorded the effect of establishing an employer-employee relationship. If radio and television program hosts can render their services only as employees. especially when the classification has no basis either in law or in fact.to give meaning to the security of tenure clause . who himself is represented by MJMDC. MJMDC merely acted as SONZA’s agent. he cannot be faulted for not conducting a formal trial. In a labor-only contract. Labor Standards | To digest (old cases) | Ajean Tuazon| 75 . which aim only to promote the result.[44] The Vaughan case also held that one could still be an independent contractor although the hirer reserved certain supervision to insure the attainment of the desired result.will lead to absurd results. SONZA insists that the “exclusivity clause” in the Agreement is the most extreme form of control which ABSCBN exercised over him. namely. The classification of workers in the broadcast industry into only two groups under Policy Instruction No.[52] If the Labor Arbiter is confident that he can rely on the documents before him. The Labor Arbiter ruled that as a talent of MJMDC. Talents as Independent Contractors ABS-CBN claims that there exists a prevailing practice in the broadcast and entertainment industries to treat talents like SONZA as independent contractors. the huge talent fees partially compensates for exclusivity. The records do not show that MJMDC acted as ABS-CBN’s agent. must not deprive the one hired from performing his services according to his own initiative.”[47] Normally.The Agreement stipulates that SONZA shall abide with the rules and standards of performance “covering talents”[41] of ABS-CBN. thus: Section 3. Broadcasters are not necessarily employees of radio and television stations. NLRC. Different Tax Treatment of Talents and Broadcasters The National Internal Revenue Code (“NIRC”)[54] in relation to Republic Act No. there are three parties involved: (1) the “labor-only” contractor. The proceedings before a Labor Arbiter are non-litigious in nature. as in the present case. SONZA is not an employee of ABS-CBN. The code of conduct imposed on SONZA under the Agreement refers to the “Television and Radio Code of the Kapisanan ng mga Broadcaster sa Pilipinas (KBP). the types of employees in the broadcast industry are the station and program employees.[48] These circumstances are not present in this case. That would make MJMDC the agent of both ABS-CBN and SONZA. 7716. we held that: Logically. The right to life and livelihood guarantees this freedom to contract as independent contractors. unless under the particular circumstances of the case. Even an independent contractor can validly provide his services exclusively to the hiring party.[49] Policy Instruction No. ask clarificatory questions to further elicit facts or information. The facts of this case fall squarely with the case of Insular Life Assurance Co. it is void for violating the right of labor to security of tenure. these professionals are subject to the 10% value-added tax (“VAT”) on services they render. SONZA insists that MJMDC is a “labor-only” contractor and ABS-CBN is his employer. x x x Section 4. In said case. the station owners and managers can dictate to the radio and television hosts what they say in their shows.[43] In this case. Ltd. the documents alone are insufficient. a much higher fee is paid to talents who agree to work exclusively for a particular radio or television station. however. 40 SONZA argues that Policy Instruction No. The hiring of exclusive talents is a widespread and accepted practice in the entertainment industry. which address both the result and the means used to achieve it. exclusivity is not necessarily the same as control.[57] This different tax treatment accorded to talents and broadcasters bolters our conclusion that they are independent contractors. controlled.[56] treats talents. This Court will not interpret the right of labor to security of tenure to compel artists and talents to render their services only as employees. The Agreement does not require SONZA to comply with the rules and standards of performance prescribed for employees of ABS-CBN. We find that these general rules are merely guidelines towards the achievement of the mutually desired result.[51] The holding of a formal hearing or trial is something that the parties cannot demand as a matter of right. and (3) the principal who is deemed the real employer. Affidavits of ABS-CBN’s Witnesses SONZA also faults the Labor Arbiter for admitting the affidavits of Socorro Vidanes and Rolando Cruz without giving his counsel the opportunity to cross-examine these witnesses. the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired result without dictating the means or methods to be employed in attaining it. Under this policy. SONZA brands these witnesses as incompetent to attest on the prevailing practice in the radio and television industry. he was never prevented from denying or refuting the allegations in the affidavits. There are essentially only two parties involved under the Agreement. The first. Individuals with special skills. MJMDC is not engaged in any other business. SONZA argues that if such practice exists. – Immediately after the submission of the parties of their position papers/memorandum. We have ruled that: Further. A mere executive issuance cannot exclude independent contractors from the class of service providers to the broadcast industry. In any event. acted as agent of ABS-CBN in entering into the Agreement with SONZA. at his discretion and for the purpose of making such determination. SONZA and ABS-CBN. TIANGCO. provided all the basic elements of a contractual relationship are present as in this case. create no employer-employee relationship unlike the second.[45] Lastly. of his right to contract as an independent contractor.

would apply for availment of the package within the next two months. Dominguez’s work as telephone operator was taken over by the personnel of the accounting department. Sr. SO ORDERED. the three (3) employees filed their respective complaints with the National Labor Relations Commission (NLRC) for illegal dismissal and damages against Wack Wack and BSMI. headed by its President. In a Decision[20] dated January 25. Microstar Business and Management Services. Respondent Martina B. thus.[15] Pursuant to the Agreement. They accepted the separation package upon the assurance that they would be given their former work and assignments once the Food and Beverage Department of Wack Wack resumes its operations. (Chairman). With respect to Baluyot. proportionate 13th month pay. On the other hand. nurses. 3. SP No. Pending Wack Wack’s approval of the proposed abolition of the position of Chief Porter. 1997. The Wack Wack Golf Employees Union branded the suspension of operations of the F & B Department as arbitrary. Dominguez. or be assigned to another position. separation pay. G. The complainants averred that they were dismissed without cause. Notices to 54 employees (out of a complement of 85 employees in the department) were also sent out. An Agreement[2] was forged whereby a special separation benefit/retirement package for interested Wack Wack employees. said employees shall also receive the other benefits due them. SR. so he was offered the position of Caddie Master Aide with a starting salary of P5. That. her separation pay amounted to P91. discriminatory and constitutive of union-busting. and Azcuna. and assisted by its counsel. Wack Wack filed a notice with the Department of Labor and Employment (DOLE) on April 14. computed without premium. volunteered to avail of the separation package. The UNION and the affected employees of F & B who are members of the UNION hereby agree to accept the special separation benefit package agreed upon between the CLUB management on the one hand. 1998. and BUSINESS STAFFING AND MANAGEMENT. other than F & B employees.00. 5. messengers.010. in addition.290.00 a month.Nature of SONZA’s Claims SONZA seeks the recovery of allegedly unpaid talent fees. 2nd Division) CALLEJO. agriculturist. Bienvenido Juan. 149793. service incentive leave. Inc. Cagasan was Wack Wack’s Personnel Officer who. 1998. financial management. SONZA’s cause of action is for breach of contract which is intrinsically a civil dispute cognizable by the regular courts. They were eventually hired by BSMI to their former positions in Wack Wack as project employees and were issued probationary contracts. On October 15. Clearly.R.53. BSMI undertook an organizational analysis and manpower evaluation to determine its efficacy. golf bag attendants. signified his willingness to avail of the said early retirement package. Baluyot declined the offer. 1997. and dismissed their complaints. We agree with the findings of the Labor Arbiter and the Court of Appeals that SONZA’s claims are all based on the May 1994 Agreement and stock option plan. and not on the Labor Code. Marvel Manpower Agency . in a Letter[10] dated January 16. namely. The UNION re-affirms and recognizes that it is the sole prerogative of the management of the Club to suspend part or all of its operations as may be necessitated by the exigencies of the situation and the general welfare of its membership. Sr. 3. In effect. merchandising. Management of materials and procurement functions.500. 1998. Thereafter.. In July 1998. 4. 1997.whose 19 employees are designated as sweepers. MARTINA G. the retired employees of Wack Wack by reason of their experience were given priority by BSMI in hiring. DOMINGUEZ. On October 21. in the amount equivalent to one-and-one-half months salary for every year of service. CARMENCITA F. however. 1996.R. operation management and the like. Baluyot decided not to accept the position of Caddie Master Aide. 1997. informing them that they need not report for work anymore after April 14. we DENY the petition. 2005 Apr 15. Ynares-Santiago. 1997 that it was going to suspend the operations of the Food and Beverage (F & B) Department one (1) month thereafter. likewise. All qualified employees who may have been separated from the service under the above package shall be considered under a priority basis for employment by concessionaires and/or contractors. The Club may even persuade an employeeapplicant for availment under the package to remain on his/her job.. Atty.84. the present case does not call for an application of the Labor Code provisions but an interpretation and implementation of the May 1994 Agreement. 2. the services of Dominguez and Cagasan were terminated. Wack Wack also engaged several contractors which were assigned in various operating functions of the club. Administrative Manager of Wack Wack. 2. 1998 addressed to Mr. which is scheduled for conversion to an All-Weather Championship golf course.J.116. It is.: This is a petition for review of the Resolution[1] of the Court of Appeals (CA) in CA-G. is cited as an example. In view of the reconstruction of the whole clubhouse complex. a fire destroyed a large portion of the main clubhouse of the Wack Wack Golf and Country Club (Wack Wack). utilities and gardeners. INC. 2000. concur. were held until the parties entered into an amicable settlement. The terms and conditions thereof reads as follows: 1. and the UNION officers and the UNION lawyer on the other. telephone operator. promotions. respondents Cagasan and Dominguez filed their respective applications[16] for employment with BSMI.[8] A Release and Quitclaim[9] was signed on September 30. 63658. and amounts due under the Employee Stock Option Plan. Management and maintenance of building facilities. The last one to avail of the separation package was Crisanto Baluyot. agreed that if a sufficient number of employees. Labor Standards | To digest (old cases) | Ajean Tuazon| 76 . The total amount of P688.[17] Aside from BSMI.66 as separation pay and other economic benefits amounting to P17. and to streamline its operations.[3] Respondent Carmencita F. if any. 4. SP No. including its kitchen. That the affected F & B employees who have already signified intention to be separated from the service under the special separation benefit package shall receive their separation pay as soon as possible. Golf operations management. Thus. C. was the first to avail of the special separation package. De Quiroz. The position. The closure of the West Course. Petitioner. Panganiban. 1997. golf director. her tasks as personnel officer were likewise being taken cared of by the different management service contractors. in separate Letters[19] dated February 27. The assailed Decision of the Court of Appeals dated 26 March 1999 in CAG.[7] On September 30. BSMI saw that the positions of Cagasan and Dominguez were redundant. Davide. so they filed a notice of strike with the DOLE’s National Conciliation and Mediation Board (NCMB). Several meetings between the officers of Wack Wack and the Union. drive range attendant. 1997 but that they would still be paid their salaries up to May 14..327. was among those recommended to be abolished by the BSMI.R. a corporation engaged in the business as Management Service Consultant undertaking and managing for a fee projects which are specialized and technical in character like marketing. 2. 4. In the case of respondent Cagasan. workers and secretaries. and even by the Club upon full resumption of operations. dismissing the petition for certiorari before it for being insufficient in form and the subsequent resolution denying the motion for reconsideration thereof. 13th month pay. 1997. who was then working in the Administrative Department of Wack Wack. however. technical support engineer. Management of food and beverage operation. who. Inc. while economic benefits amounted to P6. Costs against petitioner. travel allowance.[4] Computed at 1½ months for every year of service pursuant to the Agreement.[5] On September 18.50. the cash equivalent of unused vacation and sick leave credits.. J. Crisanto Baluyot. the respondents therein alleged that the dismissal of the complainants were made pursuant to a study and evaluation of the different jobs and positions and found them to be redundant. to wit: 1.495.. and other benefits. That the same package shall. 3.[14] BSMI was to provide management services for Wack Wack in the following operational areas: 1.000. The processing and handling of benefits for these other employees shall be done over a transition period within one year. The undisputed antecedent facts are as follows: On November 29. upon the recommendation of the UNION.. City Service Corporation – contractor for janitorial services for the whole club. the Club may no longer go through the process of formally notifying the Department of Labor. whose 15 employees are designated in the Finance and Accounting departments. she received from Wack Wack the amount of P469. No. especially those in the F & B Department was offered. Jr. locker attendants. Baluyot was temporarily accepted to the position with a monthly salary of P12. the Labor Arbiter found that the dismissal of Dominguez and Cagasan was for a valid and authorized cause. JJ. Skills and Talent Employment Promotion (STEP) whose 90 workers are designated as locker attendants. CAGASAN.[58] WHEREFORE. They were further told that they would be informed once full operations in Wack Wack resume.30[11] was received and the Release and Quitclaim[12] signed on May 14. he applied for the position of Chief Porter on May 12. (BSMI). versus NATIONAL LABOR RELATIONS COMMISSION. ([2005V396] WACK WACK GOLF & COUNTRY CLUB. Wack Wack entered into a Management Contract[13] with Business Staffing and Management. In the course of its assessment. Pedro T. Dominguez signed a Release and Quitclaim[6] in favor of Wack Wack. Respondents. signing bonus.. 49190 is AFFIRMED. on the other hand. likewise. BSMI continued with its plan to abolish the said position of Chief Porter and Baluyot was dismissed from the service.[18] Due to these various management service contracts. be made available to other employees who are members of the bargaining unit and who may or may not be affected by future similar suspensions of operations. To provide and undertake administrative and support services for the [said] projects. regardless of the number of years of service rendered.

Such move really are intended to streamline operations. their jobs can be assigned to some other personnel. the NLRC rendered its Decision[24] ordering Wack Wack to reinstate Carmencita F. and while the swift unclogging of court dockets is a laudable objective. he should immediately be reinstated to his former position as Chief Porter or Caddie Master. The NLRC directed Wack Wack to reinstate the respondents and pay their backwages since “Business Staffing and Management. offered to the other employees who may wish to avail of the separation package due to the reconstruction of Wack Wack. It has nothing to do with the grievance of the complainants with their employer. v. 2000. however. docketed as CA-G. (b) the dismissal of private respondents was made pursuant to the petitioner’s exercise of its management prerogatives. [27] Likewise. considering that the NLRC committed grave abuse of discretion in ordering Wack Wack to reinstate the respondents Cagasan and Dominguez. 1999.[28] A perusal of the petition which is attached to the records reveal that BSMI ascribes grave abuse of discretion on the part of the NLRC in ruling that: (a) the private respondents have regained their employment pursuant to the Agreement between Wack Wack and the Wack Wack Golf Employees Union. (BSMI) is a contractor who [merely] supplies workers to respondent Wack Wack. It anchored its ruling on the Agreement dated June 16. B. the same procedure is repeated before the golf sets are loaded once more into the vehicle.R. considering that the records are now before us. in the instant case. docketed as CA-G. the merits of the case constitute special or compelling reasons for us to overlook the technical rules in this case. when in fact his position as Chief Porter was abolished pursuant to a bona fide reorganization of Wack Wack. 63553 pending with the Special Fourth Division. consequently.[22] The Labor Arbiter found that the dismissal of Baluyot as Chief Porter was unjustified and can not be considered redundant in the case at bar. particularly Section 4[25] thereof. Dominguez and Martina Cagasan to their positions in respondent Wack Wack Golf & Country Club with full backwages and other benefits from the date of their dismissal until actually reinstated. Indeed. BSMI also appealed to the NLRC. It further added that it shares the view of the petitioner. SP No. It further asserts that its petition for certiorari is meritorious. has accumulated in the sum of P180. however.[31] whereas. Inc. The caddie master receives them and counts the number of clubs inside the golf set. RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION AND DENIAL OF DUE PROCESS IN RULING THAT RESPONDENT BSMI IS NOT AN INDEPENDENT CONTRACTOR BUT A MERE SUPPLIER OF WORKERS TO THE PETITIONER. the Labor Arbiter found that while the position of chief porter had been abolished.[32] the Court recognized the authority of the general manager to sue on behalf of the corporation and to sign the requisite verification and certification of non-forum shopping.” Wack Wack and BSMI filed a motion for reconsideration which was denied in the Resolution[26] dated December 15. 63553. it nevertheless must not be met at the expense of substantial justice. With the dismissal of its petition for certiorari before the CA. SP No. i. who will be performing dual functions and does save Wack Wack money. RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION AND DENIAL OF DUE PROCESS IN HOLDING THAT RESPONDENTS CAGASAN AND DOMINGUEZ HAVE REGAINED THEIR JOBS OR EMPLOYMENT PURSUANT TO THE AGREEMENT BETWEEN PETITIONER AND WACK WACK GOLF EMPLOYEES UNION. A motion for reconsideration was.The position of personnel manager occupied by Martina Cagasan was redundated as it is allegedly not necessary. This is feasible on account of the fact that they are functions pertaining to administrative work. Dominguez and Martina Cagasan for lack of merit. This special separation package was thought of and agreed by the two parties (Wack Wack and the Union) after a series of discussions and negotiations to avert any labor unrest due to the closure of Wack Wack. a board resolution. docketed as CAG. Wack Wack.[34] It was. Moreover. and (c) who are the parties liable for the reinstatement of the complainants and the payment of backwages. that the assailed resolutions of the NLRC are tainted with legal infirmities. It asserted that in the interest of substantial justice. All other claims are dismissed for lack of merit. RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION AND DENIAL OF DUE PROCESS IN HOLDING PETITIONER LIABLE FOR THE REINSTATEMENT OF RESPONDENTS CAGASAN AND DOMINGUEZ AND FOR THE PAYMENT OF THEIR SUPPOSED BACKWAGES DESPITE THE ABSENCE OF EMPLOYER-EMPLOYEE RELATION BETWEEN THEM.. the CA (Twelfth Division) dismissed the petition on the ground that the petitioner therein failed to attach an Affidavit of Service as required in Section 11. the Court ruled that the subsequent submission of the requisite documents constituted substantial compliance with procedural rules. the CA denied petitioner’s motion for reconsideration. SP No. just to stress that there is no guaranty of perpetual employment in favor of the complainants. alleging that the Labor Arbiter committed grave abuse of discretion in finding Baluyot’s dismissal to be illegal.[33] While it is true that rules of procedure are intended to promote rather than frustrate the ends of justice.R. by conniving with each other to render useless and meaningless the Agreement. BSMI filed a Comment[30] to the Motion for Reconsideration of the petitioner. to the effect. also urging the CA to set aside technicalities and to consider the legal issues involved: (a) whether or not there is a guaranty of employment in favor of the complainants under the Agreement between the petitioner and the Union. Consequently. because her functions will be taken over [by] the field superintendent and the company’s personnel and operations manager. 2001. filed appending thereto the requisite documents of proof of authority. that they were promised to be rehired upon the full resumption of operations of Wack Wack. regardless of the number of years of service. The applications which were similarly worded read as follows: TO : WACK WACK GOLF & COUNTRY CLUB BOARD OF DIRECTORS AND MANAGEMENT Based on the information that the Club and the employees’ Union have reached an agreement on a special separation benefit package equivalent to one-and-one-half months salary for every year of service. and paid his backwages which. 63658 alleging the following: A.[29] On April 3. Court of Appeals. (b) whether or not the termination of the employment of the complainants. The work of Carmencita Dominguez on the other hand as telephone operator will be taken over by the accounting department personnel. It must be recalled that said respondents availed of the special separation package offered by the petitioner. The porters. 1997 reached between the Union and Wack Wack. complainants Dominguez and Cagasan filed a Partial Appeal on the ground of prima facie abuse of discretion on the part of the Labor Arbiter and serious errors in his findings of facts and law. BSMI also assailed the resolutions of the NLRC and filed its own petition for certiorari with the CA. reversible error for the CA to have dismissed the petition for certiorari before it. Respondents do not belong to the F & B Department and yet. however. There is ample jurisprudence holding that the subsequent and substantial compliance of an appellant may call for the relaxation of the rules of procedure in the interest of justice. The general manager is also one person who is in the best position to know the state of affairs of the corporation. and (c) the petitioner (BSMI) is liable for the reinstatement of private respondents and the payment of their backwages. but was. likewise. consequently filed a petition for certiorari with the Court of Appeals. upon instructions from the chief porter. the petitioner by virtue of the NLRC decision is compelled to reinstate respondents Cagasan and Dominguez and pay their full backwages from the time of their dismissal until actual reinstatement when the attendant circumstances.R. Finding Crisanto Baluyot’s dismissal to be illegal. judgment is hereby rendered dismissing the complaints of Carmencita F. therefore. The Labor Arbiter therefore found Baluyot’s dismissal to be illegal. After the game. For this reason. There is merit in the petition. and directed the respondents to file a comment thereon.00 by BSMI. C. is legal and valid. it was also constrained to file its own petition for certiorari with the CA. now the petitioner. It was not motivated by factors other than the promotion of the interest and welfare of the company. the verification and certification against forum shopping was insufficient for having been executed by the general manager who claimed to be the duly-authorized representative of the petitioner. It was also error for the CA not to admit the requisite proof of authority when in the Novelty case. 2000. In Novelty Philippines. as of December 31. they are still necessary in the operations of Wack Wack. On September 27. It points out that BSMI has filed its petition for certiorari before the CA one day late and yet.000. and to pay their backwages when indubitable evidence shows that the said respondents were no longer employees of Wack Wack when they filed their complaints with the Labor Arbiter. the Special Fourth Division admitted the petition in the interest of substantial justice.e.[21] As to Baluyot.[23] Since Baluyot no longer appealed the decision. based on redundancy. Inc. on their own volition opted to avail of the special separation package. It was a means resorted to in order to unduly sever Baluyot’s relationship with BSMI without justifiable cause. the mere lack of proof of authority of Wack Wack’s General Manager to sign the certificate of non-forum shopping was considered fatal by the CA’s Twelfth Division. While admittedly. Rule 13 of the 1997 Rules of Civil Procedure. we deem it necessary to resolve the instant case in order to ensure harmony in the rulings and expediency. but did not show any proof of authority. show that the respondents had no cause of action against the petitioner for illegal dismissal and damages. the CA should decide the case on its merits. They asserted that Wack Wack and BSMI should not avoid responsibility to their employment. are the ones who bring down the golf bags of the players from the vehicle. assailing the twin resolutions of the CA. for employees who have been affected and may be affected by ongoing as well as Labor Standards | To digest (old cases) | Ajean Tuazon| 77 .[35] Priority was given to the employees of the F & B Department. respondent Wack Wack. 2001. The petitioner is now before the Court. The ordinary recourse for us to take is to remand the case to the CA for proper disposition on the merits. The dispositive portion of the decision reads as follows: CONFORMABLY WITH THE FOREGOING. Their claims were anchored on the Agreement between the Union and management. On August 31. Their functions were one and the same. the caddie master aide had been created.

. …[40] When the respondents voluntarily signed their quitclaims and accepted the separation package offered by the petitioner. JOVITO LOON. JUNJIE LAVISTE. ANTONIO PATALINGHUG.forthcoming Club renovation. ALEJANDRO CATANDEJAN. the transaction must be recognized as a valid and binding undertaking. EDWIN SASAN. ROSENDO MONDARES. JOVENTINO CANOOG. There being no employer-employee relationship between the petitioner and respondents Cagasan and Dominguez. engaged in the management of projects. RAUL OYAO. VENERANDO ROAMAR. and payment of the contractor’s workers. This brings us to the threshold issue on whether or not BSMI is an independent contractor or a labor-only contractor. such as. MARIO BOLO.[41] There is indubitable evidence showing that BSMI is an independent contractor. DARIO DIGNOS. ALEXANDER HERA. EDUARDO DELA VEGA. EDDIE SELLE. FAUSTO BARGAYO. the transaction must be recognized as being a valid and binding undertaking. There is no showing that the execution thereof was tainted with deceit or coercion. and the consideration for the quitclaim is credible and reasonable. HENRY GEDARO. ALEX JUEN. which the parties are bound are considered valid. the nature and extent of the work. jobs and other kinds of business ventures. ARTEMIO BONGO. EDWARD FLORES. there can be no doubt as to the existence of an employer-employee relationship between the contractor and the workers. ALBERTO EMBONG. IGNACIO MISA. ORLANDO REGIS. They held responsible positions in the petitioner-employer. manner and terms of payment. ANTONIO BASALAN. MELCHOR FREGLO. PAUL CABILLADA. the respondents signed their respective release and quitclaims after receiving their money benefits. RAUL BORRES. FELIX ORDENEZA. BSMI was impelled to terminate the services of the respondents on the ground of redundancy. GERALDO ROQUE. ALLAN AGUSTIN. The Resolutions of the Court of Appeals and the NLRC are SET ASIDE and REVERSED. business operations. work premises and other materials which are necessary in the conduct of the business. MARIANO REPOLLO. WHEREFORE.[44] In accordance with its own recruitment policies. VENGELITO FRIAS. the petition is GRANTED. GERARDO BUTALID. ANTONIO ABELLA. ROY AVILA. Its Articles of Incorporation proves its sufficient capitalization.. equipments. VICTOR MAGLASANG. RUBEN TALABA. thenceforth. MELENCIO DURANO. ALLAN AGUSTIN. GONZALO RORACEÑA. BALTAZAR LABIO. in the case of In re Petition for Certification Election Among the Regular Rank-and-File Employees Workers of Byron-Jackson (BJ) Services International Incorporated. EDWIN SASAN.[42] recognized BSMI as an independent contractor. FELICIANO TORRES. ERVIN HYROSA. Where the person making the waiver has done so voluntarily. JORGE GAMUZARNO. The ruling of the NLRC is wrong. ROGELIO ABAPO. EDDIE CATAB. ALEX ANABIEZA. ANNIAS JUAMO-AS. Labor Secretary Bienvenido Laguesma. the petitioner cannot be validly ordered to reinstate the respondents and pay them their claims for backwages. MA. free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof. Nowhere does it appear in the Agreement that the petitioner assured the respondents of continuous employment in Wack Wack.. ISAIAS BRANZUELA. WARLITO DEMANA. the term and duration of the relationship. VICENTE ALIN. NLRC [39] that: Not all waivers and quitclaims are invalid as against public policy. Inc. VICTORINO TAGALOG. ROGELIO CRUZ. GUMERSINDO ALCONTIN. ANICETO LUDIA. CLYDE PRADO. MARCELINO CARACENA. DANILO ANABIEZA. DOISEDERIO GEMPERAO. MAERC Integrated Services. JOLITO ALIN. NICOLAS RIBO. and Emerberto Orque. construction and related activities and reportedly even for those who may not be affected but wish to avail of an early retirement under the above package arrangement. ZOSIMO BAOBAO. CONSORCIO MANLOLOYO. EDWIN DIGNOS. MARIO CEREZA. ARTURO HEYROSA. It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible person. ROMEO LOMBOG. ALBERT LASPIÑAS. ZOSIMO BINGAS. LYNDON BASALAN. DINDO MISA. RANILO VILLAREAL. FELICIANO AGBAY. VICTOR TENEDERO. ERNESTO SINGSON. DOMINADOR CAPARIDA. NICANOR CUIZON.e. EDWARD COLINA. VICTOR CELACIO. ADELO CANTILLAS. after a study and evaluation of its personnel organization. BERNARDINO REGIDOR. TOMACITO DE CASTRO. SR. JR. SINFORIANO CANTAGO. MANUEL CINCO. ROSALIO DURAN. tools. MARCELINO JABAGAT. RICKY ALCONZA. TINGA. WILFREDO MAGALONA. Further. and the consideration for the quitclaim is credible and reasonable. I hereby register my desire to be separated from the Club and receive the benefits under the above stated package. giving the said retired employees some degree of priority merely because of their work experience with the petitioner. In December 1993.[38] We reiterate what was stated in the case of Periquet v. HIPOLITO VIDAS. The complaints of respondents Cagasan and Dominguez are DISMISSED. ROGELIO PRADO. the latter have no cause of action for illegal dismissal and damages against the petitioner.. JOSELITO CAPILINA.” i. LORETO NUÑEZ. CALLEJO. PROSPERO MAGLASANG. machineries. the respondents were paid hefty amounts of separation pay indicating that their separation from the company was for a valuable consideration. the petitioner remains to be the principal employer of the respondents and liable for their reinstatement and payment of backwages. REYNALDO LAVANDERO. ROMEO DURAN. HECTOR CABAÑOG. ARSENIO LOGARTA. ANICETO GEMPERAO. DIOSDADO BARRIGA. good custom. but not necessarily confined to. ALIPIO TIROL. REGINO GABUYA. JUNEL CABATINGAN. MEDARDO SINGSON. EDERLITO A. LEONARDO MARTURILLAS. PUNO (Associate Justice. VICTOR VERANO. VIRGILIO ZANORIA. with full understanding of what he was doing. Labor Standards | To digest (old cases) | Ajean Tuazon| 78 . firing. RODOLFO PAHUGOT. FELIMON ECHAVEZ. LEONARDO BONGO. GARRY DIGNOS. VICENTE CELACIO. SR. AURELIO JURPACIO. TEODULO NIQUE. the control and supervision of the work to another. VITO SEALANA. appliances. ANTONIO LAOROMILLA. and the mode. ALBERTO ANOBA. RAMON ROSALES. JOSE REY INOT. JIMMY CABIGAS. LOLITO COCIDO. vs. SASING MORENO. ANANIAS ALCONTIN. functions. EDGARDO DAGMAYAN. EULOGIO GESTOPA. that the law will step in to annul the questionable transaction. LEODEGARIO DOLLECIN. JOEL PEPITO. they. VICENTE DEVILLERES. REUYAN HERCULANO. RUDY TAGALOG. NOMER SANCHEZ. EDGARDO NUÑEZ. ROLANDO ESPINA. DANILO R. REYNALDO LUDIA. FERNANDO REMEDIO. EDGAR CORTES. ALLAN RAGO. JOSE DIOCAMPO. ROBERTO TORRES. the employer’s power with respect to the hiring. RONIE GONZAGA. petitioner. already ceased to be employees of the petitioner. or the terms of settlement are unconscionable on its face. EFRAIM YUBAL.[43] BSMI admitted that it employed the respondents. it is binding on the parties and may not later be disowned simply because of a change of mind. JUANITO GARCES. ZOSIMO CARARATON. ALEJANDRO ANNABIEZA. Chairman). JOEBE BOY DAYON. ANTHONY ARANETA. LEONARDO NATAD. SILVINO LIMBAGA. RENATO MENDOZA. But where it is shown that the person making the waiver did so voluntarily. JUANITO GARCES. JOSE BANDIALAN. RAMON ARCALLANA. FERNANDO ANAJAO. BENJAMIN SAYSON. MARCELO CARACINA. FERMIN ALIVIANO. JESUS CAPANGPANGAN. RODRIGO ENERLAS. BIENVENIDO ROSARIO. RICARDO RAMAS. so they presumably understood the contents of the documents they signed.[36] Thereafter. CORLITO PESTAÑAS. No costs. EMERBERTO ORQUE. materials and labor. It cannot be said that the respondents in the case at bar did not fully comprehend and realize the consequences of their acts. JEROME PRADO. TEODULO JUMAO-AS. CONRADO MESANQUE. the right to assign the performance of specified pieces of work. DENECIA PALAO. RUEL SUFRERENCIA. ALEJANDRO RANIDO.[37] As in contracts. a person who: (a) carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method. and in order to have a smooth transition of operations. RODRIGO BISNAR. several factors may be considered. ALFREDO GESTOPA. public policy and public order. SO ORDERED. PEDRO INOC. LINO TONGALAMOS. JOEL PEPITO. WILFREDO HORTEZUELA. whether or not the contractor is carrying on an independent business. FRANCISCO CARBONILLA. DIZON. The NLRC posits that BSMI is merely a supplier of workers or a labor-only contractor. and (b) has substantial capital or investment in the form of tools. ROMEO J. SERLITO NOYNAY. EL CID ICALINA. CHICO-NAZARIO ([2003V626] [1/2] San Miguel Corporation. WENCESLAO BACLOHON. Qualified employees were given priority in being hired by its concessionaires and/or contractors such as BSMI when it entered into a management contract with the petitioner. ALDRIN SUSON. (Associate Justice) WE CONCUR: REYNATO S. NESTOR REYNANTE. GAUDENCIO PESON. the control of the premises. FILEMON ECHAVEZ. TEOFILO RICARDO. JOVITO CATAB. POLEGARPO DEGAMO. these employment contracts. RUEL NAVARES. and has sufficient capital and resources to undertake its principal business. ALEX FLORES. Consequently. RAUL CABILLADA. EDUARDO LANGITA. LUCIANO RECOPELACION. An independent contractor is one who undertakes “job contracting. ALFRED NAPARATE. ARNELIO SUMALINOG. Herein respondents are not unlettered persons who need special protection. accepting the condition that they were hired by BSMI as probationary employees only. JOSE ZANORIA. the respondents were made to sign applications for employment. BALOCANO. If the agreement was voluntarily entered into and represents a reasonable settlement. MARCELO PESCADOR. hence. the duty to supply premises. This right to hire and fire is another element of the employer-employee relationship[45] which actually existed between the respondents and BSMI. Federation of Free Workers (FFW)-Byron Jackson Services Employees Chapter. the skill required. JAIME RUBIN. ROBERTO LAPIZ. morals. and not with Wack Wack. VICTORINO SENO. ROMMEL GUERERO. ALLAN ZANORIA. ROSALIO DURAN. JR. PAUL DUMAQUETA. WILFREDO ALIVIANO. As a legitimate job contractor. BIRNING REGIDOR. with a full understanding thereof. REY GESTOPA. RODOLFO CABALHUG. It had provided management services to various industrial and commercial business establishments. ROGELIO DIGNOS. CESAR ESCARIO.. PROCTUSO MAGALLANES. ELADIO TORRES. Jurisprudential holdings are to the effect that in determining the existence of an independent contractor relationship. JERRY CAPAROSO. ALFONSO ECHAVEZ. JR. MINITA V. PABLITO POLEGRATES. ALICIA AUSTRIA-MARTINEZ DANTE O. SAMUEL CASQUEJO. PEDRO BRIONES. these quitclaims amount to a valid and binding compromise agreement between the parties which deserve to be respected.. GABRIEL SALAS. MOISES SASAN. MARIO RANIS. ROGER SASING. Unfortunately. Not being contrary to law. JOSELITO MELENDEZ.

[14] SMC also paid the employer's share of the SSS and Medicare contributions.R. engagement and discharge of its personnel. No. classifying. equipment and fixed assets used in its business valued at P4.[2] He dismissed the complaints for illegal dismissal but ordered MAERC to pay complainants' separation benefits in the total amount of P2. ARISTON VELASCO. SMC cited its plans to phase out its segregation activities starting 1 June 1991 due to the installation of labor and cost-saving devices. It also appears that majority of the complainants had already been working for SMC long before the signing of the service contract between SMC and MAERC in 1988. until the services of the latter were terminated on 31 January 1988. NICANOR MANAYAGA. etc.926.000. ANICETO MONTERO. (respondent herein). (MAERC) to work in two (2) designated workplaces in Mandaue City: one.[9] This Court has invariably held that in ascertaining an employer-employee relationship.. complainants claimed that SMC stopped them from performing their jobs.TOTO MOSQUIDA. trucking and shipping any glass and/or metal containers and that it had listed in its general information sheet two hundred seventy-eight (278) workers. (b) the payment of wages. upon the instruction of SMC through its supervisors to make it appear that complainants were hired by MAERC. It appears that SMC entered into a Contract of Services with MAERC engaging its services on a non-exclusive basis for one (1) year beginning 1 February 1988. We find no basis to overturn the Court of Appeals and the NLRC. They were paid on a per piece or pakiao basis except for a few who worked as checkers and were paid on daily wage basis. the NLRC modified the judgment of the Labor Arbiter and held SMC jointly and severally liable with MAERC for complainants' separation benefits. sorting. DAMIAN CAPANGPANGAN. Labor Standards | To digest (old cases) | Ajean Tuazon| 79 . EMILIO MONDARES. Petitioner poses the same issues brought up in the appeals court and the pivotal question is whether the complainants are employees of petitioner SMC or of respondent MAERC. FERNANDO LOPEZ. receiving. holiday and rest day pays of the MAERC workers. they are binding and conclusive upon the Supreme Court and will not normally be disturbed. SMC moved for a reconsideration which resulted in the reduction of the award of attorney's fees from P317.117. Thus. Relying heavily on the factual findings of the Labor Arbiter. 144672. it is conceded that MAERC was paid in lump sum but records suggest that the remuneration was not computed merely according to the result or the volume of work performed.334.[3] The NLRC also held that whether MAERC was a job contractor or a labor-only contractor. if supported by substantial evidence.. On 28 April 2000 the Court of Appeals denied the petition and affirmed the decision of the NLRC. ALEJANDRO RANIDO. EDILBERTO PADILLA.70 to P84.00.70. underpayment of wages. JR. AQUILLO DAMOLE. ALLAN HEROSA. ROMEO QUILONGQUILONG. MARIO ALIPAN. HIPOLITO VIDAS. NILO CAPANGPANGAN. They washed and segregated various kinds of empty bottles used by SMC to sell and distribute its beer beverages to the consuming public. citing Art. the last being the most important. and. the service contract specified that MAERC had the selection. respondents.511. The nine (9) cases[1] were consolidated.[5] On 12 March 1998. These lend credence to the complaining workers' assertion that while MAERC paid the wages of the complainants.: TWO HUNDRED NINETY-ONE (291) workers filed their complaints (nine [9] complaints in all) against San Miguel Corporation (petitioner herein) and Maerc Integrated Services. employees or agents or otherwise in the direction and control thereof. petitioner seeks a review of the Court of Appeals’ judgment before this Court. DOMINADOR CAPARIDA. The contract was renewed for two (2) more years in March 1989. MARIANITO AGUIRRE. PERFECTO REGIS. JAIME RESPONSO. The complainants appealed the Labor Arbiter's finding that MAERC was an independent contractor and solely liable to pay the amount representing the separation benefits to the exclusion of SMC. GAUDIOSO LABASAN. Jopard Services. warehousing.608.926. VICTOR BARIQUIT. and another. GODOFREDO TUÑACAO. sorting. should a party decide to discontinue with the contract. SMC informed MAERC of the termination of their service contract by the end of June 1991. Well-established is the principle that findings of fact of quasi-judicial bodies. the complainants who were then already working for SMC were made to go through the motion of applying for work with Ms. and for separation pays from 25 June to 24 October 1991. NICANOR CUIZON.00 to each complainant. As for the payment of workers' wages. CELSO COMPUESTO. MAERC earned a marginal amount representing the contractor’s share. RAFAELITO VERZOSA. ALFONSO ECHAVEZ. Inc.568. Olga Ouano. When the service contract was terminated. The incorporators of MAERC admitted having supplied and recruited workers for SMC even before MAERC was created. for illegal dismissal. 2003 Jul 10. WILFREDO GESTOPA. HENRY ORIO. Complainants alleged that long before SMC contracted the services of MAERC a majority of them had already been working for SMC under the guise of being employees of another contractor. ERNESTO SUMALINOG. are accorded with respect. PONCIANO AGANA.[11] The NLRC also found that when MAERC was organized into a corporation in February 1988. classifying. ROEL DEMANA. WILLY ROBLE and NIEL ZANORIA. HENRY TALABA. MARIO RANIS. LEOPOLDO REGIS. JESUS CAPANGPANGAN. and. Hence. an independent contractor whose primary corporate purpose was to engage in the business of cleaning. delivering. in the Philphos Warehouse owned by MAERC. In a letter dated 15 May 1991. LEOVIJILDO PUNAY.110.[6] The appellate court also denied SMC's motion for reconsideration in a resolution[7] dated 26 July 2000. it also voluntarily entered into a service contract on a non-exclusive basis with petitioner from which it earned a gross income of P42. G. glass and metal containers. IGNACIO MISA. DIOSDADO BESABELA. as well as the Labor Arbiter's failure to grant the Temporary Living Allowance of the complainants. 109[4] of the Labor Code.70. (d) the power to control an employee's conduct. sanitizing. VIRCEDE. ROMULO TALABA. MARCELINO HABAGAT. The memoranda of the labor rates bearing the signature of a Vice-President and General Manager for the Vismin Beer Operations[12] as well as a director of SMC[13] appended to the contract of service reveal that SMC assumed the responsibility of paying for the mandated overtime. receiving. ROMANITO ALIPAN. SMC denied liability for the claims and averred that the complainants were not its employees but of MAERC.080.24 from 17 October 1988 to 27 November 1991. DIONISIO YAGONIA. MAERC for its part admitted that it recruited the complainants and placed them in the bottle segregation project of SMC but maintained that it was only conveniently used by SMC as an intermediary in operating the project or work directly related to the primary business concern of the latter with the end in view of avoiding its obligations and responsibilities towards the complaining workers. ALBERTO YAGONIA. WILLIAM ITORALDE. seven (7) managers/officers and a board of directors. It directed this Court's attention to the undisputed evidence it claimed to establish this assertion: MAERC is a duly organized stock corporation whose primary purpose is to engage in the business of cleaning. ELISEO VILLARENO. EFRAIM YUBAL. It also provided for its automatic renewal on a month-to-month basis after the two (2)-year period and required that a written notice to the other party be given thirty (30) days prior to the intended date of termination. respectively.00 and to pay attorney's fees in the amount of P317. JEREMIAS RONDERO. Both witnesses also testified that together with other complainants they continued working for SMC without break from Jopard Services to MAERC. SMC appealed the award of attorney's fees. This was testified to by two (2) of the workers who were segregator and forklift operator assigned to the Beer Marketing Division at the SMC compound and who had been working with SMC under a purported contractor Jopard Services since March 1979 and March 1981. VICTOR CELOCIA. twenty-two (22) supervisors. J.[15] In the lump sum received. The complainants alleged that they were hired by San Miguel Corporation (SMC) through its agent or intermediary Maerc Integrated Services. President and General Manager of MAERC. it failed to appeal the Labor Arbiter's decision which declared it to be an independent contractor and ordered it to solely pay the separation benefits of the complaining workers. that this was tantamount to their being illegally dismissed by SMC who was their real employer as their activities were directly related. 2nd Division) BELLOSILLO . non-payment of service incentive leave pays and other labor standards benefits. the following factors are considered: (a) the selection and engagement of employee. necessary and desirable to the main business of SMC. it merely acted as an agent of SMC. ARTEMIO LOVERANES. WINEFREDO CALAMOHOY.. ELISEO SANTOS. CORORENO CAPANGPANGAN. TEODORO ARCILLAS. VICENTE DEVILLERES. RUDY LUCERNAS. and. inside the SMC premises at the Mandaue Container Services. ANTONIO PESCADOR. TEODORO SALINAS. SMC filed a petition for certiorari with prayer for the issuance of a temporary restraining order and/or injunction with this Court which then referred the petition to the Court of Appeals. the 13th month pay. Inc. Evidence discloses that petitioner played a large and indispensable part in the hiring of MAERC's workers. incentive leave pay and maternity benefits. MANUEL LAVANDERO. (c) the power of dismissal. ANTONIO CAÑETE. The National Labor Relations Commission (NLRC) ruled in its 7 January 1997 decision that MAERC was a laboronly contractor and that complainants were employees of SMC.[8] Particularly when passed upon and upheld by the Court of Appeals. packing. like the NLRC. that MAERC was merely made a tool or a shield by SMC to avoid its liability under the Labor Code. In addition. TEOFILO CAPANGPANGAN. grouping. JOSE YAP. petitioner maintained that MAERC was a legitimate job contractor. even finality. MAERC and SMC were also ordered to jointly and severally pay complainants their wage differentials in the amount of P845. ZOSIMO CORORATION.00. SYLVESTRE TORING. The rest of the assailed decision was unchanged. On 31 January 1995 the Labor Arbiter rendered a decision holding that MAERC was an independent contractor. ESTROPIO PUNAY. MAERC admitted that it had machinery.150.[10] Application of the aforesaid criteria clearly indicates an employer-employee relationship between petitioner and the complainants. SMC was still solidarily liable with MAERC for the latter's unpaid obligations. both respondents were ordered to pay jointly and severally an indemnity fee of P2. MARCIAL HERUELA. ELMER CASTILLO. FORTUNATO SOCO. ALDEON ROBINSON.

we find more credible the contention of the complainants that these were manifestations of the right of petitioner to recommend disciplinary measures over MAERC employees. the term and duration of the relationship. asking the latter to reconsider the phasing out of SMC’s segregation activities in Mandaue City.[31] In Neri. then recommended the penalty to be imposed. NLRC. While the Labor Arbiter dismissed these letters as merely indicative of the concern in the end-result of the job contracted by MAERC. However. the Court considered not only the fact that respondent Building Care Corporation (BBC) had substantial capitalization but noted that BCC carried on an independent business and performed its contract according to its own manner and method. NLRC. MAERC. Accordingly. This conduct by SMC representatives went beyond a mere reminder with respect to the improperly cleaned/segregated bottles or a genuine concern in the outcome of the job contracted by MAERC. Singson. we agree with petitioner as distinctions must be made. machinery and equipment. This is evident from the memoranda of labor rates which included rates for the use of forklifts and the warehouse at the PHILPHOS area. More than just a mere written report of the number of bottles improperly cleaned and/or segregated. several factors may be considered. tools.e. Padin[20] addressed to the President and General Manager of MAERC as well as to its head of operations. whether the contractor was carrying on an independent business. materials and labor. This distinction between job contractor and labor-only contractor. the right to assign the performance of specified pieces of work. appliances. to be considered a job contractor. it is the totality of the facts and surrounding circumstances of each case. Petitioner also ascribes as error the failure of the Court of Appeals to apply the ruling in Neri v. the letter exposed the actual state of affairs under which MAERC was formed and engaged to handle the segregation project of SMC. [26] Briefly. in Vinoya v.e. the skill required.[17] Despite SMC’s disclaimer. that the checkers were also tasked to report on the identity of the workers whose performance or quality of work was not according to the rules and standards set by SMC. equipment. It provided an account of how in 1987 Eizmendi approached the would-be incorporators of MAERC and offered them the business of servicing the SMC bottle-washing and segregation department in order to avert an impending labor strike. head of the Mandaue Container Service of SMC. the right to control. Reinforcing the belief that the SMC exerted control over the work performed by the segregators or cleaners. Naturally. among others.. Other than that. in which case. manner and terms of payment. machinery and work premises. and the mode. Although calling the attention of its contractors as to the quality of their services may reasonably be done by SMC. Vice-President of MAERC dated 27 May 1991 addressed to Francisco Eizmendi. there appears to be no need to instruct MAERC as to what disciplinary measures should be imposed on the specific workers who were responsible for rejections of bottles. in labor-only contracting. the duty to supply premises. Among those matters discussed were the calling of SMC contractors to have workers assigned to segregation to undergo and pass eye examination to be done by SMC EENT company doctor and a review of compensation/incentive system for segregators to improve the segregation activities. Petitioner also alleged that the Court of Appeals erred in ruling that "whether MAERC is an independent contractor or a labor-only contractor. in any manner and under any circumstances. the law creates an employer-employee relationship for a limited purpose. the nature and extent of the work.[25] But the most telling evidence is a letter by Mr. none of its workers was also ever assigned to any other establishment. In legitimate job contracting. the principal employer is not responsible for any claim made by the employees. as earlier discussed.Petitioner insists that the most significant determinant of an employer-employee relationship. Evidently. a university. MAERC incorporators accepted the offer and before long trial segregation was conducted by SMC at the PHILPHOS warehouse. petitioner alleged that the appellate court and the NLRC erred when they declared MAERC a labor-only contractor despite the finding that MAERC had investments amounting to P4. but not necessarily confined to. there were only two (2) complainants in that case who were not only selected and hired by the contractor before being assigned to work in the Cagayan de Oro branch of FEBTC but the Court also found that the contractor maintained effective supervision and control over them. i. the loss of jobs for the whole MAERC workforce and the resulting actions instituted by the workers. In comparison. i. we cannot disregard the fact that it was the SMC which required MAERC to undertake such investments under the understanding that the business relationship between petitioner and MAERC would be on a long term basis. displayed the characteristics of a labor-only contractor. equipment. After initial reservations. such as.[30] we clarified that it was not enough to show substantial capitalization or investment in the form of tools. A peculiar relationship mutually beneficial for a time but nonetheless ended in dispute when SMC decided to prematurely end the contract leaving MAERC to shoulder all the obligations to the workers. Nor do we believe MAERC to have an independent business. the letters named three (3) workers who were responsible for the rejection of several bottles. The principal employer therefore becomes solidarily liable with the labor-only contractor for all the rightful claims of the employees. The second condition to establish permissible job contracting[29] was sufficiently met if one possessed either attribute. It was with this understanding that MAERC undertook borrowings from banking institutions and from affiliate corporations so that it could comply with the demands of SMC to invest in machinery and facilities.[23] In the case at bar. is absent. rather. etc. the bulk of the MAERC segregation activities was accomplished at the MAERC-owned PHILPHOS warehouse but the building along with the machinery and equipment in the facility was actually being rented by SMC." On this point. the control of the premises. Singson also addressed to the President and General Manager of MAERC. a big local bank.[33] The status of BCC had also been passed upon by the Court in a previous case where it was found to be a qualified job contractor because it was "a big firm which services among others. The contract of services between MAERC and SMC provided that MAERC was an independent contractor and that the workers hired by it "shall not. and that the Company has no control or supervision whatsoever over the conduct of the Contractor or any of its workers in respect to how they accomplish their work or perform the Contractor's obligations under the Contract. tools and equipment amounted to more than P4 Million. W." Furthermore. etc. petitioner's liability is that of a direct employer and thus solidarily liable with MAERC.[34] The principal employer becomes jointly and severally liable with the job contractor only for the payment of the employees' wages whenever the contractor fails to pay the same. SMC President and Chief Executive Officer.080.[27] The letter also set out the circumstances under which MAERC entered into the Contract of Services in 1988 with the assurances of the SMC President and CEO that the employment of MAERC's services would be long term to enable it to recover its investments.. the statute creates an employer-employee relationship for a comprehensive purpose: to prevent a circumvention of labor laws. it was held that the law did not require one to possess both substantial capital and investment in the form of tools. the responsibility of watching over the MAERC workers by MAERC personnel became superfluous with the presence of additional checkers from SMC."[16] In deciding the question of control. albeit through the instrumentality of MAERC. hence.[21] and a third letter[22] from Carlito R. specified the infraction committed in the segregation and cleaning. In fact. free from the control and supervision of its principal in all matters except as to the results thereof. These were letters[19] written by a certain Mr. there are indicia that it actively supervised the complainants. an international bank. Moreover. The contractor is considered merely an agent of the principal employer and the latter is responsible to the employees of the labor-only contractor as if such employees had been directly employed by the principal employer. the NLRC’s conclusion that the payment for the rent was cleverly disguised since MAERC was not in the business of renting warehouses and forklifts. to ensure that the employees are paid their wages. be considered employees of the Company. Its asseveration that the checkers were there only to check the end result was belied by the testimony of Carlito R. Not only was it set up to specifically meet the pressing needs of SMC which was then having labor problems in its segregation division. the language of the contract is not determinative of the parties' relationship. According to Singson. In sum. will not discharge SMC from paying the separation benefits of the workers. On the other hand. inasmuch as MAERC was shown to be a labor-only contractor. firing and payment of the workers of the contractor. however. "it (was) necessary to identify the names of those concerned so that the management [referring to MAERC] could call the attention to make these people improve the quality of work. the control and supervision of the workers. jurisprudential holdings were to the effect that in determining the existence of an independent contractor relationship. work premises. with the severance of relationship between MAERC and SMC followed MAERC’s cessation of operations. to be considered an independent contractor.[24] Other instances attesting to SMC’s supervision of the workers are found in the minutes of the meeting held by the SMC officers on 5 December 1988."[18] Viewed alongside the findings of the Labor Arbiter that the MAERC organizational set-up in the bottle segregation project was such that the segregators/cleaners were supervised by checkers and each checker was also under a supervisor who was in turn under a field supervisor. and this strongly tended to disprove the independence of the contractor.[28] In that case. government agencies. The letter was not denied but in fact used by SMC to advance its own arguments. the letter attested to an arrangement entered into by the two (2) parties which was not reflected in the Contract of Services. machinery. SMC maintained a constant presence in the workplace through its own checkers. thus convincing us that it was created solely to service the needs of SMC. SMC also failed to comply with the requirement of written notice to both the employees concerned and the Department of Labor and Employment (DOLE) which must be given at least one (1) month before the intended date Labor Standards | To digest (old cases) | Ajean Tuazon| 80 . SMC is liable with MAERC for the latter's unpaid obligations to MAERC's workers. these workers were reported by the SMC checkers to the SMC inspector. the power of the employer with respect to the hiring.00 consisting of buildings.[32] The Court likewise mentioned that the employees of BCC were engaged to perform specific special services for their principal.608. while MAERC’s investments in the form of buildings. Control of the premises in which the contractor's work was performed was also viewed as another phase of control over the work. a hospital center. Antonio Ouano. were letters by SMC to the MAERC management..

00 3.00 2.00 11.00 8.190.00 8.00 8.00 8.056.246.00 11.00 3.246. These amounts are the aggregate of the awards due the two hundred ninety-one (291) complainants as computed by the Labor Arbiter.00 3.246.056.00 3.00 8.190.056.190.190. 93. 86.865. 76.246.190. 54.00 8. 88.246.246.00 11. Leonardo Bongo 17.00 3. 69. Consorcio Manloloyo 6.00 3.00 11. 51. 82.00 8.00 8. Jose Diocampo 19.00 3.190.00 8.00 11. 49.055.00 8.00 11.00 8.843. 87. Loreto Nuñez 31. 47.00 8.00 8.00 8. Hector Cabañog 24. Rolando Espina 27.00 11. Aurelio Jurpacio 44.056. 61.00 3.00 8.246.00 8.056.190.00 8.246.00 3.056.056.190. 64.00 8.056.00 11.00 8. Gumersindo Alcontin 30.843.00 2.246.056.056.190.00 8.00 8.00 11.00 3.00 8.00 11.056.00 11.246.00 11.190.246.00 8. Jovito Loon P3.00 3.246.056.246.246.190. 68.00 11.00 11.00 11.00 3.00 3.056.00 3.00 8.190.00 11.056.190.056.056.00 11.865.190.056.00 8.00 11. 77.00 3.673.00.00 8.246.00 8.056. 60.056.00 8. Juanito Garces 42.00 11.246.00 8.056.00 3.056.190.00 3. Baltazar Labio 16.056. Jr. Vicente Devilleres 36.00 8. Gaudencio Peson 23.190. Jr 2.[36] The measure of this award depends on the facts of each case and the gravity of the omission committed by the employer.00 8.246.056.00 8. 66.00 11.00 3.00 8.00 8. Silvino Limbaga 43.246.00 8.00 8.056.246.190. The following is a summary of the computation of the benefits due the complainants which is part of the Decision of the Labor Arbiter.00 3.00 3.190.00 11.00 11.056. Anananias Alcotin 7.246.00 3.00 2.00 3.056. Dizon Alberto Embong Alfonso Echavez Gonzalo Roraceña Marcelo Caracina Raul Borres Lino Tongalamos Artemio Bongo.00 3.056.00 10.117.056.056.00 8.190.00 3.190.246.190. Arnelio Sumalinog 29.00 11. 99.00 3.00 11.00 11.190.00 3.00 11.056.00 11.00 3.00 3.00 11.00 11.246.246.056.056.246.056.00 3.00 2.056.00 10.00 8.00 2.00 8.00 3.246.056.246.00.00 3. 100.190.00 3.00 11. 59.246.246.00 11. Victor Tenedero Sasing Moreno Wilfredo Hortezuela Joselito Melendez Alfredo Gestopa Regino Gabuya Jorge Gamuzarno Lolito Cocido Efraim Yubal Venerando Roamar Gerardo Butalid Hipolito Vidas Vengelito Frias Vicente Celacio Corlito Pestañas Ervin Hyrosa Rommel Guerero Rodrigo Enerlas Francisco Carbonilla Nicanor Cuizon Pedro Briones Rodolfo Cabalhug Teofilo Ricardo Danilo R.246.190. Rodolfo Pahugot 38.246.00 3.00 11.00 8.056.00 10.00 2.246.of retrenchment.246.00 11. SUMMARY NAME SALARY DIFFERENTIAL SEPARATION PAY TOTAL Case No.00 3.00 3.056.190.00 8.00 3.246. Bernardino Regidor 28.246. Isaias Branzuela 21.00 11.00 8.00 11.00 8.190.246.460.190.190.246.00 P8. 46.00 8.056.246.00 11.00 11.00 8.246.00 11.00 8.190.00 3.00 8.056.056. 96. Adelo Cantillas 20.00 11. Roberto Lapiz 15. Vito Sealana 13.00 3.246.00 3.246.00 8.00 3.00 3.190.190.246.056.056.00 3.00 11.00 8.246.190.00 8.00 11.00 8.246.00 11. 71.246.00 3. The NLRC and the Court of Appeals affirmed the Labor Arbiter’s award of separation pay to the complainants in the total amount of P2. petitioner was justly ordered to indemnify each displaced worker P2.190.190.00 8.00 2.00 8. Roy Avila Melchor Freglo Raul Cabillada Eddie Catab Melencio Durano Allan Rago Dominador Caparida Jovito Catab Albert Laspiñas Alex Anabieza Nestor Reynante Eulogio Estopa Mario Bolo Ederlito A.00 3.190. 57.00 11.00 8.190.190.056. Edgardo Dagmayan 25.190.00 11.00 11.190.00 3.056.00 8.00 8.190.246.00 3.00 8.150.00 3.00 8. Ruel Navares 39.190.190.056.056.055.190.00 3.190.246.056.00 8.00 5.246.00 11.00 11.246.00 11.246.190.055.190.246.246.00 8.00 11.246.00 8.00 11.246.190.056. Ananias Jumao-as 5.00 3.246. 81.00 11.00 3.00 3.673.00 11.190.00 8. 70.00 11.056. 72.00 8.190.246.00 3. Marcelo Pescador 34.[35] The fines imposed for violations of the notice requirement have varied.190.056. Edgardo Nuñez 9.00 5.00 8.00 8. 62.190.190.056.056.190.246.00 3.190.[37] For its failure.056.00 11.00 11.00 8.00 3.00 8.00 11.056.00 8.00 3.00 3.00 11.00 8.056.00 11.00 3.190.00 11. 58.00 3.246. Junel Cabatingan 10. 73.246. 52.246.00 3.056.056. Balocano Joel Pepito Reynaldo Ludia Manuel Cinco Allan Agustin Pablito Polegrates Clyde Prado Dindo Misa Roger Sasing Ramon Arcallana Gabriel Salas Edwin Sasan 3.246.00 3.190.190.056.246. Felimon Echavez 12. Rey Gestopa 8.190.00 3.190.00 8.056. 56.00 8.190.00 8. Marcelino Jabagat 35.00 3. Paul Dumaqueta 11. Alex Juen 41. 89.00 3.00 11.190.00 3.190.246.056.865. 48.00 8. Eddie Selle 3.190.056.00 3.00 3.334.00 11.00 11. 63.190. 78.00 8.246.00 11.516.00 11.00 3.00 3.00 45.00 8.246.00 11.246.190.00 11.00 3.190.00 3.00 8.190.056.00 11.00 8.056.00 Labor Standards | To digest (old cases) | Ajean Tuazon| 81 .246.00 8.00 11.246.056. 85. 92.056.00 8.056.190.056. 65.246. O6-1165-91 1.00 3.00 11.00 3.00 11.190.843.246.00 8. Danilo Anabieza 40.056.190. 94. 97.190.190.056.00 11.190.056.056.246.00 3. Rogelio Prado.190.00 11.056.460.00 3. Ramon Rosales 22.673.190. 95.00 3.190.00 11.190.056.00 3.056. 91.00 11.190.055.246.056.056. 50.190. El Cid Icalina 18. 79.00 8.00 11.190.056.00 3. Joebe Boy Dayon 32. Rogelio Cruz 26.00 11.190.00 8.190.056. 84. 74.00 8.00 8.00 11.246.00 3. Denecia Palao 14.246.00 8.00 11.246.00 8.00 8.00 11.246.190.00 3.00 8.00 11. Conrado Mesanque 33.00 11. 83.00 11.00 3.865.00 11.00 3.056.056.190.00 8. 90.056.00 3.056. Alejandro Annabieza 4.00 11.056. 80.246.00 11.00 11.00 8. 67.00 11. Vicente Alin 37.246.000. 98.246.516.246.00 and of wage differentials in the total amount of P845.00 8.056.190.190.00 11.246.00 11.00 8.190.190. 53.056.190.00 8.00 3.00 8.00 3.056.190.056.246.190.00 3.190.246.00 8.00 11. 55.190.246.190.00 11.00 8.00 3.00 11.00 11.190.00 3.190.056.246.00 8.246.00 3.00 3.056.246.190.056.246.190.056.246.00 3.00 8. 75.00 11.246.00 8.246.00 P11.056.00 3.056.246.

Nicolas Ribo 2.00 11.190.190.190.190.190.816. Victor Maglasang 2.006. 09-1507-91 131.816.00 138.00 103.190.006.00 8. Emerberto Orque P2.00 8.00 11.00 11.00 11.190.006.00 148.056. Lyndon Basalan 2.816.056.816.006.246.00 11. Cesar Escario 2.516.00 188.00 11.00 8.190.816.00 8.816. Ruben Talaba 2.056.816. Juanito Garces 2.816. Feliciano Torres 2.00 181.00 P11.190. Wilfredo Aliviano 2.00 8.00 5.00 8.190.190.00 11. Romeo Duran 2. Joselito Capilina 2.246.190.190.190.816. Rodrigo Bisnar 2.00 8.00 11.00 185.056.056.00 8.006.00 TOTAL P59.00 8.00 11.190.460.006.00 183.00 200.190.246.00 119. 07-1176-91 111. Reynaldo Lavandero 2.00 11.00 11.00 8.816.816. Doisederio Gemperao 2.00 132.00 106. Roberto Torres 2. 2.00 11.440.006.006.00 190.00 179.460.246. 07-1219-91 112. Rosalio Duran.816.516.056. Anthony Araneta 3.00 8.00 11.760.00 8.006.460.816.00 199. Feliciano Agbay 2. 10-1584-91 129.190. Teodula Nique 2.246. Gerardo Roque 3.056. Victorino Seno 3.516.00 5.006.00 158.00 11.00 11.006.00 Case No.816.516.00 171.00 11.190.00 P1. 07-1283-91 125. Romeo Lombog 2. 08-1321-91 130. Edwin Sasan 2. Antonio Patalinghug 2. Antonio Basalan 2. Mario Ranis 3.00 8.00 8.056.246. Teodulo Jumao-as 3.00 121.190. Wenceslao Baclohon 3.190.00 8.00 8.00 P32.00 11.00 5.00 8.816.246. Alfred Naparate 3.816.00 11.00 11.056.00 TOTAL P39.460.816.816.816.00 8.00 8.00 Case No.190.00 11.00 178.00 11.816.00 11.00 11. Renato Mendoza 2.816.816.00 P5.056.190.190.00 151.00 11.006.00 11.00 105.006.00 150.00 8.006. Edward Flores 2. Alexander Hera 3.816.816.00 108.00 11.00 155.006.00 153.190.00 175.984.00 P231.00 11.00 166.190.006.00 8.006.00 11.816.00 11.190. Sr.816.006.190. Jose Rey Inot 2.816.00 11.00 8.190.190.00 120. Rosalio Duran.006.00 127.00 118.516.056. Proctuso Magallanes 2.006.816.006. Luciano Recopelacion 2.816.816.00 5.006.190.190.190.816. Raul Oyao 3.00 11.190.006.00 11. Arturo Heyrosa 2.00 8.00 11.00 8.00 167.816.006.006.00 187.00 8. Junjie Laviste 2.00 8.190.00 8.00 P11.816.816.00 P8. Ernesto Singson 2.168. Fermin Aliviano 2. Filemon Echavez 2.00 P5.00 8.00 5.460.00 114.460.056. Samuel Casquejo 2.00 8. Polegarpo Degamo 2.00 11.00 8.00 8.00 126.00 139.00 8.00 169.246.00 156.460.056.00 141.00 P171. Jerome Prado 3.190.190.00 8.00 11.006.190.246.006.816.00 11.00 5.246.460. Diosdado Barriga 3.816.190.190. Ruel Sufrerencia 3.056.00 11. Ignacio Misa 2.006.056.00 163.00 189.816.006.00 104.00 8.246.190.215141.006.816.00 11.816.816.190.00 P8. Moises Sasan 3.190.190.00 201.00 11.00 135.00 11.00 8.00 8.190.00 172.006.816. Leodegario Dollecin 2.192.00 8.516.006.246.190. Marcelino Caracena 2.816.126.00 8.00 202.056. Medardo Singson 2.056.00 11. Warlito Demana 2.990.056.00 8.190.00 8.190.816.00 8.00 11.056.816.00 8.00 128.00 8. Henry Gedaro 2.00 11.00 8.00 11.816.516.006.816.00 11.190. Rudy Tagalog 2.816.00 11.190.190.00 8.006. Jose Bandialan P2.00 8.816.00 137.006.00 11.006.00 177.190.520.190.816.006.190.00 8.00 115.00 11.00 194.00 117.00 8.00 8.006.00 11.00 122.190. Zosimo Bingas 2.00 8.516.00 11. Jaime Rubin 2.00 8.00 11.006.00 8.00 123.816.816.190.460. Arsenio Logarta 3.190.190.00 198.816.00 11.006.516.00 133.00 5.00 11.00 136. Victor Celacio 3.00 196.00 Case No.006.056. Jose Zanoria 3.006. Mario Cereza 2. Jesus Capangpangan 2.00 8. Edgar Cortes 2.00 174.00 11.00 8.00 8.00 P11.00 8.190. Pedro Inoc 2.006.00 5.00 8. Serlito Noynay 2.006.006.621.006.460.00 TOTAL P11.00 149.728.101.00 11.816.00 147.190.00 8.190. Bienvenido Rosario 2.006.816.00 8.00 116.00 11.190. 07-1177-91 110.00 11.006.006. Virgilio Zanoria P3. Regelio Abapo P3.190.056.00 8. Benjamin Sayson 2.00 Case No.816.00 8.00 11.006.056.00 8.00 8. Allan Zanoria 3.190.056.00 176.006.190.006.00 8.00 11. Alejandro Catandejan 2.00 8.006.00 11.00 8.816.00 P8.006.006.056.006.190. Aniceto Ludia 2. Eduardo dela Vega 3.00 102.190.006.460.006.190.00 11.00 11.00 11.00 11.190.00 8.006.00 145.190.516.190.00 Case No. Alipio Tirol 2.00 8.246. Tomacito de Castro 2.816.190.00 P8. Ricky Alconza 2.00 8.00 159.00 8.816.006. Aniceto Gemperao 2.00 Labor Standards | To digest (old cases) | Ajean Tuazon| 82 .00 173.816. Eladio Torres 2.006.006.00 11.816.00 8.00 11.460.190.00 146.00 165.816. Ranilo Villareal 2. 06-1145-91 152.00 8.00 8. Zosimo Cararaton P3.190.056.00 11.00 8. Edward Colina 2.00 11.00 11.816.00 11.00 P8.190. Victor Verano 3.00 P44.00 8.190.00 184.190. Zosimo Baobao 2.00 8. Antonio Laoronilla 2. Victorino Tagalog 2.00 160 Alberto Anoba 2.00 8.00 8.00 162.00 154. Aldrin Suson 3.136.056.00 5.00 186.00 P116.00 193.00 8.00 8. Alejandro Ranido 3.00 TOTAL P330.00 124.00 11.006.006.00 8.00 11.006.190.190.00 142. Leonardo Natad 2. Reuyan Herculano 2.056.190.00 143.190.056.246.00 11.00 P11.00 8.00 109.00 Case No.460.190. Joventino Canoog 3. Mariano Repollo 2.190.00 11.816.00 11.006.516.006.00 11.006.816.00 170.744.00 180. Leonardo Marturillas 3. Eduardo Langita 3.190.00 5. Feliz Ordeneza P2.00 11.00 164.00 191. Jr.00 8. 2.00 197.246.00 192.00 140.00 107.00 8. Antonio Abella 2.816.00 11.00 157.00 182.00 11.00 161.516.00 Case No.00 P884.00 P8.006.00 P8.00 8.516. Jerry Caparoso 2.056.190.00 11. Orlando Regis 2.00 8.006.00 195.00 8.816.00 113. Ricardo Ramas P3.190. Sinforiano Cantago 3.00 P76.816.00 11.816. Rosendo Mondares 2.190.006.00 11.00 8.00 11.190.006.246.00 8.00 Case No.00 11.00 11.816.190.00 5.00 8.816.00 8.00 144.00 8.00 8.00 8.816.00 168.00 134.006.816.816.00 8.

00 Perfecto Regis 2. Rafaelito Versoza 2. 247.00 8.816.816.00 11.00 11.00 11.00 8.190.00 272.00 290. 225. Zosimo Cororation 2.190.00 11.006.440.190.006.00 11.190.00 8. 212.00 274.00 11.00 09-1507-91 59.00 8.00 281.006. 257.006.410.00 8. The records before us are incomplete and do not aid in verifying whether these names belong to the same persons but at least three (3) of those names were found to have identical signatures in the complaint forms they filed in the separate cases. Sylvestre Toring 2.816.760.00 11.00 Leovijildo Punay 2.006.00 273.190. Aniceto Montero 2.00 11.00 8.190.00 11.190.00 8.728.00 285.00 Vircede 2.190. 205.00 289.00 11.006.816.00 8.816. 221.00 Nomer Sanchez 2. 252. 204.00 11.006.816.00 8.00 Godofredo Tuñacao 2.424.00 8.816.006.00 11.006.816.00 Antonio Pescador 2.00 11.190.006.00 11.190.190.190.00 262.816.744.190. Diosdado Besabela 2.006.006.00 11.190.190.00 11.006.816.190.816.006.00 11.190.00 Jolito Alin 2.00 11.816. 210. Aquillo Damole 2.190.006.00 TOTAL P391.00 8.006.006.136.00 11.816.006.816.006.006.00 8. 246.006.00 8.00 8.00 8.00 267.00 Romanito Alipan 2.00 11.00 8.00 Eliseo Villareno 2. were also different.520.816.006. 223.006. Ernesto Sumalinog 2.516.00 11.00 07-1177-91 3. 244.00 11.00 11.006. Teodoro Arcillas 2. 243.00 Alberto Yagonia 2.006.006.00 8.006.00 11.00 11.816. Apart from this.00 11.00 11.00 07-1219-91 39.816.190.816.00 8.00 8.00 11. 208.190.006. Artemio Loveranes 2. 234.460.00 11.190.00 Dario Dignos 2.190.00 Estropio Punay 2.816. 228.00 8.203.00 P2.00 Ignacio Misa 2.00 8.006.00 8.00 1.00 8.190.00 Marianito Aguirre 2.816.00 282.00 287.00 11.00 Wilfredo Magalona 2.006.816.00 8.816.190.816.00 8.816.190.00 11.00 231.00 Emilio Mondares 2. Alfonso Echavez 2.00 Alex Flores 2.00 Jimmy Cabigas 2.00 8.190.190. Leopoldo Regis 2.006. 216. 259.00 Fausto Bargayo 2.190.190.190.006.00 11. 211.006.816.00 11.00 11.00 8.006. Ronie Gonzaga 2.00 76.006.00 Joel Pepito 2.00 8.006.816.816.00 11.00 11.006.00 8. Romulo Talaba 2.006.246. 250.816.00 8.00 8.190.006. 254.138.00 8.00 269.190.00 Victor Bariquit 2.816.00 Prospero Maglasang 2.00 11.816.006.816.006.816. 219.006.816.816.190. certain matters have cropped up which require a review of the awards to some complainants and a recomputation by the Labor Arbiter of the total amounts.190.138.00 116. we also discovered some names that are almost identical.00 8. Teodoro Salinas 2.00 11.006.00 11.00 Romeo Quilongquilong 2.00 Jeremias Rondero 2. 224.00 08-1321-91 3.006.006.006.190.00 Fernando Anajao 2.816.00 11.00 11.00 GRAND TOTAL P845. 249.006.816.190.816.00 Teofilo Capangpangan 2.190. 239.00 10-1584-91 3. 229.00 Birning Regidor 2.00 11.006. Dionisio Yagonia 2.00 8.984.00 265.39 It is possible that the minor variance in the spelling of some Labor Standards | To digest (old cases) | Ajean Tuazon| 83 .056. 235. though overlapping.816.190.006.00 8.424.006.00 8.334.816.816.006.816. 238.00 11.00 8.190.006.00 11.190.00 266.816.00 Damian Capangpangan 2.00 284. Henry Orio 2.00 280.00 Mario Ranis 2.00 Toto Mosquido 2.190. 218. SALARY SEPARATION TOTAL DIFFERENTIAL PAY 06-1165-91 P330.621.190.190.00 11.816.816.190.00 8. 258.00 8.816.816.190.816.529.00 8.00 However.190. 226.190.00 8.00 11.006.006.00 8.00 8.190.190. 213. 242.00 8.141.006.00 8.00 11.00 11.190.00 8.00 Efraim Yubal 2. It is likely therefore that the Labor Arbiter erroneously granted some complainants separation benefits and wage differentials twice.00 11.190.00 171.00 8.006.006.00 RECAP CASE NO.006.00 Garry Dignos 2.00 Jaime Responso 2.006.00 Mario Alipan 2.00 8.00 Aldeon Robinson 2.00 Manuel Lavandero 2. 222.006.00 8.00 11. Jr.00 11.190.00 11.00 Ponciano Agana 2. 240. Victor Celocia 2.00 1.00 8.816.00 8. Eliseo Santos 2.190.00 278.006.00 8.190.00 11.190.00 271.00 268.190.816.00 11.00 Antonio Cañete 2.00 8.006. 251.00 8.00 11. Nicanor Manayaga 2.00 8.190.00 8. 241.00 Roel Demana 2.00 11.00 Cororeno Capangpangan 2.00 279.00 8.056.126.00 11. Marcelino Habagat 2. 233.006.006.00 11. 255.00 Paul Cabillada 2.006.190.190.00 5.006.816.00 8.00 8.00 8. 236.00 277.190.006.00 11.816. Willy Roble 2.006. Allan Herosa 2.816.00 8.00 8.00 11. A scrutiny of the enumeration of all the complainants shows that some names38 appear twice by virtue of their being included in two (2) of the nine (9) consolidated cases.006.190.00 11.00 Allan Agustin 2.00 06-1176-91 3.00 Fortunato Soco 2. 231.00 11.00 8.816.816.00 Jesus Capangpangan 2.816.00 11. Alejandro Ranido 2.00 8.190.190.006.00 8.00 8.00 Celso Compuesto 2.816.190.00 P3.00 Fernando Remedio 2.00 8.00 11.00 8.00 Wilfredo Gestopa 2.816.00 11.00 283.006.00 8.150.00 260.00 261.006.00 11.00 8.816.00 11.00 P1.006. 214.190. Jose Yap 2.816.00 8.190.190.00 263.267.006.816.816.006.00 8.190.006.816.00 11.00 8.816.00 8.00 276. A check of the Labor Arbiter’s computation discloses that most of these names were awarded different amounts of separation pay or wage differential in each separate case where they were impleaded as parties because the allegations of the length and period of their employment for the separate cases.006.00 11.00 06-1145-91 391. Dominador Caparida 2.190.006.190.215.00 Nilo Capangpangan 2.006.179.00 11.00 11. 220.00 11.006. 207. 245.816.816.00 William Itoralde 2. Edilberto Padilla 2.056.816.00 11. 2.816.990.00 8.168.00 8.00 11.816.00 P1.00 8. Nicanor Cuizon 2.00 11.816.190.834.00 8.00 8. 230.816.00 11.816.00 11.006. Gaudioso Labasan 2.00 288.816.00 11.00 8.190.00 11.006.00 11. 206.816.190.190.117.00 P1.246. 232.190.246.00 Elmer Castillo 2. 227.816. Hipolito Vidas 2.00 11.00 8.190.00 11. Ariston Velasco.816.00 8.00 270.00 8. 256.816.190.816. 217.00 11.00 11.816.834.00 8.00 Vicente Devilleres 2.00 8.529.00 11.190.00 11.00 275.00 44.006.816. 248.00 Marcial Heruela 2.00 P884.816.00 Rogelio Dignos 2.816.816.816.816.816.190.00 11.190.00 8.00 8.816.190. Henry Talaba 2.006.816.006.00 32.190.190.00 Rudy Lucernas 2. Fernando Lopez 2. 237.816.190.190.190.00 8.00 11. 253.00 8.00 11.00 8.006.00 11.190.00 264.00 286.190.00 07-1283-91 11.190.006.00 Edwin Dignos 2.00 8.056.190. 215.410.006.190.00 8.00 11.00 Wilfredo Calamohoy 2. 209.

Picking up of baggage from the baggage sorting area to the designated parked aircraft. WHEREFORE. unloading and delivery materials. 1994.359. and ALLAN BENTUZAL. SO ORDERED.”[5] Respondent Auxtero had initially filed a complaint against petitioner and Synergy and their respective officials for regularization of his employment status. and Tinga. non-payment of premium pay for holidays. NONILON PILAPIL. and OWNER.”[2] The Agreement specified the following “Scope of Services” of Contractor Synergy: 1. 1991 whereby Synergy undertook to “provide loading.names may have been a typographical error and refer to the same persons although the records seem to be inconclusive. 111 of the Labor Code. Fourth Division. supplies. filed on March 3. J. ARTHUR M. with the recomputation of the salary differentials. Petitioner. allowances and other benefits and privileges from the time of his dismissal up to his actual reinstatement.43 The NLRC for its part acknowledged the omission44 but both the Commission and subsequently the Court of Appeals failed to rectify the oversight in their decisions. 10. they claiming to be “performing duties for the benefit of [petitioner] since their job is directly connected with [its] business x x x. affirmed the Decision of the NLRC. xxxx (3) Ordering respondent Synergy to pay complainant Benedicto Auxtero a financial assistance in the amount of P5. Cargo Terminal Area. workers. EMELITO SOCO. Respondents. CLEMENTE R. 1991 Agreement. service incentive leave pay. CAMPOS. 1999. Baggage Sorting Area[3] nderscoring supplied) And it expressly provided that Synergy was “an independent contractor and .[6] The complaints of respondents were consolidated. unloading. 1992 complaints before the NLRC Regional Office VII at Cebu City against petitioner. judgment is hereby rendered as follows: (1) Ordering respondents PAL and Synergy jointly and severally to pay all the complainants herein their 13th month pay and service incentive leave benefits. concur. By Decision[7] of August 29. Delivering of cargo unloaded from the flight to cargo terminal. Quisumbing.. Labor Arbiter Dominador Almirante found Synergy an independent contractor and dismissed respondents’ complaint for regularization against petitioner. Furthermore. as its regular employees. National Labor Relations Commission which was promulgated on September 16. BERNABE SANDOVAL. EDUARDO MAGDADARAUG. Almirante. RUEL GONCER. 2000. with full backwages.. ([2008V254] PHILIPPINE AIRLINES. but granted their money claims.. x x x x nderscoring supplied) Except for respondent Benedicto Auxtero (Auxtero). Callejo.[10] (Emphasis and underscoring supplied) Only petitioner assailed the NLRC decision via petition for certiorari before this Court. c. Austria-Martinez. delivery of baggage and cargo and other related services to and from [petitioner]’s aircraft at the Mactan Station. Cebu City. BENEDICTO AUXTERO. to wit: a. faulting the appellate court Labor Standards | To digest (old cases) | Ajean Tuazon| 84 . NELSON M. . JR. on leave. verbally dismissed. The rest of the claims are hereby ordered dismissed for lack of merit. The Labor Arbiter is directed to review and recompute the award of separation pays and wage differentials due complainants whose names appear twice or are notably similar. JEFFREY LLENOS. Martin Funeral Homes v. The awards hereinabove enumerated in the aggregate total amount of THREE HUNDRED TWENTY-TWO THOUSAND THREE HUNDRED FIFTY NINE PESOS AND EIGHTY SEVEN CENTAVOS (P322. who appear to have been assigned by Synergy to petitioner following the execution of the July 15. he filed a complaint against petitioner and Synergy and their respective officials for illegal dismissal and reinstatement with full backwages.41 The counsel for the complainants promptly filed a motion for inclusion/correction42 which motion was treated as an appeal of the Decision as the Labor Arbiter was prohibited by the rules of the NLRC from entertaining any motion at that stage of the proceedings.2 Should CONTRACTOR fail to improve the services within the period stated above or should CONTRACTOR breach the terms of this Agreement and fail or refuse to perform the Work in such a manner as will be consistent with the achievement of the result therein contracted for or in any other way fail to comply strictly with any terms of this Agreement. Declaring the dismissal of complainant Benedicto Auxtero to be illegal and ordering his reinstatement as helper or utility man with respondent Philippine Airlines.. and 5. Loading and unloading of baggage and cargo to and from the aircraft. 111 of the Labor Code. Costs against petitioner. is hereby VACATED and SET ASIDE and judgment is hereby rendered: 1. If CONTRACTOR fails to improve the services under this Agreement according to OWNER’S specifications and standards. ROQUE PILAPIL. Finally. LORENZO BUTANAS. Later alleging that he was. Dismissing the appeal of respondent Synergy Services Corporation. and to give each of them the salaries..[8] nderscoring supplied) On appeal by respondents. PAREJA.2 CONTRACTOR shall furnish all the necessary capital. facilities. Declaring respondent Synergy Services Corporation to be a ‘labor-only’ contractor. xxxx 4. Section 10 thereof provided: 10. By Resolution[11] of January 25. this Court referred the case to the Court of Appeals for appropriate action and disposition.87) are computed in detail by our Fiscal Examiner which computation is hereto attached to form part of this decision.000. compute the monetary award due to complainant Niel Zanoria whose name was omitted in the Labor Arbiter’s Decision and immediately execute the monetary awards as found in the Labor Arbiter’s computations insofar as those complainants whose entitlement to separation pay and wage differentials and the amounts thereof are no longer in question. 1 Should at any time OWNER find the services herein undertaken by CONTRACTOR to be unsatisfactory. The assailed Decision of the Court of Appeals dated 28 April 2000 and the Resolution dated 26 July 2000 are affirmed with MODIFICATION. 2000. 2nd Division) CARPIO MORALES. ROLANDO TUNACAO. .R. without valid ground. 13th month pay and allowances. the rest of the respondents.000. JJ.. G. the fallo of which reads: WHEREFORE. CONTRACTOR shall perform and execute the aforementioned Work at the following areas located at Mactan Station. allowances and other employment benefits and privileges of a regular employee under the Collective Bargaining Agreement subsisting during the period of their employment. shall have the right to terminate this Agreement and to make other arrangements for having said Work performed and pursuant thereto shall retain so much of the money held on the Agreement as is necessary to cover the OWNER’s costs and damages. Sr. without prejudice to the right of OWNER to seek resort to the bond furnished by CONTRACTOR should the money in OWNER’s possession be insufficient. Consequently. Accordingly. DULCE. foregoing premises considered.[13] the present petition was filed. entered into an Agreement[1] on July 15. Synergy and their respective officials for underpayment. 2. and Synergy Services Corporation (Synergy) as Contractor. Ramp Area b. the Decision of the Labor Arbiter Dominador A. the NLRC ordered both MAERC and SMC to pay P84. equipment and tools for the satisfactory performance and execution of the following services (the Work): a. Respondent Maerc Integrated Services. premium pay for rest days. 1998. 2008 Feb 29. RICHARD GONCER. VIRGILIO P. and d. ALLAN PANQUE. the award of attorney’s fees must also be modified. Inc. No. Baggage Claim Area c. versus ENRIQUE LIGAN. one of the original complainants40 was inadvertently omitted by the Labor Arbiter from his computations. plus attorney’s fees to be computed on the basis of ten percent (10%) of the amounts which complainants may recover pursuant to Art. NELSON TAMPUS.511. it shall notify CONTRACTOR who shall have fifteen (15) days from such notice within which to improve the services. 1994. and for regularization of employment status with petitioner. is declared to be a labor-only contractor. are ordered to jointly and severally pay complainants (private respondents herein) separation benefits and wage differentials as may be finally recomputed by the Labor Arbiter as herein directed. RAMEL BERNARDES. vacated and set aside the decision of the Labor Arbiter by Decision[9] of January 5. JOLITO OLIVEROS.. ANTONIO M. . The fallo of the decision reads: WHEREFORE.”[4] On the duration of the Agreement. INC. Ordering respondent Philippine Airlines to accept. that there w[ould] be no employeremployee relationship between CONTRACTOR and/or its employees on the one hand. both petitioner San Miguel Corporation and respondent Maerc Integrated Services. e. BENSON CARESUSA. 146408. OWNER at its option. 1996.00 to each complainant.70 in attorneys fees which is ten percent (10%) of the salary differentials awarded to the complainants in accordance with Art. LUMAYNO. loading.00. The Court of Appeals also affirmed the award. d. the NLRC. J. as well as an indemnity fee of P2. dated August 29. the petition is denied. CHERRIE ALEGRES. by Decision of September 29.: Petitioner Philippine Airlines as Owner. CAPIN. all the complainants. . Other related jobs (but not janitorial functions) as may be required and necessary. on the other. b. for lack of merit. Inc. conformably with St. Delivering of baggage from the ramp to the baggage claim area. OWNER shall have the right to terminate this Agreement immediately and without advance notice. AQUILINO YBANEZ. . The appellate court.[12] Petitioner’s motion for reconsideration having been denied by Resolution of December 21.

payment of wages. which are directly related to its business. e. (Emphasis and CAPITALIZATION supplied) Even if only one of the two elements is present then. In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code. thus: Section 6. such as trailers and conveyors. there are three parties involved in these arrangements. Inc. a big local bank. 2002 when petitioner. Series of 2002 (Rules Implementing Articles 106 to 109 of the Labor Code. among others. . does not make respondents its employees.[26] echoes the prevailing jurisprudential trend[27] elevating such element as a primary determinant of employer-employee relationship in job contracting agreements. . One who claims to be an independent contractor has to prove that he contracted to do the work according to his own methods and without being subject to the employer’s control except only as to the results. baggagehandling. is that respondents worked alongside petitioner’s regular employees who were performing identical work. etc. Even the parties’ Agreement does not lend support to petitioner’s claim. by appropriate regulations. supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal. In legitimate contracting. 1998[16] as a cost-saving measure. a hospital center. the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract. Aballa[24] and Dole Philippines. to perform specific jobs. work or service to be performed and the employees recruited. to prevent any violation or circumvention of any provision of this Code. In so prohibiting or restricting. supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal. materials. (Emphasis. shall be paid in accordance with the provisions of this Code. [IN ANY EVENT IN] COMMITT[ING] A PATENT AND GRAVE ERROR IN UPHOLDING THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION WHICH COMPELLED THE PETITIONER TO EMPLOY THE RESPONDENTS AS REGULAR EMPLOYEES DESPITE THE FACT THAT THEIR SERVICES ARE IN EXCESS OF PETITIONER COMPANY’S OPERATIONAL REQUIREMENTS. . It did not even identify who were the Synergy supervisors assigned at the workplace. the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him. re-quoted: (i) The contractor or subcontractor does not have substantial capital or investment which relates to the job. CONTRACTOR OR SUBCONTRACTOR. No. are owned by petitioner. if Synergy is found to be a legitimate contractor. supplies or places workers to perform a job. 106. supplies and tools necessary for the performance of the Work. among others. capitalization and underscoring supplied) Legitimate contracting and labor-only contracting are defined in Department Order (D.” In stark contrast to the case at bar. the Labor Arbiter and the NLRC both determined that Building Care Corporation had a capital stock of P1 million fully subscribed and paid for. balance sheets. OR (ii) The contractor does not exercise the right to control over the performance of the work of the contractual employee. Section 5 of D. if any. for convenience. underscoring and capitalization supplied) “Substantial capital or investment” and the “right to control” are defined in the same Section 5 of the Department Order as follows: "Substantial capital or investment" refers to capital stocks and subscribed capitalization in the case of corporations. The "right to control" shall refer to the right reserved to the person for whom the services of the contractual workers are performed. II. and the contractual workers engaged by the contractor or subcontractor to accomplish the job. respondents could be considered as regular employees of petitioner as Synergy would then be a mere agent of petitioner in which case respondents would be entitled to all the benefits granted to petitioner’s regular employees. OR (ii) The contractor does not exercise the right to control over the performance of the work of the contractual employee. citing Neri v. Qualified and Experienced Worker: Owner’s Right to Dismiss Workers. If Synergy is found to be a mere job-only contractor. Prohibition against labor-only contracting. Petitioner further argues that its contracting out to Synergy various services like janitorial. etc.[18] Petitioner’s reliance on said case is misplaced. however. unloading and delivery Work as well as provide all equipment.. actually and directly used by the contractor or subcontractor in the performance or completion of the job. work premises.g. sought to prove. equipment. there exists a trilateral relationship under which there is a contract for a specific job. otherwise. and a contract of employment between the contractor or subcontractor and its workers. the employees of the contractor and of the latter's subcontractor. marked as “Annexes ‘A’ – ‘A-4. statements of income and retained earnings. such is an indicium of labor-only contracting. There is "labor-only" contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools. IN AFFIRMING THE RULING OF THE NATIONAL LABOR RELATIONS COMMISSION ORDERING THE REINSTATEMENT OF RESPONDENT AUXTERO DESPITE THE ABSENCE [OF] ANY FACTUAL FINDING IN THE DECISION THAT PETITIONER ILLEGALLY TERMINATED HIS EMPLOYMENT. to prove their capability and experience. . work or service. which was not present in the old Implementing Rules (Department Order No.[28] While petitioner claimed that it was Synergy’s supervisors who actually supervised respondents. however. but there is no showing in the records as to how much is that capital. 18-02. to determine not only the end to be achieved. Labor-only contracting is hereby declared prohibited. power of dismissal. The decision of the case hinges on a determination of whether Synergy is a mere job-only contractor or a legitimate contractor. implements. the contractor or subcontractor which has the capacity to independently undertake the performance of the job. As the NLRC held: The decision of the Labor Arbiter merely mentioned on page 5 of his decision that respondent SYNERGY has substantial capital. The Secretary of Labor may. there is labor-only contracting. Series of 1997). for the first time. Labor Standards | To digest (old cases) | Ajean Tuazon| 85 . and any of the following elements are [sic] present: (i) The contractor or subcontractor does not have substantial capital or investment which relates to the job. For this purpose. aircraft cleaning. viz: selection and engagement of an employee.I. as amended) as follows: Section 3.[25] teach.) No. he may make appropriate distinctions between labor-only contracting and job contracting as well as differentiations within these types of contracting and determine who among the parties involved shall be considered the employer for purposes of this Code. .[15] Finally. government agencies. an international bank. Neither had respondents shown that SYNERGY has such substantial capital. et al.. unloading and delivery equipment. The statutory basis of legitimate contracting or subcontracting is provided in Article 106 of the Labor Code which reads: ART. Esteva. Synergy’s substantial capitalization by attaching photocopies of Synergy’s financial statements. Hence. a university. loading. equipment. National Labor Relations Commission. that mere compliance with substantial capital requirement suffices for Synergy to be considered a legitimate contractor.O. work or service to be performed and the employees recruited. is present in the case. like Synergy. v. (Emphasis and underscoring supplied) From the records of the case. respondents’ claims against petitioner must fail as they would then be considered employees of Synergy. but also the manner and means to be used in reaching that end. work or service contracted out. 10. machineries. The control test element under the immediately-quoted paragraph (ii). 18-02 which requires any of two elements to be present is. it failed to present evidence thereon. For labor-only contracting to exist. machineries and work premises. . in its Motion for Reconsideration of the decision. In such cases. x x x[21] nderscoring supplied) It was only after the appellate court rendered its challenged Decision of September 29.[17] Petitioner asserts.. which has substantial capital in carrying on an independent business of contracting. it failed to present evidence thereon. And the equipment used by respondents as station loaders. work or service for a principal.O. work or service between the principal and the contractor or subcontractor. work or service. — Whenever an employer enters into a contract with another person for the performance of the former's work. labor-only contracting shall refer to an arrangement where the contractor or subcontractor merely recruits. while petitioner steadfastly asserted before the Labor Arbiter and the NLRC that Synergy has a substantial capital to engage in legitimate contracting.[14] nderscoring supplied) Petitioner argues that the law does not prohibit an employer from engaging an independent contractor. III. AND the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer. Trilateral relationship in contracting arrangements. Petitioner furthermore argues that none of the four (4) elements of an employer-employee relationship between petitioner and respondents.. CONTRACTOR shall upon OWNER’S request furnish the latter with information regarding the qualifications of the former’s workers.. CONTRACTOR shall employ capable and experienced workers and foremen to carry out the loading. In Neri.’”[22] More significantly.[19] The corporation’s status as independent contractor had in fact been previously confirmed in an earlier case[20] by this Court which found it to be serving. the principal which decides to farm out a job or service to a contractor or subcontractor. in the same manner and extent that he is liable to employees directly employed by him. (Emphasis. tools. (Emphasis and underscoring supplied) Section 5. it is gathered that the work performed by almost all of the respondents – loading and unloading of baggage and cargo of passengers – is directly related to the main business of petitioner.[23] As San Miguel Corporation v. restrict or prohibit the contracting out of labor to protect the rights of workers established under the Code. IN UPHOLDING THE NATIONAL LABOR RELATIONS COMMISSION DECISION WHICH IMPOSED THE RELATIONSHIP OF EMPLOYER-EMPLOYEE BETWEEN PETITIONER AND THE RESPONDENTS HEREIN. petitioner avers that reinstatement of respondents had been rendered impossible because it had reduced its personnel due to heavy losses as it had in fact terminated its service agreement with Synergy effective June 30. and the power to control employee’s conduct.

[41] Hence.[9] With respect to the termination of private respondent’s employment.. had acquired security of tenure. EMELITO SOCO. the real employer. private respondent Oabel performed the following functions: Secretary. procedures and directives relative to the safety and security of OWNER’S premises. of the long period of time[39] that had elapsed since his dismissal on November 15. JR. the case is REMANDED to the Labor Arbiter solely for that purpose.[6] Respondent converted her petition for regularization into a complaint for illegal dismissal. 1992[34] of Auxtero. the Court of Appeals Decision of September 29. For it is the totality of the facts and surrounding circumstances of the case[33] which is determinative of the parties’ relationship. CAPIN. reinstatement plus backwages until the finality of this decision. MARANAW HOTELS AND RESORT CORP. As such. the NLRC observed that under the very terms of the service contract. complainant never disputed the fact that her work with the same were on a per function basis or on a “need basis” – co-terminus with the function she was hired for…. 1997 Shop Attendant: May 21. private respondent Oabel was transferred to MANRED. PAREJA. OWNER may require CONTRACTOR to dismiss immediately and prohibit entry into OWNER’S premises of any person employed therein by CONTRACTOR who in OWNER’S opinion is incompetent or misconducts himself or does not comply with OWNER’S reasonable instructions and requests regarding security. with the latter deporting itself as her employer. EDUARDO MAGDADARAUG. DULCE and ALLAN BENTUZAL as its regular employees in their same or substantially equivalent positions. xxxx Respondents Century Park Hotel and Manila Resource Development Corporation are hereby declared jointly and severally liable for the following awards Labor Standards | To digest (old cases) | Ajean Tuazon| 86 . Respondents.R. ordering petitioner to accept them as its regular employees and to give each of them the salaries.[8] The NLRC likewise observed that the activities performed by the private respondent were directly related to and usually necessary or desirable in the business of the petitioner. private respondent Oabel was dismissed from employment. however. RUEL GONCER. CONCHITA CARPIO MORALES (Associate Justice) WE CONCUR: (ON OFFICIAL LEAVE) LEONARDO A. complainant could not even be considered as casual employee or provisional employee. LORENZO BUTANAS. for during the pendency of this case.. ROLANDO TUNACAO. No. Chairperson) ANTONIO T. it is not legally justified for want of just or authorized cause therefor and for non-compliance with procedural due process.[30] And as the NLRC found. VIRGILIO P. an establishment owned by the petitioner. and [petitioner] on the other hand” is not legally binding and conclusive as contractual provisions are not valid determinants of the existence of such relationship.Considering that complainant job (sic) with the respondent hotel was on a per function basis or on a “need basis”. issued by this Court in 1996 before it referred the case to the Court of Appeals in January 1999. VELASCO. it must be stressed that respondents. petitioner waived this defense by failing to raise it in its Memorandum filed on June 14. Of the first holding. and (2) private respondent was illegally dismissed. the Court affirms the ruling of both the NLRC and the appellate court. on the basis of just or authorized cause. Synergy being a mere agent of the latter. allowances and other employment benefits and privileges of a regular employee under the pertinent Collective Bargaining Agreement. 1999. 2009 Jan 20. On August 1.[40] As regards the remaining respondents. Auxtero.[36] the onus probandi lies with petitioner which. INC. Petitioner.[7] Private respondent appealed before the National Labor Relations Commission (NLRC). NELSON M. and with observance of procedural due process. petitioner presented nothing to substantiate its impossibility of compliance. the NLRC held that it was not effected for a valid or just cause and was therefore illegal. ROQUE PILAPIL. properties and operations. versus COURT OF APPEALS. CAMPOS. 1998. and found to be illegally dismissed from employment. 1992. and (b) pay respondent BENEDICTO AUXTERO salary differential. 1st Division PUNO. NELSON TAMPUS. CONTRACTOR shall furnish its employees and workers identification cards to be countersigned by OWNER and uniforms to be approved by OWNER. 1997 – March 6. MANRED shall provide the petitioner not specific jobs or services but personnel and that MANRED had insufficient capitalization and was not sufficiently equipped to provide specific jobs.Contractor shall require all its workers. safety and other matters and such person shall not again be employed to perform the services hereunder without OWNER’S permission. 1997 Waitress: April 22. ARTHUR M. at most. Acting Chairperson). For the duration of her employment. JOLITO OLIVEROS. dismissing the complaint against the petitioner. subsequently converted into one for illegal dismissal. failed to discharge the same. however. On September 16. SHERYL OABEL AND MANILA RESOURCE DEVELOPMENT CORP. 1996.[1] Respondent worked in Century Park Hotel. CLEMENTE R. there are no available positions where respondents could be placed. and separation pay. WHEREFORE. JEFFREY LLENOS. C. should be entitled to salary differential[37] from the time he rendered one year of service until his dismissal. AQUILINO YBANEZ. Finally. having been declared to be a regular employee of petitioner. In fact. Petitioner claims. AZCUNA (Associate Justice) DANTE O. . JR. that it has become impossible for it to comply with the orders of the NLRC and the Court of Appeals. it was forced to reduce its personnel due to heavy losses caused by economic crisis and the pilots’ strike of June 5.[2] petitioner contracted with Manila Resource Development Corporation. 1995. 2000 is AFFIRMED with MODIFICATION.[31] Respondents having performed tasks which are usually necessary and desirable in the air transportation business of petitioner. So as to thwart the attempt to subvert the implementation of the assailed decision.”[42] Other than its bare allegations. mphasis supplied) Petitioner in fact admitted that it fixes the work schedule of respondents as their work was dependent on the frequency of plane arrivals. and pay the wages and benefits due them as regular employees plus salary differential corresponding to the difference between the wages and benefits given them and those granted to petitioner’s other regular employees of the same rank. ADOLFO S. RICHARD GONCER. were terminated by Synergy effective 30 June 1998 when petitioner terminated its contract with Synergy. It appears that private respondent Oabel was initially hired by petitioner as an extra beverage attendant on April 24. .[38] In view. Petitioner’s claim that he abandoned his work does not persuade. the notice of termination in 1998 was in disregard of a subsisting temporary restraining order[44] to preserve the status quo.. ANTONIO M. Respecting the dismissal on November 15. private respondent filed before the Labor Arbiter a petition for regularization of employment against the petitioner. however. regulations. Ajan rendered a decision on July 13. The present proceedings emanate from a complaint for regularization.[43] Further. filed before Labor Arbiter Madjayran H. Labor Arbiter Madjayran H. 1997 Gift Shop Attendant: April 7.[29] (Underscoring partly in the original and partly supplied. Ajan by private respondent Sheryl Oabel. The resolution denied the petition for review filed by petitioner Maranaw Hotels and Resort Corp. it would be appropriate to award separation pay of one (1) month salary for each year of service. There being no data from which this Court may determine the monetary liabilities of petitioner. And petitioner informs that “the employment contracts of all if not most of the respondents .. CARPIO (Associate Justice. Petitioner PHILIPPINE AIRLINES. BERNABE SANDOVAL. 1997. 1997 – May 20. in lieu of reinstatement. Public Relations Department: February 10. for purposes of computing the wages and benefits due respondents. TINGA PRESBITERO J. 1997 – April 21.: Before the Court is a petition for review on certiorari assailing a resolution issued by the Court of Appeals. respondents are deemed to be continuously employed by petitioner.[35] The elements of abandonment being (1) the failure to report for work or absence without valid or justifiable reason. RAMEL BERNARDES. 1997 – July 30. they should be deemed its regular employees and Synergy as a labor-only contractor. LUMAYNO. Respondent hotel consider (sic) complainant.[4] MANRED has intervened at all stages of these proceedings and has consistently claimed to be the employer of private respondent Oabel. The decision held: While complainant alleged that she has been working with the respondent hotel in different department (sic) of the latter on (sic) various capacities (although not all departments are part and parcel of the hotels).[32] The express provision in the Agreement that Synergy was an independent contractor and there would be “no employer-employee relationship between [Synergy] and/or its employees on one hand. a project employee which does not ripened (sic) into regular employee (sic). backwages from the time of his dismissal until the finality of this decision. 1998. equivalent to one (1) month pay for every year of service until the finality of this decision. G. having been declared to be regular employees of petitioner. NONILON PILAPIL. The NLRC reversed the ruling of the Labor Arbiter and held that: (1) MANRED is a labor-only contractor. For this purpose. 1998[5] On July 20. in lieu of reinstatement.J. 1998. is ordered to: (a) accept respondents ENRIQUE LIGAN. the decision appealed from is hereby REVERSED. petitioner’s managers and supervisors approved respondents’ weekly work assignments and respondents and other regular PAL employees were all referred to as “station attendants” of the cargo operation and airfreight services of petitioner. BENSON CARESUSA. This lasted until February 7. however. and (2) a clear intention to sever the employer-employee relationship manifested by some overt acts. suppliers and visitors to comply with OWNER’S rules. QUISUMBING (Associate Justice. 1999 before the Court of Appeals. The dispositive portion of the ruling reads thus: WHEREFORE.[3] Subsequently. ALLAN PANQUE. CHERRIE ALEGRES. they could only be dismissed by petitioner. 149660. SO ORDERED. a regular employee of petitioner who had been working as utility man/helper since November 1988. employees.

petitioner Philippine Telegraph and Telephone Company (hereafter.in favor of complainant: 1) her full backwages and benefits from August 1. 1998 up to the date of her actual reinstatement. 1990 until April 20. in turn. contrarily argues that what really motivated PT & T to terminate her services was her having contracted marriage during her employment." for a fixed period from November 21. whether such service is continuous or broken. CORONA. When petitioner supposedly learned about the same later. PUNO (Chief Justice) WE CONCUR: ANTONIO T. that is. 4 In her reply letter dated January 17. REYNATO S. the petitioner invokes substantial justice as justification for a reversal of the resolution of the Court of Appeals. The Court of Appeals held: After a careful perusal of the records of the case. G. Petitioner’s contention that the filing of a motion for reconsideration with an appended certificate of non forumshopping suffices to cure the defect in the pleading is absolutely specious. In any event. In that memorandum. herein private respondent Grace de Guzman. This being so. share in the service charges. except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. Well-settled is the rule that the certificate of non-forum shopping is a mandatory requirement. Regular and casual employment. the need for sufficient manpower to carry them out does not. 1997 May 23. Court of Appeals[17] where this Court emphasized that the lawyer acting for the corporation must be specifically authorized to sign pleadings for the corporation. Oficial. the real employer of private respondent Oabel is the petitioner. Petitioner. private respondent's services as reliever were again engaged by petitioner. on May 26. In the interest of averting further litigation arising from the present controversy.F. Substantial compliance applies only with respect to the contents of the certificate but not as to its presence in the pleading wherein it is required. the petitioner determines the nature of the tasks to be performed by the private respondent..R. CARPIO (Associate Justice). coupled with a claim for non-payment of cost of living allowances (COLA). an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. 1 Under the Reliever Agreement which she signed with petitioner company. 5 Petitioner nonetheless remained unconvinced by her explanations. Grace de Guzman was initially hired by petitioner as a reliever. We resolve to DISMISS the present petition on the ground of noncompliance with the rule on certification against forum shopping taking into account that the aforesaid certification was subscribed and verified by the Personnel Director of petitioner corporation without attaching thereto his authority to do so for and in behalf of petitioner corporation per board resolution or special power of attorney executed by the latter. They are not to be trifled with lightly. The ruling does not.[12] In the present petition for review. 2001 is affirmed. The requirement applies to both natural and juridical persons. 118978. For this reason alone. 1992. which is prohibited by petitioner in its company policies. Costs against petitioner. and that all along she had not deliberately hidden her true civil status. In a resolution. 280. v. J. * petitioner vs. Tenorio who went on maternity leave. Dizon who went on leave during both periods.[10] Petitioner subsequently appealed before the Court of Appeals. She thus claims that she was discriminated against in gross violation of law. the petition must still fail. however. That any employee who has rendered at least one year of service. LEONARDO-DE CASTRO TITLE 3: WORKING CONDITIONS FOR SPECIAL GROUP OF EMPLOYEES EMPLOYMENT OF WOMEN PHILIPPINE TELEGRAPH AND TELEPHONE COMPANY. SO ORDERED.[19] This Court has not wavered in stressing the need for strict adherence to procedural requirements. Notably. mphasis supplied) IN VIEW WHEREOF. SO ORDERED. 1991. TERESITA J.[20] Concordantly. the appellate court dismissed the petition on account of the failure of the petitioner to append the board resolution authorizing the counsel for petitioner to file the petition before the Court of Appeals. it has not escaped the notice of the Court that the operations of the hotel itself do not cease with the end of each event or function and that there is an ever present need for individuals to perform certain tasks necessary in the petitioner’s business. service incentive leave pay and 13th month pay from July 20. 1995 to July 31. 1995. In the job application form that was furnished her to be filled up for the purpose. although the tasks themselves may vary. 1991 and July 8. the Court held. she was reminded about the company's policy of not accepting married women for employment. as borne out by the findings of the NLRC. 1991. However. Labor Standards | To digest (old cases) | Ajean Tuazon| 87 . The rules of procedure exist to ensure the orderly administration of justice. Any doubt on the matter has been resolved by the Court’s ruling in BPI Leasing Corp. for the period 1995-1998. 6 which she readily contested by initiating a complaint for illegal dismissal. the probationary period to cover 150 days. private respondent was once more asked to join petitioner company as a probationary employee. There is thus much credence in the private respondent’s claim that the service agreement executed between the petitioner and MANRED is a mere ploy to circumvent the law on employment. AZCUNA. Private respondent was dismissed from the company effective January 29. before the Regional Arbitration Branch of the National Labor Relations Commission in Baguio City. That employee.[13] Petitioner likewise contends that the filing of a motion for reconsideration with the certificate of non-forum shopping attached constitutes substantial compliance with the requirement. this time in replacement of one Erlinda F. 1991. specifically as a "Supernumerary Project Worker. its branch supervisor in Baguio City. The portion of the ruling in Digital Microwave upon which petitioner relies was in response to the issue of impossibility of compliance by juridical persons with the requirements of Circular 28-91. could only come in the form of a board resolution issued by the Board of Directors that specifically authorizes the counsel to institute the petition and execute the certification. In this regard. her services were terminated. way after she was hired by the petitioner as extra beverage attendant on April 24. her employment was to be immediately terminated upon expiration of the agreed period. even if this grave procedural infirmity is set aside. shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. the corporation. pursuant to Article 280 of the Labor Code: Art.. has taken the ruling in Digital Microwave out of context. to make his actions binding on his principal. such a proscription by an employer being outlawed by Article 136 of the Labor Code.[18] Specific authorization. the present petition is DENIED. v. the Court finds no difficulty in sustaining the finding of the NLRC that MANRED is a labor-only contractor. ipso facto clothe a corporate officer or director with authority to execute a certificate of non-forum shopping by virtue of the former’s position alone. 1991. private respondent stated that she was not aware of PT&T's policy regarding married women at the time. in particular that which pertains on regularization. 1992 requiring her to explain the discrepancy. and pursuant to their Reliever Agreement. 1991 to August 8. 2nd Division REGALADO. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided. and in light of the respective positions asserted by the parties in the pleadings and other memoranda filed before this Court. PT & T) invokes the alleged concealment of civil status and defalcation of company funds as grounds to terminate the services of an employee. 2) her salary differentials. maintains that private respondent Oabel is its employee and subsequently holds itself out as the employer and offers the reinstatement of private respondent. RENATO C. 1991 to July 1. 2001. 3 It now appears that private respondent had made the same representation in the two successive reliever agreements which she signed on June 10.: Seeking relief through the extraordinary writ of certiorari. however. respondents. the Court now proceeds to resolve the case on the merits. No. 2 After August 8. for which she must already be considered a regular employee. Thereafter. and from July 19. private respondent’s purported employment with MANRED commenced only in 1996. she indicated in the portion for civil status therein that she was single although she had contracted marriage a few months earlier.[11] Petitioner duly filed its motion for reconsideration which was denied by the Court of Appeals in a resolution dated August 30. 1991. sent to private respondent a memorandum dated January 15. NATIONAL LABOR RELATIONS COMMISSION and GRACE DE GUZMAN. the petition must already be dismissed. 1991.e. from June 10. 1991 vice one C. It negates the very purpose for which the certification against forum shopping is required: to inform the Court of the pendency of any other case which may present similar issues and involve similar parties as the one before it. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties. Thus. It appears further that private respondent has already rendered more than one year of service to the petitioner.[16] The Court’s identification of duly authorized officers or directors as the proper signatories of a certificate of non forum-shopping was in response to that issue. ADOLFO S.[14] There is no merit to the petition. The latter. Petitioner posits that it has entered into a service agreement with intervenor MANRED. Delia M. The resolution of the Court of Appeals dated June 15. 1998. Petitioner relies upon this Court’s ruling in Digital Microwave Corp. On September 2. 1992. Court of Appeals[15] to show that its Personnel Director has been duly authorized to sign pleadings for and in behalf of the petitioner. in the process exercising control. i.

it is recognized that regulation of manpower by the company falls within the so-called management prerogatives. expressly recognizes the role of women in nation-building and commands the State to ensure. it should never be used as a subterfuge for causes which are improper. on the other hand. with the reminder. and for appointment. Indeed. This line of reasoning does not impress us as reflecting its true management policy or that we are being regaled with responsible advocacy. Nowhere has that prejudice against womankind been so pervasive as in the field of labor. hence this special civil action assailing the aforestated decisions of the labor arbiter and respondent NLRC. it should not be simulated. that "you're fully aware that the company is not accepting married women employee (sic). cocktail lounge. and training opportunities. as a condition sine qua non prior to severance of the employment ties of an individual under his employ.") 22 Parenthetically. all aspects of employment. What it submits as unforgivable is her concealment of that marriage yet. Acknowledged as paramount in the due process scheme is the constitutional guarantee of protection to labor and security of tenure. Article 136 explicitly prohibits discrimination merely by reason of the marriage of a female employee. provisions governing the rights of women workers are found in Articles 130 to 138 thereof. This Court should be spared the ennui of strained reasoning and the tedium of propositions which confuse through less than candid arguments. It is then apropos to recall the familiar saying that he who is the cause of the cause is the cause of the evil caused. Similarly. largely due to our country's commitment as a signatory to the United Nations Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW). Finally. private respondent's act of concealing the true nature of her status from PT & T could not be properly characterized as willful or in bad faith as she was moved to act the way she did mainly because she wanted to retain a permanent job in a stable company. She then executed a promissory note for that amount in favor of petitioner 7. the decision of the labor arbiter was modified with the qualification that Grace de Guzman deserved to be suspended for three months in view of the dishonest nature of her acts which should not be condoned. in the termination notice sent to her by the same branch supervisor. and the discipline. 1993. 17 or the "Migrant Workers and Overseas Filipinos Act of 1995. training. private respondent was made to understand that her severance from the service was not only by reason of her concealment of her married status but. If that employee confesses such fact of marriage. to convincingly establish. 8042. which compelled private respondent to conceal her supervenient marriage. an employer is free to regulate. Republic Act No. On November 23. Republic Act No. promotion and retention. and the right against. 6955 13 which bans the "mail-order-bride" practice for a fee and the export of female labor to countries that cannot guarantee protection to the rights of women workers. and that it was apparent that she had been discriminated against on account of her having contracted marriage in violation of company rules. 25 Furthermore.75 of her collections. Section 3 of Article XIII 9 (the progenitor whereof dates back to both the 1935 and 1973 Constitution) pointedly requires the State to afford full protection to labor and to promote full employment and equality of employment opportunities for all. massage clinic. that very policy alone which was the cause of private respondent's secretive conduct now complained of. this seems to be the curious reason why it was made to appear in the initiatory pleadings that petitioner was represented in this case only by its said supervisor and not by its highest ranking officers who would otherwise be solidarily liable with the corporation. Labor Standards | To digest (old cases) | Ajean Tuazon| 88 . according to his discretion and best business judgment. In other words. and commissioning in all military or similar schools of the Armed Forces of the Philippines and the Philippine National Police. "from hiring to firing. a woman working in a nightclub. 7192 14 also known as the "Women in Development and Nation Building Act. women have traditionally been considered as falling within the vulnerable groups or types of workers who must be safeguarded with preventive and remedial social legislation against discriminatory and exploitative practices in hiring. Republic Act No." 21 Again. both on the aspects of qualification and retention. she will be dismissed. admission. afforded all women workers by our labor laws and by no less than the Constitution. as it was verbally instructed to you. All of these took place in a formal proceeding and with the agreement of the parties and/or their counsel. Petitioner would asseverate. Petitioner would have the Court believe that although private respondent defied its policy against its female employees contracting marriage. 24 It must rest on an actual breach of duty committed by the employee and not on the employer's caprices. Article 130 involves the right against particular kinds of night work while Article 132 ensures the right of women to be provided with facilities and standards which the Secretary of Labor may establish to ensure their health and safety. despite the maternity leaves and other benefits it would consequently respond for and which obviously it would have wanted to avoid. In the Labor Code. bespeaks dishonesty hence the consequent loss of confidence in her which justified her dismissal. However. recognizes a woman's right against discrimination with respect to terms and conditions of employment on account simply of sex. through substantial evidence. The Constitution. and this brings us to the issue at hand. it ruled that private respondent had indeed been the subject of an unjust and unlawful discrimination by her employer. 7322 15 increasing the maternity benefits granted to women in the private sector. This improbable reasoning. 442. On appeal to the National Labor Relations Commission (NLRC). men have responded to that injunction with indifference. petitioner's expostulations that it dismissed private respondent. working methods and assignments. Oficial. Labor Arbiter Irenarco R. the labor arbiter being of the firmly expressed view that the ground relied upon by petitioner in dismissing private respondent was clearly insufficient. The subsequent motion for reconsideration filed by petitioner was rebuffed by respondent NLRC in its resolution of November 9. 6727 12 which explicitly prohibits discrimination against women with respect to terms and conditions of employment. the NLRC affirmed the decision of the labor arbiter.380. Republic Act No. 26 In the present controversy. 20 In the case at bar. Her concealment. and recall of employees. Decreed in the Bible itself is the universal norm that women should be regarded with love and respect but. training. through the ages. To cite a few of the primordial ones. private respondent volunteered the information. was illegally dismissed by petitioner. supervision of workers. what could be an act of insubordination was inconsequential. the existence of a valid and just cause in dispensing with the services of such employee. so it is claimed. bar or other similar establishments shall be considered as an employee under Article 138. Article 135. she was practically forced by that very same illegal company policy into misrepresenting her civil status for fear of being disqualified from work. promotion. 3. While loss of confidence is a just cause for termination of employment. there will be no sanction. it nonetheless takes umbrage over the concealment of that fact. over and on top of that. that she had failed to remit the amount of P2. the record discloses clearly that her ties with the company were dissolved principally because of the company's policy that married women are not qualified for employment in PT & T. as well as regulations on the transfer of employees." which affords women equal opportunities with men to act and to enter into contracts. Section 14. the fundamental equality before the law of women and men. On the other hand. the branch supervisor of the company. it would not be amiss to point out that in the Family Code. It was. graduation. that while it has nothing against marriage. therefore. 23 Verily. Section 14 of Article XIII 10 mandates that the State shall protect working women through provisions for opportunities that would enable them to reach their full potential. Her reinstatement. PT & T. Corrective labor and social laws on gender inequality have emerged with more frequency in the years since the Labor Code was enacted on May 1. petitioner's policy of not accepting or considering as disqualified from work any woman worker who contracts marriage runs afoul of the test of. 2.At the preliminary conference conducted in connection therewith. but if such employee conceals the same instead of proceeding to the confessional. however. 7877 16 which outlaws and punishes sexual harassment in the workplace and in the education and training environment. 11 Principal among these laws are Republic Act No. in its decision dated April 29. with interstitial distinctions." except in cases of unlawful discrimination or those which may be provided by law. discrimination. does have a hollow ring. dismissal. with emphasis on women. work assignments. 18 women's rights in the field of civil law have been greatly enhanced and expanded. including the order for the reinstatement of private respondent in her employment with PT & T. For purposes of labor and social legislation. That it was so can easily be seen from the memorandum sent to private respondent by Delia M. 1974 as Presidential Decree No. only in countries where their rights are secure. Contrary to petitioner's assertion that it dismissed private respondent from employment on account of her dishonesty. lay-off of workers. In all other respects. 19 As put in a case. who had already gained the status of a regular employee. including an assurance of entitlement to tenurial security of all workers. one's labor being regarded as constitutionally protected property. Article II 8 on the Declaration of Principles and State Policies. Likewise. an employer is required. was correspondingly ordered. at all times. In other words. 1. which prescriptions encompass the matter of hiring. plus payment of the corresponding back wages and COLA. 1994. cognizant of the disparity in rights between men and women in almost all phases of social and political life. petitioner glosses over the fact that it was its unlawful policy against married women. Corollary thereto. the deployment of migrant workers. in the words of the latter. perturbs the Court since private respondent may well be minded to claim that the imputation of dishonesty should be the other way around. was her violation of the company's policy against marriage ("and even told you that married women employees are not applicable [sic] or accepted in our company. especially on the matter of equal employment opportunities and standards. as well as the denial resolution of the latter. Rimando handed down a decision declaring that private respondent. not because the latter got married but because she concealed that fact. Thus. PT & T says it gives its blessings to its female employees contracting marriage. In the Philippine setting. 1994. illegal. on the hubristic conceit that women constitute the inferior sex. at the same time. and this was incorporated in the stipulation of facts between the parties. said public respondent upheld the labor arbiter and. inter alia. benefits. and Republic Act No." which prescribes as a matter of policy. provides a gamut of protective provisions. and not merely because of her supposed acts of dishonesty. or unjustified. declaring that marriage as a trivial matter to which it supposedly has no objection.

Respondent discussed at length in the instant appeal the supposed ill effects of pregnancy on flight attendants in the course of their employment. albeit under the compulsion of an unlawful imposition of petitioner. all policies and acts against it are deemed illegal and therefore abrogated. as no basis has been laid therefor. True. private respondent admitted in the course of the proceedings that she failed to remit some of her collections. et al. Respondent further claimed that complainant was employed in the project with an oral understanding that her services would be terminated when she gets married. 1991. 1974 to take effect six (6) months later. had gained regular status at the time of her dismissal. in dismissing from the service the complainant. 148. which shall be computed from the time her compensation was withheld up to the time of her actual reinstatement. which amended paragraph (c) of Section 12 of Republic Act No. 1923 and which regulated the employment of women and children in shops." or BFOQ. in one case. she was about to complete the probationary period of 150 days as she was contracted as a probationary employee on September 2. 30 However. as she had undeniably committed an act of dishonesty in concealing her status. or to stipulate expressly or tacitly that upon getting married. respondent claims that its concern is not so much against the continued employment of the flight attendant merely by reason of marriage as observed by the Secretary of Labor. like flight attendants. 27 On the other hand. which provides: Sec. Actually. even if the same were for fixed periods. considering the pecularities of their chosen profession. just to bolster its case for dismissal. it is not relevant that the rule is not directed against all women but just against married women. 679. it must be observed. respondent predicates absence of a flight attendant from her home for long periods of time as contributory to an unhappy married life. a woman employee shall be deemed resigned or separated. collective bargaining. For. 1976. she is entitled to reinstatement without loss of seniority rights and other privileges and to full back wages. 679. as bases for its policy of non-marriage. respondent overlooked the fact that married flight attendants can program their lives to adapt to prevailing circumstances and events. Section 12 of Republic Act No. It cannot be gainsaid that.Finally. nor has the Secretary of Labor issued any regulation affecting flight attendants. 148. ensure equal work opportunities regardless of sex. was Act No. if so. petitioner's collateral insistence on the admission of private respondent that she supposedly misappropriated company funds. and as she had been dismissed without just cause. 3071 which became law on March 16. agricultural. It shall be unlawful for an employer to require as a condition of employment or continuation of employment that a woman shall not get married. 29 As an employee who had therefore gained regular status. respondent went as far as invoking the provisions of Articles 52 and 216 of the New Civil Code on the preservation of marriage as an inviolable social institution and the family as a basic social institution. but rather on the consequence of marriage-pregnancy. in this modern world." The forerunner to Republic Act No. We feel that this needs no further discussion as it had been adequately explained by the Secretary of Labor in his decision of May 2. but not against married men. When she was served her walking papers on January 29. the variable is sex and the discrimination is unlawful. shall be reduced by deducting therefrom the amount corresponding to her three months suspension. and the matter was deemed settled as a peripheral issue in the labor case. but that is an altogether different story. The government. But for the timidity of those affected or their labor unions in challenging the validity of the policy. The fact is that she was dismissed solely because of her concealment of her marital status. the appellate court struck down said employer policy as unlawful in view of its repugnance to the Civil Code. or creed. Concededly. as an additional ground to dismiss her from employment. 1973 when Presidential Decree No. it knew that the controverted policy has already met its doom as early as March 13. 36 Upon the other hand. was promulgated. Thus: Of first impression is the incompatibility of the respondent's policy or regulation with the codal provision of law. Marinduque Mining & Industrial Corporation 34 considered as void a policy of the same nature. a requirement that a woman employee must remain unmarried could be justified as a "bona fide occupational qualification. considering that. have been held to violate Title VII of the United States Civil Rights Act of 1964. All along. The standards have not yet been established as set forth in the first paragraph. Employment rules that forbid or restrict the employment of married women. 679. there was no showing that private respondent deliberately misappropriated the amount or whether her failure to remit the same was through negligence and. et al. to repeat. And. invoked a policy of the firm to consider female employees in the project it was undertaking as separated the moment they get married due to lack of facilities for married women. That the labor arbiter would thus consider petitioner's submissions on this supposed dishonesty as a mere afterthought. In fact. with the reiteration of the same provision in the new Labor Code. was regarded as unlawful since the restriction was not related to the job performance of the flight attendants. Private respondent. 1974. as follows: Art. 148 and the Constitution. 136. the main federal statute prohibiting job discrimination against employees and applicants on the basis of. In a vain attempt to give meaning to its position. or it should have categorically expressed so. A close look at Section 8 of said decree. A requirement of that nature would be valid provided it reflects an inherent quality reasonably necessary for satisfactory job performance. such as those of flight attendants. and not on the basis of that supposed defalcation of company funds. Article 136 is not intended to apply only to women employed in ordinary occupations. where the particular requirements of the job would justify the same. and regulate the relations between workers and employees. to Provide Penalties for Violations Thereof. the policy of respondent against marriage is patently illegal. It is logical to presume that. This is pure conjecture not based on actual conditions. it being violative of the clear mandate in Article 136 of the Labor Code with regard to discrimination against married women. This provision had a studied history for its origin can be traced to Section 8 of Presidential Decree No. The sweeping intendment of the law. but that is precisely the factor that militates against the policy of respondent. 37 Labor Standards | To digest (old cases) | Ajean Tuazon| 89 . and mercantile establishments and other places of labor in the then Philippine Islands. Stipulation against marriage. 9. as she performed activities which were essential or necessary in the usual trade and business of PT & T. Further. which was promulgated on May 1. among other things. industrial. is fair and reasonable. 33 a decision that emanated from the Office of the President. 32 entitled "An Act to Regulate the Employment of Women and Children. respondent. Thus." which amended paragraph (c). reveals that it is exactly the same provision reproduced verbatim in Article 136 of the Labor Code. the same was able to obtain a momentary reprieve. Thus. but not on the ground of a general principle. a no-marriage rule applicable to both male and female flight attendants. . Article 132 enjoins the Secretary of Labor to establish standards that will ensure the safety and health of women employees and in appropriate cases shall by regulation require employers to determine appropriate minimum standards for termination in special occupations. Branding the policy of the employer as an example of "discriminatory chauvinism" tantamount to denying equal employment opportunities to women simply on account of their sex. Presidential Decree No. her entitlement to back wages. but do not apply to married men. promote full employment and equality in employment. the threemonth suspension imposed by respondent NLRC must be upheld to obviate the impression or inference that such act should be condoned. It would be worthwhile to reflect upon and adopt here the rationalization in Zialcita. be it on special or ordinary occupations. factories. we cannot agree to the respondent's proposition that termination from employment of flight attendants on account of marriage is a fair and reasonable standard designed for their own health. We cannot subscribe to the line of reasoning pursued by respondent. That her dismissal would be effected just when her probationary period was winding down clearly raises the plausible conclusion that it was done in order to prevent her from earning security of tenure. This finds support in Section 9 of the New Constitution. is a perceptive conclusion born of experience in labor cases. 35 Further. Under American jurisprudence. In both instances. or to actually dismiss. inclusive of allowances and other benefits or their monetary equivalent. Moreover. discharge. in no uncertain terms. the same should be evenly applied and must not inflict adverse effects on a racial or sexual group which is protected by federal job discrimination laws. which she did. a policy of Philippine Air Lines requiring that prospective flight attendants must be single and that they will be automatically separated from the service once they marry was declared void. The judgment of the Court of Appeals in Gualberto. 1992. where the employer discriminates against married women. . vs. 28 The primary standard of determining regular employment is the reasonable connection between the activity performed by the employee in relation to the business or trade of the employer. race. and just and humane conditions of work . Moreover. The Labor Code state. in the absence of said standards or regulations which are as yet to be established. The State shall assure the rights of workers to self-organization. There. job requirements which establish employer preference or conditions relating to the marital status of an employee are categorized as a "sex-plus" discrimination where it is imposed on one sex and not on the other. 31 better known as the "Women andChild Labor Law. is somewhat insincere and self-serving. Philippine Air Lines. . vs. on the other hand. and for Other Purposes. safety. sophisticated technology has narrowed the distance from one place to another. discriminate or otherwise prejudice a woman employee merely by reason of marriage. is reflected in the whole text and supported by Article 135 that speaks of non-discrimination on the employment of women. The State shall afford protection to labor. respectively. 4. abhors any stipulation or policy in the nature of that adopted by petitioner PT & T. whether the negligence was in nature simple or grave. otherwise known as the Women and Child Labor Law. her earlier stints with the company as reliever were undoubtedly those of a regular employee. It would be unfair to the employer if she were to return to its fold without any sanction whatsoever for her act which was not totally justified. Respondent is resolute in its contention that Article 136 of the Labor Code applies only to women employed in ordinary occupations and that the prohibition against marriage of women engaged in extraordinary occupations. sex. or on November 1. such as the desirability of spreading work in the workplace. In said case. protection and welfare. it was merely agreed that private respondent execute a promissory note to refund the same. security of tenure.

Belga brought her daughter to the Philippine General Hospital (PGH) for treatment of bronchopneumonia. incoming and outgoing bank transactions. or two days after giving birth. that is. Puno. we have recognized the right of employers to dismiss employees by reason of loss of trust and confidence. ideals and purpose of marriage as an inviolable social institution and. Tropical harps on the alleged concealment by Belga of her pregnancy. LOURDES BELGA. a privilege that by all accounts inheres in the individual as an intangible and inalienable right.. Time and again. Tropical claimed that this position was not merely clerical because it included duties such as assisting the cashier in preparing deposit slips.[7] Belga filed a petition for certiorari with the Court of Appeals which found in favor of Belga. We thereby render judgment: (1) declaring complainant-appellee’s dismissal valid. tending as it does to deprive a woman of the freedom to choose her status. a dereliction of duty. We have defined misconduct as a transgression of some established and definite rule of action. Petitioner Tropical Biological Phils. a forbidden act. No. 248. INC. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ERROR IN DISREGARDING THE FINDINGS OF THE NATIONAL LABOR RELATIONS COMMISSION. the alleged misconduct of Belga barely falls within the situation contemplated by the law. It was thus physically impossible for Belga to report for work and explain her absence. Tropical. Petitioners. Petitioner's policy is not only in derogation of the provisions of Article 136 of the Labor Code on the right of a woman to be free from any kind of stipulation against marriage in connection with her employment. averred that it hired Belga on March 1. 2001. 1st Division YNARES-SANTIAGO. thus: WHEREFORE. J.[9] The petition lacks merit. 2001. 2001 as her newborn was scheduled for check-up on April 2. The misconduct to be serious must be of such grave and aggravated character and not merely trivial and unimportant. 2001 where she was given a chance to explain. begs the question as to how one can conceal a full-term pregnancy. (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative. INC. LA CROESUS PHARMA. nevertheless. for deliberately concealing her pregnancy. While there may be instances where the pregnancy may be inconspicuous. Inc. with double costs against petitioner. Technical Manager of Tropical.R. This argument. SO ORDERED. which can hardly be considered a forbidden act. (Tropical). as a just cause for termination. provisional receipts. 2001. 41 In the final reckoning. ultimately. hence the parties brought the case before the NLRC-NCR. Tropical terminated Belga on the following grounds: (1) Absence without official leave for 16 days. as ordered. 2003. 40 It goes on to intone that neither capital nor labor should visit acts of oppression against the other. Belga dropped by the house of Marylinda O. SO ORDERED.[11] In the instant case. 2001.[4] The Labor Arbiter ruled in favor of Belga and found that she was illegally dismissed. Tropical claimed that Belga refused to receive the second memorandum and did not attend the conference.: Before us is a petition for review of the July 28.[10] In the instant case. She did not apply for leave and her absence disrupted Tropical’s financial transactions. Attempts to settle the case failed. — An employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work.. premises considered. hired on March 1.. Her absence for 16 days was justified considering that she had just delivered a child. On March 21. 1995 respondent Ma. which reversed the findings of the labor arbiter in its Decision dated April 14. II. thus: WHEREFORE. Such misconduct. 2003 of the public respondent National Labor Relations Commission are hereby REVERSED and SET ASIDE. 2001. or public policy. 2005 Oct 20. for her deliberate refusal to heed and comply with the memoranda sent by the Personnel Department on March 21 and 30. she was informed of her dismissal effective that day. of the family as the foundation of the nation. Vegafria. Tropical also alleged that Belga concealed her pregnancy from the company.[8] Hence.. Willfulness is characterized by a wrongful and perverse mental attitude rendering the employee’s act inconsistent with proper subordination. 166379. 2001. It argues that such non-disclosure is tantamount to dishonesty and impresses upon this Court the importance of Belga’s position and the gravity of the disruption her unexpected absence brought to the company. and its December 17. while it is true that the parties to a contract may establish any agreements. Tropical sent Belga another memorandum ordering her to report for work and also informing her of the clarificatory conference scheduled on April 2. for its part. and implies wrongful intent and not mere error in judgment. . We agree with respondent’s position that it can hardly escape notice how she grows bigger each day. On April 17.R. G. public order. On March 30. disguised or dissembled forms as discriminatory conduct derogatory of the laws of the land is not only in order but imperatively required. thus: WHEREFORE.. be in connection with the employee’s work to constitute just cause for his separation. It adds that the nature of Belga’s work and the character of her duties involved utmost trust and confidence. the act Labor Standards | To digest (old cases) | Ajean Tuazon| 90 . 80616 which reversed and set aside the April 14. (2) Dishonesty. The decision of the Labor Arbiter dated June 15. On March 22. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ERROR IN HOLDING THAT RESPONDENT WAS ILLEGALLY DISMISSED. INC. and (2) nullifying complainant-appellee’s monetary claims. Tropical also charges Belga with insubordination for refusing to comply with its directives to report for work and to explain her absence. (all known as LAKPUE GROUP OF COMPANIES) and/or ENRIQUE CASTILLO. willful in character. SP No. 2001. She reported for work only on April 4. 2001. 1995 as a bookkeeper and later promoted to various positions the last of which was as “Treasury Assistant”. Lourdes Belga (Belga) as bookkeeper and subsequently promoted as assistant cashier. Termination by employer. Belga who was pregnant experienced labor pains and gave birth on the same day. nor impair the interest or convenience of the public. to hand over the documents she worked on over the weekend and to give notice of her emergency leave. it required Belga to explain her unauthorized absence and on March 30. Jr. she should be reinstated with full backwages. a subsidiary of Lakpue Group of Companies. Tropical filed the instant petition claiming that: I. concur. 2001. Tropical summoned Belga to report for work but the latter replied that she could not comply because of her situation. JJ.. now amounts to P122. but it likewise assaults good morals and public policy. 2003 Decision[2] of the National Labor Relations Commission (NLRC) in NLRC NCR 00-09-04981-01. however serious. must be willful or intentional. Tropical cites the following paragraphs of Article 282 of the Labor Code as legal basis for terminating Belga: Article 282. withdrawal slips. 2002 is hereby REINSTATED. SO ORDERED. morals. 2001.[6] Upon denial of the motion for reconsideration on September 24. TROPICAL BIOLOGICAL PHILS. of capital and labor. the danger of just such a policy against marriage followed by petitioner PT & T is that it strikes at the very essence. the memoranda were given to Belga two days after she had given birth. Tropical’s ground for terminating Belga is her alleged concealment of pregnancy. are not merely contractual. The charge of disobedience for Belga’s failure to comply with the memoranda must likewise fail. When Belga attended the clarificatory conference on April 4. Disobedience. 2001 respectively. supplier’s checklist and issuance of checks. however. Parenthetically. we emphasize that such ground is premised on the fact that the employee concerned holds a position of responsibility or trust and confidence. Belga requested that the conference be moved to April 4. good customs. much less does it imply wrongful intent on the part of Belga. the Civil Code provisions on the contract of labor state that the relations between the parties.. which as of May 31. 42 That it must be effectively interdicted here in all its indirect.[5] Tropical appealed to the NLRC. bills purchased. 2004 Resolution[3] denying the motion for reconsideration. On her way to the hospital.71. postdated checks.. impressed as they are with so much public interest that the same should yield to the common good. Mendoza and Torres. Respondent. Belga thus filed a complaint with the Public Assistance and Complaint Unit (PACU) of the Department of Labor and Employment (DOLE). SO ORDERED.. ON THE FOREGOING PREMISES. However. 2003 and the Resolution promulgated on September 24. LAKPUE DRUG. 2002. Ten (10%) percent of the total monetary award as attorney’s fees is likewise ordered. 38 Hence. JR. terms. ACCORDINGLY. On March 19... the same should not be contrary to law. it has not been sufficiently proven by Tropical that Belga’s case is such. (3) Insubordination. Romero..[12] In order to constitute a just cause for dismissal.. 2004 Decision[1] of the Court of Appeals in CA-G. the petition of Philippine Telegraph and Telephone Company is hereby DISMISSED for lack of merit. the assailed Decision is REVERSED and SET ASIDE. it informed her of a conference scheduled on April 2. and conditions that they may deem convenient. a dereliction of duty. 39 Carried to its logical consequences. in the light of the foregoing. 2003. . authorities to debit and doing liaison work with banks. the termination of complainant is hereby declared illegal. versus MA. it may even be said that petitioner's policy against legitimate marital bonds would encourage illicit or common-law relations and subvert the sacrament of marriage. Belga’s failure to formally inform Tropical of her pregnancy can not be considered as grave misconduct directly connected to her work as to constitute just cause for her separation. the Decision promulgated on April 14. While at the PGH.. Tropical avers that Belga’s job as Treasury Assistant is a position of responsibility since she handles vital transactions for the company. must.5.

which appropriately should be a special civil action for certiorari. She was permitted to go on leave for medication. otherwise the notice cannot be considered sufficient compliance with the rules. Such definition covers family drivers. 2 The main thrust of the petition is that private respondent should be treated as a mere househelper or domestic servant and not as a regular employee of petitioner. private respondent filed a request for assistance with the Department of Labor and Employment. respondents. Emergency Living Allowance 12. Separation Pay (One-month for every year of service [1973-1988]) 25. Hence. Conformably With The Foregoing. as distinguished from an act done carelessly. the employer has the burden of proving that the worker has been served two notices: (1) one to apprise him of the particular acts or omissions for which his dismissal is sought. the herein petition for review by certiorari. They may not be considered as within the meaning of a "househelper" or "domestic servant" as above-defined by law. J. Asirit. 2001 memorandum demanded that she report for work and attend a clarificatory conference. petitioner. thoughtlessly. like petitioner who attends to the needs of the company's guest and other persons availing of said facilities. SO ORDERED. In the beginning. vs. GANCAYCO. Further. Davao del Norte. 2004 Decision of the Court of Appeals in CA-G.[17] Thus. whether male or female. In Electro System Industries Corporation v.[16] we held that. on May 18. CONSUELO YNARES-SANTIAGO (Associate Justice) WE CONCUR: HILARIO G. An employee who was illegally dismissed from work is entitled to reinstatement without loss of seniority rights. On December 18.430. petitioner appealed to the public respondent National Labor Relations Commission (NLRC). The first notice must state that the dismissal is sought for the act or omission charged against the employee. knowingly and purposely. Davao del Norte. 13th Month Pay Differential 1. and which in the interest of justice. NATIONAL LABOR RELATIONS COMMISSION and SINCLITICA CANDIDO. heedlessly or inadvertently. etc. ANTONIO T. Section 1(b). if proven. her termination from employment is not commensurate to her lapse in judgment. inclusive of allowances. The petition is devoid of merit. After the parties submitted their position papers as required by the labor arbiter assigned to the case on August 24. All told. The March 30. QUISUMBING. whether it is a corporation or a single proprietorship engaged in business or industry or any other agricultural or similar pursuit. judgment is hereby rendered ordering the respondent. in dismissing an employee. while she was attending to her assigned task and she was hanging her laundry. gardeners. Inc. Maco. she was paid on a monthly basis at P250. the dispositive part of which reads as follows: "WHEREFORE. The mere fact that the househelper or domestic servant is working within the premises of the business of the employer and in relation to or in connection with its business. 2001 memorandum merely informed her to report for work and explain her absences. 1988. laundry women.: Is the househelper in the staff houses of an industrial company a domestic helper or a regular employee of the said firm? This is the novel issue raised in this petition. 1989 dismissing the appeal for lack of merit and affirming the appealed decision..42). DAVIDE. service is being rendered in the staffhouses or within the premises of the business of the employer. 1988. wherein in due course a decision was rendered by the Fifth Division thereof on July 20. it is undisputed that Belga has worked for Tropical for 7 years without any blemish on her service record. she managed to transmit to the company the documents she worked on over the weekend so that it would not cause any problem for the company.R. Tropical has not satisfactorily shown how and to what extent it had suffered damages because of Belga’s absences.32.[15] And her fidelity to her work is evident because even in the midst of an emergency. post-dated checks. without justifiable excuse.000.[14] Belga was an assistant cashier whose primary function was to assist the cashier in such duties as preparation of deposit slips. they are employees of the company or employer in the business concerned entitled to the privileges of a regular employee. SP No. the instant petition is DENIED.161. as in its staffhouses for its guest or even for its officers and employees. the terms "househelper" or "domestic servant" are defined as follows: "The term 'househelper' as used herein is synonymous to the term 'domestic servant' and shall refer to any person. to pay the complainant. Private respondent Sinclitica Candido was employed by petitioner Apex Mining Company. 80616 and its December 17.[13] More importantly.289. On the other hand. Even assuming that there was just cause for terminating Belga. domestic servants. the loss of trust and confidence must be based on the willful breach of the trust reposed in the employee by his employer. and ministers exclusively to the personal comfort and enjoyment of the employer's family. She reported the accident to her immediate supervisor Mila de la Rosa and to the personnel officer. A motion for reconsideration thereof was denied in a resolution of the NLRC dated June 29. CARPIO. The March 21.30 or in the total of FIFTY FIVE THOUSAND ONE HUNDRED SIXTY ONE PESOS AND 42/100 (P55. and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. Under Rule XIII.00 to persuade her to quit her job. The definition cannot be interpreted to include househelp or laundry women working in staffhouses of a company.119.322.. Inc. on January 17. Labor Standards | To digest (old cases) | Ajean Tuazon| 91 .20 2." 3 The foregoing definition clearly contemplates such househelper or domestic servant who is employed in the employer's home to minister exclusively to the personal comfort and enjoyment of the employer's family. who renders services in and about the employer's home and which services are usually necessary or desirable for the maintenance and enjoyment thereof. Hence. The July 28. Masara. For while ostensibly. 1987. In fact.00 which was eventually increased to P5. as amended." 1 Not satisfied therewith. Florendo D. the difference in their circumstances is that in the former instance they are actually serving the family while in the latter case. 1988 the latter rendered a decision. 4. 1990. we are not convinced that Belga’s absence for 16 days has wreaked havoc on Tropical’s business as to justify her termination from the company. As a result of the accident she was not able to continue with her work. It must also inform outright that an investigation will be conducted on the charges particularized therein which. Apex Mining Company. National Labor Relations Commission.00 3. JR. While it may be true that the nature of the work of a househelper. However. she accidentally slipped and hit her back on a stone.complained of must be “work-related” such as would show the employee concerned to be unfit to continue working for the employer. these functions are essentially clerical. the documents that Belga prepares as Assistant Cashier pertain to her employer’s property. Salary Differential P16. houseboys and other similar househelps. (Chief Justice). Petitioner contends that it is only when the househelper or domestic servant is assigned to certain aspects of the business of the employer that such househelper or domestic servant may be considered as such as employee. 1982. and (2) the other to inform him of his employer’s decision to dismiss him. we find that the penalty of dismissal was too harsh in light of the circumstances obtaining in this case. On March 11. A breach of trust is willful if it is done intentionally. her position cannot be considered as one of responsibility or imbued with trust and confidence. domestic servant or laundrywoman in a home or in a company staffhouse may be similar in nature. Belga is entitled to be reinstated to her former or equivalent position and to the payment of full backwages from the time she was illegally dismissed until her actual reinstatement. By the same token. Belga simply prepares the documents as instructed by her superiors subject to the latter’s verification or approval. SO ORDERED.000. For while it may be true that the company was caught unprepared and unable to hire a temporary replacement.00 a month. 1973 to perform laundry services at its staff house located at Masara. is hereby treated as such. her dismissal is nonetheless invalid for failure of Tropical to observe the twin-notice requirement.00 a month which was ultimately increased to P575. 2004 Resolution are AFFIRMED in toto. The Court finds no merit in making any such distinction. the staffhouses and its premises. ADOLFO S. provisional receipts. De la Rosa offered her the amount of P2. we held that a notation in the notice that the employee refused to sign is not sufficient proof that the employer attempted to serve the notice to the employee. Belga received the first memorandum but allegedly refused to receive the second. and other privileges and to his full backwages. will result to his dismissal. LEONARDO A. or gardener exclusively working in the company. the company admitted in its petition that she “has rendered seven (7) years of service in compliance with [the company’s] rules”. she was paid on a piece rate basis. to wit: 1. INC. As correctly observed by the Court of Appeals. WHEREFORE. it cannot be considered to extend to the driver. The criteria is the personal comfort and enjoyment of the family of the employer in the home of said employer. Book 3 of the Labor Code. her work does not call for independent judgment or discretion. While it may be true that Belga ought to have formally informed the company of her impending maternity leave so as to give the latter sufficient time to find a temporary replacement. AZCUNA EMPLOYMENT OF HOUSEHELPERS APEX MINING COMPANY. In such instance. houseboy. yayas. Petitioner did not allow her to return to work and dismissed her on February 4. but she refused the offer and preferred to return to work. Furthermore.

Su was empowered to hire the petitioner under Article V of the By-laws of the Association which states: ".00 as separation pay. 1979. P10. Her personal belongings including assorted jewelries were never returned by respondent Chua. 1988 in NLRC-NCR Case No. This argument notwithstanding. entitled to appropriate relief as a regular employee of petitioner. Upon the death of Su in July. In addition. ACCORDINGLY. Hence. Clearly. Inasmuch as private respondent appears not to be interested in returning to her work for valid reasons. no proof that she was re-hired by the new Head Monk.575. JJ. Chua and Dee. Petitioner. 1982 which she filed only in 1986. Moreover. her status as a regular employee ended upon her return to Bicol in May. Petitioner herself supplied the reason for her return. shall deal with the bank or banks . 1983. the petition is DISMISSED and the appealed decision and resolution of public respondent NLRC are hereby AFFIRMED. this instant petition. however. P26. Aside from her pay and allowances under the law. petitioner was sent home to Bicol. SOCIAL SECURITY COMMISSION. No pronouncement as to costs. Chua and Dee discontinued payment of her monthly allowance and the additional P500. "SO ORDERED. In her pleadings. Anent the petitioner's claim for unpaid wages since May. for short) in his capacity as the Head Monk of the Buddhist Temple of Manila and Baguio City and as President and Chairman of the Board of Directors of the Poh Toh Buddhist Association of the Phils. She was brought first to the Police precinct in Tondo and then brought to Aloha Hotel where she was compelled to sign a written undertaking not to return to the Buddhist temple in consideration of the sum of P10. subject to the Board. premises considered. (I)t was the death-bed instruction to her by Chua Se Su to stay at the temple and to take care of the two boys and to see to it that they finish their studies to become monks and when they are monks to eventually take over the two temples as their inheritance from their father Chua Se Su. In 1981. It must be noted that petitioner was hired in 1978 and no whimper of protest was raised until this present controversy. the Labor Arbiter rendered a decision. Chua Se Su (Su. PABLO CANALE. respondent Manuel Chua (Chua. act as tourist guide for foreign Chinese visitors. Petitioner denies having illegally dismissed private respondent and maintains that respondent abandoned her work." 4 Thus. respondents. P18.000. her return could not be deemed as a resumption of her old position which she had already abandoned. however. . WHEREFORE. A painstaking review of the records compels Us to dismiss the petition. 986.. RUEL PANGAN.R.00 effective 1983. 1988. MANUEL CHUA. she received an amount of P500. she herself manifested that respondents made it clear to her in no uncertain terms that her services as well as her presence and that of her son were no longer needed. Inc. Su and petitioner had amorous relations. MWSS bills and act as liaison in some government offices. We view the respondents' offer of P10. Inc.. the work that petitioner performed in the temple could not be categorized as mere domestic work. PLDT. attended to the visitors.. her return to the temple was no longer as an employee but rather as Su's mistress who is bent on protecting the proprietary and hereditary rights of her son and nephew." Respondent NLRC represented by its Legal Officer 3 argues that since petitioner was hired without the approval of the Board of Directors of the Poh Toh Buddhist Association of the Philippines. no employeremployee relationship could have arisen. vs. shall manage the active business operation of the Association. "Complainant's charge of unfair labor practice is hereby dismissed for lack of merit. she persisted and continued to work in the temple without receiving her salary because she expected Chua and Dee to relent and permit the studies of the two boys. therefore. "2. In fact. 1983 after Su died that she went back to the Manila Buddhist Temple. and "4. acted as tourist guide of foreign visitors. there is enough evidence to show that because of an accident which took place while private respondent was performing her laundry services.000. No. petitioner and her son were evicted forcibly from their quarters in the temple by six police officers. while petitioner contends that she continued to work in the temple after Su died. Rev. Gancayco and Griño-Aquino. Petitioner alleged in her position paper the following facts: In 1978. Section l(b). They should be appropriately threshed out in the complaints already filed by the petitioner before the civil courts. she was not able to work and was ultimately separated from the service. . the decision of the National Labor Relations Commission dated November 29. She is. 1982 to await the birth of her lovechild allegedly by Su. as amended. the petitioner claims that they were forcefully evicted from the temple.warrants the conclusion that such househelper or domestic servant is and should be considered as a regular employee of the employer and not as a mere family househelper or domestic servant as contemplated in Rule XIII. FILOMENA BARCENAS. P14. concur. and in his private capacity. 1986 up to date hereof. 1990 July 16. Narvasa (Chairman). the dispositive portion of which states: "WHEREFORE. Su. Thereafter. Petitioner's position required her to receive and assist Chinese visitors to the temple. BOOK 4: HEALTH SAFETY AND SOCIAL WELFARE BENEFITS SOCIAL SECURITY ACT OF 1997 REYNALDO CANO CHUA..00. doing business under the name & style PRIME MOVER CONSTRUCTION DEVELOPMENT. In May. G. the payment of separation pay to her is in order. versus COURT OF APPEALS. In 1985. They were essential and important to the operation and religious functions of the temple. and made the payment for the temple's Meralco. judgment is hereby rendered in favor of the complainant Filomena Barcenas. Su assumed the responsibility of paying for the education of petitioner's nephew. in his capacity as the President and Chairman of the Board of Directors of the Poh Toh Buddhist Association of the Philippines. her position is co-terminous with that of her master. Thus. 87210. run errands for the Head Monk such as paying the Meralco. complainant remained and continued in her job. . under these circumstances. 1982.000. SOCIAL SECURITY SYSTEM. 5 However. for short) was elected Head Buddhist Priest. These claims are not proper in this labor case. Cruz. Inc. 1982. The records do not show that petitioner filed any leave from work or that a leave was granted her. and the respondent corporation is hereby ordered to pay her the following: "1. 1982. whom she named Robert Chua alias Chua Sim Tiong. Book 3 of the Labor Code. No costs. Indeed. 1988 is hereby AFFIRMED for the reasons aforestated. reversed the above decision of the Labor Arbiter. being proficient in the Chinese language. et al.650. hired the petitioner who speaks the Chinese language as secretary and interpreter. THE NATIONAL LABOR RELATIONS COMMISSION (NLRC). otherwise they shall forever be barred. J. she was not an employee of respondents. We agree with the petitioner's claim that she was a regular employee of the Manila Buddhist Temple as secretary and interpreter of its Head Monk. the present Head Monk of the Manila Buddah Temple. On February 10. the same was already granted. Petitioner's pleadings failed to rebut this finding. SO ORDERED. attend to the callers of the Head Monk as well as to the food for the temple visitors. She stated: ". MWSS and PLDT bills. ..) on the ground that no employer-employee relationship exists between the parties. Finally. even granting that prior Board approval is required to confirm the hiring of the petitioner.00 as unpaid wages from August. 1st Division MEDIALDEA. SO ORDERED. which reversed the decision of the Labor Arbiter dated February 10. 1988. JJ. We find that petitioner. "3. Due to these claims.: This petition for review on certiorari (which We treat as a special civil action for certiorari) seeks to annul the decision of the National Labor Relations Commission dated November 29. Sim Dee (Dee. etc. of five months before giving birth to the alleged son of Su on October 12. The required Board approval would appear to relate to the acts of the President in representing the association "in all its dealings with the public. concur.. This argument is specious. 12-4861-86 (Filomena Barcenas v. 6 Consequently. At the outset. We hold that the same has already prescribed. . and Rev. shall have the power to enter into any contract or agreement in the name of the Association. Griño-Aquino and Medialdea. harassed and threatened by respondents and that the Poh Toh Buddhist Association is a trustee corporation with the children as cestui que trust. SIM DEE. claimed that petitioner was never an employee of the Poh Toh Temple but a servant who confined herself to the temple and to the personal needs of the late Chua Se Su and thus. as earlier stated. on the other hand. these tasks may not be deemed activities of a household helper. 1983 up to August 8. arranged meetings between these visitors and Su and supervised the preparation of the food for the temple visitors. . In December.00 per month plus free board and lodging in the temple. . mostly Chinese. who came to pray or seek advice before Buddha for personal or business problems. the Vice President shall represent the Association in all its dealings with the public.00 backwages from August 9. Neither did she return to work after the birth of her child on October 12. Inc. As Head Monk. Narvasa (Chairman). tacitly. albeit. Rev. Under Article 292 of the Labor Code. In spite of this finding. The NLRC found that it was only in July.000. for short) was elected President and Chairman of the Board of the Poh Toh Buddhist Association of the Philippines. acted as liaison with some government offices. ANDRES PAGUIO. all money claims arising from employer-employee relations must be filed within three years from the time the cause of action accrued. (T)he President or in his absence. petitioner. Sim See.00 as indicative more of their desire to evict the petitioner and her son from the temple rather than an admission of an employer-employee relations. AURELIO PAGUIO." 1 Respondents appealed to the National Labor Relations Commission which. Petitioner refused and Chua shouted threats against her and her son." And. there is. Cruz. ROLANDO Labor Standards | To digest (old cases) | Ajean Tuazon| 92 . President and Chairman of the Board of Directors of the Poh Toh Buddhist Association of the Philippines.00 moral damages.

the Court of Appeals synthesized the issues in the petition. stating that the filing of private respondents’ claims was well within the twenty (20)-year period provided by the Social Security Act.[39] Even without such admission from petitioner. private respondents are subject of the compulsory coverage under the SSS Law. or six (6) years or eight (8) years after they were taken in by petitioner. Thus. claiming that the case.TRINIDAD. and with the corresponding basic salaries. the existence of an employer-employee relationship between the parties can easily be determined by the application of the “control test..[17] He claimed that private respondents were project employees. He added that private respondents “went into a long swoon. or his honest belief that project employees are not regular employees under Article 280 of the Labor Code.[27] It cited the case of Mehitabel Furniture Company. (c) the power of dismissal. and that there was no evidence that petitioner lacked knowledge that private respondents would assert their rights.[24] In resolving the petition. the essential elements of which are: (a) selection and engagement of the employee.[18] There being no employeremployee relationship. 2nd Division Tinga. The SSC. More importantly. On 01 February 1995. old age and death. Significantly.”[35] It provides for compulsory coverage of all employees not over sixty years of age and their employers. otherwise they would not have accepted …. The Social Security Act was enacted pursuant to the policy of the government “to develop. whose periods of employment were terminated upon completion of the project. claiming that they were all regular employees of the petitioner in his construction business. granting that private respondents were entitled to coverage under the Act. ROMEO TAPANG and CARLOS MALIWAT.R.” The petitioner could then hire all its workers on a contract basis only and prevent them from attaining permanent status…. v.[8] petitioner claimed that private respondents had no cause of action against him.) 39/day Carlos Maliwat Mason 1977 42/day Private respondents alleged that petitioner dismissed all of them without justifiable grounds and without notice to them and to the then Ministry of Labor and Employment. v. whether petitioner is now liable to pay the SSS contributions and penalties during the period of employment. on the nature of private respondents’ employment.[38] although the period of their employment was allegedly co-terminus with their phase of work. should have been filed within four (4) years from the time their cause of action accrued.[30] It found that the principle of laches could not also apply to the instant case since delay could not be attributed to private respondents. having filed the case within the prescriptive period. petitioner claimed that the SSC erred in imposing penalties since his failure to include private respondents under SSS coverage was neither willful nor deliberate. No.[29] The Court of Appeals rejected the claim of prescription. In addition.[7] In his Answer. Pablo Canale. as well as the means and methods by which the same were accomplished. if not repetitive. since the period indicated. the private respondents have been hired to work on certain special orders that as a matter of business policy it cannot decline.[16] Petitioner elevated the matter to the Court of Appeals via a Petition for Review. whether it is regular or project.[22] Petitioner also questioned the failure to apply the rules on prescription of actions and of laches. Moreover. SSS[42] to the effect that all Labor Standards | To digest (old cases) | Ajean Tuazon| 93 .[32] claiming that the Court of Appeals overlooked (1) the doctrine that length of service of a project employee is not the controlling test of employment tenure.”[40] the elements of which are enumerated above. and (d) the power of control with regard to the means and methods by which the work is to be accomplished. J. is premised on the existence of an employer-employee relationship. petitioner again insists that private respondents were not regular. CV No.: This is a petition for review of the Decision[1] of the Court of Appeals in CA-G. Ruel Pangan.[2] affirming the Order of the Social Security Commission (SSC) dated 1 February 1995[3] which held that private respondents were regular employees of the petitioner and ordered petitioner to pay the Social Security System (SSS) for its unpaid contributions. disquisition of the private parties in the case. G. without prejudice to any other penalties which may have accrued. and its Resolution dated 30 July 1996 denying petitioner’s Motion for Reconsideration. he claimed that the SSC erred in ordering payment of contributions and penalties even for long periods between projects when private respondents were not working. and that their work was necessary and desirable to petitioner’s business which involved the construction of roads and bridges. Labor Code). (2) if so. 38269 dated 06 March 1996. including the penalty imposed for late premium remittances.[25] The Court of Appeals. and also of the public respondents. On 20 August 1985.[12] declared private respondents to be petitioner’s regular employees. and shall provide protection against the hazards of disability. Petitioner’s arguments are mere reiterations of his arguments submitted before the SSC and the Court of Appeals. Well-entrenched is the rule that the Supreme Court’s jurisdiction in a petition for review is limited to reviewing or revising errors of law allegedly committed by the appellate court. he claimed that private respondents were not regular employees. private respondents Andres Paguio.[34] Stripped of the lengthy. petitioner claims that assuming private respondents were subject to SSS coverage. but project employees whose work had been fixed for a specific project or undertaking the completion of which was determined at the time of their engagement. and (2) petitioner’s failure to place private respondents under SSS coverage was in good faith.[6] to wit: Andres Paguio Carpenter 1977 P 42/day Pablo Canale Mason 1977 42/day Ruel Pangan Mason 1979 39/day Aurelio Paguio Fine grading 1979 42/day Romeo Tapang Fine grading 1979 42/day Rolando Trinidad Carpenter 1983 (Jan. The SSS stated that it is the mandatory obligation of every employer to report its employees to the SSS for coverage and to remit the required contribution. owner of Prime Mover Construction Development. or from the time they were hired as project employees. it would have no regular workers because all of its orders would be special undertakings or projects.[28] particularly the ruling therein which states: By petitioner’s own admission. as well as penalty for the delayed remittance thereof. and assuming there was any. (b) payment of wages.[13] It ordered petitioner to pay the SSS the unpaid SS/EC and Medicare contributions plus penalty for the delayed remittance thereof. petitioner invokes the defense of good faith. RAB-III-8-2373-85.[26] declared that private respondents were all regular employees of the petitioner in relation to certain activities since they all worked either as masons. such special orders are not really seasonal but more or less regular. the NLRC has determined that the private respondents have worked for more than one year in the socalled “special projects” of the petitioner and so fall under the second condition specified in the above-quoted provision (Article 280. relying on NLRC Case No. the latter having control over the results of the work done. Petitioner himself admitted that they worked in his construction projects.[19] In addition. folded their arms and closed their eyes”[23] and filed their claim only in 1985. Aurelio Paguio. Rolando Trinidad.R.[31] Petitioner filed a Motion for Reconsideration.[33] In the present Petition for Review.[9] Meanwhile. sickness.[37] There is no dispute that private respondents were employees of petitioner. 2004 Oct 6. and whether their causes of action as such are barred by prescription or laches. he concluded that said employees were not entitled to coverage under the Social Security Act. no employer-employee relation existed between the parties. Furthermore.[5] Private respondents claimed that they were assigned by petitioner in his various construction projects continuously in the following capacity. to wit: (1) whether private respondents were regular employees of petitioner. being one for the injury to the rights of the private respondents.” The NLRC also correctly observed that “if we were to accept respondent’s theory. but project. 125837. They further alleged that petitioner did not report them to the SSS for compulsory coverage in flagrant violation of the Social Security Act. Romeo Tapang and Carlos Maliwat (hereinafter referred to as respondents) filed a Petition[4] with the SSC for SSS coverage and contributions against petitioner Reynaldo Chua. the SSS filed a Petition in Intervention[10] alleging that it has an interest in the petition filed by private respondents as it is charged with the implementation and enforcement of the provisions of the Social Security Act. Inc. their petition was barred by prescription and laches. petitioner wants this Court to review factual questions already passed upon by the SSC and the Court of Appeals which are not cognizable by a petition for review under Rule 45. the same was barred by prescription and laches. the findings of fact being generally conclusive on the Court and it is not for the Court to weigh evidence all over again. This being the case.[36] Well-settled is the rule that the mandatory coverage of Republic Act No. but due to the honest belief that project employees are not regular employees.[20] Moreover.[14] The SSC denied the Motion for Reconsideration[15] of petitioner for lack of merit. as amended. In addition. NLRC. the controversy boils down to one issue: the entitlement of private respondents to compulsory SSS coverage. Suffice it to say that regardless of the nature of their employment. It is clear that private respondents are employees of petitioner. carpenters and fine graders in petitioner’s various construction projects for at least one year. petitioner claimed that private respondents’ length of service did not change their status from project to regular employees.[21] Likewise. [41] This rule is in accord with the Court’s ruling in Luzon Stevedoring Corp. employees and thus not subject to SSS coverage. he claimed. private respondents are not entitled to coverage under the Social Security Act. with the power of control being the most determinative factor. citing Article 280 of the Labor Code. The motion was denied for lack of merit. These projects are necessary or desirable in its usual business or trade. requiring the virtually continuous services of the “temporary workers. Respondents. their employment not falling under the exceptions provided by the law. 1161. establish gradually and perfect a social security system which shall be suitable to the needs of the laborers throughout the Philippines. the SSC issued its Order[11] which ruled in favor of private respondents.

employees, regardless of tenure, would qualify for compulsory membership in the SSS, except those classes of employees contemplated in Section 8(j) of the Social Security Act.[43] This Court also finds no reason to deviate from the finding of the Court of Appeals regarding the nature of employment of private respondents. Despite the insistence of petitioner that they were project employees, the facts show that as masons, carpenters and fine graders in petitioner’s various construction projects, they performed work which was usually necessary and desirable to petitioner’s business which involves construction of roads and bridges. In Violeta v. NLRC,[44] this Court ruled that to be exempted from the presumption of regularity of employment, the agreement between a project employee and his employer must strictly conform to the requirements and conditions under Article 280 of the Labor Code. It is not enough that an employee is hired for a specific project or phase of work. There must also be a determination of, or a clear agreement on, the completion or termination of the project at the time the employee was engaged if the objectives of Article 280 are to be achieved.[45] This second requirement was not met in this case. Moreover, while it may be true that private respondents were initially hired for specific projects or undertakings, the repeated re-hiring and continuing need for their services over a long span of time—the shortest being two years and the longest being eight—have undeniably made them regular employees.[46] This Court has held that an employment ceases to be co-terminus with specific projects when the employee is continuously rehired due to the demands of the employer’s business and re-engaged for many more projects without interruption.[47] The Court likewise takes note of the fact that, as cited by the SSC, even the National Labor Relations Commission in a labor case involving the same parties, found that private respondents were regular employees of the petitioner.[48] Another cogent factor militates against the allegations of the petitioner. In the proceedings before the SSC and the Court of Appeals, petitioner was unable to show that private respondents were appraised of the project nature of their employment, the specific projects themselves or any phase thereof undertaken by petitioner and for which private respondents were hired. He failed to show any document such as private respondents’ employment contracts and employment records that would indicate the dates of hiring and termination in relation to the particular construction project or phases in which they were employed.[49] Moreover, it is peculiar that petitioner did not show proof that he submitted reports of termination after the completion of his construction projects, considering that he alleges that private respondents were hired and rehired for various projects or phases of work therein. Anent the issue of prescription, this Court rules that private respondents’ right to file their claim had not yet prescribed at the time of the filing of their petition, considering that a mere eight (8) years had passed from the time delinquency was discovered or the proper assessment was made. Republic Act No. 1161, as amended, prescribes a period of twenty (20) years, from the time the delinquency is known or assessment is made by the SSS, within which to file a claim for non-remittance against employers.[50] Likewise, this Court is in full accord with the findings of the Court of Appeals that private respondents are not guilty of laches. The principle of laches or “stale demands” ordains that the failure or neglect, for an unreasonable and unexplained length of time, to do that which by exercising due diligence could or should have been done earlier, or the negligence or omission to assert a right within a reasonable time, warrants a presumption that the party entitled to assert it either has abandoned it or declined to assert it.[51] In the instant case, this Court finds no proof that private respondents had failed or neglected to assert their right, considering that they filed their claim within the period prescribed by law. This Court finds no merit in petitioner’s protestations of good faith. In United Christian Missionary Society v. Social Security Commission,[52] this Court ruled that good faith or bad faith is irrelevant for purposes of assessment and collection of the penalty for delayed remittance of premiums, since the law makes no distinction between an employer who professes good reasons for delaying the remittance of premiums and another who deliberately disregards the legal duty imposed upon him to make such remittance.[53] For the same reasons, petitioner cannot now invoke the defense of good faith. WHEREFORE, the Petition is DENIED. The Decision and Resolution of the Court of Appeals promulgated on 6 March 1996 and 30 July 1996 respectively, are AFFIRMED. Costs against petitioner. SO ORDERED. DANTE O. TINGA - Associate Justice WE CONCUR: REYNATO S. PUNO, (On Leave) MA. ALICIA AUSTRIA-MARTINEZ, ROMEO J. CALLEJO, SR., MINITA V. CHICO-NAZARIO YOLANDA SIGNEY, Petitioner, versus SOCIAL SECURITY SYSTEM, EDITHA ESPINOSA-CASTILLO, and GINA SERVANO, representative of GINALYN and RODELYN SIGNEY, Respondents., G.R. No. 173582, 2008 Jan 28, 2nd Division Tinga, J:

We are called to determine who is entitled to the social security benefits of a Social Security System (SSS) member who was survived not only by his legal wife, but also by two common-law wives with whom he had six children. This Petition for Review on Certiorari[1] under Rule 45 of the 1997 Rules of Civil Procedure assails the 31 March 2004 Decision[2] of the Court of Appeals affirming the resolution of the Social Security Commission (SSC),[3] as well as the 23 July 2004 Resolution[4] of the same court denying petitioner’s motion for reconsideration. The facts as culled from the records are as follows: Rodolfo Signey, Sr., a member of the SSS, died on 21 May 2001. In his member’s records, he had designated Yolanda Signey (petitioner) as primary beneficiary and his four children with her as secondary beneficiaries. On 6 July 2001, petitioner filed a claim for death benefits with the public respondent SSS.[5] She revealed in her SSS claim that the deceased had a common-law wife, Gina Servano (Gina), with whom he had two minor children namey, Ginalyn Servano (Ginalyn), born on 13 April 1996, and Rodelyn Signey (Rodelyn), born on 20 April 2000.[6] Petitioner’s declaration was confirmed when Gina herself filed a claim for the same death benefits on 13 July 2001 in which she also declared that both she and petitioner were common-law wives of the deceased and that Editha Espinosa (Editha) was the legal wife. In addition, in October 2001, Editha also filed an application for death benefits with the SSS stating that she was the legal wife of the deceased.[7] The SSS, through a letter dated 4 December 2001,[8] denied the death benefit claim of petitioner. However, it recognized Ginalyn and Rodelyn, the minor children of the deceased with Gina, as the primary beneficiaries under the SSS Law. The SSS also found that the 20 March 1992 marriage between petitioner and the deceased was null and void because of a prior subsisting marriage contracted on 29 October 1967 between the deceased and Editha, as confirmed with the Local Civil Registry of Cebu City. Thereafter, petitioner filed a petition[9] with the SSC in which she attached a waiver of rights[10] executed by Editha whereby the latter waived “any/all claims from National Trucking Forwarding Corporation (NTFC) under the supervision of National Development Corporation (NDC), Social Security System (SSS) and other (i)nsurance (b)enefits due to the deceased Rodolfo Signey Sr., who died intestate on May 21, 2001 at Manila Doctors,” and further declared that “I am legally married to Mr. Aquilino Castillo and not to Mr. Rodolfo P. Signey Sr.”[11] In a Resolution[12] dated 29 January 2003, the SSC affirmed the decision of the SSS. The SSC gave more weight to the SSS field investigation and the confirmed certification of marriage showing that the deceased was married to Editha on 29 October 1967, than to the aforestated declarations of Editha in her waiver of rights. It found that petitioner only relied on the waiver of Editha, as she failed to present any evidence to invalidate or otherwise controvert the confirmed marriage certificate. The SSC also found, based on the SSS field investigation report dated 6 November 2001 that even if Editha was the legal wife, she was not qualified to the death benefits since she herself admitted that she was not dependent on her deceased husband for support inasmuch as she was cohabiting with a certain Aquilino Castillo.[13] Considering that petitioner, Editha, and Gina were not entitled to the death benefits, the SSC applied Section 8(e) and (k) of Republic Act (RA) No. 8282, the SSS Law which was in force at the time of the member’s death on 21 May 2001, and held that the dependent legitimate and illegitimate minor children of the deceased member were also considered primary beneficiaries. The records disclosed that the deceased had one legitimate child, Ma. Evelyn Signey, who predeceased him, and several illegitimate children with petitioner and with Gina. Based on their respective certificates of live birth, the deceased SSS member’s four illegitimate children with petitioner could no longer be considered dependents at the time of his death because all of them were over 21 years old when he died on 21 May 2001, the youngest having been born on 31 March 1978. On the other hand, the deceased SSS member’s illegitimate children with Gina were qualified to be his primary beneficiaries for they were still minors at the time of his death, Ginalyn having been born on 13 April 1996, and Rodelyn on 20 April 2000.[14] The SSC denied the motion for reconsideration filed by petitioner in an Order[15] dated 9 April 2003. This order further elaborated on the reasons for the denial of petitioner’s claims. It held that the mere designation of petitioner and her children as beneficiaries by the deceased member was not the controlling factor in the determination of beneficiaries. Sections 13, 8(e) and 8(k) of the SSS Law, as amended, provide that dependent legal spouse entitled by law to receive support from the member and dependent legitimate, legitimated or legally adopted, and illegitimate children of the member shall be the primary beneficiaries of the latter.[16] Based on the certification dated 25 July 2001 issued by the Office of the Local Civil Registrar of Cebu City, the marriage of the deceased and Editha on 29 October 1967 at the Metropolitan Cathedral, Cebu City was duly registered under LCR Registry No. 2083 on 21 November 1967. The SSS field investigation reports verified the authenticity of the said certification.[17] The SSC did not give credence to the waiver executed by Editha, which manifested her lack of interest in the outcome of the case, considering that she was not entitled to the benefit anyway because of her admitted cohabitation with Aquilino Castillo. Moreover, the SSC held that considering that one of the requisites of a valid waiver is the existence of an actual right which could be renounced, petitioner in effect recognized that Editha had a Labor Standards | To digest (old cases) | Ajean Tuazon| 94

right over the benefits of the deceased thereby enabling her to renounce said right in favor of petitioner and her children. The declaration by Editha that she was not married to the deceased is not only contrary to the records of the Local Civil Registrar of Cebu City which state that they were married on 29 October 1967 but also renders nugatory the waiver of right itself, for if she was not married to the deceased then she would have no rights that may be waived. Petitioner had argued that the illegitimate children of the deceased with Gina failed to show proof that they were indeed dependent on the deceased for support during his lifetime. The SSC observed that Section 8(e) of the SSS Law, as amended, provides among others that dependents include the legitimate, legitimated or legally adopted, and illegitimate child who is unmarried, not gainfully employed, and has not reached 21 years of age. The provision vested the right of the benefit to his illegitimate minor children, Ginalyn and Rodelyn, irrespective of any proof that they had been dependent on the support of the deceased.[18] Petitioner appealed the judgment of the SSC to the Court of Appeals by filing a Petition for Review[19] under Rule 43 of the 1997 Rules of Civil Procedure. The appellate court affirmed the decision of the SSC in its 31 March 2004 Decision. Resolving the determinative question of who between petitioner and the illegitimate children of the deceased are the primary beneficiaries lawfully entitled to the social security benefits accruing by virtue of the latter’s death, it held that based on Section 8(e) of R. A. No. 8282, a surviving spouse claiming death benefits as a dependent must be the legal spouse. Petitioner’s presentation of a marriage certificate attesting to her marriage to the deceased was futile, according to the appellate court, as said marriage is null and void in view of the previous marriage of the deceased to Editha as certified by the Local Civil Registrar of Cebu City. The appellate court also held that the law is clear that for a child to be qualified as dependent, he must be unmarried, not gainfully employed and must not be 21 years of age, or if over 21 years of age, he is congenitally or while still a minor has been permanently incapacitated and incapable of self-support, physically or mentally. And in this case, only the illegitimate children of the deceased with Gina namely, Ginalyn and Rodelyn, are the qualified beneficiaries as they were still minors at the time of the death of their father. Considering petitioner is disqualified to be a beneficiary and the absence of any legitimate children of the deceased, it follows that the dependent illegitimate minor children of the deceased should be entitled to the death benefits as primary beneficiaries, the Court of Appeals concluded.[20] The Court of Appeals denied the motion for reconsideration of petitioner in a Resolution[21] dated 23 July 2004. It found that there was no new matter of substance which would warrant a modification and/or reversal of the 31 March 2004 Decision. Hence, this petition for review on certiorari. Petitioner raises issues similar to the ones which have been adequately resolved by the SSC and the appellate court. The first issue is whether petitioner’s marriage with the deceased is valid. The second issue is whether petitioner has a superior legal right over the SSS benefits as against the illegitimate minor children of the deceased. There is no merit in the petition. We deemed it best not to disturb the findings of fact of the SSS which are supported by substantial evidence[22] and affirmed by the SSC and the Court of Appeals. Moreover, petitioner ought to be reminded of the basic rule that this Court is not a trier of facts.[23] It is a well-known rule that in proceedings before administrative bodies, technical rules of procedure and evidence are not binding.[24] The important consideration is that both parties were afforded an opportunity to be heard and they availed themselves of it to present their respective positions on the matter in dispute.[25] It must likewise be noted that under Section 2, Rule 1[26] of the SSC Revised Rules of Procedure, the rules of evidence prevailing in the courts of law shall not be controlling. In the case at bar, the existence of a prior subsisting marriage between the deceased and Editha is supported by substantial evidence. Petitioner, who has fully availed of her right to be heard, only relied on the waiver of Editha and failed to present any evidence to invalidate or otherwise controvert the confirmed marriage certificate registered under LCR Registry No. 2083 on 21 November 1967. She did not even try to allege and prove any infirmity in the marriage between the deceased and Editha. As to the issue of who has the better right over the SSS death benefits, Section 8(e) and (k) of R. A. No. 8282[27] is very clear. Hence, we need only apply the law. Under the principles of statutory construction, if a statute is clear, plain and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation. This plain meaning rule or verba legis, derived from the maxim index animi sermo est (speech is the index of intention), rests on the valid presumption that the words employed by the legislature in a statute correctly express its intent by the use of such words as are found in the statute. Verba legis non est recedendum, or, from the words of a statute there should be no departure.[28] Section 8(e) and (k) of R.A. No. 8282 provides: SEC. 8. Terms Defined.—For the purposes of this Act, the following terms shall, unless the context indicates otherwise, have the following meanings:

xxx (e) Dependents — The dependent shall be the following: (1) The legal spouse entitled by law to receive support from the member; 2) The legitimate, legitimated, or legally adopted, and illegitimate child who is unmarried, not gainfully employed and has not reached twenty-one years (21) of age, or if over twenty-one (21) years of age, he is congenitally or while still a minor has been permanently incapacitated and incapable of self-support, physically or mentally; and 3) The parent who is receiving regular support from the member. xxx (k) Beneficiaries — The dependent spouse until he or she remarries, the dependent legitimate, legitimated or legally adopted, and illegitimate children, who shall be the primary beneficiaries of the member: Provided, That the dependent illegitimate children shall be entitled to fifty percent (50%) of the share of the legitimate, legitimated or legally adopted children: Provided, further, That in the absence of the dependent legitimate, legitimated or legally adopted children of the member, his/her dependent illegitimate children shall be entitled to one hundred percent (100%) of the benefits. In their absence, the dependent parents who shall be the secondary beneficiaries of the member. In the absence of all of the foregoing, any other person designated by the member as his/her secondary beneficiary. SEC. 13. Death Benefits. — Upon the death of a member who has paid at least thirty-six (36) monthly contributions prior to the semester of death, his primary beneficiaries shall be entitled to the monthly pension: Provided, That if he has no primary beneficiaries, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to thirtysix (36) times the monthly pension. If he has not paid the required thirty-six (36) monthly contributions, his primary or secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the monthly pension times the number of monthly contributions paid to the SSS or twelve (12) times the monthly pension, whichever is higher. mphasis supplied). Whoever claims entitlement to the benefits provided by law should establish his or her right thereto by substantial evidence. Since petitioner is disqualified to be a beneficiary and because the deceased has no legitimate child, it follows that the dependent illegitimate minor children of the deceased shall be entitled to the death benefits as primary beneficiaries. The SSS Law is clear that for a minor child to qualify as a “dependent,[29]” the only requirements are that he/she must be below 21 years of age, not married nor gainfully employed.[30] In this case, the minor illegitimate children Ginalyn and Rodelyn were born on 13 April 1996 and 20 April 2000, respectively. Had the legitimate child of the deceased and Editha survived and qualified as a dependent under the SSS Law, Ginalyn and Rodelyn would have been entitled to a share equivalent to only 50% of the share of the said legitimate child. Since the legitimate child of the deceased predeceased him, Ginalyn and Rodelyn, as the only qualified primary beneficiaries of the deceased, are entitled to 100% of the benefits. WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals is AFFIRMED. Cost against petitioner. SO ORDERED. DANTE O.T INGA - Associate Justice WE CONCUR: LEONARDO A. QUISUMBING. ANTONIO T. CARPIO, CONCHITA CARPIO MORALES, PRESBITERO J. VELASCO, JR. GOVERNMENT INSURANCE ACT OF 1997 ([2004R1163E] GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner, versus COMMISSION ON AUDIT, Respondent., G.R. No. 138381, 2004 Nov 10, En Banc) YNARES-SANTIAGO, J.: On April 16, 2002, the Court promulgated a decision on these two consolidated cases partially granting the petition in G.R. No. 138381 (“first petition”) thereby reversing the Commission on Audit’s (COA) disallowance of certain fringe benefits granted to GSIS employees. As a result, the Court ordered the refund of amounts representing fringe benefits corresponding to those allowed in the first petition in favor of the respondents in G.R. No. 141625 (“second petition”). The benefits which the Court ordered to be refunded included increases in longevity pay, children’s allowance and management contribution to the Provident Fund as well as premiums for group personal accident insurance. On the other hand, the Court affirmed the COA disallowance of loyalty and service cash award as well as housing allowance in excess of that approved by the COA. Amounts corresponding to these benefits were previously deducted by GSIS from respondents’ retirement benefits in view of the COA disallowance in the first petition. COA did not seek reconsideration of the judgment ordering said refund, which thus became final and executory. On August 7, 2002, the respondents in the second petition, all GSIS retirees, filed a motion for amendatory and clarificatory judgment (“amendatory motion”).[1] They averred that we did not categorically resolve the issue raised

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in the second petition, namely: whether or not the GSIS may lawfully deduct any amount from their retirement benefits in light of Section 39 of Republic Act No. 8291. According to respondents, said provision of law clearly states that no amount whatsoever could be legally deducted from retirement benefits, even those amounts representing COA disallowances. They posit that we should have ordered refund not only of benefits allowed in the first petition, but all amounts claimed, regardless of whether or not these were allowed by the COA. These include items which were correctly disallowed by the COA in the first petition, as well as disallowed benefits under the second petition. The latter consists of initial payment of productivity bonus, accelerated implementation of the new salary schedule effective August 1, 1995, 1995 mid-year financial assistance and increase in clothing, rice and meal allowances. Respondents further insist that we should have awarded damages in their favor, citing the GSIS’ alleged bad faith in making the deductions. GSIS filed a comment[2] to respondents’ amendatory motion, as directed by the Court in a resolution dated September 3, 2002. GSIS posited that the other benefits not passed upon in the main judgment should be understood by respondents as having been impliedly denied by this Court. It also sought clarification of our decision insofar as it declared that there was no identity of subject matter between the COA proceedings, from which the first petition stemmed, and respondents’ claim under the second petition, which emanated from an order of the GSIS Board of Trustees (“Board”). As for the damages claimed by respondents, GSIS insists that it made the deductions in good faith for these were done in accordance with COA directives. Respondents filed a reply[3] to the comment of GSIS on September 9, 2002. Meanwhile, respondents filed a second motion, this time for leave to file a motion for discretionary and partial execution[4] (“motion for execution”). They prayed that GSIS be ordered to effect the refund, as finally adjudged in our decision, pending resolution of their amendatory motion as to the other deducted amounts. We granted the motion for execution on September 3, 2002. Subsequently, on December 26, 2002, counsel for respondents, Atty. Agustin Sundiam, filed a motion for entry and enforcement of attorney’s lien[5] (“motion for charging lien”) and a supplement[6] to this motion on January 10, 2003. He sought entry of a charging lien in the records of this case pursuant to Section 37 of Rule 138. He prayed for an order directing the GSIS to deduct, as his professional fees, 15% from respondents’ refund vouchers since the GSIS was already in the process of releasing his clients’ checks in compliance with our judgment in the first petition. The payment scheme was allegedly authorized by the Board of Directors of his clients, the GSIS Retirees Association, Inc. (GRIA), through a board resolution[7] that he has attached to the motion. Atty. Sundiam’s motion for charging lien was opposed by petitioner GSIS on the ground that it was through its efforts, and not Atty. Sundiam’s, that the retirees were able to obtain a refund.[8] Meanwhile, the GRIA confirmed the payment scheme it adopted with Atty. Sundiam and prayed for its approval.[9] Thereafter, on January 10, 2003, respondents filed another manifestation and motion as well as supplement thereto, claiming that GSIS was deducting new and unspecified sums from the amount it was refunding to respondents. These new deductions purportedly pertain to another set of COA disallowances.[10] On January 21, 2003, respondents again filed a motion[11] praying for the inclusion in the refundable amount of dividends on the management contribution to the Provident Fund (“motion for payment of dividends”). Respondents claimed that the contribution, which amounted to Fifty Million Pesos (P50M), was retained by GSIS for more than five years and thus earned a considerable sum of income while under its control. GSIS declared and paid dividends on said contribution to incumbent officials and employees, but refused to extend the same benefits to respondents/retirees. On March 6, 2003, GSIS filed a joint comment[12] to respondents’ two foregoing motions contending that the new deductions are legitimate. The deductions pertain to car loan arrearages, disallowed employees’ compensation claims and the like. As for the dividends on the Provident Fund contributions, respondents are not entitled to the same because while the first petition was pending, the contributions were not actually remitted to the fund but were withheld by COA pursuant to its earlier disallowance. On October 2, 2003, respondents filed another motion[13] for an order to compel the GSIS to pay dividends on the Provident Fund contributions pending resolution of their other motions. They also sought refund of Permanent Partial Disability (PPD) benefits that GSIS supposedly paid to some of the respondents, but once again arbitrarily deducted from the amount which the Court ordered to be refunded. In a minute resolution[14] dated November 11, 2003, we denied the last motion for lack of merit. We likewise denied with finality respondents’ motion for reconsideration from the denial of said motion.[15] We now resolve the matters raised by the parties. On the amendatory motion, it must be clarified that the question raised before this Court in the second petition was the issue of the Board’s jurisdiction to resolve respondents’ claim for refund of amounts representing deductions from their retirement benefits. What was assailed in the second petition was the appellate court’s ruling that the Board had jurisdiction over respondents’ claim since there was no identity of subject matter between the proceedings then

pending before the COA and the petition brought by respondents before the Board. The Court of Appeals did not rule on the main controversy of whether COA disallowances could be deducted from retirement benefits because the Board ordered the dismissal of respondents’ claim for alleged lack of jurisdiction, before it could even decide on the principal issue. Consequently, the only matter that was properly elevated to this Court was the issue of whether or not the Board had jurisdiction over respondents’ demands. We did not resolve the issue of whether or not the deductions were valid under Section 39 of RA 8291, for the simple reason that the Board, as well as the appellate court, did not tackle the issue. The doctrine of primary jurisdiction[16] would ordinarily preclude us from resolving the matter, which calls for a ruling to be first made by the Board. It is the latter that is vested by law with exclusive and original jurisdiction to settle any dispute arising under RA 8291, as well as other matters related thereto.[17] However, both the GSIS and respondents have extensively discussed the merits of the case in their respective pleadings and did not confine their arguments to the issue of jurisdiction. Respondents, in fact, submit that we should resolve the main issue on the ground that it is a purely legal question. Respondents further state that a remand of the case to the Board would merely result in unnecessary delay and needless expense for the parties. They thus urge the Court to decide the main question in order to finally put an end to the controversy. Indeed, the principal issue pending before the Board does not involve any factual question, as it concerns only the correct application of the last paragraph of Section 39, RA 8291. The parties agreed that the lone issue is whether COA disallowances could be legally deducted from retirement benefits on the ground that these were respondents’ monetary liabilities to the GSIS under the said provision. There is no dispute that the amounts deducted by GSIS represented COA disallowances. Thus, the only question left for the Board to decide is whether the deductions are allowed under RA 8291. Under certain exceptional circumstances, we have taken cognizance of questions of law even in the absence of an initial determination by a lower court or administrative body. In China Banking Corporation v. Court of Appeals,[18] the Court held: At the outset, the Court’s attention is drawn to the fact that since the filing of this suit before the trial court, none of the substantial issues have been resolved. To avoid and gloss over the issues raised by the parties, as what the trial court and respondent Court of Appeals did, would unduly prolong this litigation involving a rather simple case of foreclosure of mortgage. Undoubtedly, this will run counter to the avowed purpose of the rules, i.e., to assist the parties in obtaining just, speedy and inexpensive determination of every action or proceeding. The Court, therefore, feels that the central issues of the case, albeit unresolved by the courts below, should now be settled specially as they involved pure questions of law. Furthermore, the pleadings of the respective parties on file have amply ventilated their various positions and arguments on the matter necessitating prompt adjudication. In Roman Catholic Archbishop of Manila v. Court of Appeals,[19] the Court likewise held that the remand of a case is not necessary where the court is in a position to resolve the dispute based on the records before it. The Court will decide actions on the merits in order to expedite the settlement of a controversy and if the ends of justice would not be subserved by a remand of the case. Here, the primary issue calls for an application of a specific provision of RA 8291 as well as relevant jurisprudence on the matter. No useful purpose will indeed be served if we remand the matter to the Board, only for its decision to be elevated again to the Court of Appeals and subsequently to this Court. Hence, we deem it sound to rule on the merits of the controversy rather than to remand the case for further proceedings. The last paragraph of Section 39, RA 8291 specifically provides: SEC. 39. Exemption from Tax, Legal Process and Lien.xxx xxx xxx The funds and/or the properties referred to herein as well as the benefits, sums or monies corresponding to the benefits under this Act shall be exempt from attachment, garnishment, execution, levy or other processes issued by the courts, quasi-judicial agencies or administrative bodies including Commission on Audit (COA) disallowances and from all financial obligations of the members, including his pecuniary accountab