You are on page 1of 8

G.R. No.

155504 June 26, 2009
We resolve the petition filed by Professional Video, Inc. (PROVI)
to annul and set aside the
of the Court of Appeals (CA) in CA-G.R. SP No. 67599, and its subsequent Order
denying PROVI’s motion for reconsideration.
The assailed CA decision nullified:
a. the Order
dated July 16, 2001 of the Regional Trial Court (RTC), Pasig City, in Civil Case
No. 68527, directing the attachment/garnishment of the properties of respondent Technical
Education and Skills Development Authority (TESDA) amounting to Thirty Five Million
Pesos (P35,000,000.00); and
b. the RTC’s August 24, 2001 Order
denying respondent TESDA’s motion to discharge/quash
writ of attachment.

PROVI is an entity engaged in the sale of high technology equipment, information technology
products and broadcast devices, including the supply of plastic card printing and security
TESDA is an instrumentality of the government established under Republic Act (R.A.) No.
7796 (the TESDA Act of 1994) and attached to the Department of Labor and Employment
(DOLE) to "develop and establish a national system of skills standardization, testing, and
certification in the country."
To fulfill this mandate, it sought to issue security-printed
certification and/or identification polyvinyl (PVC) cards to trainees who have passed the
certification process.
TESDA’s Pre-Qualification Bids Award Committee (PBAC) conducted two (2) public
biddings on June 25, 1999 and July 22, 1999 for the printing and encoding of PVC cards. A
failure of bidding resulted in both instances since only two (2) bidders – PROVI and Sirex
Phils. Corp. – submitted proposals.
Due to the failed bidding, the PBAC recommended that TESDA enter into a negotiated
contract with PROVI. On December 29, 1999, TESDA and PROVI signed and executed their
"Contract Agreement Project: PVC ID Card Issuance" (the Contract Agreement) for the
provision of goods and services in the printing and encoding of PVC cards.
Under this
Contract Agreement, PROVI was to provide TESDA with the system and equipment compliant
with the specifications defined in the Technical Proposal. In return, TESDA would pay PROVI
the amount of Thirty-Nine Million Four Hundred and Seventy-Five Thousand Pesos
(P39,475,000) within fifteen (15) days after TESDA’s acceptance of the contracted goods and
On August 24, 2000, TESDA and PROVI executed an "Addendum to the Contract Agreement
Project: PVC ID Card Issuance" (Addendum),
whose terms bound PROVI to deliver one
hundred percent (100%) of the enumerated supplies to TESDA consisting of five hundred
thousand (500,000) pieces of security foil; five (5) pieces of security die with TESDA seal;
five hundred thousand (500,000) pieces of pre-printed and customized identification cards; one
hundred thousand (100,000) pieces of scannable answer sheets; and five hundred thousand
(500,000) customized TESDA holographic laminate. In addition, PROVI would install and
maintain the following equipment: one (1) unit of Micropoise, two (2) units of card printer,
three (3) units of flatbed scanner, one (1) unit of OMR scanner, one (1) unit of Server, and
seven (7) units of personal computer.
TESDA in turn undertook to pay PROVI thirty percent (30%) of the total cost of the supplies
within thirty (30) days after receipt and acceptance of the contracted supplies, with the balance
payable within thirty (30) days after the initial payment.
According to PROVI, it delivered the following items to TESDA on the dates indicated:
Date Particulars Amount
26 April 2000 48,500 pre-printed cards P 2,764,500.00
07 June 2000 330,000 pre-printed cards 18,810,000.00
07 August 2000 121,500 pre-printed cards 6,925,500.00
26 April 2000 100,000 scannable answer sheets 600,000.00
06 June 2000 5 Micro-Poise customized die 375,000.00
13 June 2000 35 boxes @ 15,000 imp/box
Custom hologram Foil
Total P 39,475,000.00
PROVI further alleged that out of TESDA’s liability of P39,475,000.00, TESDA paid PROVI
only P3,739,500.00, leaving an outstanding balance of P35,735,500.00, as evidenced by
PROVI’s Statement of Account.
Despite the two demand letters dated March 8 and April 27,
2001 that PROVI sent TESDA,
the outstanding balance remained unpaid.
On July 11, 2001, PROVI filed with the RTC a complaint for sum of money with damages
against TESDA. PROVI additionally prayed for the issuance of a writ of preliminary
attachment/garnishment against TESDA. The case was docketed as Civil Case No. 68527. In
an Order dated July 16, 2001, the RTC granted PROVI’s prayer and issued a writ of
preliminary attachment against the properties of TESDA not exempt from execution in the
amount of P35,000,000.00.

TESDA responded on July 24, 2001 by filing a Motion to Discharge/Quash the Writ of
Attachment, arguing mainly that public funds cannot be the subject of garnishment.
denied TESDA’s motion, and subsequently ordered the manager of the Land Bank of the
Philippines to produce TESDA’s bank statement for the garnishment of the covered amount.

Faced with these rulings, TESDA filed a Petition for Certiorari with the CA to question the
RTC orders, imputing grave abuse of discretion amounting to lack or excess of jurisdiction on
the trial court for issuing a writ of preliminary attachment against TESDA’s public funds.

The CA set aside the RTC’s orders after finding that: (a) TESDA’s funds are public in nature
and, therefore, exempt from garnishment; and (b) TESDA’s purchase of the PVC cards was a
necessary incident of its governmental function; consequently, it ruled that there was no legal
basis for the issuance of a writ of preliminary attachment/garnishment.
The CA subsequently
denied PROVI’s motion for reconsideration;
hence, the present petition.

The petition submits to this Court the single issue of whether or not the writ of attachment
against TESDA and its funds, to cover PROVI’s claim against TESDA, is valid. The issue
involves a pure question of law and requires us to determine whether the CA was correct in
ruling that the RTC gravely abused its discretion in issuing a writ of attachment against
PROVI argues that the CA should have dismissed TESDA’s petition for certiorari as the RTC
did not commit any grave abuse of discretion when it issued the Orders dated July 16, 2001
and August 24, 2001. According to PROVI, the RTC correctly found that when TESDA
entered into a purely commercial contract with PROVI, TESDA went to the level of an
ordinary private citizen and could no longer use the defense of state immunity from suit.
PROVI further contends that it has alleged sufficient ultimate facts in the affidavit it submitted
to support its application for a writ of preliminary attachment. Lastly, PROVI maintains that
sufficient basis existed for the RTC’s grant of the writ of preliminary attachment, since
TESDA fraudulently misapplied or embezzled the money earmarked for the payment of the
contracted supplies and services, as evidenced by the Certification as to Availability of Funds.
TESDA claims that it entered the Contract Agreement and Addendum in the performance of its
governmental function to develop and establish a national system of skills standardization,
testing, and certification; in the performance of this governmental function, TESDA is immune
from suit. Even assuming that it had impliedly consented to be sued by entering into a contract
with PROVI, TESDA posits that the RTC still did not have the power to garnish or attach its
funds since these are public funds. Lastly, TESDA points out that PROVI failed to comply
with the elements for the valid issuance of a writ of preliminary attachment, as set forth in
Section 1, Rule 57 of the 1997 Rules of Civil Procedure.
We find, as the CA did, that the RTC’s questioned order involved a gross misreading of the
law and jurisprudence amounting to action in excess of its jurisdiction. Hence, we resolve to
DENY PROVI’s petition for lack of merit.
TESDA is an instrumentality of the government undertaking governmental functions.
R.A. No. 7796 created the Technical Education and Skills Development Authority or TESDA
under the declared "policy of the State to provide relevant, accessible, high quality and
efficient technical education and skills development in support of the development of high
quality Filipino middle-level manpower responsive to and in accordance with Philippine
development goals and priorities."
TESDA replaced and absorbed the National Manpower
and Youth Council, the Bureau of Technical and Vocational Education and the personnel and
functions pertaining to technical-vocational education in the regional offices of the Department
of Education, Culture and Sports and the apprenticeship program of the Bureau of Local
Employment of the DOLE.
Thus, TESDA is an unincorporated instrumentality of the
government operating under its own charter.
Among others, TESDA is empowered to: approve trade skills standards and trade tests as
established and conducted by private industries; establish and administer a system of
accreditation of both public and private institutions; establish, develop and support the
institutions' trainors' training and/or programs; exact reasonable fees and charges for such tests
and trainings conducted, and retain such earnings for its own use, subject to guidelines
promulgated by the Authority; and perform such other duties and functions necessary to carry
out the provisions of the Act, consistent with the purposes of the creation of TESDA.

Within TESDA’s structure, as provided by R.A. No. 7769, is a Skills Standards and
Certification Office expressly tasked, among others, to develop and establish a national system
of skills standardization, testing and certification in the country; and to conduct research and
development on various occupational areas in order to recommend policies, rules and
regulations for effective and efficient skills standardization, testing and certification system in
the country.
The law likewise mandates that "[T]here shall be national occupational skills
standards to be established by TESDA-accredited industry committees. The TESDA shall
develop and implement a certification and accreditation program in which private groups and
trade associations are accredited to conduct approved trade tests, and the local government
units to promote such trade testing activities in their respective areas in accordance with the
guidelines to be set by the TESDA. The Secretary of Labor and Employment shall determine
the occupational trades for mandatory certification. All certificates relating to the national trade
skills testing and certification system shall be issued by the TESDA through its Secretariat."

All these measures are undertaken pursuant to the constitutional command that "[T]he State
affirms labor as a primary social economic force," and shall "protect the rights of workers and
promote their welfare";
that "[T]he State shall protect and promote the right of all citizens to
quality education at all levels, and shall take appropriate steps to make such education
accessible to all";
in order "to afford protection to labor" and "promote full employment and
equality of employment opportunities for all."

Under these terms, both constitutional and statutory, we do not believe that the role and status
of TESDA can seriously be contested: it is an unincorporated instrumentality of the
government, directly attached to the DOLE through the participation of the Secretary of Labor
as its Chairman, for the performance of governmental functions – i.e., the handling of formal
and non-formal education and training, and skills development. As an unincorporated
instrumentality operating under a specific charter, it is equipped with both express and implied
and all State immunities fully apply to it.

TESDA, as an agency of the State, cannot be sued without its consent.
The rule that a state may not be sued without its consent is embodied in Section 3, Article XVI
of the 1987 Constitution and has been an established principle that antedates this
It is as well a universally recognized principle of international law that exempts
a state and its organs from the jurisdiction of another state.
The principle is based on the very
essence of sovereignty, and on the practical ground that there can be no legal right as against
the authority that makes the law on which the right depends.
It also rests on reasons of public
policy — that public service would be hindered, and the public endangered, if the sovereign
authority could be subjected to law suits at the instance of every citizen and, consequently,
controlled in the uses and dispositions of the means required for the proper administration of
the government.

The proscribed suit that the state immunity principle covers takes on various forms, namely: a
suit against the Republic by name; a suit against an unincorporated government agency; a suit
against a government agency covered by a charter with respect to the agency’s performance of
governmental functions; and a suit that on its face is against a government officer, but where
the ultimate liability will fall on the government. In the present case, the writ of attachment
was issued against a government agency covered by its own charter. As discussed above,
TESDA performs governmental functions, and the issuance of certifications is a task within its
function of developing and establishing a system of skills standardization, testing, and
certification in the country. From the perspective of this function, the core reason for the
existence of state immunity applies – i.e., the public policy reason that the performance of
governmental function cannot be hindered or delayed by suits, nor can these suits control the
use and disposition of the means for the performance of governmental functions. In Providence
Washington Insurance Co. v. Republic of the Philippines,
we said:
[A] continued adherence to the doctrine of non-suability is not to be deplored for as against the
inconvenience that may be caused private parties, the loss of governmental efficiency and the
obstacle to the performance of its multifarious functions are far greater if such a fundamental
principle were abandoned and the availability of judicial remedy were not thus restricted. With
the well known propensity on the part of our people to go to court, at the least provocation, the
loss of time and energy required to defend against law suits, in the absence of such a basic
principle that constitutes such an effective obstacle, could very well be imagined.
PROVI argues that TESDA can be sued because it has effectively waived its immunity when it
entered into a contract with PROVI for a commercial purpose. According to PROVI, since the
purpose of its contract with TESDA is to provide identification PVC cards with security seal
which TESDA will thereafter sell to TESDA trainees, TESDA thereby engages in commercial
transactions not incidental to its governmental functions.
TESDA’s response to this position is to point out that it is not engaged in business, and there is
nothing in the records to show that its purchase of the PVC cards from PROVI is for a business
purpose. While TESDA admits that it will charge the trainees with a fee for the PVC cards, it
claims that this fee is only to recover their costs and is not intended for profit.
We agree with TESDA. As the appellate court found, the PVC cards purchased by TESDA
from PROVI are meant to properly identify the trainees who passed TESDA’s National Skills
Certification Program – the program that immediately serves TESDA’s mandated function of
developing and establishing a national system of skills standardization, testing, and
certification in the country.
Aside from the express mention of this function in R.A. No.
7796, the details of this function are provided under DOLE Administrative Order No. 157, S.
1992, as supplemented by Department Order Nos. 3 thru 3-F, S. 1994 and Department Order
No. 13, S. 1994.

Admittedly, the certification and classification of trainees may be undertaken in ways other
than the issuance of identification cards, as the RTC stated in its assailed Order.
How the
mandated certification is to be done, however, lies within the discretion of TESDA as an
incident of its mandated function, and is a properly delegated authority that this Court cannot
inquire into, unless its exercise is attended by grave abuse of discretion.
That TESDA sells the PVC cards to its trainees for a fee does not characterize the transaction
as industrial or business; the sale, expressly authorized by the TESDA Act,
cannot be
considered separately from TESDA’s general governmental functions, as they are undertaken
in the discharge of these functions. Along this line of reasoning, we held in Mobil Philippines
v. Customs Arrastre Services:

Now, the fact that a non-corporate government entity performs a function proprietary in nature
does not necessarily result in its being suable. If said non-governmental function is undertaken
as an incident to its governmental function, there is no waiver thereby of the sovereign
immunity from suit extended to such government entity.
TESDA’s funds are public in character, hence exempt from attachment or garnishment.
Even assuming that TESDA entered into a proprietary contract with PROVI and thereby gave
its implied consent to be sued, TESDA’s funds are still public in nature and, thus, cannot be the
valid subject of a writ of garnishment or attachment. Under Section 33 of the TESDA Act, the
TESDA budget for the implementation of the Act shall be included in the annual General
Appropriation Act; hence, TESDA funds, being sourced from the Treasury, are moneys
belonging to the government, or any of its departments, in the hands of public officials.
specifically spoke of the limits in dealing with this fund in Republic v. Villasor
when we
This fundamental postulate underlying the 1935 Constitution is now made explicit in the
revised charter. It is therein expressly provided, ‘The State may not be sued without its
consent.’ A corollary, both dictated by logic and sound sense, from such a basic concept, is that
public funds cannot be the object of garnishment proceedings even if the consent to be sued
had been previously granted and the state liability adjudged. Thus in the recent case of
Commissioner of Public Highways vs. San Diego, such a well-settled doctrine was restated in
the opinion of Justice Teehankee:
The universal rule that where the State gives its consent to be sued by private parties either by
general or special law, it may limit claimant's action 'only up to the completion of proceedings
anterior to the stage of execution' and that the power of the Courts ends when the judgment is
rendered, since government funds and properties may not be seized under writs of execution or
garnishment to satisfy such judgments, is based on obvious considerations of public policy.
Disbursements of public funds must be covered by the corresponding appropriation as required
by law. The functions and public services rendered by the State cannot be allowed to be
paralyzed or disrupted by the diversion of public funds from their legitimate and specific
objects, as appropriated by law. [Emphasis supplied.]
We reiterated this doctrine in Traders Royal Bank v. Intermediate Appellate Court,
where we
The NMPC’s implied consent to be sued notwithstanding, the trial court did not have the
power to garnish NMPC deposits to answer for any eventual judgment against it. Being public
funds, the deposits are not within the reach of any garnishment or attachment proceedings.
[Emphasis supplied.]
As pointed out by TESDA in its Memorandum,
the garnished funds constitute TESDA’s
lifeblood – in government parlance, its MOOE
– whose withholding via a writ of attachment,
even on a temporary basis, would paralyze TESDA’s functions and services. As well, these
funds also include TESDA’s Personal Services funds from which salaries of TESDA personnel
are sourced. Again and for obvious reasons, the release of these funds cannot be delayed.
PROVI has not shown that it is entitled to the writ of attachment.
Even without the benefit of any immunity from suit, the attachment of TESDA funds should
not have been granted, as PROVI failed to prove that TESDA "fraudulently misapplied or
converted funds allocated under the Certificate as to Availability of Funds." Section 1, Rule 57
of the Rules of Court sets forth the grounds for issuance of a writ of preliminary attachment, as
SECTION 1. Grounds upon which attachment may issue. – A plaintiff or any proper party
may, at the commencement of the action or at any time thereafter, have the property of the
adverse party attached as security for the satisfaction of any judgment that may be recovered in
the following cases:
(a) In an action for recovery of a specified amount of money or damages, other than
moral and exemplary, on a cause of action arising from law, contract, quasi-
contract, delict or quasi-delict against a party who is about to depart from the
Philippines with intent to defraud his creditors;
(b) In an action for money or property embezzled or fraudulently misapplied or
converted to his use by a public officer, or an officer of a corporation, or an
attorney, factor, broker, agent or clerk, in the course of his employment as such, or
by any other person in a fiduciary capacity, or for a willful violation of duty;
(c) In an action to recover the possession of property unjustly or fraudulently taken,
detained or converted, when the property or any part thereof, has been concealed,
removed or disposed of to prevent its being found or taken by the applicant or an
authorized person;
(d) In an action against a party who has been guilty of fraud in contracting the debt
or incurring the obligation upon which the action is brought, or in concealing or
disposing of the property for the taking, detention or conversion of which the action
is brought;
(e) In an action against a party who has removed or disposed of his property, or is
about to do so, with intent to defraud his creditors;
(f) In an action against a party who does not reside and is not found in the
Philippines, or on whom summons may be served by publication. [Emphasis
Jurisprudence teaches us that the rule on the issuance of a writ of attachment must be construed
strictly in favor of the defendant. Attachment, a harsh remedy, must be issued only on concrete
and specific grounds and not on general averments merely quoting the words of the pertinent
Thus, the applicant’s affidavit must contain statements clearly showing that the ground
relied upon for the attachment exists.
Section 1(b), Rule 57 of the Rules of Court, that PROVI relied upon, applies only where
money or property has been embezzled or converted by a public officer, an officer of a
corporation, or some other person who took advantage of his fiduciary position or who
willfully violated his duty.
PROVI, in this case, never entrusted any money or property to TESDA. While the Contract
Agreement is supported by a Certificate as to Availability of Funds (Certificate) issued by the
Chief of TESDA’s Accounting Division, this Certificate does not automatically confer
ownership over the funds to PROVI. Absent any actual disbursement, these funds form part of
TESDA’s public funds, and TESDA’s failure to pay PROVI the amount stated in the
Certificate cannot be construed as an act of fraudulent misapplication or embezzlement. In this
regard, Section 86 of Presidential Decree No. 1445 (The Accounting Code) provides:
Section 86. Certificate showing appropriation to meet contract. – Except in a case of a contract
for personal service, for supplies for current consumption or to be carried in stock not
exceeding the estimated consumption for three months, or banking transactions of government-
owned or controlled banks, no contract involving the expenditure of public funds by any
government agency shall be entered into or authorized unless the proper accounting official or
the agency concerned shall have certified to the officer entering into the obligation that funds
have been duly appropriated for the purpose and that the amount necessary to cover the
proposed contract for the current fiscal year is available for expenditure on account thereof,
subject to verification by the auditor concerned. The certification signed by the proper
accounting official and the auditor who verified it, shall be attached to and become an integral
part of the proposed contract, and the sum so certified shall not thereafter be available for
expenditure for any other purpose until the obligation of the government agency concerned
under the contract is fully extinguished. [Emphasis supplied.]
By law, therefore, the amount stated in the Certification should be intact and remains devoted
to its purpose since its original appropriation. PROVI can rebut the presumption that
necessarily arises from the cited provision only by evidence to the contrary. No such evidence
has been adduced.
Section 1 (d), Rule 57 of the Rules of Court applies where a party is guilty of fraud in
contracting a debt or incurring an obligation, or in concealing or disposing of the property for
the taking, detention or conversion of which the action is brought. In Wee v. Tankiansee,
held that for a writ of attachment to issue under this Rule, the applicant must sufficiently show
the factual circumstances of the alleged fraud because fraudulent intent cannot be inferred from
the debtor’s mere non-payment of the debt or failure to comply with his obligation. The
affidavit, being the foundation of the writ, must contain particulars showing how the imputed
fraud was committed for the court to decide whether or not to issue the writ. To reiterate, a writ
of attachment can only be granted on concrete and specific grounds and not on general
averments merely quoting the words of the rules.

The affidavit filed by PROVI through Elmer Ramiro, its President and Chief Executive
Officer, only contained a general allegation that TESDA had fraudulent misapplied or
converted the amount of P10,975,000.00 that was allotted to it. Clearly, we cannot infer any
finding of fraud from PROVI’s vague assertion, and the CA correctly ruled that the lower court
acted with grave abuse of discretion in granting the writ of attachment despite want of any
valid ground for its issuance.1avvphi1
For all these reasons, we support the appellate court’s conclusion that no valid ground exists to
support the grant of the writ of attachment against TESDA. The CA’s annulment and setting
aside of the Orders of the RTC were therefore fully in order.
WHEREFORE, premises considered, we hereby DENY the petition filed by petitioner
Professional Video, Inc., and AFFIRM the Court of Appeals’ Decision dated July 23, 2002,
and Resolution of September 27, 2002, in CA-G.R. SP No. 67599. Costs against the petitioner.


The Facts
cralawOn 15 July 1997, Century Canning Corporation (petitioner) hired Gloria C. Palad
(Palad) as fish cleaner at petitioners tuna and sardines factory. Palad signed on 17 July 1997 an
apprenticeship agreement with petitioner. Palad received an apprentice allowance of P138.75
daily. On 25 July 1997, petitioner submitted its apprenticeship program for approval to the
Technical Education and Skills Development Authority (TESDA) of the Department of Labor
and Employment (DOLE). On 26 September 1997, the TESDA approved petitioners
apprenticeship program. According to petitioner, a performance evaluation was conducted on
15 November 1997, where petitioner gave Palad a rating of N.I. or needs improvement since
she scored only27.75% based on a 100% performance indicator. Furthermore, according to the
performance evaluation, Palad incurred numerous tardiness and absences. As a consequence,
petitioner issued a termination notice dated 22 November 1997 to Palad, informing her of her
termination effective at the close of business hours of 28 November 1997. Palad then filed a
complaint for illegal dismissal, underpayment of wages, and non-payment of pro-rated 13

month pay for the year 1997.



The Court 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
petitioners apprenticeship program. The Court cited Nitto Enterprises v. National Labor
Relations Commission, where it was held that an apprenticeship program should first be
approved by the DOLE before an apprentice may be hired, otherwise the person hired will be
considered a regular employee. 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. Prior approval by the
Department of Labor and Employment of the proposed apprenticeship program is, therefore, a
sine qua non before an apprenticeship agreement can be validly entered into. The Labor Code
defines an apprentice as a worker who is covered by a written apprenticeship agreement with
an employer. Since Palad is not considered an apprentice because the apprenticeship agreement
was enforced before the TESDAs approval of petitioners apprenticeship program, Palad is
deemed a regular employee performing the job of a fish cleaner. Clearly, the job of a fish
cleaner is necessary in petitioners business as a tuna and sardines factory. Under Article 280 of
the Labor Code, 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

Under Article 279 of the Labor Code, an employer may terminate the services of an employee
for just causes or for authorized causes. under Article 277(b) of the Labor Code, the employer
must send the employee who is about to be terminated, a written notice stating the causes for
termination and must give the employee the opportunity to be heard and to defend himself.
Thus, to constitute valid
dismissal from employment, two requisites must concur: (1) the dismissal must be for a just or
authorized cause; and (2) the employee must be afforded an opportunity to be heard and to
defend himself. Palad was not accorded due process. Even if petitioner did conduct a
performance evaluation on Palad, petitioner failed to warn Palad of her alleged poor
performance. In fact, Palad denies any knowledge of the performance evaluation conducted
and of the result thereof. Petitioner likewise admits that Palad did not receive the notice of
termination because Palad allegedly stopped reporting for work. The records are bereft of
evidence to show that petitioner ever gave Palad the opportunity to explain and defend herself.
Clearly, the two requisites for a valid dismissal are lacking in this case.

Atlanta Industries, Inc. And/Or Robert Chan, v. Aprilito R. Sebolino, Khim V. Costales, Et. Al.
G.R. No. 187320, January 26, 2011 Brion, J.:

FACTS: Atlanta Industries, Inc. (petitioner) is a domestic corporation engaged in the
manufacture of steel pipes. Almoite and Costales (respondents) were employed by petitioner
as early as December 2003, while Sebolino and Sagun were employed as early as March 2004.
Respondents occupied positions such as machine operator, extruder operator and scaleman.
Two apprenticeship agreements were entered between Atlanta Industries, Inc. and private
respondents, one in 2004 and the other in 2005. After the second apprenticeship agreement
expired the respondents were dismissed, hence they filed a case for illegal dismissal. In
defense, Atlanta Industries, Inc. argued that the workers were not entitled to regularization
and to their money claims because they were engaged as apprentices under a government-
approved apprenticeship program. The company offered to hire them as regular employees in
the event vacancies for regular positions occur in the section of the plant where they had
trained. They also claimed that their names did not appear in the list of employees (Master
List) prior to their engagement as apprentices.

ISSUE: 1) Whether or not the apprenticeship agreements were valid.
3) Whether or not respondents were already employees when they were required to
undergo apprenticeship.
4) Whether or not the petition may be dismissed for failure to attach to the petition a
copy of the Production and Work Schedule and the compromise agreement.

1) HELD: NO. The first and second apprenticeship agreements were defective as they
were executed in violation of the law and the rules. The agreements did not
indicate the trade or occupation in which the apprentice would be trained; neither
was the apprenticeship program approved by the Technical Education and Skills
Development Authority (TESDA). Moreover, with the expiration of the first
agreement and the retention of the employees, the employer, to all intents and
purposes, recognized the completion of their training and their acquisition of a
regular employee status. To foist upon them the second apprenticeship agreement
for a second skill which was not even mentioned in the agreement itself, is a
violation of the Labor Code’s implementing rules and is an act manifestly unfair to
the employees.

2) HELD: YES. The respondent employees were already rendering service to the
company when they were made to undergo apprenticeship. The respondent were
regular employees because they occupied positions such as machine operator,
scaleman and extruder operator – tasks that are usually necessary and desirable in
petitioner employer’s usual business or trade as manufacturer of plastic building
materials. These tasks and their nature characterized the respondents as regular
employees under Article 280 of the Labor Code. Thus, when they were dismissed
without just or authorized cause, without notice, and without the opportunity to
be heard, their dismissal was illegal under the law.

3) HELD: NO. The Court, in addressed the issue arising from Section 2(d), Rule 42 of
the Rules of Court, held that the phrase “of the pleadings and other material
portions of the record xxx as would support the allegation of the petition clearly
contemplates the exercise of discretion on the part of the petitioner in the
selection of documents that are deemed to be relevant to the petition. The crucial
issue to consider then is whether or not the documents accompanying the petition
sufficiently supported the allegations therein.” The Court finds that the documents
attached to the petition sufficiently support the petitioners’ allegations. If any, the
defect in the petition lies in the petitioners’ failure to provide legible copies of
some of the material documents mentioned, especially several pages in the
decisions of the labor arbiter and of the NLRC. This defect, however, is not fatal as
the challenged CA decision clearly summarized the labor tribunal’s rulings. We,
thus, find no procedural obstacle in resolving the petition on the merits.


September 29, 1995


Petitioner Nitto Enterprises, a company engaged in the sale of glass and aluminum
products, hi red Roberto Capi l i someti me i n May 1990 as an apprenti ce
machi ni st, mol der and coremaker as evidenced by an apprenticeship agreement 2for a
period of six (6) months from May 28, 1990 to November 28, 1990 with a daily wage rate of
P66.75 which was 75% of the applicable minimum wage. On August 2, 1990, Roberto Capili
who was handling a piece of glass which he was working on, accidentally hit and injured the
leg of an office secretary who was treated at a nearby hospi tal . Further, Capi l i entered
a workshop wi thi n the offi ce premi ses whi ch was not hi s work station. There, he
operated one of the power press machines without authority and in the process i nj ured
hi s l eft thumb. The fol l owi ng day he was asked to resi gn. Three days after, ,
private respondent formally filed before the NLRC Arbitration Branch, National Capital Region
a complaint for illegal dismissal and payment of other monetary benefits.

The Labor Arbi ter rendered hi s deci si on fi ndi ng the termi nati on of
pri vate respondent as val i d and dismissing the money claim for lack of merit. On
appeal, NLRC issued an order reversing the decision of the Labor Arbiter. The NLRC declared
that Capili was a regular employee of Nitto Enterprises and not an apprentice. Consequently,
Labor Arbiter issued a Writ of Execution orderi ng for the rei nstatement of Capi l i
and to col l ect hi s back wages. Peti ti oner, Ni tto Enterprises filed a case to the
Supreme Court.

ISSUE: Does the NLRC correctly rule that Capili is a regular employee and not an apprentice of
Nitto Enterprises?

LAW: Article 280 of the Labor Code


Yes. The apprenti ceshi p agreement between peti ti oner and pri vate
respondent was executed on May 28, 1990 al l egedl y empl oyi ng the l atter
as an apprenti ce i n the trade of "care maker/molder. However, the apprenticeship
Agreement was filed only on June 7, 1990.Notwithstanding the absence of approval by the
Department of Labor and Employment, the apprenticeship agreement was enforced the day it was
signed. The act of fi l i ng the proposed apprenti ceshi p program wi th 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.

Ni tto Enterpri ses di d not compl y wi th the requi rements of the l aw. I t i s
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. Thus, the apprenticeship agreement has no force and
effect; and Capili is considered to be a regular employee of the company.


I concur with the Courts findings that since the apprenticeship agreement between
petitioner and private respondent have no force and effect in the absence of a valid
apprenticeship program duly approved by the DOLE, private respondent's assertion that he
was hired not as an apprentice but as a delivery boy ("kargador" or "pahinante") deserves
credence. He should rightly be considered as a regular employee of petitioner as defined by
Article 280 of the Labor Code.

July 12, 1999 Series: 7FACTS:
The 43 petitioners are deaf-mutes who were hired on various periods from 1988 to 1993 by
respondent Far East Bank and Trust Co. as Money Sorters and Counters through a uniformly
worded agreement called "Employment Contract for Handicapped Workers". The said
agreement provides for the manner of how they are hired and be rehired, the amount of their
wages (P118.00 per day), period of employment (5 days a week, 8 hours a day, training for 1
month, 6 months period) and the manner and methods of how their works are to be done (Sort
out bills according to color; Count each denomination per hundred, either manually or with the
aid of a counting machine; Wrap and label bills per hundred; Put the wrapped bills into
bundles; and Submit bundled bills to the bank teller for verification.) Many of their
employments were renewed every six months. Claiming that they should be considered as
regular employees they filed a complaint for illegal dismissal and recovery of various benefits.
Labor arbiter’s decision: complaint is dismissed for lack of merit (the terms of the contract
shall be the law between the parties.). Affirmed by the NLRC (Art. 280 is not controlling
herein but Art. 80) (the Magna Carta for Disabled Persons was not applicable, "considering the
prevailing circumstances of the case.") and denied motion for reconsideration.

ISSUES: Does petitioners considered as regular employees?

LAW:Art.78 & 80 of the Labor Code and the Magna Carta for Disabled Persons.

The petition is meritorious. However, only the employees, who worked for more than six
months and whose contracts were renewed are deemed regular. Hence, their dismissal from
employment was illegal. The stipulations in the employment contracts indubitably conform
with Article 80, however, the application of Article 280 of the Labor Code is justified because
of the advent of RA No. 7277 (the Magna Carta for Disabled Persons) which mandates that a
qualified disabled employee should be given the same terms and conditions of employment as
a qualified able-bodied person (compensation, privileges, benefits, fringe benefits, incentives
or allowances) 27 of the petitioners are considered regular employees by provision of law
regardless of any agreement between the parties as embodied in article280 in relation to article
281 of the Labor Code. The test is whether the former is usually necessary or desirable in the
usual business or trade of the employer. Hence, the employment is considered regular, but only
with respect to such activity, and while such activity exist. Without a doubt, the task of
counting and sorting bills is necessary and desirable to the business of respondent bank. When
the bank renewed the contract after the lapse of the six-month probationary period, the
employees thereby became regular employees. No employer is allowed to determine
indefinitely the fitness of its employees. Those who have worked for only 6 months and
employments were not renewed are not considered regular employees.

The Court correctly finds that 27 of the handicapped workers are regular employees. The test is
whether the activity is usually necessary or desirable in the usual business or trade of the
employer. The employment is considered regular, but only with respect to such activity, and
while such activity exist. Without a doubt, the task of counting and sorting bills is necessary
and desirable to the business of respondent bank. As regular employees, the twenty-seven
petitioners are entitled to security of tenure; that is, their services may be terminated only for a
just or authorized cause.

G.R. No. L-24394, Carlos v. Villegas, Samio and Cudiamat, 24 SCRA 831
August 30, 1968
G.R. No. L-24394
JUANITO CARLOS, petitioner-appellant,
ANTONIO J. VILLEGAS, as Mayor, City of Manila and/or EULOGIO SAMIO, as
Chief, Manila Fire Department and/or MANUEL CUDIAMAT, as Treasurer, City of
Manila, respondents-appellees.
Juanito Carlos for and in his behalf as petitioner-appellant.
Assistant City Fiscal Olimpio R. Navarro for respondents-appellees.
This is an appeal from the decision of the Court of First Instance of Manila dismissing the
petition for mandamus (Civil Case No. 53514) seeking to order the respondents to cause the
City of Manila to pay petitioner and other members of the Uniformed Force Division of the
Manila Fire Department (MFD) for overtime services rendered from January 1, 1962, up to the
date when the petition was filed January 4, 1963; to enforce immediately the 40-Hour a Week
Work Law to petitioner and said other members of the MFD; and to pay damages sustained by
them as a consequence of the acts complained of.
The facts of the case are set forth in the stipulation of facts submitted by the parties in the
lower court, to wit:
1. Under Sec. 15 of the Revised Charter of the City of Manila (Rep. Act 409, as amended),
"there shall be a chief of the Fire Department, ... who shall have the management and control
of all matters relating to the administration of said department, and the organization,
government, discipline, and disposition of fire forces; ... [Emphasis supplied]
2. Pursuant to the foregoing provision, from September 16, 1957, to the present, the petitioner
and other members of the Uniformed Force Division of the Manila Fire Department have been
required and ordered by the Chief of the Manila Fire Department, upon approval of the City
Mayor, the Commissioner of the Civil Service and the Office of the President, to be 24 hours
on duty and 24 hours off duty, alternately; that is, a member of the MFD Uniformed Force
Division reports to his station at 8:00 o'clock in the morning and continues on duty until 8:00
o'clock of the following morning for 24 hours; he is then off duty for the next 24 hours
immediately thereafter; this schedule continuous throughout the days of the week regardless of
Saturdays, Sundays and holidays; for an average of eighty-four (84) hours a week the firemen
stay at the station and while there, their duties are to clean and maintain the station, fire engines
or apparatuses and equipment to respond to fire and to perform other duties required by
ordinances and laws; during the 24 hours' stay in the station, unless they are out working to
fight and extinguish fires, the firemen are given time to rest from 12:00 noon to 4:00 o'clock in
the afternoon, and time to sleep from 9:00 o'clock in the evening to 6:00 o'clock the following
3. On July 10, 1957, the Chief of the Manila Fire Department requested the Office of the
President for authority, in the interest of the service, for the members of the Uniformed Force
Division and of the Fire Alarm and Radio Division of the department to render service without
overtime pay beyond the 40-hour-5-day a week requirement of the law.
4. On December 9, 1962, a petition was addressed to the Mayor, City of Manila, through the
Chief, Fire Department, Manila, claiming payment for overtime services rendered effective
January 1, 1962 and demanding the enforcement of the 40-hour a week work law with respect
to the Uniformed Force Division of the Manila Fire Department, and the reply thereto was that
services rendered beyond a regular period fixed by R.A. No. 1880 will not entitle the employee
to overtime pay as a matter of legal right, citing Opinion No. 218, Series of 1957, of the
Secretary of Justice.
5. On December 26, 1962, petitioner addressed a petition to His Excellency, the President of
the Philippines, petitioning also the latter to order the City of Manila to pay petitioner and other
members of the MFD Uniformed Force Division for overtime services rendered during 1962
and caused to be enforced the 40-hour a week law and there was no favorable reply. "6. The
parties herein reserve the right to submit additional evidence should a necessity therefor arise. "
No additional evidence was submitted thereafter, and upon the foregoing stipulation of facts
and the law applicable thereon, the lower court dismissed the petition.
The issue for adjudication is whether the petitioner-appellant and other firemen similarly
situated are entitled to collect overtime pay for overtime services rendered by them since
January 1, 1962.
The provisions of law that resolve the issue are neither those of Republic Act 1880, otherwise
known as the Forty Hour Week Work Law, nor Commonwealth Act 444, the Eight-Hour Labor
Law, as suggested by the petitioner-appellant, but the following sections of the Revised
Administrative Code, to wit:
SEC. 566. Extension of hours and requirement of overtime work. — When the interests of the
public service so require, the head of any Department, Bureau, or Office may extend the daily
hours of labor, in what manner so ever fixed, for any or all of the employees under him, and
may likewise require any or all of them to do overtime work not only on work days but also on
SEC. 259. Inhibition against payment of extra compensation. — In the absence of special
provision, persons regularly and permanently appointed under the Civil Service Law or whose
salary, wages or emoluments are fixed by law or regulation shall not, for any service rendered
or labor done by them on holidays or for other overtime work, receive or be paid any additional
compensation; nor, in the absence of special provision, shall any officer or employee in an
branch of the Government service receive additional compensation on account of the discharge
of duties pertaining to the position of another or for the performance of any public service
whatever, whether such service is rendered voluntarily or exacted of him under authority of
law." .
The petitioner-appellant contends that the above-quoted portions of the Revised Administrative
Code have been repealed by the provisions of Commonwealth Act 444, in so far as the
provisions of the former are inconsistent with the latter. The contention is erroneous. This
Court has explicitly declared
that the Eight-Hour Labor Law was not intended to apply to
civil service employees who are still governed by the above provisions of the Revised
Administrative Code. As there appears to be no debate over the employment of petitioner-
appellant and the other firemen similarly situated as falling under the civil service, they being
employees of the City of Manila, a municipal corporation, in its governmental capacity, We
perceive no reason to deviate from said ruling. And as We hold that the above sections of the
Revised Administrative Code are still legally in force, it necessarily follows that Rule XV,
section 3 of the Civil Service Rules, a similar provision promulgated pursuant to that of
Section 16(e) of the Civil Service Act of 1959 (Republic Act No. 2260) is likewise applicable
to petitioner-appellant. Said provision reads:
SEC. 3. When the nature of the duties to be performed or the interest of the public service so
requires, the head of any Department or agency may extend the daily hours of work specified
for any or all the employees under him, and such extension shall be without additional
compensation unless otherwise provided by law. Office and employees may be required by the
head of the Department or agency to work on Saturdays, Sundays and public holidays also,
without additional compensation unless otherwise specifically authorized by law.
It needs no lengthy explanation that the nature of work of a fireman requires him to be always
on the alert to respond to fire alarms which may occur at any time of the day, for the exigency
of the service necessitates a round-the-clock observance of his duties, which situation excepts
him from the applicability of Section 562 of the Revised Administrative Code, as amended by
Republic Act 18809 the Forty-Hour a Week Work Law, which provides, in part:
Such hours, except for schools, courts, hospitals and health clinics or where the exigencies of
service so require, shall be as prescribed in the Civil Service Rules and as otherwise from time
to time disposed in temporary executive orders in the discretion of the President of the
Philippines but shall be eight (8) hours a day, for five (5) days a week or a total of forty (40)
hours a week, exclusive of the time for lunch. [Emphasis supplied].
Parallel to the instant case are the circumstances obtaining in Department of Public Services
Labor Union vs. CIR, et al.,
where this Court held that in view of the exigency of the
service, garbage collectors in Manila are not entitled to the benefits of the Forty-Hour a Week
Work Law.
In the light of the foregoing, the conclusion is inevitable that the petitioner-appellant and other
firemen of his situation are not entitled to overtime pay and to the coverage of the said Forty-
Hour a Week Work Law.
Parenthetically, a side issue has come up in this appeal during its pendency, and that is whether
or not the City Fiscal of Manila should continue his appearance for the respondents-appellees,
despite the creation of the office and subsequent appointment of a City Legal Officer of
Manila, pursuant to Republic Act 5185, known as the Decentralization Act of 1967, to take
charge of civil cases concerning the City. We believe this is not the proper forum to first pass
upon the question since the motion for withdrawal of appearance filed by the City Fiscal and
the opposition thereto put at issue the validity of an ordinance
passed by the City Council of
Manila which is alleged to be in conflict with the said Decentralization Act. Anyway, the said
motion for withdrawal of appearance was filed only on May 19, 1968, long after August 18,
1965, when the case had been rested for resolution and when there was no more need for
further representation in behalf of the parties.
IN VIEW OF THE FOREGOING, the decision appealed from is hereby affirmed. For
equitable considerations, no costs.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez. Castro and Fernando,
JJ., concur.