Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 157634 May 16, 2005
MAYON HOTEL & RESTAURANT, PACITA O. PO a!"o# $OSE%A PO LAM,
petitioners,
vs.
ROLAN&O A&ANA, CHONA 'UMALAY, ROGER 'URCE, E&UAR&O ALAMARES,
AMA&O ALAMARES, E&GAR&O TORRE%RANCA, LOUR&ES CAMIGLA,
TEO&ORO LAURENARIA, (ENE%RE&O LO)ERES, LUIS GUA&ES, AMA&O
MACAN&OG, PATERNO LLARENA, GREGORIO NICERIO, $OSE ATRACTI)O,
MIGUEL TORRE%RANCA, a! SANTOS 'RO*OLA, respondents.
D E C I S I O N
PUNO, J.+
his is a petition for certiorari to reverse and set aside the Decision issued b! the Court
of "ppeals #C"$
%
in C"&'.R. SP No. ()(*+, entitled ,Rolando "dana, -enefredo
.overes, et. al. vs. National .abor Relations Co//ission #N.RC$, Ma!on 0otel 1
Restaurant2Pacita O. Po, et al.,, and the Resolution
+
den!in3 petitioners4 /otion for
reconsideration. he assailed C" decision reversed the N.RC Decision 5hich had
dis/issed all of respondents4 co/plaints,
6
and reinstated the 7oint Decision of the .abor
"rbiter
*
5hich ruled that respondents 5ere ille3all! dis/issed and entitled to their
/one! clai/s.
he facts, culled fro/ the records, are as follo5s8
9
Petitioner Ma!on 0otel 1 Restaurant is a sin3le proprietor business re3istered in the
na/e of petitioner Pacita O. Po,
(
5hose /other, petitioner 7osefa Po .a/, /ana3es the
establish/ent.
:
he hotel and restaurant e/plo!ed about si;teen #%($ e/plo!ees.
Records sho5 that on various dates startin3 in %<)%, petitioner hotel and restaurant
hired the follo5in3 people, all respondents in this case, 5ith the follo5in3 =obs8
)
%. -enefredo .overes "ccountant and Officer&in&char3e
+. Paterno .larena >ront Des? Cler?
6. 're3orio Nicerio Supervisor! -aiter
*. "/ado Macando3 Roo/bo!
9. .uis 'uades @tilit!2Maintenance -or?er
(. Santos AroBola Roo/bo!
:. eodoro .aurenaria -aiter
). Eduardo "la/ares Roo/bo!2-aiter
<. .ourdes Ca/i3la Cashier
%C. Chona Au/ala! Cashier
%%. 7ose "tractivo echnician
%+. "/ado "la/ares Dish5asher and Ditchen 0elper
%6. Ro3er Aurce Coo?
%*. Rolando "dana -aiter
%9. Mi3uel orrefranca Coo?
%(. Ed3ardo orrefranca Coo?
Due to the e;piration and non&rene5al of the lease contract for the rented space
occupied b! the said hotel and restaurant at RiEal Street, the hotel operations of the
business 5ere suspended on March 6%, %<<:.
<
he operation of the restaurant 5as
continued in its ne5 location at EliEondo Street, .e3aEpi Cit!, 5hile 5aitin3 for the
construction of a ne5 Ma!on 0otel 1 Restaurant at PeBaranda Street, .e3aEpi Cit!.
%C

Onl! nine #<$ of the si;teen #%($ e/plo!ees continued 5or?in3 in the Ma!on Restaurant
at its ne5 site.
%%
On various dates of "pril and Ma! %<<:, the %( e/plo!ees filed co/plaints for
underpa!/ent of 5a3es and other /one! clai/s a3ainst petitioners, as follo5s8
%+
-enefredo .overes, .uis 'uades, "/ado Macando3 and 7ose "tractivo for
ille3al dis/issal, underpa!/ent of 5a3es, nonpa!/ent of holida! and rest da!
pa!F service incentive leave pa! #SI.P$ and clai/s for separation pa! plus
da/a3esF
Paterno .larena and 're3orio Nicerio for ille3al dis/issal 5ith clai/s for
underpa!/ent of 5a3esF nonpa!/ent of cost of livin3 allo5ance #CO."$ and
overti/e pa!F pre/iu/ pa! for holida! and rest da!F SI.PF ni3htshift differential
pa! and separation pa! plus da/a3esF
Mi3uel orrefranca, Chona Au/ala! and .ourdes Ca/i3la for underpa!/ent of
5a3esF nonpa!/ent of holida! and rest da! pa! and SI.PF
1
Rolando "dana, Ro3er Aurce and "/ado "la/ares for underpa!/ent of
5a3esF nonpa!/ent of CO.", overti/e, holida!, rest da!, SI.P and ni3htshift
differential pa!F
Eduardo "la/ares for underpa!/ent of 5a3es, nonpa!/ent of holida!, rest
da! and SI.P and ni3ht shift differential pa!F
Santos AroBola for ille3al dis/issal, underpa!/ent of 5a3es, overti/e pa!,
rest da! pa!, holida! pa!, SI.P, and da/a3esF
%6
and
eodoro .aurenaria for underpa!/ent of 5a3esF nonpa!/ent of CO." and
overti/e pa!F pre/iu/ pa! for holida! and rest da!, and SI.P.
On 7ul! %*, +CCC, E;ecutive .abor "rbiter 'elacio .. Rivera, 7r. rendered a 7oint
Decision in favor of the e/plo!ees. he .abor "rbiter a5arded substantiall! all of
respondents4 /one! clai/s, and held that respondents .overes, Macando3 and .larena
5ere entitled to separation pa!, 5hile respondents 'uades, Nicerio and "la/ares 5ere
entitled to their retire/ent pa!. he .abor "rbiter also held that based on the evidence
presented, 7osefa Po .a/ is the o5ner2proprietor of Ma!on 0otel 1 Restaurant and the
proper respondent in these cases.
On appeal to the N.RC, the decision of the .abor "rbiter 5as reversed, and all the
co/plaints 5ere dis/issed.
Respondents filed a /otion for reconsideration 5ith the N.RC and 5hen this 5as
denied, the! filed a petition for certiorari 5ith the C" 5hich rendered the no5 assailed
decision.
"fter their /otion for reconsideration 5as denied, petitioners no5 co/e to this Court,
see?in3 the reversal of the C" decision on the follo5in3 3rounds8
I. he 0onorable Court of "ppeals erred in reversin3 the decision of the
National .abor Relations Co//ission #Second Division$ b! holdin3 that the
findin3s of fact of the N.RC 5ere not supported b! substantial evidence
despite a/ple and sufficient evidence sho5in3 that the N.RC decision is
indeed supported b! substantial evidenceF
II. he 0onorable Court of "ppeals erred in upholdin3 the =oint decision of the
labor arbiter 5hich ruled that private respondents 5ere ille3all! dis/issed fro/
their e/plo!/ent, despite the fact that the reason 5h! private respondents
5ere out of 5or? 5as not due to the fault of petitioners but to causes be!ond
the control of petitioners.
III. he 0onorable Court of "ppeals erred in upholdin3 the a5ard of /onetar!
benefits b! the labor arbiter in his =oint decision in favor of the private
respondentS, includin3 the a5ard of da/a3es to si; #($ of the private
respondents, despite the fact that the private respondents have not proven b!
substantial evidence their entitle/ent thereto and especiall! the fact that the!
5ere not ille3all! dis/issed b! the petitioners.
IV. he 0onorable Court of "ppeals erred in holdin3 that Pacita On3 Po is the
o5ner of the business establish/ent, petitioner Ma!on 0otel and Restaurant,
thus disre3ardin3 the certificate of re3istration of the business establish/ent
ISS@ED b! the local 3overn/ent, 5hich is a public docu/ent, and the
unGualified ad/issions of co/plainants&private respondents.
%*
In essence, the petition calls for a revie5 of the follo5in3 issues8
%. -as it correct for petitioner 7osefa Po .a/ to be held liable as the o5ner of
petitioner Ma!on 0otel 1 Restaurant, and the proper respondent in this caseH
+. -ere respondents .overes, 'uades, Macando3, "tractivo, .larena and
Nicerio ille3all! dis/issedH
6. "re respondents entitled to their /one! clai/s due to underpa!/ent of
5a3es, and nonpa!/ent of holida! pa!, rest da! pre/iu/, SI.P, CO.",
overti/e pa!, and ni3ht shift differential pa!H
It is petitioners4 contention that the above issues have alread! been threshed out
sufficientl! and definitivel! b! the N.RC. he! therefore assail the C"4s reversal of the
N.RC decision, clai/in3 that based on the rulin3 in Ca,-.//o 0. NLRC,
%9
it is non
sequitur that the C" should re&e;a/ine the factual findin3s of both the N.RC and the
.abor "rbiter, especiall! as in this case the N.RC4s findin3s are alle3edl! supported b!
substantial evidence.
-e do not a3ree.
here is no den!in3 that it is 5ithin the N.RC4s co/petence, as an appellate a3enc!
revie5in3 decisions of .abor "rbiters, to disa3ree 5ith and set aside the latter4s
findin3s.
%(
Aut it stands to reason that the N.RC should state an acceptable cause
therefore, other5ise it 5ould be a 5hi/sical, capricious, oppressive, illo3ical,
unreasonable e;ercise of Guasi&=udicial prero3ative, sub=ect to invalidation b! the
e;traordinar! 5rit of certiorari.
%:
"nd 5hen the factual findin3s of the .abor "rbiter and
the N.RC are dia/etricall! opposed and this disparit! of findin3s is called into Guestion,
2
there is, necessaril!, a re&e;a/ination of the factual findin3s to ascertain 5hich opinion
should be sustained.
%)
"s ruled in A,12.o 0. NLRC,
%<
"lthou3h, it is a le3al tenet that factual findin3s of ad/inistrative bodies are
entitled to 3reat 5ei3ht and respect, 5e are constrained to ta?e a second loo?
at the facts before us because of the diversit! in the opinions of the .abor
"rbiter and the N.RC. " dishar/on! bet5een the factual findin3s of the .abor
"rbiter and those of the N.RC opens the door to a revie5 thereof b! this
Court.
+C
he C", therefore, did not err in revie5in3 the records to deter/ine 5hich opinion 5as
supported b! substantial evidence.
Moreover, it is e;plicit in Ca,-.//o 0. NLRC
+%
that factual findin3s of ad/inistrative bodies
li?e the N.RC are affir/ed o/y .3 -45y a#5 ,166o#-5! 7y ,17,-a-.a/ 50.!525 -4a-
., 8a.35,- . -45 !52.,.o a! o -45 #52o#!,. A, ,-a-5! . Ca,-.//o8
I"Jbuse of discretion does not necessaril! follo5 fro/ a reversal b! the N.RC
of a decision of a .abor "rbiter. Mere variance in evidentiar! assess/ent
bet5een the N.RC and the .abor "rbiter does not auto/aticall! call for a full
revie5 of the facts b! this Court. he N.RC4s decision, so lon3 as it is not
bereft of substantial support fro/ the records, deserves respect fro/ this
Court. "s a rule, the ori3inal and e;clusive =urisdiction to revie5 a decision or
resolution of respondent N.RC in a petition for certiorari under Rule (9 of the
Rules of Court does not include a correction of its evaluation of the evidence
but is confined to issues of =urisdiction or 3rave abuse of discretion. hus, the
N.RC4s factual findin3s, if supported b! substantial evidence, are entitled to
3reat respect and even finalit!, unless petitioner is able to sho5 that it si/pl!
and arbitraril! disre3arded the evidence before it or had /isappreciated the
evidence to such an e;tent as to co/pel a contrar! conclusion if such
evidence had been properl! appreciated. #citations o/itted$
++
"fter careful revie5, 5e find that the reversal of the N.RC4s decision 5as in order
precisel! because it 5as not supported b! substantial evidence.
1. O95#,4.6 7y $o,53a Po La8
he .abor "rbiter ruled that as re3ards the clai/s of the e/plo!ees, petitioner 7osefa
Po .a/ is, in fact, the o5ner of Ma!on 0otel 1 Restaurant. "lthou3h the N.RC
reversed this decision, the C", on revie5, a3reed 5ith the .abor "rbiter that
not5ithstandin3 the certificate of re3istration in the na/e of Pacita Po, it is 7osefa Po
.a/ 5ho is the o5ner2proprietor of Ma!on 0otel 1 Restaurant, and the proper
respondent in the co/plaints filed b! the e/plo!ees. he C" decision states in part8
IDespiteJ the e;istence of the Certificate of Re3istration in the na/e of Pacita
Po, 5e cannot fault the labor arbiter in rulin3 that 7osefa Po .a/ is the o5ner
of the sub=ect hotel and restaurant. here 5ere conflictin3 docu/ents
sub/itted b! 7osefa herself. She 5as ordered to sub/it additional docu/ents
to clearl! establish o5nership of the hotel and restaurant, considerin3 the
testi/onies 3iven b! the IrespondentsJ and the non&appearance and failure to
sub/it her o5n position paper b! Pacita Po. Aut 7osefa did not co/pl! 5ith the
directive of the .abor "rbiter. he rulin3 of the Supre/e Court in Metropolitan
Aan? and rust Co/pan! v. Court of "ppeals applies to 7osefa Po .a/ 5hich
is stated in this 5ise8
-hen the evidence tends to prove a /aterial fact 5hich i/poses a
liabilit! on a part!, and he has it in his po5er to produce evidence
5hich fro/ its ver! nature /ust overthro5 the case /ade a3ainst hi/
if it is not founded on fact, and he refuses to produce such evidence,
the presu/ption arises that the evidenceI,J if produced, 5ould operate
to his pre=udice, and support the case of his adversar!.
>urther/ore, in rulin3 that 7osefa Po .a/ is the real o5ner of the hotel and
restaurant, the labor arbiter relied also on the testi/onies of the 5itnesses,
durin3 the hearin3 of the instant case. -hen the conclusions of the labor
arbiter are sufficientl! corroborated b! evidence on record, the sa/e should be
respected b! appellate tribunals, since he is in a better position to assess and
evaluate the credibilit! of the contendin3 parties.
+6
#citations o/itted$
Petitioners insist that it 5as error for the .abor "rbiter and the C" to have ruled that
petitioner 7osefa Po .a/ is the o5ner of Ma!on 0otel 1 Restaurant. he! alle3e that
the docu/ents the! sub/itted to the .abor "rbiter sufficientl! and clearl! establish the
fact of o5nership b! petitioner Pacita Po, and not her /other, petitioner 7osefa Po .a/.
he! contend that petitioner 7osefa Po .a/4s participation 5as li/ited to /erel! #a$
bein3 the overseerF #b$ receivin3 the /onth&to&/onth and2or !ear&to&!ear financial
reports prepared and sub/itted b! respondent .overesF and #c$ visitation of the
pre/ises.
+*
he! also put e/phasis on the ad/ission of the respondents in their
position paper sub/itted to the .abor "rbiter, identif!in3 petitioner 7osefa Po .a/ as
the /ana3er, and Pacita Po as the o5ner.
+9
his, the! clai/, is a =udicial ad/ission and
is bindin3 on respondents. he! protest the reliance the .abor "rbiter and the C"
placed on their failure to sub/it additional docu/ents to clearl! establish o5nership of
the hotel and restaurant, clai/in3 that there 5as no need for petitioner 7osefa Po .a/
to sub/it additional docu/ents considerin3 that the Certificate of Re3istration is the
best and pri/ar! evidence of o5nership.
3
-e disa3ree 5ith petitioners. -e have scrutiniEed the records and find the clai/ that
petitioner 7osefa Po .a/ is /erel! the overseer is not borne out b! the evidence.
%.#,-. It is si3nificant that onl! 7osefa Po .a/ appeared in the proceedin3s 5ith the
.abor "rbiter. Despite receipt of the .abor "rbiter4s notice and su//ons, other notices
and Orders, petitioner Pacita Po failed to appear in an! of the proceedin3s 5ith the
.abor "rbiter in these cases, nor file her position paper.
+(
It 5as onl! on appeal 5ith the
N.RC that Pacita Po si3ned the pleadin3s.
+:
he apath! sho5n b! petitioner Pacita Po
is contrar! to hu/an e;perience as one 5ould thin? that the o5ner of an establish/ent
5ould naturall! be concerned 5hen all her e/plo!ees file co/plaints a3ainst her.
S52o!. he records of the case belie petitioner 7osefa Po .a/4s clai/ that she is
/erel! an overseer. he findin3s of the .abor "rbiter on this Guestion 5ere based on
credible, co/petent and substantial evidence. -e a3ain Guote the 7oint Decision on this
/atter8
Ma!on 0otel and Restaurant is a Ibusiness na/eJ of an enterprise. -hile
IpetitionerJ 7osefa Po .a/ clai/s that it is her dau3hter, Pacita Po, 5ho o5ns
the hotel and restaurant 5hen the latter purchased the sa/e fro/ one Palanos
in %<)%, 7osefa failed to sub/it the docu/ent of sale fro/ said Palanos to
Pacita as alle3edl! the sale 5as onl! verbal althou3h the license to operate
said hotel and restaurant is in the na/e of Pacita 5hich, despite our Order to
7osefa to present the sa/e, she failed to co/pl! #p. 6), tsn. "u3ust %6, %<<)$.
-hile several docu/entar! evidences 5ere sub/itted b! 7osefa 5herein
Pacita 5as na/ed therein as o5ner of the hotel and restaurant #pp. (*, (9, (:
to (<F vol. I, rollo$I,J there 5ere docu/entar! evidences also that 5ere
sub/itted b! 7osefa sho5in3 her o5nership of said enterprise #pp. *() to *(<F
vol. II, rollo$. -hile 7osefa e;plained her participation and interest in the
business as /erel! to help and assist her dau3hter as the hotel and restaurant
5as near the for/er4s store, the testi/onies of IrespondentsJ and 7osefa as
5ell as her de/eanor durin3 the trial in these cases proves #sic$ that 7osefa Po
.a/ o5ns Ma!on 0otel and Restaurant. IRespondentsJ testified that it 5as
7osefa 5ho e;ercises all the acts and /anifestation of o5nership of the hotel
and restaurant li?e transferrin3 e/plo!ees fro/ the 'reat5all Palace
Restaurant 5hich she and her husband Ro! Po .a/ previousl! o5nedF it is
7osefa to 5ho/ the e/plo!ees sub/its #sic$ reports, dra5s /one! for
pa!/ent of pa!ables and for /ar?etin3, attendin3 #sic$ to .abor Inspectors
durin3 ocular inspections. E;cept for docu/ents 5hereb! Pacita Po appears
as the o5ner of Ma!on 0otel and Restaurant, nothin3 in the record sho5s an!
circu/stance or /anifestation that Pacita Po is the o5ner of Ma!on 0otel and
Restaurant. he least that can be said is that it is absurd for a person to
purchase a hotel and restaurant in the ver! heart of the Cit! of .e3aEpi
verball!. "ssu/in3 this to be true, 5hen IpetitionersJ, particularl! 7osefa, 5as
directed to sub/it evidence as to the o5nership of Pacita of the hotel and
restaurant, considerin3 the testi/onies of IrespondentsJ, the for/er should
IhaveJ sub/itted the lease contract bet5een the o5ner of the buildin3 5here
Ma!on 0otel and Restaurant 5as located at RiEal St., .e3aEpi Cit! and Pacita
Po to clearl! establish o5nership b! the latter of said enterprise. 7osefa failed.
-e are not surprised 5h! so/e e/plo!ers e/plo! sche/es to /islead @s in
order to evade liabilities. -e therefore consider and hold 7osefa Po .a/ as the
o5ner2proprietor of Ma!on 0otel and Restaurant and the proper respondent in
these cases.
+)
Petitioners4 reliance on the rules of evidence, i.e., the certificate of re3istration bein3 the
best proof of o5nership, is /isplaced. Not5ithstandin3 the certificate of re3istration,
doubts 5ere cast as to the true nature of petitioner 7osefa Po .a/4s involve/ent in the
enterprise, and the .abor "rbiter had the authorit! to resolve this issue. It 5as therefore
5ithin his =urisdiction to reGuire the additional docu/ents to ascertain 5ho 5as the real
o5ner of petitioner Ma!on 0otel 1 Restaurant.
"rticle ++% of the .abor Code is clear8 technical rules are not bindin3, and the
application of technical rules of procedure /a! be rela;ed in labor cases to serve the
de/and of substantial =ustice.
+<
he rule of evidence prevailin3 in court of la5 or eGuit!
shall not be controllin3 in labor cases and it is the spirit and intention of the .abor Code
that the .abor "rbiter shall use ever! and all reasonable /eans to ascertain the facts in
each case speedil! and ob=ectivel! and 5ithout re3ard to technicalities of la5 or
procedure, all in the interest of due process.
6C
.abor la5s /andate the speed!
ad/inistration of =ustice, 5ith least attention to technicalities but 5ithout sacrificin3 the
funda/ental reGuisites of due process.
6%
Si/ilarl!, the fact that the respondents4 co/plaints contained no alle3ation that
petitioner 7osefa Po .a/ is the o5ner is of no /o/ent. o appl! the concept of =udicial
ad/issions to respondents K 5ho are but lo5l! e/plo!ees & 5ould be to e;act
co/pliance 5ith technicalities of la5 that is contrar! to the de/ands of substantial
=ustice. Moreover, the issue of o5nership 5as an issue that arose onl! durin3 the course
of the proceedin3s 5ith the .abor "rbiter, as an incident of deter/inin3 respondents4
clai/s, and 5as 5ell 5ithin his =urisdiction.
6+
Petitioners 5ere also not denied due process, as the! 5ere 3iven sufficient opportunit!
to be heard on the issue of o5nership.
66
he essence of due process in ad/inistrative
proceedin3s is si/pl! an opportunit! to e;plain one4s side or an opportunit! to see?
reconsideration of the action or rulin3 co/plained of.
6*
"nd there is nothin3 in the
records 5hich 5ould su33est that petitioners had absolute lac? of opportunit! to be
heard.
69
Obviousl!, the choice not to present evidence 5as /ade b! petitioners
the/selves.
6(
4
Aut /ore si3nificantl!, 5e sustain the .abor "rbiter and the C" because even 5hen the
case 5as on appeal 5ith the N.RC, nothin3 5as sub/itted to ne3ate the .abor "rbiter4s
findin3 that Pacita Po is not the real o5ner of the sub=ect hotel and restaurant. Indeed,
no such evidence 5as sub/itted in the proceedin3s 5ith the C" nor 5ith this Court.
Considerin3 that petitioners vehe/entl! den! o5nership b! petitioner 7osefa Po .a/, it
is /ost tellin3 that the! continue to 5ithhold evidence 5hich 5ould shed /ore li3ht on
this issue. -e therefore a3ree 5ith the C" that the failure to sub/it could onl! /ean
that if produced, it 5ould have been adverse to petitioners4 case.
6:

hus, 5e find that there is substantial evidence to rule that petitioner 7osefa Po .a/ is
the o5ner of petitioner Ma!on 0otel 1 Restaurant.
2. I//5:a/ &.,8.,,a/+ 2/a.8 3o# ,56a#a-.o 6ay
Of the si;teen e/plo!ees, onl! the follo5in3 filed a case for ille3al dis/issal8
respondents .overes, .larena, Nicerio, Macando3, 'uades, "tractivo and AroBola.
6)
he .abor "rbiter found that there 5as ille3al dis/issal, and 3ranted separation pa! to
respondents .overes, Macando3 and .larena. "s respondents 'uades, Nicerio and
"la/ares 5ere alread! :<, (( and (9 !ears old respectivel! at the ti/e of the dis/issal,
the .abor "rbiter 3ranted retire/ent benefits pursuant to "rticle +): of the .abor Code
as a/ended.
6<
he .abor "rbiter ruled that respondent "tractivo 5as not entitled to
separation pa! because he had been transferred to 5or? in the restaurant operations in
EliEondo Street, but a5arded hi/ da/a3es. Respondents .overes, .larena, Nicerio,
Macando3 and 'uades 5ere also a5arded da/a3es.
*C
he N.RC reversed the .abor "rbiter, findin3 that ,no clear act of ter/ination is
attendant in the case at bar, and that respondents ,did not sub/it an! evidence to that
effect, but the findin3 and conclusion of the .abor "rbiter IareJ /erel! based on his o5n
sur/ises and con=ectures.,
*%
In turn, the N.RC 5as reversed b! the C".
It is petitioners contention that the C" should have sustained the N.RC findin3 that
none of the above&na/ed respondents 5ere ille3all! dis/issed, or entitled to separation
or retire/ent pa!. "ccordin3 to petitioners, even the .abor "rbiter and the C" ad/it that
5hen the ille3al dis/issal case 5as filed b! respondents on "pril %<<:, the! had as !et
no cause of action. Petitioners therefore conclude that the filin3 b! respondents of the
ille3al dis/issal case 5as pre/ature and should have been dis/issed outri3ht b! the
.abor "rbiter.
*+
Petitioners also clai/ that since the validit! of respondents4 dis/issal is
a factual Guestion, it is not for the revie5in3 court to 5ei3h the conflictin3 evidence.
*6
-e do not a3ree. -hether respondents a#5 ,-.// 9o#;.: for petitioners ., a factual
Guestion. "nd the records are uneGuivocal that since "pril %<<:, 5hen petitioner Ma!on
0otel 1 Restaurant suspended its hotel operations and transferred its restaurant
operations in EliEondo Street, respondents .overes, Macando3, .larena, 'uades and
Nicerio have not been per/itted to 5or? for petitioners. Respondent "la/ares, on the
other hand, 5as also laid&off 5hen the EliEondo Street operations closed, as 5ere all
the other respondents. Since then, respondents have not been per/itted to 5or? nor
recalled, even after the construction of the ne5 pre/ises at PeBaranda Street and the
reopenin3 of the hotel operations 5ith the restaurant in this ne5 site. "s stated b! the
7oint Decision of the .abor "rbiter on 7ul! +CCC, or /ore than three #6$ !ears after the
co/plaint 5as filed8
**
I>Jro/ the records, /ore than si; /onths had lapsed 5ithout IpetitionerJ
havin3 resu/ed operation of the hotel. "fter /ore than one !ear fro/ the
te/porar! closure of Ma!on 0otel and the te/porar! transfer to another site of
Ma!on Restaurant, the buildin3 5hich IpetitionerJ 7osefa alle3eIdJ 5IhJere the
hotel and restaurant 5ill be transferred has been finall! constructed and the
sa/e is operated as a hotel 5ith bar and restaurant nevertheless, none of
IrespondentsJ herein 5ho 5ere e/plo!ed at Ma!on 0otel and Restaurant
5hich 5as also closed on "pril 6C, %<<) 5as25ere recalled b! IpetitionerJ to
continue their services...
Parentheticall!, the .abor "rbiter did not 3rant separation pa! to the other respondents
as the! had not filed an a/ended co/plaint to Guestion the cessation of their
e/plo!/ent after the closure of Ma!on 0otel 1 Restaurant on March 6%, %<<:.
*9
he above factual findin3 of the .abor "rbiter 5as never refuted b! petitioners in their
appeal 5ith the N.RC. It confounds us, therefore, ho5 the N.RC could have so
cavalierl! treated this uncontroverted factual findin3 b! rulin3 that respondents have not
introduced an! evidence to sho5 that the! 5ere ille3all! dis/issed, and that the .abor
"rbiter4s findin3 5as based on con=ecture.
*(
It 5as a serious error that the N.RC did not
inGuire as to the /5:a/.-y of the cessation of e/plo!/ent. "rticle +)( of the .abor Code
is clear K there is ter/ination of e/plo!/ent 5hen an other5ise bona fide suspension
of 5or? e;ceeds si; #($ /onths.
*:
he cessation of e/plo!/ent for /ore than si;
/onths 5as patent and the e/plo!er has the burden of provin3 that the ter/ination 5as
for a =ust or authoriEed cause.
*)
Moreover, 5e are not i/pressed b! an! of petitioners4 atte/pts to e;culpate the/selves
fro/ the char3es. >irst, in the proceedin3s 5ith the .abor "rbiter, the! clai/ed that it
could not be ille3al dis/issal because the la!&off 5as /erel! te/porar! #and due to the
e;piration of the lease contract over the old pre/ises of the hotel$. he! ,652.3.2a//y
invo?ed "rticle +)( of the .abor Code to ar3ue that the clai/ for separation pa! 5as
pre/ature and 5ithout le3al and factual basis.
*<
hen, because the .abor "rbiter had
ruled that there 5as alread! ille3al dis/issal 5hen the la!&off had e;ceeded the si;&
/onth period provided for in "rticle +)(, petitioners raise this novel ar3u/ent, to 5it8
5
It is the fir/ but respectful sub/ission of petitioners that reliance on "rticle +)(
of the .abor Code is /isplaced, considerin3 that the reason 5h! private
respondents 5ere out of 5or? 5as not due to the fault of petitioners. he
failure of petitioners to reinstate the private respondents to their for/er
positions should not li?e5ise be attributable to said petitioners as the private
respondents did not sub/it an! evidence to prove their alle3ed ille3al
dis/issal. he petitioners cannot discern 5h! the! should be /ade liable to
the private respondents for their failure to be reinstated considerin3 that the
fact that the! 5ere out of 5or? 5as not due to the fault of petitioners but due to
circu/stances be!ond the control of petitioners, 5hich are the ter/ination and
non&rene5al of the lease contract over the sub=ect pre/ises. Private
respondents, ho5ever, ar3ue in their Co//ent that petitioners the/selves
sou3ht the application of "rticle +)( of the .abor Code in their case in their
Position Paper filed before the .abor "rbiter. In refutation, petitioners hu/bl!
sub/it that even if the! invo?e "rticle +)( of the .abor Code, still the fact
re/ains, and this bears stress and e/phasis, that the te/porar! suspension of
the operations of the establish/ent arisin3 fro/ the non&rene5al of the lease
contract did not result in the ter/ination of e/plo!/ent of private respondents
and, therefore, the petitioners cannot be faulted if said private respondents
5ere out of 5or?, and conseGuentl!, the! are not entitled to their /one! clai/s
a3ainst the petitioners.
9C
It is confoundin3 ho5 petitioners have fashioned their ar3u/ents. "fter havin3 ad/itted,
in effect, that respondents have been laid&off since "pril %<<:, the! 5ould have this
Court e;cuse their refusal to reinstate respondents or 3rant the/ separation pa!
because these sa/e respondents purportedl! have not proven the ille3alit! of their
dis/issal.
Petitioners4 ar3u/ents reflect their lac? of candor and the blatant atte/pt to use
technicalities to /uddle the issues and defeat the la5ful clai/s of their e/plo!ees.
%.#,-, petitioners ad/it that ,.25 A6#./ 1<<7, 5hen hotel operations 5ere suspended
due to the ter/ination of the lease of the old pre/ises, respondents .overes,
Macando3, .larena, Nicerio and 'uades 4a05 o- 755 65#8.--5! -o 9o#;. Second,
505 a3-5# ,.= 8o-4, of 5hat should have been =ust a te/porar! la!&off, the sa/e
respondents 5ere ,-.// o- #52a//5! -o 9o#;. "s a /atter of fact, the .abor "rbiter even
found that as of the ti/e 5hen he rendered his 7oint Decision on 7ul! +CCC K or /ore
than three #6$ !ears after the supposed ,te/porar! la!&off,, -45 586/oy85- o3 a// o3
-45 #5,6o!5-, 9.-4 65-.-.o5#, 4a! 25a,5!, not5ithstandin3 that the ne5 pre/ises
had been co/pleted and the sa/e operated as a hotel 5ith bar and restaurant. his is
clearl! !.,8.,,a/ K or the per/anent severance or co/plete separation of the 5or?er
fro/ the service on the initiative of the e/plo!er re3ardless of the reasons therefor.
9%
On this point, 5e note that the .abor "rbiter and the C" are in accord that at the ti/e of
the filin3 of the co/plaint, respondents had no cause of action to file the case for ille3al
dis/issal. "ccordin3 to the C" and the .abor "rbiter, the la!&off of the respondents 5as
/erel! te/porar!, pendin3 construction of the ne5 buildin3 at PeBaranda Street.
9+
-hile the 2/o,1#5 of the hotel operations in "pril of %<<: /a! have been te/porar!, 5e
hold that the evidence on record belie an! clai/ of petitioners that the /ay>o33 of
respondents on that sa/e date 5as /erel! te/porar!. On the contrar!, 5e find
substantial evidence that petitioners intended the ter/ination to be per/anent. %.#,-,
respondents .overes, Macando3, .larena, 'uades, Nicerio and "la/ares filed the
co/plaint for ille3al dis/issal .885!.a-5/y a3-5# the closure of the hotel operations in
RiEal Street, not5ithstandin3 the alle3ed te/porar! nature of the closure of the hotel
operations, and petitioners4 alle3ations that the e/plo!ees assi3ned to the hotel
operations ?ne5 about this beforehand. S52o!, in their position paper sub/itted to the
.abor "rbiter, petitioners invo?ed "rticle +)( of the .abor Code to assert that the
e/plo!er&e/plo!ee relationship 5as /erel! suspended, and therefore the clai/ for
separation pa! 5as pre/ature and 5ithout le3al or factual basis.
96
'1- -45y 8a!5 o
85-.o o3 ay .-5- -o #52a// -45,5 #5,6o!5-, -o 9o#; 16o 2o86/5-.o o3 -45
59 6#58.,5,. T4.#!, the various pleadin3s on record sho5 that petitioners held
respondents, particularl! .overes, as responsible for /is/ana3e/ent of the
establish/ent and for abuse of trust and confidence. Petitioner 7osefa Po .a/4s
affidavit on 7ul! +%, %<<), for e;a/ple, sGuarel! bla/ed respondents, specificall!
.overes, Au/ala! and Ca/i3la, for abusin3 her lenienc! and causin3 petitioner Ma!on
0otel 1 Restaurant to sustain ,continuous losses until it is closed., She then asserts
that respondents ,are not entitled to separation pa! for the! 5ere not ter/inated and if
ever the business ceased to operate it 5as because of losses.,
9*
"3ain, petitioners
/a?e the sa/e alle3ation in their /e/orandu/ on appeal 5ith the N.RC, 5here the!
alle3ed that three #6$ !ears prior to the e;piration of the lease in %<<:, the operation of
the 0otel had been sustainin3 consistent losses, and these 5ere solel! attributed to
respondents, but /ost especiall! due to .overes4s /is/ana3e/ent and abuse of
petitioners4 trust and confidence.
99
Even the petition filed in this court /ade reference to
the separation of the respondents due to ,severe financial losses and reverses,, a3ain
i/putin3 it to respondents4 /is/ana3e/ent.
9(
he vehe/ence of petitioners4 accusation
of /is/ana3e/ent a3ainst respondents, especiall! a3ainst .overes, is inconsistent 5ith
the desire to recall the/ to 5or?. %o1#-4, petitioners4 /e/orandu/ on appeal also
averred that the case 5as filed ,not because of the business bein3 operated b! the/ or
that the! 5ere supposedl! not receivin3 benefits fro/ the .abor Code 5hich is true, but
because of the fact that -45 ,o1#25 o3 -45.# /.05/.4oo!, 945-45# /5:a/ o# .88o#a/,
9a, ,-o665! o Ma#24 31, 1<<7, 5hen the o5ner of the buildin3 ter/inated the .ease
Contract.,
9:
>ifth, petitioners had inconsistencies in their pleadin3s #5ith the N.RC, C"
and 5ith this Court$ in referrin3 to the closure,
9)
i.e., in the petition filed 5ith this court,
the! assert that there is no ille3al dis/issal because there 5as ,onl! a te/porar!
cessation or suspension of operations of the hotel and restaurant due to circu/stances
be!ond the control of petitioners, and that is, the non&rene5al of the lease contract...,
9<

"nd !et, in the sa/e petition, the! also assert that8 #a$ the separation of respondents
5as due to severe financial losses and reverses leadin3 -o -45 2/o,1#5 o3 -45
6
71,.5,,F and #b$ 65-.-.o5# Pacita Po 4a! -o 2/o,5 ,4o6 and 5as ban?rupt and has
no liGuidit! to put up her o5n buildin3 to house Ma!on 0otel 1 Restaurant.
(C
S.=-4, and
finall!, the uncontroverted findin3 of the .abor "rbiter that petitioners ter/inated all the
other respondents, b! not e/plo!in3 the/ 5hen the 0otel and Restaurant transferred to
its ne5 site on PeBaranda Street.
(%
Indeed, in this sa/e /e/orandu/, petitioners
referred to all respondents as ,for/er e/plo!ees of Ma!on 0otel 1 Restaurant.,
(+
hese factors /a! be inconclusive individuall!, but 5hen ta?en to3ether, the! lead us to
conclude that petitioners reall! intended to dis/iss all respondents and /erel! used the
ter/ination of the lease #on RiEal Street pre/ises$ as a /eans b! 5hich the! could
ter/inate their e/plo!ees.
Moreover, even assu/in3 arguendo that the cessation of e/plo!/ent on "pril %<<:
5as /erel! te/porar!, it 752a85 dis/issal b! operation of la5 5hen petitioners failed
to reinstate respondents after the lapse of si; #($ /onths, pursuant to "rticle +)( of the
.abor Code.
-e are not i/pressed b! petitioners4 clai/ that severe business losses =ustified their
failure to reinstate respondents. he evidence to prove this fact is inconclusive. Aut
/ore i/portant, serious business losses do not e;cuse the e/plo!er fro/ co/pl!in3
5ith the clearance or report reGuired under "rticle +)6 of the .abor Code and its
i/ple/entin3 rules before ter/inatin3 the e/plo!/ent of its 5or?ers.
(6
In the absence
of =ustif!in3 circu/stances, the failure of petitioners to observe the procedural
reGuire/ents set out under "rticle +)*, taints their actuations 5ith bad faith, especiall!
since the! clai/ed that the! have been e;periencin3 losses in the three !ears before
%<<:. o sa! the least, if it 5ere true that the la!&off 5as te/porar! but then serious
business losses prevented the reinstate/ent of respondents, then petitioners should
have co/plied 5ith the reGuire/ents of 5ritten notice. he reGuire/ent of la5
/andatin3 the 3ivin3 of notices 5as intended not onl! to enable the e/plo!ees to loo?
for another e/plo!/ent and therefore ease the i/pact of the loss of their =obs and the
correspondin3 inco/e, but /ore i/portantl!, to 3ive the Depart/ent of .abor and
E/plo!/ent #DO.E$ the opportunit! to ascertain the verit! of the alle3ed authoriEed
cause of ter/ination.
(*
"nd even assu/in3 that the closure 5as due to a reason be!ond the control of the
e/plo!er, it still has to accord its e/plo!ees so/e relief in the for/ of severance pa!.
(9
-hile 5e reco3niEe the ri3ht of the e/plo!er to ter/inate the services of an e/plo!ee
for a =ust or authoriEed cause, the dis/issal of e/plo!ees /ust be /ade 5ithin the
para/eters of la5 and pursuant to the tenets of fair pla!.
((
"nd in ter/ination disputes,
the burden of proof is al5a!s on the e/plo!er to prove that the dis/issal 5as for a =ust
or authoriEed cause.
(:
-here there is no sho5in3 of a clear, valid and le3al cause for
ter/ination of e/plo!/ent, the la5 considers the case a /atter of ille3al dis/issal.
()
@nder these circu/stances, the a5ard of da/a3es 5as proper. "s a rule, /oral
da/a3es are recoverable 5here the dis/issal of the e/plo!ee 5as attended b! bad
faith or fraud or constituted an act oppressive to labor, or 5as done in a /anner
contrar! to /orals, 3ood custo/s or public polic!.
(<
-e believe that the dis/issal of the
respondents 5as attended 5ith bad faith and /eant to evade the la5ful obli3ations
i/posed upon an e/plo!er.
o rule other5ise 5ould lead to the ano/al! of respondents bein3 ter/inated fro/
e/plo!/ent in %<<: as a /atter of fact, but 5ithout le3al redress. his runs counter to
notions of fair pla!, substantial =ustice and the constitutional /andate that labor ri3hts
should be respected. If doubts e;ist bet5een the evidence presented b! the e/plo!er
and the e/plo!ee, the scales of =ustice /ust be tilted in favor of the latter K the
e/plo!er /ust affir/ativel! sho5 rationall! adeGuate evidence that the dis/issal 5as
for a =ustifiable cause.
:C
It is a ti/e&honored rule that in controversies bet5een a laborer
and his /aster, doubts reasonabl! arisin3 fro/ the evidence, or in the interpretation of
a3ree/ents and 5ritin3 should be resolved in the for/er4s favor.
:%
he polic! is to
e;tend the doctrine to a 3reater nu/ber of e/plo!ees 5ho can avail of the benefits
under the la5, 5hich is in consonance 5ith the avo5ed polic! of the State to 3ive
/a;i/u/ aid and protection of labor.
:+
-e therefore reinstate the .abor "rbiter4s decision 5ith the follo5in3 /odifications8
#a$ Separation pa! for the ille3al dis/issal of respondents .overes, Macando3
and .larenaF #Santos AroBola cannot be 3ranted separation pa! as he /ade
no such clai/$F
#b$ Retire/ent pa! for respondents 'uades, Nicerio, and "la/ares, 5ho at the
ti/e of dis/issal 5ere entitled to their retire/ent benefits pursuant to "rticle
+): of the .abor Code as a/endedF
:6
and
#c$ Da/a3es for respondents .overes, Macando3, .larena, 'uades, Nicerio,
"tractivo, and AroBola.
3. Mo5y 2/a.8,
he C" held that contrar! to the N.RC4s rulin3, petitioners had not dischar3ed the
burden of provin3 that the /onetar! clai/s of the respondents have been paid.
:*
he
C" thus reinstated the .abor "rbiter4s 3rant of respondents4 /onetar! clai/s, includin3
da/a3es.
Petitioners assail this rulin3 b! repeatin3 their lon3 and convoluted ar3u/ent that as
there 5as no ille3al dis/issal, then respondents are not entitled to their /onetar!
7
clai/s or separation pa! and da/a3es. Petitioners4 ar3u/ents are not onl! tirin3,
repetitive and unconvincin3, but confusin3 and confused K entitle/ent to labor
standard benefits is a separate and distinct concept fro/ pa!/ent of separation pa!
arisin3 fro/ ille3al dis/issal, and are 3overned b! different provisions of the .abor
Code.
-e a3ree 5ith the C" and the .abor "rbiter. Respondents have set out 5ith particularit!
in their co/plaint, position paper, affidavits and other docu/ents the labor standard
benefits the! are entitled to, and 5hich the! alle3ed that petitioners have failed to pa!
the/. It 5as therefore petitioners4 burden to prove that the! have paid these /one!
clai/s. One 5ho pleads pa!/ent has the burden of provin3 it, and even 5here the
e/plo!ees /ust alle3e nonpa!/ent, the 3eneral rule is that the burden rests on the
defendant to prove nonpa!/ent, rather than on the plaintiff to prove non pa!/ent.
:9

his petitioners failed to do.
-e also a3ree 5ith the .abor "rbiter and the C" that the docu/ents petitioners
sub/itted, i.e., affidavits e;ecuted b! so/e of respondents durin3 an ocular inspection
conducted b! an inspector of the DO.EF notices of inspection result and >acilit!
Evaluation Orders issued b! DO.E, are not sufficient to prove pa!/ent.
:(
Despite
repeated orders fro/ the .abor "rbiter,
::
petitioners failed to sub/it the pertinent
e/plo!ee files, pa!rolls, records, re/ittances and other si/ilar docu/ents 5hich 5ould
sho5 that respondents rendered 5or? entitlin3 the/ to pa!/ent for overti/e 5or?, ni3ht
shift differential, pre/iu/ pa! for 5or? on holida!s and rest da!, and pa!/ent of these
as 5ell as the CO." and the SI.P L docu/ents 5hich are not in respondents4
possession but in the custod! and absolute control of petitioners.
:)
A! choosin3 not to
full! and co/pletel! disclose infor/ation and present the necessar! docu/ents to
prove pa!/ent of labor standard benefits due to respondents, petitioners failed to
dischar3e the burden of proof.
:<
Indeed, petitioners4 failure to sub/it the necessar!
docu/ents 5hich as e/plo!ers are in their possession, inspite of orders to do so, 3ives
rise to the presu/ption that their presentation is pre=udicial to its cause.
)C
"s aptl!
Guoted b! the C"8
I-Jhen the evidence tends to prove a /aterial fact 5hich i/poses a liabilit! on
a part!, and he has it in his po5er to produce evidence 5hich fro/ its ver!
nature /ust overthro5 the case /ade a3ainst hi/ if it is not founded on fact,
and he refuses to produce such evidence, the presu/ption arises that the
evidence, if produced, 5ould operate to his pre=udice, and support the case of
his adversar!.
)%
Petitioners ne;t clai/ that the cost of the food and snac?s provided to respondents as
facilities should have been included in rec?onin3 the pa!/ent of respondents4 5a3es.
he! state that althou3h on the surface respondents appeared to receive /ini/al
5a3es, petitioners had 3ranted respondents other benefits 5hich are considered part
and parcel of their 5a3es and are allo5ed under e;istin3 la5s.
)+
he! clai/ that these
benefits /a?e up for 5hatever inadeGuacies there /a! be in co/pensation.
)6

Specificall!, the! invo?ed Sections 9 and (, Rule VII&", 5hich allo5 the deduction of
facilities provided b! the e/plo!er throu3h an appropriate >acilit! Evaluation Order
issued b! the Re3ional Director of the DO.E.
)*
Petitioners also aver that the! 3ive five
#9$ percent of the 3ross inco/e each /onth as incentives. "s proof of co/pliance of
pa!/ent of /ini/u/ 5a3es, petitioners sub/itted the Notice of Inspection Results
issued in %<<9 and %<<: b! the DO.E Re3ional Office.
)9
he cost of /eals and snac?s purportedl! provided to respondents cannot be deducted
as part of respondents4 /ini/u/ 5a3e. "s stated in the .abor "rbiter4s decision8
)(
-hile IpetitionersJ sub/itted >acilit! Evaluation Orders #pp. *(), *(<F vol. II,
rollo$ issued b! the DO.E Re3ional Office 5hereb! the cost of /eals 3iven b!
IpetitionersJ to IrespondentsJ 5ere specified for purposes of considerin3 the
sa/e as part of their 5a3es, -e cannot consider the cost of /eals in the
Orders as applicable to IrespondentsJ. IRespondentsJ 5ere not intervie5ed b!
the DO.E as to the Gualit! and Guantit! of food appearin3 in the applications of
IpetitionersJ for facilit! evaluation prior to its approval to deter/ine 5hether or
not IrespondentsJ 5ere indeed 3iven such ?ind and Guantit! of food. "lso, there
5as no evidence that the Gualit! and Guantit! of food in the Orders 5ere
voluntaril! accepted b! IrespondentsJ. On the contrar!F 5hile so/e Iof the
respondentsJ ad/itted that the! 5ere 3iven /eals and /erienda, the Gualit! of
food serveIdJ to the/ 5ere not 5hat 5ere provided for in the Orders and that it
5as onl! 5hen the! filed these cases that the! ca/e to ?no5 about said
>acilit! Evaluation Orders #pp. %CCF 6:<I,J vol. II, rolloF p. *C, tsnI,J 7une %<,
%<<)$. IPetitionerJ 7osefa herself, 5ho applied for evaluation of the facilit!
#food$ 3iven to IrespondentsJ, testified that she did not infor/ IrespondentsJ
concernin3 said >acilit! Evaluation Orders #p. 6*, tsnI,J "u3ust %6, %<<)$.
Even 3rantin3 that /eals and snac?s 5ere provided and indeed constituted facilities,
such facilities could not be deducted 5ithout co/pliance 5ith certain le3al reGuire/ents.
"s stated in Ma75?a 0. NLRC,
):
the e/plo!er si/pl! cannot deduct the value fro/ the
e/plo!ee4s 5a3es 5ithout satisf!in3 the follo5in38 #a$ proof that such facilities are
custo/aril! furnished b! the tradeF #b$ the provision of deductible facilities is voluntaril!
accepted in 5ritin3 b! the e/plo!eeF and #c$ the facilities are char3ed at fair and
reasonable value. he records are clear that petitioners failed to co/pl! 5ith these
reGuire/ents. here 5as no proof of respondents4 5ritten authoriEation. Indeed, the
.abor "rbiter found that 5hile the respondents ad/itted that the! 5ere 3iven /eals and
merienda, the Gualit! of food served to the/ 5as not 5hat 5as provided for in the
>acilit! Evaluation Orders and it 5as onl! 5hen the! filed the cases that the! ca/e to
?no5 of this supposed >acilit! Evaluation Orders.
))
Petitioner 7osefa Po .a/ herself
a!8.--5! that she did not infor/ the respondents of the facilities she had applied for.
)<
8
Considerin3 the failure to co/pl! 5ith the above&/entioned le3al reGuire/ents, the
.abor "rbiter therefore erred 5hen he ruled that the cost of the /eals actuall! provided
to respondents should be deducted as part of their salaries, on the 3round that
respondents have availed the/selves of the food 3iven b! petitioners.
<C
he la5 is clear
that /ere avail/ent is not sufficient to allo5 deductions fro/ e/plo!ees4 5a3es.
More i/portant, 5e note the uncontroverted testi/on! of respondents on record that
the! 5ere reGuired to eat in the hotel and restaurant so that the! 5ill not 3o ho/e and
there is no interruption in the services of Ma!on 0otel 1 Restaurant. "s ruled in
Ma75?a, food or snac?s or other convenience provided b! the e/plo!ers are dee/ed
as supple/ents if the! are 3ranted for the convenience of the e/plo!er. he criterion in
/a?in3 a distinction bet5een a supple/ent and a facilit! does not so /uch lie in the
?ind #food, lod3in3$ but the purpose.
<%
Considerin3, therefore, that hotel 5or?ers are
reGuired to 5or? different shifts and are e;pected to be available at various odd hours,
their read! availabilit! is a necessar! /atter in the operations of a s/all hotel, such as
petitioners4 business.
<+
he deduction of the cost of /eals fro/ respondents4 5a3es,
therefore, should be re/oved.
-e also do not a3ree 5ith petitioners that the five #9$ percent of the 3ross inco/e of the
establish/ent can be considered as part of the respondents4 5a3es. -e Guote 5ith
approval the .abor "rbiter on this /atter, to 5it8
-hile co/plainants, 5ho 5ere e/plo!ed in the hotel, receiveIdJ various
a/ounts as profit share, the sa/e cannot be considered as part of their 5a3es
in deter/inin3 their clai/s for violation of labor standard benefits. "lthou3h
called profit shareI,J such is in the nature of share fro/ service char3es
char3ed b! the hotel. his is /ore e;plained b! IrespondentsJ 5hen the!
testified that 5hat the! received are not fi;ed a/ounts and the sa/e are paid
not on a /onthl! basis #pp. 99, <6, <*, %C6, %C*F vol. II, rollo$. "lso,
IpetitionersJ failed to sub/it evidence that the a/ounts received b!
IrespondentsJ as profit share are to be considered part of their 5a3es and had
been a3reed b! the/ prior to their e/plo!/ent. >urther, ho5 can the a/ounts
receiveIdJ b! IrespondentsJ be considered as profit share 5hen the sa/e IareJ
based on the 3ross receipt of the hotelIHJ No profit can as !et be deter/ined
out of the 3ross receipt of an enterprise. Profits are realiEed after e;penses are
deducted fro/ the 3ross inco/e.
On the issue of the proper /ini/u/ 5a3e applicable to respondents, 5e sustain the
.abor "rbiter. -e note that petitioners the/selves have ad/itted that the establish/ent
e/plo!s ,/ore or less si;teen #%($ e/plo!ees,,
<6
therefore the! are estopped fro/
clai/in3 that the applicable /ini/u/ 5a3e should be for service establish/ents
e/plo!in3 %9 e/plo!ees or less.
"s for petitioners repeated invocation of serious business losses, suffice to sa! that this
is not a defense to pa!/ent of labor standard benefits. he e/plo!er cannot e;e/pt
hi/self fro/ liabilit! to pa! /ini/u/ 5a3es because of poor financial condition of the
co/pan!. he pa!/ent of /ini/u/ 5a3es is not dependent on the e/plo!er4s abilit! to
pa!.
<*
hus, 5e reinstate the a5ard of /onetar! clai/s 3ranted b! the .abor "rbiter.
4. Co2/1,.o
here is no den!in3 that the actuations of petitioners in this case have been
reprehensible. he! have ter/inated the respondents4 e/plo!/ent in an underhanded
/anner, and have used and abused the Guasi&=udicial and =udicial processes to resist
pa!/ent of their e/plo!ees4 ri3htful clai/s, thereb! protractin3 this case and causin3
the unnecessar! clo33in3 of doc?ets of the Court. he! have also forced respondents to
unnecessar! hardship and financial e;pense. Indeed, the circu/stances of this case
5ould have called for e;e/plar! da/a3es, as the dis/issal 5as effected in a 5anton,
oppressive or /alevolent /anner,
<9
and public polic! reGuires that these acts /ust be
suppressed and discoura3ed.
<(
Nevertheless, 5e cannot a3ree 5ith the .abor "rbiter in 3rantin3 e;e/plar! da/a3es of
P%C,CCC.CC each to all respondents. -hile it is true that other for/s of da/a3es under
the Civil Code /a! be a5arded to ille3all! dis/issed e/plo!ees,
<:
an! a5ard of /oral
da/a3es b! the .abor "rbiter cannot be based on the .abor Code but should be
3rounded on the Civil Code.
<)
"nd the la5 is clear that e;e/plar! da/a3es can onl! be
a5arded if plaintiff sho5s proof that he is entitled to /oral, te/perate or co/pensator!
da/a3es.
<<
"s onl! respondents .overes, 'uades, Macando3, .larena, Nicerio, "tractivo and
AroBola specificall! clai/ed da/a3es fro/ petitioners, then onl! the! are entitled to
e;e/plar! da/a3es.
s=3s%

>inall!, 5e rule that attorne!4s fees in the a/ount to P%C,CCC.CC should be 3ranted to
each respondent. It is settled that in actions for recover! of 5a3es or 5here an
e/plo!ee 5as forced to liti3ate and incur e;penses to protect his ri3hts and interest, he
is entitled to an a5ard of attorne!4s fees.
%CC
his case undoubtedl! falls 5ithin this rule.
IN )IE( (HEREO%, the petition is hereb! DENIED. he Decision of 7anuar! %:, +CC6
of the Court of "ppeals in C"&'.R. SP No. ()(*+ upholdin3 the 7oint Decision of 7ul!
%*, +CCC of the .abor "rbiter in R"A V Case Nos. C*&CCC:<&<: and C*&CCC)C&<: is
">>IRMED, 5ith the follo5in3 MODI>IC"IONS8
9
#%$ 'rantin3 separation pa! of one&half #%2+$ /onth for ever! !ear of service to
respondents .overes, Macando3 and .larenaF
#+$ 'rantin3 retire/ent pa! for respondents 'uades, Nicerio, and "la/aresF
#6$ Re/ovin3 the deductions for food facilit! fro/ the a/ounts due to all
respondentsF
#*$ "5ardin3 /oral da/a3es of P+C,CCC.CC each for respondents .overes,
Macando3, .larena, 'uades, Nicerio, "tractivo, and AroBolaF
#9$ Deletin3 the a5ard of e;e/plar! da/a3es of P%C,CCC.CC fro/ all
respondents e;cept .overes, Macando3, .larena, 'uades, Nicerio, "tractivo,
and AroBolaF and
#($ 'rantin3 attorne!4s fees of P%C,CCC.CC each to all respondents.
he case is REM"NDED to the .abor "rbiter for the RECOMP@"ION of the total
/onetar! benefits a5arded and due to the e/plo!ees concerned in accordance 5ith
the decision. he .abor "rbiter is ORDERED to sub/it his co/pliance thereon 5ithin
thirt! #6C$ da!s fro/ notice of this decision, 5ith copies furnished to the parties.
SO OR&ERE&.
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