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Meanwhile, ABS-CBN continued to remit SONZAs monthly talent fees through his account at PCIBank, Quezon
Avenue Branch, Quezon City. In July 1996, ABS-CBN opened a new account with the same bank where ABS-CBN
DECISION deposited SONZAs talent fees and other payments due him under the Agreement.
CARPIO, J.: In his Order dated 2 December 1996, the Labor Arbiter[5] denied the motion to dismiss and directed the parties to
file their respective position papers. The Labor Arbiter ruled:
The Case
In this instant case, complainant for having invoked a claim that he was an employee of respondent company
Before this Court is a petition for review on certiorari[1] assailing the 26 March 1999 Decision[2] of the Court of
until April 15, 1996 and that he was not paid certain claims, it is sufficient enough as to confer jurisdiction over the
Appeals in CA-G.R. SP No. 49190 dismissing the petition filed by Jose Y. Sonza (SONZA). The Court of Appeals affirmed
instant case in this Office. And as to whether or not such claim would entitle complainant to recover upon the causes
the findings of the National Labor Relations Commission (NLRC), which affirmed the Labor Arbiters dismissal of the
of action asserted is a matter to be resolved only after and as a result of a hearing. Thus, the respondents plea of
case for lack of jurisdiction.
lack of employer-employee relationship may be pleaded only as a matter of defense. It behooves upon it the duty
The Facts to prove that there really is no employer-employee relationship between it and the complainant.

In May 1994, respondent ABS-CBN Broadcasting Corporation (ABS-CBN) signed an Agreement (Agreement) with the The Labor Arbiter then considered the case submitted for resolution. The parties submitted their position papers
Mel and Jay Management and Development Corporation (MJMDC). ABS-CBN was represented by its corporate on 24 February 1997.
officers while MJMDC was represented by SONZA, as President and General Manager, and Carmela Tiangco
On 11 March 1997, SONZA filed a Reply to Respondents Position Paper with Motion to Expunge Respondents Annex
(TIANGCO), as EVP and Treasurer. Referred to in the Agreement as AGENT, MJMDC agreed to provide SONZAs
4 and Annex 5 from the Records. Annexes 4 and 5 are affidavits of ABS-CBNs witnesses Soccoro Vidanes and Rolando
services exclusively to ABS-CBN as talent for radio and television. The Agreement listed the services SONZA would
V. Cruz. These witnesses stated in their affidavits that the prevailing practice in the television and broadcast industry
render to ABS-CBN, as follows:
is to treat talents like SONZA as independent contractors.
a. Co-host for Mel & Jay radio program, 8:00 to 10:00 a.m., Mondays to Fridays;
The Labor Arbiter rendered his Decision dated 8 July 1997 dismissing the complaint for lack of jurisdiction.[6] The
b. Co-host for Mel & Jay television program, 5:30 to 7:00 p.m., Sundays.[3] pertinent parts of the decision read as follows:

ABS-CBN agreed to pay for SONZAs services a monthly talent fee of P310,000 for the first year and P317,000 for the xxx
second and third year of the Agreement. ABS-CBN would pay the talent fees on the 10th and 25thdays of the month.
While Philippine jurisprudence has not yet, with certainty, touched on the true nature of the contract of a talent, it
On 1 April 1996, SONZA wrote a letter to ABS-CBNs President, Eugenio Lopez III, which reads: stands to reason that a talent as above-described cannot be considered as an employee by reason of the peculiar
circumstances surrounding the engagement of his services.
Dear Mr. Lopez,
It must be noted that complainant was engaged by respondent by reason of his peculiar skills and talent as a TV host
We would like to call your attention to the Agreement dated May 1994 entered into by your goodself on behalf of and a radio broadcaster. Unlike an ordinary employee, he was free to perform the services he undertook to render
ABS-CBN with our company relative to our talent JOSE Y. SONZA. in accordance with his own style. The benefits conferred to complainant under the May 1994 Agreement are
certainly very much higher than those generally given to employees. For one, complainant Sonzas monthly talent
As you are well aware, Mr. Sonza irrevocably resigned in view of recent events concerning his programs and fees amount to a staggering P317,000. Moreover, his engagement as a talent was covered by a specific
career. We consider these acts of the station violative of the Agreement and the station as in breach thereof. In this contract. Likewise, he was not bound to render eight (8) hours of work per day as he worked only for such number
connection, we hereby serve notice of rescission of said Agreement at our instance effective as of date. of hours as may be necessary.

Mr. Sonza informed us that he is waiving and renouncing recovery of the remaining amount stipulated in paragraph The fact that per the May 1994 Agreement complainant was accorded some benefits normally given to an employee
7 of the Agreement but reserves the right to seek recovery of the other benefits under said Agreement. is inconsequential. Whatever benefits complainant enjoyed arose from specific agreement by the parties and not
by reason of employer-employee relationship. As correctly put by the respondent, All these benefits are merely
Thank you for your attention.
talent fees and other contractual benefits and should not be deemed as salaries, wages and/or other remuneration
Very truly yours, accorded to an employee, notwithstanding the nomenclature appended to these benefits. Apropos to this is the
rule that the term or nomenclature given to a stipulated benefit is not controlling, but the intent of the parties to
(Sgd.) the Agreement conferring such benefit.

JOSE Y. SONZA The fact that complainant was made subject to respondents Rules and Regulations, likewise, does not detract from
the absence of employer-employee relationship. As held by the Supreme Court, The line should be drawn between
President and Gen. Manager[4] rules that merely serve as guidelines towards the achievement of the mutually desired result without dictating the
means or methods to be employed in attaining it, and those that control or fix the methodology and bind or restrict
On 30 April 1996, SONZA filed a complaint against ABS-CBN before the Department of Labor and Employment,
the party hired to the use of such means. The first, which aim only to promote the result, create no employer-
National Capital Region in Quezon City. SONZA complained that ABS-CBN did not pay his salaries, separation pay,
employee relationship unlike the second, which address both the result and the means to achieve it. (Insular Life
service incentive leave pay, 13th month pay, signing bonus, travel allowance and amounts due under the Employees
Assurance Co., Ltd. vs. NLRC, et al., G.R. No. 84484, November 15, 1989).
Stock Option Plan (ESOP).
x x x (Emphasis supplied)[7]
On 10 July 1996, ABS-CBN filed a Motion to Dismiss on the ground that no employer-employee relationship existed
between the parties. SONZA filed an Opposition to the motion on 19 July 1996.
SONZA appealed to the NLRC. On 24 February 1998, the NLRC rendered a Decision affirming the Labor Arbiters Evidently, it is precisely by reason of the alleged violation of the May 1994 Agreement and/or the Stock Purchase
decision. SONZA filed a motion for reconsideration, which the NLRC denied in its Resolution dated 3 July 1998. Agreement by respondent-appellee that complainant-appellant filed his complaint. Complainant-appellants claims
being anchored on the alleged breach of contract on the part of respondent-appellee, the same can be resolved by
On 6 October 1998, SONZA filed a special civil action for certiorari before the Court of Appeals assailing the decision reference to civil law and not to labor law. Consequently, they are within the realm of civil law and, thus, lie with the
and resolution of the NLRC. On 26 March 1999, the Court of Appeals rendered a Decision dismissing the case.[8] regular courts. As held in the case of Dai-Chi Electronics Manufacturing vs. Villarama, 238 SCRA 267, 21 November
1994, an action for breach of contractual obligation is intrinsically a civil dispute.[9] (Emphasis supplied)
Hence, this petition.
The Court of Appeals ruled that the existence of an employer-employee relationship between SONZA and ABS-CBN
The Rulings of the NLRC and Court of Appeals
is a factual question that is within the jurisdiction of the NLRC to resolve.[10] A special civil action for certiorari extends
The Court of Appeals affirmed the NLRCs finding that no employer-employee relationship existed between SONZA only to issues of want or excess of jurisdiction of the NLRC.[11] Such action cannot cover an inquiry into the
and ABS-CBN. Adopting the NLRCs decision, the appellate court quoted the following findings of the NLRC: correctness of the evaluation of the evidence which served as basis of the NLRCs conclusion.[12]The Court of Appeals
added that it could not re-examine the parties evidence and substitute the factual findings of the NLRC with its
x x x the May 1994 Agreement will readily reveal that MJMDC entered into the contract merely as an agent of own.[13]
complainant Sonza, the principal. By all indication and as the law puts it, the act of the agent is the act of the principal
itself. This fact is made particularly true in this case, as admittedly MJMDC is a management company devoted The Issue
exclusively to managing the careers of Mr. Sonza and his broadcast partner, Mrs. Carmela C. Tiangco. (Opposition
In assailing the decision of the Court of Appeals, SONZA contends that:
to Motion to Dismiss)
Clearly, the relations of principal and agent only accrues between complainant Sonza and MJMDC, and not between
ABS-CBN and MJMDC. This is clear from the provisions of the May 1994 Agreement which specifically referred to
MJMDC as the AGENT. As a matter of fact, when complainant herein unilaterally rescinded said May 1994
Agreement, it was MJMDC which issued the notice of rescission in behalf of Mr. Sonza, who himself signed the same The Courts Ruling
in his capacity as President.
We affirm the assailed decision.
Moreover, previous contracts between Mr. Sonza and ABS-CBN reveal the fact that historically, the parties to the
said agreements are ABS-CBN and Mr. Sonza. And it is only in the May 1994 Agreement, which is the latest No convincing reason exists to warrant a reversal of the decision of the Court of Appeals affirming the NLRC ruling
Agreement executed between ABS-CBN and Mr. Sonza, that MJMDC figured in the said Agreement as the agent of which upheld the Labor Arbiters dismissal of the case for lack of jurisdiction.
Mr. Sonza.
The present controversy is one of first impression. Although Philippine labor laws and jurisprudence define clearly
We find it erroneous to assert that MJMDC is a mere labor-only contractor of ABS-CBN such that there exist[s] the elements of an employer-employee relationship, this is the first time that the Court will resolve the nature of
employer-employee relationship between the latter and Mr. Sonza. On the contrary, We find it indubitable, that the relationship between a television and radio station and one of its talents. There is no case law stating that a
MJMDC is an agent, not of ABS-CBN, but of the talent/contractor Mr. Sonza, as expressly admitted by the latter and radio and television program host is an employee of the broadcast station.
MJMDC in the May 1994 Agreement.
The instant case involves big names in the broadcast industry, namely Jose Jay Sonza, a known television and radio
It may not be amiss to state that jurisdiction over the instant controversy indeed belongs to the regular courts, the personality, and ABS-CBN, one of the biggest television and radio networks in the country.
same being in the nature of an action for alleged breach of contractual obligation on the part of respondent-
appellee. As squarely apparent from complainant-appellants Position Paper, his claims for compensation for SONZA contends that the Labor Arbiter has jurisdiction over the case because he was an employee of ABS-CBN. On
services, 13th month pay, signing bonus and travel allowance against respondent-appellee are not based on the the other hand, ABS-CBN insists that the Labor Arbiter has no jurisdiction because SONZA was an independent
Labor Code but rather on the provisions of the May 1994 Agreement, while his claims for proceeds under Stock contractor.
Purchase Agreement are based on the latter. A portion of the Position Paper of complainant-appellant bears perusal:
Employee or Independent Contractor?
Under [the May 1994 Agreement] with respondent ABS-CBN, the latter contractually bound itself to pay complainant
The existence of an employer-employee relationship is a question of fact. Appellate courts accord the factual
a signing bonus consisting of shares of stockswith FIVE HUNDRED THOUSAND PESOS (P500,000.00).
findings of the Labor Arbiter and the NLRC not only respect but also finality when supported by substantial
Similarly, complainant is also entitled to be paid 13th month pay based on an amount not lower than the amount he evidence.[15] Substantial evidence means such relevant evidence as a reasonable mind might accept as adequate to
was receiving prior to effectivity of (the) Agreement. support a conclusion.[16] A party cannot prove the absence of substantial evidence by simply pointing out that there
is contrary evidence on record, direct or circumstantial. The Court does not substitute its own judgment for that of
Under paragraph 9 of (the May 1994 Agreement), complainant is entitled to a commutable travel benefit amounting the tribunal in determining where the weight of evidence lies or what evidence is credible.[17]
to at least One Hundred Fifty Thousand Pesos (P150,000.00) per year.
SONZA maintains that all essential elements of an employer-employee relationship are present in this case. Case
Thus, it is precisely because of complainant-appellants own recognition of the fact that his contractual relations with law has consistently held that the elements of an employer-employee relationship are: (a) the selection and
ABS-CBN are founded on the New Civil Code, rather than the Labor Code, that instead of merely resigning from ABS- engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers power
CBN, complainant-appellant served upon the latter a notice of rescission of Agreement with the station, per his to control the employee on the means and methods by which the work is accomplished.[18] The last element, the so-
letter dated April 1, 1996, which asserted that instead of referring to unpaid employee benefits, he is waiving and called control test, is the most important element.[19]
renouncing recovery of the remaining amount stipulated in paragraph 7 of the Agreement but reserves the right to
such recovery of the other benefits under said Agreement. (Annex 3 of the respondent ABS-CBNs Motion to Dismiss A. Selection and Engagement of Employee
dated July 10, 1996).
ABS-CBN engaged SONZAs services to co-host its television and radio programs because of SONZAs peculiar skills, rescinded the Agreement. SONZAs letter clearly bears this out.[26] However, the manner by which SONZA terminated
talent and celebrity status. SONZA contends that the discretion used by respondent in specifically selecting and his relationship with ABS-CBN is immaterial. Whether SONZA rescinded the Agreement or resigned from work does
hiring complainant over other broadcasters of possibly similar experience and qualification as complainant belies not determine his status as employee or independent contractor.
respondents claim of independent contractorship.
D. Power of Control
Independent contractors often present themselves to possess unique skills, expertise or talent to distinguish them
from ordinary employees. The specific selection and hiring of SONZA, because of his unique skills, talent and celebrity Since there is no local precedent on whether a radio and television program host is an employee or an independent
status not possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent contractor, we refer to foreign case law in analyzing the present case. The United States Court of Appeals, First
contractual relationship. If SONZA did not possess such unique skills, talent and celebrity status, ABS-CBN would not Circuit, recently held in Alberty-Vlez v. Corporacin De Puerto Rico Para La Difusin Pblica (WIPR)[27] that a television
have entered into the Agreement with SONZA but would have hired him through its personnel department just like program host is an independent contractor. We quote the following findings of the U.S.court:
any other employee.
Several factors favor classifying Alberty as an independent contractor. First, a television actress is a skilled position
In any event, the method of selecting and engaging SONZA does not conclusively determine his status. We must requiring talent and training not available on-the-job. x x x In this regard, Alberty possesses a masters degree in
consider all the circumstances of the relationship, with the control test being the most important element. public communications and journalism; is trained in dance, singing, and modeling; taught with the drama
department at the University of Puerto Rico; and acted in several theater and television productions prior to her
B. Payment of Wages affiliation with Desde Mi Pueblo.Second, Alberty provided the tools and instrumentalities necessary for her to
perform. Specifically, she provided, or obtained sponsors to provide, the costumes, jewelry, and other image-related
ABS-CBN directly paid SONZA his monthly talent fees with no part of his fees going to MJMDC. SONZA asserts that supplies and services necessary for her appearance. Alberty disputes that this factor favors independent contractor
this mode of fee payment shows that he was an employee of ABS-CBN. SONZA also points out that ABS-CBN granted status because WIPR provided the equipment necessary to tape the show. Albertys argument is misplaced. The
him benefits and privileges which he would not have enjoyed if he were truly the subject of a valid job contract. equipment necessary for Alberty to conduct her job as host of Desde Mi Pueblo related to her appearance on the
show. Others provided equipment for filming and producing the show, but these were not the primary tools that
All the talent fees and benefits paid to SONZA were the result of negotiations that led to the Agreement. If SONZA
Alberty used to perform her particular function. If we accepted this argument, independent contractors could never
were ABS-CBNs employee, there would be no need for the parties to stipulate on benefits such as SSS, Medicare, x
work on collaborative projects because other individuals often provide the equipment required for different aspects
x x and 13th month pay[20] which the law automatically incorporates into every employer-employee
of the collaboration. x x x
contract.[21] Whatever benefits SONZA enjoyed arose from contract and not because of an employer-employee
relationship.[22] Third, WIPR could not assign Alberty work in addition to filming Desde Mi Pueblo. Albertys contracts with WIPR
specifically provided that WIPR hired her professional services as Hostess for the Program Desde Mi Pueblo. There
SONZAs talent fees, amounting to P317,000 monthly in the second and third year, are so huge and out of the
is no evidence that WIPR assigned Alberty tasks in addition to work related to these tapings. x x x[28] (Emphasis
ordinary that they indicate more an independent contractual relationship rather than an employer-employee
relationship. ABS-CBN agreed to pay SONZA such huge talent fees precisely because of SONZAs unique skills, talent
and celebrity status not possessed by ordinary employees. Obviously, SONZA acting alone possessed enough Applying the control test to the present case, we find that SONZA is not an employee but an independent
bargaining power to demand and receive such huge talent fees for his services. The power to bargain talent fees contractor. The control test is the most important test our courts apply in distinguishing an employee from an
way above the salary scales of ordinary employees is a circumstance indicative, but not conclusive, of an independent contractor.[29] This test is based on the extent of control the hirer exercises over a worker. The greater
independent contractual relationship. the supervision and control the hirer exercises, the more likely the worker is deemed an employee. The converse
holds true as well the less control the hirer exercises, the more likely the worker is considered an independent
The payment of talent fees directly to SONZA and not to MJMDC does not negate the status of SONZA as an
independent contractor. The parties expressly agreed on such mode of payment. Under the Agreement, MJMDC is
the AGENT of SONZA, to whom MJMDC would have to turn over any talent fee accruing under the Agreement. First, SONZA contends that ABS-CBN exercised control over the means and methods of his work.
C. Power of Dismissal SONZAs argument is misplaced. ABS-CBN engaged SONZAs services specifically to co-host the Mel & Jay programs.
ABS-CBN did not assign any other work to SONZA. To perform his work, SONZA only needed his skills and talent.
For violation of any provision of the Agreement, either party may terminate their relationship. SONZA failed to show
How SONZA delivered his lines, appeared on television, and sounded on radio were outside ABS-CBNs
that ABS-CBN could terminate his services on grounds other than breach of contract, such as retrenchment to
control. SONZA did not have to render eight hours of work per day. The Agreement required SONZA to attend only
prevent losses as provided under labor laws.[23]
rehearsals and tapings of the shows, as well as pre- and post-production staff meetings.[31] ABS-CBN could not dictate
During the life of the Agreement, ABS-CBN agreed to pay SONZAs talent fees as long as AGENT and Jay Sonza shall the contents of SONZAs script. However, the Agreement prohibited SONZA from criticizing in his shows ABS-CBN or
faithfully and completely perform each condition of this Agreement.[24] Even if it suffered severe business losses, its interests.[32] The clear implication is that SONZA had a free hand on what to say or discuss in his shows provided
ABS-CBN could not retrench SONZA because ABS-CBN remained obligated to pay SONZAs talent fees during the life he did not attack ABS-CBN or its interests.
of the Agreement. This circumstance indicates an independent contractual relationship between SONZA and ABS-
We find that ABS-CBN was not involved in the actual performance that produced the finished product of SONZAs
work.[33] ABS-CBN did not instruct SONZA how to perform his job. ABS-CBN merely reserved the right to modify the
SONZA admits that even after ABS-CBN ceased broadcasting his programs, ABS-CBN still paid him his talent program format and airtime schedule for more effective programming.[34] ABS-CBNs sole concern was the quality of
fees. Plainly, ABS-CBN adhered to its undertaking in the Agreement to continue paying SONZAs talent fees during the shows and their standing in the ratings. Clearly, ABS-CBN did not exercise control over the means and methods
the remaining life of the Agreement even if ABS-CBN cancelled SONZAs programs through no fault of SONZA.[25] of performance of SONZAs work.

SONZA assails the Labor Arbiters interpretation of his rescission of the Agreement as an admission that he is not an SONZA claims that ABS-CBNs power not to broadcast his shows proves ABS-CBNs power over the means and
employee of ABS-CBN. The Labor Arbiter stated that if it were true that complainant was really an employee, he methods of the performance of his work. Although ABS-CBN did have the option not to broadcast SONZAs show,
would merely resign, instead. SONZA did actually resign from ABS-CBN but he also, as president of MJMDC, ABS-CBN was still obligated to pay SONZAs talent fees. Thus, even if ABS-CBN was completely dissatisfied with the
means and methods of SONZAs performance of his work, or even with the quality or product of his work, ABS-CBN
could not dismiss or even discipline SONZA. All that ABS-CBN could do is not to broadcast SONZAs show but ABS- The Vaughan case also held that one could still be an independent contractor although the hirer reserved certain
CBN must still pay his talent fees in full.[35] supervision to insure the attainment of the desired result. The hirer, however, must not deprive the one hired from
performing his services according to his own initiative.[45]
Clearly, ABS-CBNs right not to broadcast SONZAs show, burdened as it was by the obligation to continue paying in
full SONZAs talent fees, did not amount to control over the means and methods of the performance of SONZAs Lastly, SONZA insists that the exclusivity clause in the Agreement is the most extreme form of control which ABS-
work. ABS-CBN could not terminate or discipline SONZA even if the means and methods of performance of his work CBN exercised over him.
- how he delivered his lines and appeared on television - did not meet ABS-CBNs approval.This proves that ABS-CBNs
control was limited only to the result of SONZAs work, whether to broadcast the final product or not. In either case, This argument is futile. Being an exclusive talent does not by itself mean that SONZA is an employee of ABS-CBN.
ABS-CBN must still pay SONZAs talent fees in full until the expiry of the Agreement. Even an independent contractor can validly provide his services exclusively to the hiring party. In the broadcast
industry, exclusivity is not necessarily the same as control.
In Vaughan, et al. v. Warner, et al.,[36] the United States Circuit Court of Appeals ruled that vaudeville performers
were independent contractors although the management reserved the right to delete objectionable features in their The hiring of exclusive talents is a widespread and accepted practice in the entertainment industry.[46] This practice
shows. Since the management did not have control over the manner of performance of the skills of the artists, it is not designed to control the means and methods of work of the talent, but simply to protect the investment of the
could only control the result of the work by deleting objectionable features.[37] broadcast station. The broadcast station normally spends substantial amounts of money, time and effort in building
up its talents as well as the programs they appear in and thus expects that said talents remain exclusive with the
SONZA further contends that ABS-CBN exercised control over his work by supplying all equipment and crew. No station for a commensurate period of time.[47] Normally, a much higher fee is paid to talents who agree to work
doubt, ABS-CBN supplied the equipment, crew and airtime needed to broadcast the Mel & Jay programs. However, exclusively for a particular radio or television station. In short, the huge talent fees partially compensates for
the equipment, crew and airtime are not the tools and instrumentalities SONZA needed to perform his job. What exclusivity, as in the present case.
SONZA principally needed were his talent or skills and the costumes necessary for his appearance. [38] Even though
ABS-CBN provided SONZA with the place of work and the necessary equipment, SONZA was still an independent MJMDC as Agent of SONZA
contractor since ABS-CBN did not supervise and control his work. ABS-CBNs sole concern was for SONZA to display
SONZA protests the Labor Arbiters finding that he is a talent of MJMDC, which contracted out his services to ABS-
his talent during the airing of the programs.[39]
CBN. The Labor Arbiter ruled that as a talent of MJMDC, SONZA is not an employee of ABS-CBN.SONZA insists that
A radio broadcast specialist who works under minimal supervision is an independent contractor.[40] SONZAs work as MJMDC is a labor-only contractor and ABS-CBN is his employer.
television and radio program host required special skills and talent, which SONZA admittedly possesses. The records
In a labor-only contract, there are three parties involved: (1) the labor-only contractor; (2) the employee who is
do not show that ABS-CBN exercised any supervision and control over how SONZA utilized his skills and talent in his
ostensibly under the employ of the labor-only contractor; and (3) the principal who is deemed the real
employer. Under this scheme, the labor-only contractor is the agent of the principal. The law makes the principal
Second, SONZA urges us to rule that he was ABS-CBNs employee because ABS-CBN subjected him to its rules and responsible to the employees of the labor-only contractor as if the principal itself directly hired or employed the
standards of performance. SONZA claims that this indicates ABS-CBNs control not only [over] his manner of work employees.[48] These circumstances are not present in this case.
but also the quality of his work.
There are essentially only two parties involved under the Agreement, namely, SONZA and ABS-CBN. MJMDC merely
The Agreement stipulates that SONZA shall abide with the rules and standards of performance covering talents[41] of acted as SONZAs agent. The Agreement expressly states that MJMDC acted as the AGENT of SONZA. The records do
ABS-CBN. The Agreement does not require SONZA to comply with the rules and standards of performance not show that MJMDC acted as ABS-CBNs agent. MJMDC, which stands for Mel and Jay Management and
prescribed for employees of ABS-CBN. The code of conduct imposed on SONZA under the Agreement refers to the Development Corporation, is a corporation organized and owned by SONZA and TIANGCO. The President and
Television and Radio Code of the Kapisanan ng mga Broadcaster sa Pilipinas (KBP), which has been adopted by the General Manager of MJMDC is SONZA himself. It is absurd to hold that MJMDC, which is owned, controlled, headed
COMPANY (ABS-CBN) as its Code of Ethics.[42] The KBP code applies to broadcasters, not to employees of radio and and managed by SONZA, acted as agent of ABS-CBN in entering into the Agreement with SONZA, who himself is
television stations. Broadcasters are not necessarily employees of radio and television stations. Clearly, the rules represented by MJMDC. That would make MJMDC the agent of both ABS-CBN and SONZA.
and standards of performance referred to in the Agreement are those applicable to talents and not to employees
As SONZA admits, MJMDC is a management company devoted exclusively to managing the careers of SONZA and
his broadcast partner, TIANGCO. MJMDC is not engaged in any other business, not even job contracting. MJMDC
In any event, not all rules imposed by the hiring party on the hired party indicate that the latter is an employee of does not have any other function apart from acting as agent of SONZA or TIANGCO to promote their careers in the
the former.[43] In this case, SONZA failed to show that these rules controlled his performance. We find that these broadcast and television industry.[49]
general rules are merely guidelines towards the achievement of the mutually desired result, which are top-rating
Policy Instruction No. 40
television and radio programs that comply with standards of the industry. We have ruled that:
SONZA argues that Policy Instruction No. 40 issued by then Minister of Labor Blas Ople on 8 January 1979 finally
Further, not every form of control that a party reserves to himself over the conduct of the other party in relation to
settled the status of workers in the broadcast industry. Under this policy, the types of employees in the broadcast
the services being rendered may be accorded the effect of establishing an employer-employee relationship. The
industry are the station and program employees.
facts of this case fall squarely with the case of Insular Life Assurance Co., Ltd. vs. NLRC. In said case, we held that:
Policy Instruction No. 40 is a mere executive issuance which does not have the force and effect of law. There is no
Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the
legal presumption that Policy Instruction No. 40 determines SONZAs status. A mere executive issuance cannot
mutually desired result without dictating the means or methods to be employed in attaining it, and those that
exclude independent contractors from the class of service providers to the broadcast industry. The classification of
control or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim
workers in the broadcast industry into only two groups under Policy Instruction No. 40 is not binding on this Court,
only to promote the result, create no employer-employee relationship unlike the second, which address both the
especially when the classification has no basis either in law or in fact.
result and the means used to achieve it.[44]
Affidavits of ABS-CBNs Witnesses
SONZA also faults the Labor Arbiter for admitting the affidavits of Socorro Vidanes and Rolando Cruz without giving conclusion that they are independent contractors, provided all the basic elements of a contractual relationship are
his counsel the opportunity to cross-examine these witnesses. SONZA brands these witnesses as incompetent to present as in this case.
attest on the prevailing practice in the radio and television industry. SONZA views the affidavits of these witnesses
as misleading and irrelevant. Nature of SONZAs Claims

While SONZA failed to cross-examine ABS-CBNs witnesses, he was never prevented from denying or refuting the SONZA seeks the recovery of allegedly unpaid talent fees, 13th month pay, separation pay, service incentive leave,
allegations in the affidavits. The Labor Arbiter has the discretion whether to conduct a formal (trial-type) hearing signing bonus, travel allowance, and amounts due under the Employee Stock Option Plan. We agree with the findings
after the submission of the position papers of the parties, thus: of the Labor Arbiter and the Court of Appeals that SONZAs claims are all based on the May 1994 Agreement and
stock option plan, and not on the Labor Code. Clearly, the present case does not call for an application of the Labor
Section 3. Submission of Position Papers/Memorandum Code provisions but an interpretation and implementation of the May 1994 Agreement. In effect, SONZAs cause of
action is for breach of contract which is intrinsically a civil dispute cognizable by the regular courts.[58]
WHEREFORE, we DENY the petition. The assailed Decision of the Court of Appeals dated 26 March 1999 in CA-G.R.
These verified position papers shall cover only those claims and causes of action raised in the complaint excluding SP No. 49190 is AFFIRMED. Costs against petitioner.
those that may have been amicably settled, and shall be accompanied by all supporting documents including the
affidavits of their respective witnesses which shall take the place of the latters direct testimony. x x x SO ORDERED.

Section 4. Determination of Necessity of Hearing. Immediately after the submission of the parties of their position QUIJANO VS BARTOLABAC
papers/memorandum, the Labor Arbiter shall motu propio determine whether there is need for a formal trial or
hearing. At this stage, he may, at his discretion and for the purpose of making such determination, ask clarificatory On 19 March 2002, complainant Dandy Quijano filed before this Court a
questions to further elicit facts or information, including but not limited to the subpoena of relevant documentary verified complaint [1] written in Pilipino against herein respondents Atty.
evidence, if any from any party or witness.[50] Geobel A. Bartolabac (Bartolabac), Labor Arbiter of the National Labor
Relations Commission (NLRC), and Commissioner Alberto R. Quimpo
The Labor Arbiter can decide a case based solely on the position papers and the supporting documents without a (Quimpo) of the same Commission for violating Canon 1 [2] and Rule
formal trial.[51] The holding of a formal hearing or trial is something that the parties cannot demand as a matter of 1.01 [3] of the Code of Professional Responsibility.
right.[52] If the Labor Arbiter is confident that he can rely on the documents before him, he cannot be faulted for not
According to complainant, respondents violated his constitutional right to
conducting a formal trial, unless under the particular circumstances of the case, the documents alone are
due process in failing to execute the final and executory judgment of this
insufficient. The proceedings before a Labor Arbiter are non-litigious in nature. Subject to the requirements of due
Court in G.R. No. 126561 entitled Quijano v. Mercury Drug Corporation. [4]
process, the technicalities of law and the rules obtaining in the courts of law do not strictly apply in proceedings
before a Labor Arbiter. The antecedent facts are as follows:
Talents as Independent Contractors Complainant was dismissed from service by the Mercury Drug Corporation
(corporation). He filed a complaint for illegal dismissal before the NLRC.
ABS-CBN claims that there exists a prevailing practice in the broadcast and entertainment industries to treat talents
Eventually, the case was elevated to this Court. On 8 July 1998, the Court
like SONZA as independent contractors. SONZA argues that if such practice exists, it is void for violating the right of
promulgated its Decision in favor of herein complainant ordering, among
labor to security of tenure. others, his reinstatement. [5] The corporation's motion for reconsideration
was denied by this Court in its Resolution dated 5 July 1999.
The right of labor to security of tenure as guaranteed in the Constitution [53] arises only if there is an employer-
employee relationship under labor laws. Not every performance of services for a fee creates an employer-employee Complainant relates that he filed with respondent Labor Arbiter Bartolabac
relationship. To hold that every person who renders services to another for a fee is an employee - to give meaning a motion for execution on 9 December 1998 but despite the final resolution
to the security of tenure clause - will lead to absurd results. of his case, Bartolabac issued an order that in effect changed the tenor of
the final judgment. [6] While the decision of this Court had mandated
Individuals with special skills, expertise or talent enjoy the freedom to offer their services as independent complainant's reinstatement, Bartolabac instead awarded backwages and
contractors. The right to life and livelihood guarantees this freedom to contract as independent contractors. The separation pay.
right of labor to security of tenure cannot operate to deprive an individual, possessed with special skills, expertise
and talent, of his right to contract as an independent contractor. An individual like an artist or talent has a right to The Court, upon learning this, issued a Resolution [7] on 17 November 1999
render his services without any one controlling the means and methods by which he performs his art or craft. This directing Bartolabac to fully comply with its Decision dated 8 July 1998 and
Court will not interpret the right of labor to security of tenure to compel artists and talents to render their services Resolution dated 5 July 1999 within a non-extendible period of five (5) days
only as employees. If radio and television program hosts can render their services only as employees, the station from receipt thereof and to explain in writing why he should not be punished
owners and managers can dictate to the radio and television hosts what they say in their shows. This is not conducive for indirect contempt for his actuations in handling the case and defiance of
to freedom of the press. the Court's directives.

Different Tax Treatment of Talents and Broadcasters Pursuant to the Resolution of this Court, Bartolabac issued an alias writ of
execution on 18 February 2000. However, respondent Bartolabac allegedly
The National Internal Revenue Code (NIRC)[54] in relation to Republic Act No. 7716,[55] as amended by Republic Act again unilaterally issued another order dated 5 April 2000, amending his
No. 8241,[56] treats talents, television and radio broadcasters differently. Under the NIRC, these professionals are previous order and assigning the complainant to the position of self-service
subject to the 10% value-added tax (VAT) on services they render. Exempted from the VAT are those under an attendant of the corporation instead of his original position of
employer-employee relationship.[57] This different tax treatment accorded to talents and broadcasters bolters our warehouseman. Subsequently, respondent Commissioner Quimpo
overturned the above order of Bartolabac and directed the payment of
separation pay rather than reinstatement to a substantially similar position P449,062.36 which complainant has already received.
as ordered by this Court.
Offering another perspective of the case at bar, Bartolabac avers that after
Complainant adds that he had filed a motion to cite counsel for respondent the Supreme Court had rendered its decision in G.R. No. 126561 on 8 July
corporation in contempt [8] and an answer to the order dated 5 April 2000, 1998, the case was re-raffled to Labor Arbiter Renell Joseph R. Dela Cruz for
but these were disregarded by Bartolabac on the ground that an appeal was the satisfaction of judgment. At that point, the exact monetary award and
already underway at the NLRC by the corporation. reinstatement aspects were raised. Both parties submitted conflicting
computations on the monetary award. The corporation also asserted that
Further, he states that he was not given a copy of the appeal memorandum they had abolished the position of warehouseman and there was no
filed by the corporation with the NLRC; yet, the NLRC First Division headed substantially equivalent vacant position. Labor Arbiter Dela Cruz then
by Quimpo disposed of the same. He also alleges that the corporation did ordered the parties to submit their respective position papers but eleven
not post a cash bond for the appeal nor did they give him a temporary (11) days thereafter, said labor arbiter issued an order inhibiting himself
reinstatement or payroll reinstatement, which according to complainant, is from handling the case as he allegedly could not bear with complainant
mandatory. Despite this, and without giving complainant any opportunity to dictating the rules of the proceedings. [12]
comment on the appeal memorandum, Quimpo nonetheless issued a
resolution dated 26 September 2000 which ordered the corporation to pay The labor case was re-raffled to Bartolabac on 20 April 1999. Unaware of the
complainant separation pay plus backwages. Complainant asserts that pending motion for reconsideration of the corporation in G.R. No. 126561
Quimpo should have inhibited himself from deciding the case as he, or the where the feasibility of reinstatement was at issue, he issued an order on 24
NLRC First Division, was the public respondent in the Supreme Court case. June 1999 ruling out complainant's reinstatement, awarding separation pay
instead and the amount of P573,228.00 (less necessary deductions) as
Complainant admits having received the monetary award in the amount of backwages.
P449,062.98 from the corporation in satisfaction of this Court's ruling in G.R.
No. 126561 but contends that the award cannot be considered a cash bond As a consequence, this Court on 17 November 1999 reproached Bartolabac
for the appeal memorandum before the NLRC as the same was computed for completely disregarding the corporation's motion for reconsideration
until 24 November 1999 only and he has a right to the award because his with this Court, directing him to order complainant's reinstatement and
case had long become final and executory. payment of backwages, moral damages, exemplary damages and attorney's
fees, and requiring him to explain in writing why he should not be punished
Thus, complainant asserts that his constitutional right to due process has for indirect contempt for his handling of the case and defiance of the Court's
been seriously violated by Bartolabac and Quimpo. directives. Bartolabac complied by filing his manifestation stating that his
office was not furnished with a copy of the motion for reconsideration. His
On 22 April 2002, this Court issued a Resolution [9] requiring respondents to act of adjudicating the issue of reinstatement was impelled by the sense of
file their respective comments on the complaint within ten (10) days from urgency on the matter since he received a letter signed by complainant and
notice. a Memo from the NLRC Chairman referring the complainant's letter to him
for appropriate action. [13] Both letters sought the immediate disposition of
In his comment [10] filed on 4 July 2002, Bartolabac states that the present his labor case. [14]
complaint is a rehash of several complaints against him which complainant
filed before different fora, including this Court and the Office of the Based on the foregoing, Bartolabac maintains that complainant engaged in
Ombudsman. forum-shopping for while complainant knew of the existence of the
corporation's motion for reconsideration with this Court, he remained
As to the issue of monetary award and reinstatement due the complainant, insistent that Bartolabac resolve the reinstatement issue. [15]
Bartolabac argues that the records of G.R. No. 126561 reveal that the
corporation had already released to complainant the sum of P297,930.75 as He also stresses that he did not incur delay in the disposition of the labor
cash bond deposit. The amount of P449,062.98 had been deposited to the case. After he received the 17 November 1999 Resolution of this Court on
cashier of the NLRC. Out of the said remaining amount, Bartolabac directed 22 November 1999, he issued an alias writ of execution on 24 November
the release of P250,660.62 to complainant. The remaining balance of 1999 directing the sheriff to garnish the amount of P449,062.98 and to cause
P198,402.36 was to answer for complainant's MEDICARE and SSS the reinstatement of complainant to a substantially equivalent position.
contributions, withholding tax, loans, etc., which had yet to be determined When the sheriff returned the writ unsatisfied for failure of the corporation
at that time. Bartolabac gave both parties the opportunity to dispute or to comply with the reinstatement aspect as the open positions were only for
defend their respective claims but complainant failed to cooperate either by pharmacist, pharmacy assistant, cashier and self-service attendant, he lost
not attending the scheduled hearing called for that purpose on 27 March no time in resolving that, while the first three positions need college
2000, or by failing to file controverting evidence to dispute the claimed graduates, the self-service attendant position may be sufficiently performed
deductions by the corporation. [11] by complainant even though he is not a college graduate. [16]

Before Bartolabac could adjudicate the proper monetary award for Lastly, Bartolabac declares that with the filing of the appeal from the order
complainant, the latter filed a complaint against him before the Office of the of reinstatement with the NLRC, he lost jurisdiction over the issue.
Ombudsman for oppression and grave misconduct. Due to this supervening
event, Bartolabac's sense of propriety compelled him to inhibit himself from For his part, Quimpo alleges that his inclusion in the present administrative
further participating in the adjudication of the remaining balance of case was due to his participation in disposing of the corporation's appeal on
P198,402.36. But most importantly, he adds, the case was re-raffled to Labor the issue of complainant's reinstatement as self-service attendant. He
Arbiter Gaudencio P. Demaisip, Jr. who awarded the whole amount of asserts that by law, the Commission has exclusive appellate jurisdiction to
hear and decide all decisions, awards or orders rendered by the labor On 19 August 2002, this Court resolved, among others, to refer this case to
arbiter. [17] He adds that said authority was even tacitly recognized by the the Integrated Bar of the Philippines (IBP) for investigation, report and
Court in its Resolution dated 7 June 2000 in relation to G.R. No. 126561. The recommendation. On 6 May 2003, the IBP submitted its resolution adopting
pertinent portions of the resolution read: and approving the report and recommendation of Investigating
Commissioner Lydia A. Navarro dismissing the complaint against
"On the issue of reinstatement, the Labor Arbiter issued an Order on April 5, respondents. [24]
2000, directing the private respondent to reinstate petitioner to the position
of self-service attendant. The reinstatement order was impugned by the Complainant filed a motion for reconsideration with the IBP but it was
private respondent as the petitioner was allegedly not qualified for the subsequently denied since the matter had already been endorsed to this
position and there was already strained relations between the parties. The Court and the IBP no longer had jurisdiction over the case. [25]
reinstatement order is now pending appeal before the NLRC.
We nonetheless resolve to treat the motion for reconsideration as a petition
As the NLRC has acquired jurisdiction over the issue of petitioner's for review on certiorari of the IBP resolution. [26]
reinstatement and the amount of deduction on petitioner's monetary award
is subject to proof and/or dispute by the respective parties before the Labor We now go to the main issue at bar, i.e., whether or not respondents are
Arbiter, the letter-complaints of the petitioner are thus hereby NOTED. liable for their acts in deviating from the final and executory judgment of this
Court in G.R. No. 126561.
IN VIEW THEREOF, Labor Arbiter Geobel A. Bartolabac is hereby directed to
determine with dispatch the amount still owning the petitioner, if any, and The Court is unyielding in its adjudication that complainant must be
to see to it that no further delay would hamper the proceedings before him. reinstated to his former position as warehouseman or to a substantially
Public respondent NLRC, on the other hand, is requested to expedite the equivalent position. This was stated in its Decision dated 8 July 1998,
proceedings before it on the issue of petitioner's reinstatement. [18] reiterated in the Resolution dated 5 July 1999, and again stressed in the
Resolution dated 17 November 1999. In the latter resolution, it was
Hence, Quimpo adds, the NLRC did not abuse its discretion when it assumed particularly expressed that:
jurisdiction over the corporation's appeal.
Indeed, private respondent's [Mercury Drug Corporation] contention, as
Quimpo likewise explains that in resolving the appeal, he took judicial notice erroneously upheld by the labor arbiter, that there is no substantially
of the various resolutions issued by this Court and with utmost good faith equivalent position for petitioner's reinstatement has been categorically
and fidelity tried to implement the directive to reinstate the complainant to discounted by this Court. We took judicial notice of the fact that private
his former position or to a substantially equivalent position. However, due respondent Mercury Drug Corporation operates nationwide and has
to certain supervening events that transpired after the resolution of the numerous branches all over the Philippines. Petitioner, as warehouseman,
labor case and up to the time of execution, reinstatement had become occupied a clerical/rank and file position in said company and we find
improbable and so it was the ruling of the Commission that separation pay it highly inconceivable that no other substantially equivalent position exists
instead of reinstatement would be the most logical, sensible and practical to effect his reinstatement. [27]
solution. [19]
Clearly, the Court is unwilling to accept the corporation and respondent
As to complainant's claim that he was not furnished a copy of the labor arbiter's reason that reinstatement is no longer feasible because the
corporation's appeal memorandum, records show that a copy of the appeal position of warehouseman had already been abolished and there is no
memorandum was furnished his counsel and in any event, complainant substantially equivalent position in the corporation.
admitted his knowledge of the existing appeal when he filed a Reiteration of
Motion to Release Monetary Award dated 20 June 2000, arguing that his Both respondents labor arbiter and commissioner do not have any latitude
monetary award should be released to him since only the issue of to depart from the Court's ruling. The Decision in G.R. No. 126561 is final and
reinstatement is being appealed to the Commission. [20] executory and may no longer be amended. It is incumbent upon respondents
to order the execution of the judgment and implement the same to the
Furthermore, Quimpo states that complainant filed a similar complaint with letter. Respondents have no discretion on this matter, much less any
the Office of the Ombudsman for neglect of duty but the same was authority to change the order of the Court. The acts of respondent cannot
dismissed. Complainant's motion for reconsideration was denied with be regarded as acceptable discretionary performance of their functions as
finality on 21 February 2002. Complainant's act of re-filing another labor arbiter and commissioner of the NLRC, respectively, for they do not
administrative complaint is designed primarily to harass and intimidate have any discretion in executing a final decision. The implementation of the
him. [21] final and executory decision is mandatory.

He also notes that complainant already received the full satisfaction of his As held in Siy v. National Labor Relations Commission and Embang: [28]
monetary award which only shows that the Commission has complied in
good faith with the directive to execute the judgment award in favor of Once the case is decided with finality, the controversy is settled and the
complainant. [22] matter is laid to rest. The prevailing party is entitled to enjoy the fruits of his
victory while the other party is obliged to respect the court's verdict and to
Without waiting for this Court's action, complainant filed his Reply to Both comply with it. We reiterate our pronouncement in Salicdan v. Court of
Respondent[s'] Comments [23] on 23 July 2002. He substantially reiterates Appeals: [29]
the arguments he made in his complaint.
"well-settled is the principle that a decision that has acquired finality
becomes immutable and unalterable and may no longer be modified in any In fact, complainant's complaints against them before the Ombudsman
respect even if the modification is meant to correct erroneous conclusions relative to the same case were dismissed with finality which office has
of fact or law and whether it will be made by the court that rendered it or by jurisdiction over respondents relative to the performance of their duties as
the highest court of the land. Labor Arbiter and Commissioner and not on a lawyer-client relationship nor
on the practice of the professions as lawyer or members of the Bar. [34]
The reason for this is that litigation must end and terminate sometime and
somewhere, and it is essential to an effective and efficient administration of How the IBP investigating commissioner arrived at that supposition or in
justice that, once a judgment has become final, the winning party be not what manner were the acts of herein respondents regularly done cannot be
deprived of the fruits of the verdict. Courts must guard against any scheme extracted from its scanty determination.
calculated to bring about that result and must frown upon any attempt to
prolong the controversies. WHEREFORE, premises considered, the Court finds respondents liable for
violating Canon 1 and Rule 1.01 of the Code of Professional Responsibility.
The Court recognizes Bartolabac's efforts to adjudicate and advance the Respondents Labor Arbiter Geobel A. Bartolabac and Commissioner Alberto
cause of complainant, albeit erroneously. In his desire to settle the issue of R. Quimpo are hereby SUSPENDED from the practice of law for a period of
reinstatement, he determined that complainant, a high school graduate, be THREE (3) months.
appointed to the position of self-service attendant which requires the
appointee to hold a college degree, since the corporation "failed to Let a copy of this Resolution be furnished the Bar Confidant for appropriate
rationalize the need for a college graduate for the position of self-service annotation on the records of the respondents.
attendant.. and...complainant has exhibited before [the NLRC] that he has a
reasonable degree of comprehension to understand and perform the SO ORDERED.
functions of a self-service attendant." [30] Complainant had pointed out
several job openings [31] in the corporation to which he would be qualified, PHILIPS SEMICONDUCTORS INC. vs FADRIQUELA Case Digest
but respondent made no effort to verify it. Instead, he took at face value the [G.R. No. 141717. April 14, 2004]
corporation's representation that there were limited vacancies. It is PHILIPS SEMICONDUCTORS (PHILS.), INC., petitioner, vs. ELOISA FADRIQUELA,
inconceivable that a company as large as the corporation, operating respondent.
nationwide, could not accommodate complainant and appoint him to one of
its numerous rank and file positions. FACTS: The petitioner Philips Semiconductors is a domestic corporation
engaged in the production and assembly of semiconductors such as power
Again, we are unceasing in emphasizing that the decision in the labor case devices, RF modules, CATV modules, RF and metal transistors and glass
has become final and executory since 1999. There can be no justification for diods. It caters to domestic and foreign corporations that manufacture
the overturning of the Court's reinstatement order by the NLRC First Division computers, telecommunications equipment and cars. Aside from
and full satisfaction of the monetary award of only three (3) years after the contractual employees, the petitioner employed 1,029 regular workers. The
finality of the judgment. employees were subjected to periodic performance appraisal based on
output, quality, attendance and work attitude.[2] One was required to
The Court is not wont to compel the corporation to instantly restore the obtain a performance rating of at least 3.0 for the period covered by the
position of warehouseman if it has been already abolished. Indeed, the Court performance appraisal to maintain good standing as an employee.
granted that complainant could be reinstated to a substantially equivalent
or similar position as a viable alternative for the corporation to carry out. Respondent, during her 5 consecutive contracts, got the following ratings:
3.15, 3.8, 3.4, and 2.8. The reason for her failed mark on the last contract
Our Constitution mandates that no person shall be deprived of life, liberty, was her absences. She was then asked to explain such absences but she
and property without due process of law. [32] It should be borne in mind that failed to do the same. Subsequently, respondents supervisor recommended
employment is considered a property right and cannot be taken away from that her employment be terminated due to habitual absenteeism. Thus, her
the employee without going through legal proceedings. In the instant case, contract of employment was no longer renewed. Respondent then filed a
respondents wittingly or unwittingly dispossessed complainant of his source complaint for illegal dismissal. On the other hand, petitioner contends that
of living by not implementing his reinstatement. In the process, respondents respondent was not dismissed; her contract merely expired.
also run afoul of the public policy enshrined in the Constitution ensuring the
protection of the rights of workers and the promotion of their welfare. [33] The Labor Arbiter and the NLRC based their decision on the CBA between
the petitioner and the labor union which provides that a contractual
As a final word, we note that the IBP's report and recommendation falls far employee would only be considered a regular employee if he has completed
short of the Court's expectations. After a lengthy account of the allegations 17 months of service and a performance rating of at least 3.0. The
of the parties, the investigating commissioner concluded its report with a respondent filed a motion for reconsideration but the NLRC denied the
two-paragraph uncommendably bare exoneration, thus: same. On appeal, the CA reversed the decision of the NLRC. Hence, this
A detailed examination and evaluation of the evidence submitted by the
parties showed that respondents Labor Arbiter Geobel A. Bartolabac and ISSUE: Whether or not respondent was still a contractual employee of the
Commissioner Alberto R. Quimpo only performed the duties required of company.
them under the Rules and Procedure of Law particularly that pertaining to
the NLRC Rules and Procedures and the Labor Code; as Labor Arbiter and HELD: The SC agreed with the appellate court. Article 280 of the Labor Code
Commissioner. of the Philippines was emplaced in our statute books to prevent the
circumvention by unscrupulous employers of the employees right to be agreed to the employment contract. Almost always, they agree to any terms
secure in his tenure by indiscriminately and completely ruling out all written of an employment contract just to get employed considering that it is
and oral agreements inconsistent with the concept of regular employment difficult to find work given their ordinary qualifications. Their freedom to
defined therein. The language of the law manifests the intent to protect the contract is empty and hollow because theirs is the freedom to starve if they
tenurial interest of the worker who may be denied the rights and benefits refuse to work as casual or contractual workers. Indeed, to the unemployed,
due a regular employee because of lopsided agreements with the security of tenure has no value. It could not then be said that petitioner and
economically powerful employer who can maneuver to keep an employee private respondents dealt with each other on more or less equal terms with
on a casual or temporary status for as long as it is convenient to it. In tandem no moral dominance whatever being exercised by the former over the
with Article 281 of the Labor Code, Article 280 was designed to put an end latter.
to the pernicious practice of making permanent casuals of our lowly
employees by the simple expedient of extending to them temporary or The petitioners reliance on the CBA is also misplaced. It is the express
probationary appointments, ad infinitum. mandate of the CBA not to include contractual employees within its
coverage. Such being the case, we see no reason why an agreement
The two kinds of regular employees under the law are (1) those engaged to between the representative union and private respondent, delaying the
perform activities which are necessary or desirable in the usual business or regularization of contractual employees, should bind petitioner as well as
trade of the employer; and (2) those casual employees who have rendered other contractual employees. Indeed, nothing could be more unjust than to
at least one year of service, whether continuous or broken, with respect to exclude contractual employees from the benefits of the CBA on the premise
the activities in which they are employed. The primary standard to that the same contains an exclusionary clause while at the same time invoke
determine a regular employment is the reasonable connection between the a collateral agreement entered into between the parties to the CBA to
particular activity performed by the employee in relation to the business or prevent a contractual employee from attaining the status of a regular
trade of the employer. The test is whether the former is usually necessary or employee.
desirable in the usual business or trade of the employer. If the employee has
been performing the job for at least one year, even if the performance is not The CBA, during its lifetime, constitutes the law between the parties. Such
continuous or merely intermittent, the law deems the repeated and being the rule, the aforementioned CBA should be binding only upon private
continuing need for its performance as sufficient evidence of the necessity, respondent and its regular employees who were duly represented by the
if not indispensability of that activity to the business of the employer. Hence, bargaining union. The agreement embodied in the Minutes of Meeting
the employment is also considered regular, but only with respect to such between the representative union and private respondent, providing that
activity and while such activity exists. The law does not provide the contractual employees shall become regular employees only after
qualification that the employee must first be issued a regular appointment seventeen months of employment, cannot bind petitioner. Such a provision
or must be declared as such before he can acquire a regular employee runs contrary to law not only because contractual employees do not form
status. part of the collective bargaining unit which entered into the CBA with private
respondent but also because of the Labor Code provision on regularization.
In this case, the original contract of employment had been extended or The law explicitly states that an employee who had rendered at least one
renewed four times, to the same position, with the same chores. Such a year of service, whether such service is continuous or broken, shall be
continuing need for the services of the respondent is sufficient evidence of considered a regular employee. The period set by law is one year. The
the necessity and indispensability of her services to the petitioners business. seventeen months provided by the Minutes of Meeting is obviously much
By operation of law, then, the respondent had attained the regular status of longer. The principle is well settled that the law forms part of and is read into
her employment with the petitioner, and is thus entitled to security of every contract without the need for the parties expressly making reference
tenure as provided for in Article 279 of the Labor Code. to it.

The limited period specified in petitioners employment contract having Petition is denied.
been imposed precisely to circumvent the constitutional guarantee on
security of tenure should, therefore, be struck down or disregarded as
contrary to public policy or morals. To uphold the contractual arrangement JUST CAUSE art 282
would, in effect, permit the former to avoid hiring permanent or regular
employees by simply hiring them on a temporary or casual basis, thereby JEFFREY O. TORREDA,
violating the employees security of tenure in their jobs. TOSHIBA INFORMATION
Jeffrey O. Torreda was employed by Toshiba Information
Under Section 3, Article XVI of the Constitution, it is the policy of the State
to assure the workers of security of tenure and free them from the bondage Equipment (Phils.), Inc. as a finance assistant[4] (on a probationary basis)
of uncertainty of tenure woven by some employers into their contracts of
employment. The guarantee is an act of social justice. When a person has no on July 1, 1997. He was mainly responsible for payroll processing and
property, his job may possibly be his only possession or means of livelihood management, and for the bookkeeping of T&P Properties, Inc.[5] Effective
and those of his dependents. When a person loses his job, his dependents
suffer as well. The worker should therefor be protected and insulated against January 1, 1998, he was employed on a regular basis as finance
any arbitrary deprivation of his job. accountant[6] under the Finance and Accounting Department headed by

The ruling in Brent School, Inc. v. Zamora is also not applicable in this case Kazuo Kobayashi, Vice-President, and Teresita Sepulveda, Finance
because it could not be supposed that private respondents and all other so- Manager.[7] He was tasked to do the following:
called casual workers of the petitioner KNOWINGLY and VOLUNTARILY
(i) processing of the payrolls of the
questioned the propriety of his being ordered to prepare financial
employees of the Company, (ii) maintenance of
reports on year-to-date earnings and taxes withheld, summaries starting October 1996, when he was employed only on July 1,
monetary benefits, and government contributions,
(iii) preparation of vouchers related to payroll 1997.[17]
accounts of the employees, (iv) preparation and
reconciliation of payment of taxes withheld and file
tax returns, and (v) preparation of reportorial From September 1 to 3, 1998, Sepulveda received complaints from
requirements of government agencies and regulatory separated employees regarding full salary claims, and from incumbent
employees on maternity and other benefits. Torreda failed to process the
On May 22, 1998, Torreda and his four co-employees in the Finance and
claims before taking a leave of absence on September 3, 1998. In order to
Accounting Department reported to Senior Vice-President Hisao Tanaka
retrieve the claimants payrolls and Social Security Services (SSS) files, which
that, before and after the reorganization, Finance Manager Teresita
Torreda kept in his drawer, Sepulveda, with prior approval from Kobayashi,
Sepulveda had ordered them to prepare petty cash vouchers in their names
had the drawer forcibly opened by Ruben delos Santos, a staff
and that the sums covered by the vouchers were received by Sepulveda for
member of the General Administration Section. The drawer was opened in
her own personal use.[9] Tanaka told them that he would bring the matter to
the presence of Oscar Eusebio, Noralyn Florencio and Flor Berdin of the
Gerardo Cristobal, Jr., the Manager of the Human Resources
Finance Department. The claims of the employees were later processed and
Department.[10] Consequently, Sepulveda was barred from approving petty
released.[18] As shown by official records, Torreda went to his office
cash vouchers with an amount beyond P1,000.00. She was also required to
on September 5, 1998, a Saturday, and stayed thereat for several hours.
make monthly reports of petty cash vouchers to the Senior Vice-President.
Thus, restrictions were imposed on Sepulvedas authority to approve petty
On September 7, 1998, Sepulveda requested Torreda to submit
cash vouchers.[11]
his key for duplication to prevent similar incidents.[19] Torreda refused.
Sepulveda sent a formal request via e-mail directing him to turn over his
drawer key to the General Administrator of the company for duplication and
On July 22, 1998, Sepulveda opened Torredas personal computer and read to explain in writing why he refused to surrender his key.[20] Torreda replied
his Lotus Notes mail and other personal files, specifically the report he had via e-mail to Sepulveda, to wit:
sent to Tanaka about her. She reprimanded Torreda and told him that he
should not send mails to Tanaka without her approval.[12] Upset over YOU CAN PROVIDE ME WITH OR (SIC) AN
Sepulvedas actuations, Torreda reported the incident via electronic mail (e- EXPLANATION OF THE FOLLOWING:

mail) to Tanaka[13] on the same day. He complained that Sepulveda had no 1.) TIP policy on Key duplication to be submitted to
right to open the computer because it was his, and it contained his personal your possession (sic).

files. He told Tanaka that Sepulveda used to open the employees computers; 2.) Why is is (sic) that my Php 200.00 pesos (sic) in
my drawer is missing (or STOLEN, by WHO
hence, she could no longer be trusted.[14]
ELSE____)?? Because you are the only one who
FORCIBLY open (sic) my drawer without my
knowledge. This is a plain and simple robbery on your
Sepulveda filed a complaint against Torreda with the Human Resources
Department (HRD) for repeated tardiness during the period of April to July
Torreda furnished copies of this e-mail to Cristobal, Kobayashi, Tanaka
On August 27, 1998, Sepulveda ordered Torreda to make a
and N. Florencio, the Senior Manager of the HRD, Manager of General
summary of payroll overpayments from October 1996 to June
Administration, Vice-President for Finance, Senior Vice-President and
1998.[15] Torreda refused and informed Sepulveda that all countermeasures
Financial Analyst of the company, respectively.
for immediate and long-term solutions had been identified, and that what
was needed was a strict implementation of countermeasures.[16] He further
Torreda then accomplished the company complaint form against
Sepulveda declaring that at 8:00 a.m. on September 7, 1998, he discovered
that two P100.00 bills he kept in his drawer were missing. He noted that his
The next day, September 11, 1998, Sepulveda and Kobayashi
drawer had been forcibly opened before by Ruben delos Santos on
directed Torreda to explain, in writing, within 48 hours why no disciplinary
Sepulvedas orders.[22]
action should be taken against him for the following violation against the
On the same day, Sepulveda sent to the HRD a complaint/request
for investigation (via e-mail) regarding Torredas accusation and his abusive
Offenses against the Company: Insubordination
and rude behavior.[23] The complaint reads: Refusal or neglecting to obey the order of the
supervisor or superior x x x. in reference to the Sept.
This is to formally file a complaint against 10 incident.[27]
one of my staff, Mr. Jeffrey Torreda. In this statement
below, he blatantly accused me of robbery for
the P200.00 missing in his drawer. This is a fabrication
of a story and I felt very much humiliated by his words. He was warned that failure to submit the Employees Written
Explanation Form within the given period would be considered as an
Would like to request for an investigation
to be conducted to clear my name of this incident. I admission of the offense.[28]
cannot be silent and accept this as simple error when
Torreda, for his part, sent an e-mail message to Hisao Tanaka
my name and career are at stake. This is a clear case
of misrepresentation. In my position as the Finance on September 11, 1998, where he complained against Sepulveda for the
Manager of TIP, integrity is the most important virtue
that I have to project and protect. Mr. Torreda, thru following offenses/violations:
his misrepresentation particularly to top
management, caused damage to my image. A.) ABUSE OF POSITION IN THE COMPANY
I pray for justice. Lest this act of Mr. Jeffrey EMPLOYEE
Torreda will happen again.[24]
On September 7, 1998, a conference was held in the office of
Kobayashi between Torreda, Cristobal and Sepulveda. Torreda claimed that ANOTHERS LOCKER, DRAWER OR OFFICE 1st Offense
Sepulveda never informed him that his drawer needed to be opened. He
pointed out that some employees of the Finance and Accounting Section C.) FALSIFYING COMPANY RECORDS AND
knew his contact numbers. Sepulveda, for her part, claimed that she did not
have the contact numbers of Torreda, hence, was unable to contact him D.) FALSE REPORTING 1ST Offense
before his drawer was opened. Kobayashi told Sepulveda that she should
have the contact numbers of those in the Finance and Accounting Section. E.) OTHER CASE OF DISHONESTY AND

Maximo Dones of the General Administration Section conducted F.) COERCING, INTIMIDATING AND
an investigation of the complaint against Sepulveda. On September 8, 1998, THREATENING 1st Offense SUSPENSION

he submitted a Report where he declared that there was no factual basis for G.) CARELESSNESS OR NEGLIGENT
Torredas robbery charge against Sepulveda. SUBMISSION OF ANY ITEM OF EXPENSE. 1st Offense

In a separate development, the HRD issued a written warning on

September 10, 1998 to Torreda, in reference to his tardiness from April to
July 1998 (the matter Sepulveda had earlier complained of).[25] Meanwhile, Sepulveda approved Torredas paternity leave from
September 12 to September 21, 1998.[30] Torreda received the directive of
Sepulveda and Kobayashi on September 13, 1998, but failed to submit his the deduction of performance bonuses from employees so entitled; and that
written explanation on the charges against him. overpayments of salaries to several employees occurred due to Sepulvedas
Torreda then applied for leave for the period negligence in checking the payroll.
beginning September 22, 1998 up to October 2, 1998, but Sepulveda
On October 14, 1998, Torreda received a letter[36] from Gerardo
disapproved the same.[31]
Cristobal, Jr. informing him that his employment had been terminated
On October 2, 1998, the General Administration (GA) effective at the end of official working hours on that day, for grave slander,
Department recommended that Torreda be dismissed conformably with its which under the Employee Handbook is punishable by dismissal.[37] The
findings that he committed grave slander under the companys Employee letter of termination reads:
After a thorough review and evaluation of the Grave
Slander charge by your superior and your
Torreda submitted his written explanation[32] to Sepulvedas reply/explanation, the following points become
relevant; (sic)
complaint for grave slander only on October 6, 1998. He alleged that he had
the right to accuse Sepulveda of stealing because she was the one who 1. While we have a policy prohibiting unauthorized
opening of Employee lockers/drawers, your superior,
ordered his drawer forcibly opened. His charge of robbery against her was Ms. Teresita Sepulveda sought the approval of your
the normal reaction of one who finds out that something he owns is missing Department Head/Vice President. This approval made
the action of opening your drawer authorized and
due to an unlawful act. He pointed out that he had been a victim of official.
Sepulvedas unauthorized acts on prior occasions. She repeatedly opened his 2. Your Department Head/Vice President authorized
the opening of your drawer to locate and retrieve vital
computer and his drawer on September 10 and 11, 1998 while he was on documents needed last September which was (sic)
leave. Had Sepulveda acted rightly, he (Torreda) would not have committed under your custody.
3. Several employees witnessed the opening and the
grave slander against her.[33] He also pointed out that since his contact retrieval of the said vital documents from your drawer
by your superior and testified they did not see any
numbers were known to his officemates, Sepulveda should have called him
money inside the drawer nor any taken by your
up before ordering the opening of his drawer on September 3, 1998.[34] superior.
4. Your claim that there was (sic) Pesos 200 in your
In a letter[35] addressed to Hisao Tanaka dated October 7, 1998,
drawer is not substantiated.
Torreda, Finance Supervisor Visitacion Agustin, and Finance Assistant 5. You reported the alleged loss to GA on Monday,
September 7, 1998 yet you spent several hours at the
Rowena Alinas demanded that appropriate action be taken against
office the previous Saturday, September 5, 1998 per
Sepulveda for various offenses or violations. They alleged that Sepulveda had our official records. Mr. Maximino Dones of General
Affairs did not receive any report of loss then. It would
degraded and humiliated them (specifically Torreda); that she looked into seem natural for an Employee to report immediately
their personal computer files without authority; that she mishandled and the loss of his money upon discovering that his
drawer was opened.
appropriated for herself the companys petty cash; that she forcibly opened 6. Prudence and common sense dictate that personal
the drawer of Torreda resulting in the loss of documents and money; that properties including money should not be left behind
(sic) in drawers and lockers which are Company
there were cases of negligent payment of SSS contribution and under- properties.
declaration of withholding tax due to Sepulvedas fault; that Torreda was
Based on the Investigation Report submitted by Mr.
warned for tardiness without due process; that Sepulveda unjustifiably Maximino Dones on September 8, 1998 of General
disapproved Torredas leave application; that Torreda was stripped of his Affairs on your alleged theft complaint and the above
considerations, we find your complaint against Ms.
duties and responsibilities and given new ones alien to him; that she Sepulveda without basis and merit. Consequently,
there is basis in the charge of Grave Slander against
intimidated Torreda by ordering the removal of his Lotus Notes Software
you by Ms. T. Sepulveda when you called her a robber
from his computer without any explanation; that she deliberately caused the in your e-mail dated September 7, 1998 addressed to
payments of allowances to employees who were not entitled thereto and
Your false accusation has caused her undue seniority rights and to pay him backwages in the
embarrassment and has cast aspersion on her amount of P238,745.00 [(P14,692.00 x 15 months
character as Manager of TIP. This is strengthened by = P220,380.00) + (13th month pay P220,380.00/12
the fact that you furnished a copy of the said e-mail = P18,365.00)] computed from the time of dismissal
to other parties, e.g., K. Kobayashi, R. Suarez, N. up to the date of this decision. In the event that
Florencio and H. Tanaka. reinstatement is no longer possible, respondent
company is hereby ordered to pay complainant
As a subordinate, you (sic) action shows an utter separation pay in the amount of P44,076.00
disrespect and disregard to her as a person of (P14,692.00 x 3 years) plus backwages.
authority and the Company considers this a grave and
serious violation of our existing policies on Offenses SO ORDERED.[44]
Related to Conduct and Behavior. And as stated in our
Employee Handbook, the penalty for Grave Slander is
Dismissal for the first offense.
Aggrieved by the decision, respondents appealed the case to the
In view hereof, you are hereby formally informed that NLRC.[45] They maintained that the sending of an e-mail message containing
your employment with Toshiba Information
Equipment (Phils.), is terminated effective at the end insulting and offensive words, and false and malicious statements against his
of official working hours today October 14, 1998. immediate superior (Sepulveda), clearly intended to cause dishonor, is not

Please comply with the relevant post-employment only destructive of the morale of his co-employees and violative of company
requirement of the Company by surrendering your rules and regulations; it also constitutes serious misconduct that would
accountabilities to HRA through Ms. Candice Cipriano
to enable us to process your last salary. justify dismissal from employment.[46] The requirement of due process was
further met, since the termination of the complainant was made on October
14, 1998, or eight (8) days after the company received his explanation to the
Senior Manager, HRA[38]
charges against him.[47]

On March 23, 1999, Torreda filed a complaint[39] for illegal dismissal against On November 15, 2002, the NLRC reversed the decision of the Labor

Cristobal and Toshiba. The case was docketed as NLRC RAB IV Case No. 3- Arbiter.[48] The NLRC ratiocinated that the complainant committed the

10931-99-L. infraction of accusing his immediate superior of stealing P200.00 and calling
her a robber (through an e-mail message), without any evidence at all, and
On February 15, 2000, the Labor Arbiter rendered a forwarding copies to the other officers of the company. The NLRC declared
Decision,[40] declaring that Torredas dismissal from employment was that this infraction constitutes serious misconduct, a just cause for dismissal
unjustified. The series of events indicated that Torreda was harassed by under Article 282(a) of the Labor Code, as amended.
Sepulveda because of his expos of irregularities she had committed. The
opening of his drawer formed part of her harassment tactics.[41] Thus, The NLRC declared that considering the urgency of the situation,
Torreda had all the right to demand an explanation for the forcible opening it was necessary to open the drawer of Torreda: there had been numerous
of his computer files and drawer which resulted in the loss of some amount follow-ups from separated employees regarding their pending final salary
of money.[42] payments, and from incumbent employees claiming maternity and sickness
benefits under the SSS, and processing these applications was part of
The Labor Arbiter also ruled that respondent Toshiba did not
complainants responsibilities. Moreover, the opening of the drawer was
observe the rudiments of due process in terminating Torredas employment.
conducted in the presence of Oscar Eusebio, Noralyn Florencio and Flor
The result of the investigation on the charges against him came out
Berdin, who were employees of the Finance Section, with prior notice to
on October 2, 1998, or four days before Torreda submitted his written
Kobayashi, Vice-President for Finance.[49]
explanation to the charges.[43] The fallo of the decision reads:
WHEREFORE, foregoing premises considered,
respondent company is found guilty of illegal The NLRC further held that disrespect to company officials and
dismissal and is hereby ordered to reinstate the
staff members constitutes serious misconduct which means a transgression
complainant to his former position without loss of
of some established rule of action, a forbidden act, a penalizing Sepulveda, however, respondent Toshiba dismissed him from the
dereliction. Consequently, pursuant to Article 279 of the Labor Code of service for alleged grave slander.[65]
the Philippines, as amended, the complainant is not entitled to
In their Comment,[66] respondents Toshiba and HR Manager Cristobal assert
reinstatement to his former position without loss of seniority rights and
that the issues raised by petitioner involve questions of fact and not of law,
privileges, or to payment of any separation pay, in lieu of reinstatement, or
which are improper in an appeal by certiorari under Rule 45.[67] The factual
payment of any backwages and other benefits.[50] The NLRC cited the ruling
findings and conclusion of the NLRC, which were affirmed by the CA, should
of this Court in Gutierrez v. Baron.[51] The dispositive portion of the decision
be accorded with respect and finality.[68]
WHEREFORE, premises considered, the Appeal is
hereby GRANTED. Accordingly, the Decision The petition is denied for lack of merit.
appealed from is VACATED and a new one ENTERED
dismissing the instant case for lack of merit.
It bears stressing that what petitioner filed before the CA was one
SO ORDERED.[52] for certiorari under Rule 65 of the Rules of Court. Thus, he was burdened to
prove that the NLRC committed grave abuse of discretion amounting to
When his motion for reconsideration[53] was denied by the NLRC in
excess or lack of jurisdiction when it dismissed his petition. The Court has
its January 27, 2003 Resolution,[54] Torreda filed a petition
invariably defined grave abuse of discretion, thus:
for certiorari[55] before the CA on April 1, 2003. He alleged that the NLRC
x x x By grave abuse of discretion is meant
committed grave and patent abuse of discretion amounting to lack or excess
such capricious and whimsical exercise of judgment
of jurisdiction in setting aside the Labor Arbiters decision and in finding that as is equivalent to lack of jurisdiction, and it must be
shown that the discretion was exercised arbitrarily or
his dismissal was justified.[56] despotically. For certiorari to lie, there must be a
Unpersuaded, the CA rendered judgment dismissing the petition capricious, arbitrary and whimsical exercise of power,
the very antithesis of the judicial prerogative in
on February 27, 2004.[57] It affirmed the NLRC ruling dismissing petitioners accordance with centuries of both civil law and
complaint. However, the appellate court found that petitioner committed common law traditions.[69]

grave slander when he concocted the charge of theft against Sepulveda, the
penalty for which, under the Employees Handbook, is dismissal.[58] Mere abuse of discretion is not enough.[70] The only question
involved is jurisdiction, either the lack or excess thereof, and abuse of
Petitioner timely filed his motion for reconsideration[59] which the appellate
discretion warrants the issuance of the extraordinary remedy
court denied in its May 13, 2004 resolution.[60]
of certiorari only when the same is grave, as when the power is exercised in

Petitioner, thus, filed the instant petition insisting that the Court an arbitrary or despotic manner by reason of passion, prejudice or personal

of Appeals seriously erred in holding that the dismissal of the petitioner was hostility. A writ of certiorari is a remedy designed for the correction of errors

legal.[61] of jurisdiction and not errors of judgment.[71] An error of judgment is one

which the court may commit in the exercise of its jurisdiction, which error is

Petitioner contends that the ground for his termination does not fall among reversible only by an appeal.[72] In Cosep v. NLRC,[73] this Court held that

the just causes stated in Article 282 of the Labor Code, as amended.[62] The decisions of administrative agencies which are declared final by law are not

alleged grave slander was in response to Sepulvedas September 7, 1998 e- exempt from judicial review for want of substantial basis in fact and in law.

mail requesting him to submit the key of his drawer for duplication.[63] He
A careful review of the decisions of the NLRC and the CA reveal
reacted in that manner because Sepulveda had previously harassed
that they differ on their bases for the dismissal of petitioners complaint. The
him.[64] In fact, he wrote Tanaka, on September 11, 1998, requesting for
NLRC declared that the charge of robbery which was fabricated by petitioner
assistance on the offenses committed by his direct superior. Instead of
against his immediate superior, Sepulveda, constitutes serious misconduct
punishable by dismissal under Article 282(a) of the Labor Code; in contrast, The false attribution by the petitioner of robbery (theft) against
the CA ruled that petitioner committed grave slander - an act punishable by Sepulveda was made in writing; patently then, petitioner committed libel,
dismissal under the Employees Handbook. not grave slander against Sepulveda. The malicious and public imputation in
writing by one of a crime on another is libel under Article 353, in relation to
We hold that the CA correctly affirmed the NLRC Resolution Article 355, of the Revised Penal Code which reads:
ordering the Labor Arbiter to dismiss petitioners complaint. However, the
Art. 353. Definition of libel. A libel is a
appellate court erred in ruling that petitioner committed grave slander public and malicious imputation of a crime, or of a
vice or defect, real or imaginary, or any act, omission,
against Sepulveda and in applying the Employees Handbook as basis for his condition, status, or circumstance tending to cause
dismissal. the dishonor, discredit, or contempt of a natural or
juridical person, or to blacken the memory of one who
is dead.
The rule in labor cases is that the burden is on the employer to
prove that the dismissal of an employee is for a just or valid cause. Evidence
must be clear, convincing and free from any inference that the prerogative Art. 355. Libel by means of writings or
similar means. A libel committed by means of writing,
to dismiss an employee was abused and unjustly used by the employer to printing, lithography, engraving, radio, phonograph,
further any vindictive end.[74] In this case, respondent Toshiba adequately painting, theatrical exhibition, cinematographic
exhibition, or any similar means, shall be punished
proved that petitioner was dismissed for just cause. by prision correccional in its minimum and medium
periods or a fine ranging from 200 to 6,000 pesos, or
both, in addition to the civil action which may be
The NLRC did not err much less commit grave abuse of its brought by the offended party.
discretion when it based its ruling on Article 282(a) of the Labor Code on its
finding that petitioner committed serious misconduct for falsely accusing his
Indeed, an employee may be dismissed from employment for
immediate superior of robbery. As the Court held in Villanueva v. People:[75]
acts punishable by dismissal under Article 282(a) of the Labor Code, which
Slander is libel committed by oral (spoken) reads:
means, instead of in writing. The term oral
defamation or slander as now understood, has been Article 282. Termination by employer. An employer
defined as the speaking of base and defamatory may terminate an employment for any of the
words which tend to prejudice another in his following causes:
reputation, office, trade, business or means of
livelihood. (a) Serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or
There is grave slander when it is of a representative in connection with his work; x x x
serious and insulting nature. The gravity of the oral
defamation depends not only (1) upon the
expressions used, but also (2) on the personal
In Fujitsu Computer Products Corporation of the Philippines v. Court of
relations of the accused and the offended party, and
(3) the circumstances surrounding the case. Indeed, it Appeals,[77] the Court explained the nature of serious misconduct as a
is a doctrine of ancient respectability that defamatory
words will fall under one or the other, depending not ground for dismissal from employment:
only upon their sense, grammatical significance, and
accepted ordinary meaning judging them separately, Misconduct has been defined as improper or wrong
but also upon the special circumstances of the case, conduct. It is the transgression of some established
antecedents or relationship between the offended and definite rule of action, a forbidden act, a
party and the offender, which might tend to prove the dereliction of duty, willful in character, and implies
intention of the offender at the time.[76] wrongful intent and not mere error of judgment. The
misconduct to be serious must be of such grave and
aggravated character and not merely trivial and
unimportant. Such misconduct, however,
serious, must nevertheless be in connection with the
employees work to constitute just cause for his
separation. Thus, for misconduct or improper
behavior to be a just cause for dismissal, (a) it must be
serious; (b) must relate to the performance of the In St. Michaels Institute v. Santos,[80] this Court held that the employers right
employees duties; and (c) must show that the
employee has become unfit to continue working for to conduct the affairs of his business, according to its own discretion and
the employer. Indeed, an employer may not be judgment, is well-recognized. An employer has a free reign and enjoys wide
compelled to continue to employ such person whose
continuance in the service would be patently inimical latitude of discretion to regulate all aspects of employment, including the
to his employers interest.[78] prerogative to instill discipline in its employees and to impose penalties,
including dismissal, upon erring employees. This is a management
There is abundant evidence on record showing that petitioner committed
prerogative, where the free will of management to conduct its own affairs
libel against his immediate superior, Sepulveda, an act constituting serious
to achieve its purpose takes form.[81] The law, in protecting the rights of
misconduct which warrants the dismissal from employment.
workers, authorizes neither oppression nor self-destruction of the

Petitioner maliciously and publicly imputed on Sepulveda the crime of employer.[82]

robbery of P200.00. As gleaned from his Complaint dated September 7,

1999 which he filed with the General Administration, he knew that it was IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The

Delos Santos who opened his drawer and not Sepulveda. Thus, by his own Decision of the appellate court in CA-G.R. SP No. 76289 is AFFIRMED.

admission, petitioner was well aware that the robbery charge against
Sepulveda was a concoction, a mere fabrication with the sole purpose of
retaliating against Sepulvedas previous acts. RENE P. VALIAO, vs CA

The facts, as culled from records, are as follows:

The records show that Sepulveda was impelled to forcibly open petitioners
On February 5, 1990, petitioner Rene Valiao was appointed by private
drawer. She needed to retrieve the benefits applications of retirees and respondent West Negros College (WNC) as Student Affairs Office (SAO)
Director, with a starting salary of P2,800 per month. On May 14, 1990, he
incumbent employees of respondent-corporation, which petitioner had
was assigned as Acting Director, Alumni Affairs Office.
failed to process for payment before his leave. The claimants sought to have
On July 29, 1990, petitioner was transferred to a staff position and
their claims approved and released with dispatch. Before opening designated as Records Chief at the Registrars Office but was again re-
petitioners drawer, Sepulveda saw to it that she had Kobayashis approval. assigned as a typist on June 24, 1991.

Delos Santos opened the drawer of petitioner in the presence of his co- The latest re-assignment was due to his tardiness and absences, as
reflected in the summary of tardiness and absences report, which showed
employees in the Financial Section. Thereafter, the claims were processed him to have been absent or late for work from a minimum of seven (7) to a
and payments were effected. Thus, Sepulveda acted in good faith.[79] maximum of seventy-five (75) minutes for the period March to October 31,
1991, and to have reported late almost every day for the period November
to December 1991.
Petitioner admitted that his charge of robbery/theft against Sepulveda was
Copies of his tardiness/absences reports were furnished petitioner,
baseless, but claimed that he fabricated the charge because of his
along with memoranda requiring him to explain but his explanations were
exasperation and anger at Sepulvedas repeated acts of opening his drawer either unacceptable or unsatisfactory. Subsequent reports also showed that
he did not change his habits resulting in tardiness and absences. He was even
without prior permission while he was on leave, not only on September 7, caught one time manipulating the bundy clock, thus necessitating another
1998 but also on September 10 and 11, 1998; he also pointed out that memorandum to him asking him to explain his dishonest actuations in
accomplishing the daily attendance logbook and in using the bundy clock.
Sepulveda looked into his personal files in his computer. In fine, by falsely
On December 10, 1991, petitioner received a suspension order
ascribing a crime to Sepulveda, petitioner was merely retaliating against
without pay for fifteen (15) days effective January 1, 1992, because of
perceived misdeeds she had committed against him. However, the manner dishonesty in reporting his actual attendance. After serving the suspension,
the petitioner reported back to office on January 16, 1992.
resorted to by petitioner of redressing the wrong committed by Sepulveda
is a criminal act. As the adage goes, the end cannot justify the means used On June 15, 1992, another adverse report on tardiness and absences
from the Registrar was made against the petitioner prompting WNC to send
by petitioner. him another memorandum with an attached tardiness and absences report,
calling his attention on his tardiness and absences for the period February to petitioner informing him of his termination from the service for serious
April 1992. misconduct and gross and habitual neglect of duty. The petitioner received
the notice on March 25, 1993, but did not file a grievance concerning the
On June 20, 1992, petitioner sent a letter of appeal and explained his notice of termination.
side to the new college president, Suzette Arbolario-Agustin, who gave
petitioner another chance. The petitioner was then appointed as On January 19, 1995, petitioner filed a Complaint against WNC for
Information Assistant effective immediately. However, the petitioner did not illegal suspension, illegal dismissal, backwages, salary differential for salary
immediately assume the post of Information Assistant prompting the increases and other benefits granted after his dismissal as well as for moral
President of private respondent WNC to call his attention. When the and exemplary damages and attorneys fees.
petitioner finally assumed his post, he was allowed a part-time teaching job
in the same school to augment his income. In its Answer, WNC alleged that petitioner was dismissed on charges
of serious misconduct, and gross and willful neglect of duty. WNC said his
Sometime in December 1992, WNC won a case against the officials of dismissal was effected after due notice and prior hearing. It claimed also that
the union before the NLRC. Petitioner was ordered to prepare a media blitz since petitioner was terminated for a valid cause after a due hearing, the
of this victory but the petitioner did not comply with the order on the ground latters claim for moral and exemplary damages, and attorneys fees had no
that such a press release would only worsen the already aggravated situation basis in fact and in law.
and strained relations between WNC management and the union officials.
After due proceedings, the Labor Arbiter rendered a decision, the
When petitioner reported for work on the first day of January 1993, decretal portion of which reads as follows:
he was relieved from his post and transferred to the College of Liberal Arts
as Records Evaluator. Not for long, the Dean of the Liberal Arts sent a letter
WHEREFORE, premises considered, judgment is hereby rendered DIRECTING
to the Human Resources Manager complaining about the petitioners poor
respondent West Negros College to pay complainant Rene P. Valiao (a)
performance and habitual absenteeism, as shown in the daily absence
P3,300.00 as salary for the period of his preventive suspension, and (b)
P330.00 as attorneys fees, or the total amount of THREE THOUSAND SIX
On January 18, 1993, petitioner was again absent from work without HUNDRED THIRTY PESOS (P3,630.00).
permission or notice to his immediate superior. It turned out that he went
to Bacolod City and on January 28, 1993, the petitioner was one of those Further, all other claims are DISMISSED for lack of merit.
arrested during a raid in the house of one Toto Ruiz, a suspected drug pusher
and was brought to the Bacolod Police Station along with four (4) other
suspects. Upon further search and investigation by the Narcotics Control
Division, the petitioner was found possessing two (2) suspected marijuana
roaches (butts) which were placed inside his left shoe. The event was widely The Labor Arbiter found no justifiable reason to place the petitioner
publicized, focusing on petitioners position as an Economics teacher of WNC, under preventive suspension as there was no serious or imminent threat to
and considering further that one of his fellow suspects was a member of the the life or property of his employer or co-workers.
Philippine Army, who was caught with an unlicensed firearm, a tooter and
other shabu paraphernalia. The petitioner and other suspects were then However, the Labor Arbiter found the dismissal of the petitioner from
charged with violation of the Dangerous Drugs Act of 1972 (Republic Act No. WNC to be valid due to absenteeism and tardiness and after he was
6425, as amended). accorded the procedural due process aspect of the law as reflected in the
records showing that the petitioner was formally investigated and given the
Petitioner was asked to explain within 24 hours why he should not be opportunity to refute the alleged findings by the management of WNC. The
terminated as a result of the raid and the charges against him for violation Labor Arbiter held that frequent absenteeism and tardiness of the petitioner
of Rep. Act No. 6425 as amended. Petitioner allegedly was not able to constituted not only willful disobedience but also gross and habitual neglect
answer immediately since he was in jail and received said memorandum only of duties, which are valid grounds for termination of employment. He
on January 30, 1993, although his wife had earlier received the stressed that the petitioners frequent absences without proper leave of
memorandum on January 28, 1993. absence was not only unfair to WNC and the petitioners co-employees but
also set an undesirable example to the employees under his supervision,
On January 29, 1993, the petitioner was dismissed for failure to considering that the petitioner was not a mere rank-and-file employee but
answer said memorandum. one who owed more than the usual fealty to the organization.
On February 1, 1993, the petitioner wrote to the President of WNC On appeal to the NLRC, the latter affirmed the decision of the Labor
explaining his side and asking for due process. WNC cancelled its Notice of Arbiter, sustained the latters findings of facts, and made its own findings on
Termination dated January 29, 1993, and granted the petitioners the apprehension of the petitioner for possession of prohibited drugs. The
request.The petitioner was notified through a memorandum about the grant decretal portion of the decision reads as follows:
of his request and that a hearing would be conducted. He was then placed
under preventive suspension and an investigation committee was organized
to conduct the probe. On March 6, 1993, a notice of hearing/investigation WHEREFORE, premises considered, the appeal is DISMISSED and the
was sent to the petitioner. decision of the Executive Labor Arbiter is AFFIRMED in its entirety.

After the investigation attended by the petitioner and his counsel, SO ORDERED.[4]
with proceedings duly recorded, the investigation committee recommended
the dismissal of petitioner. A notice of termination was then sent to
Petitioner then filed a Petition for Certiorari under Rule 65 before the Philippines. Gross negligence connotes want of care in the performance of
Court of Appeals but this was dismissed for lack of merit. The decretal ones duties. Habitual neglect implies repeated failure to perform ones duties
portion of the decision reads as follows: for a period of time, depending upon the circumstances.[8] The Labor
Arbiters findings that petitioners habitual absenteeism and tardiness
constitute gross and habitual neglect of duties that justified his termination
WHEREFORE, the questioned Decision and Resolution dated December 11,
of employment are sufficiently supported by evidence on record. Petitioners
1998 and July 7, 1999, respectively, of public respondent National Labor
repeated acts of absences without leave and his frequent tardiness reflect
Relations Commission are hereby AFFIRMED.
his indifferent attitude to and lack of motivation in his work. More
importantly, his repeated and habitual infractions, committed despite
SO ORDERED.[5] several warnings, constitute gross misconduct unexpected from an
employee of petitioners stature. This Court has held that habitual
The Court of Appeals held that the petitioner was validly dismissed for absenteeism without leave constitute gross negligence and is sufficient to
serious misconduct and gross habitual neglect of duties, which was justify termination of an employee.[9]
aggravated by his arrest for violation of Rep. Act No. 6425, as amended [the
However, petitioner claims that he was dismissed not for his tardiness
January 28, 1993 incident] and that he was afforded the twin requirements
or absences but for his arrest as a suspected drug user. His claim, however,
of notice and hearing and the opportunity to defend himself by the
is merely speculative. We find such contention devoid of basis. First, the
investigating committee. The appellate court noted that WNC had
decisions of the Labor Arbiter, the NLRC, and the Court of Appeals are
presented sufficient evidence to support petitioners termination from
indubitable. They show that indeed petitioner had incurred numerous and
employment after taking into consideration the totality of the infractions or
repeated absences without any leave. Moreover, he was not punctual in
the number of violations committed by petitioner during the period of
reporting for work. These unexplained absences and tardiness were
employment and stressed that it properly exercised its management
reflected on the summary reports submitted by WNC before the labor
prerogative by observing due process. Finally, the Court of Appeals ruled
arbiter, but petitioner failed to controvert said reports. Second, contrary to
that the NLRC correctly denied the claim for damages and attorneys fees for
petitioners assertion, the NLRC did not base its conclusions on the fact of the
lack of evidentiary support.
arrest of petitioner for violation of Rep. Act No. 6425 but on the totality of
Petitioner duly filed a Motion of Reconsideration, which was denied the number of infractions incurred by the petitioner during the period of his
by the Court of Appeals. employment in different positions he occupied at WNC. Thus:

Hence, this petition alleging that: In the case of petitioner Valiao, his services were terminated by private
A. THE HONORABLE PUBLIC RESPONDENT COURT OF APPEALS respondent after having been found guilty of serious misconduct and gross
ERRED IN HOLDING THAT THE DISMISSAL OF PETITIONER habitual neglect of duty which was aggravated by the January 28, 1993
WAS VALID, DESPITE THE FACT THAT THERE IS CLEAR AND incident. In exercising such management prerogative, due process was
BLATANT VIOLATION OF THE BASIC CONSTITUTIONAL properly observed. Private respondent presented sufficient evidence to
RIGHTS OF THE HEREIN PETITIONER BOTH SUBSTANTIVE support its act in terminating the services of petitioner. Private respondent
AND PROCEDURAL DUE PROCESS. took into consideration the totality of the infractions or the number of
violations committed by petitioner during the period of
B. THE HONORABLE PUBLIC RESPONDENT COURT OF APPEALS employment. Furthermore, it hardly needs reminding that, in view of
IN (SIC) DISMISSING THE RELIEFS FOR MORAL AND petitioners position and responsibilities, he must demonstrate a scrupulous
EXEMPLARY DAMAGES AND ATTORNEYS FEES.[6] regard for rules and policies befitting those who would be role models for
their young charges.[10] (Emphasis and italics supplied)
In our view, the only relevant issue for our resolution is whether or
not the petitioner was validly dismissed from employment on the ground of
serious misconduct and gross habitual neglect of duties, including habitual Indeed, even without the arrest incident, WNC had more than enough
tardiness and absenteeism. basis for terminating petitioner from employment. It bears stressing that
petitioners absences and tardiness were not isolated incidents but
Petitioner claims that his outright dismissal from employment was not manifested a pattern of habituality. In one case, we held that where the
valid and too harsh and that he was not dismissed from employment records clearly show that the employee has not only been charged with the
because of tardiness or absences but because he was among those offense of highgrading but also has been warned 21 times for absences
apprehended in a raid. Also, he was not accorded due process because without official leave, these repeated acts of misconduct and willful breach
although his wife received the show cause notice, he did not have the proper of trust by an employee justify his dismissal and forfeiture of his right to
mind to reply as he was in jail and was psychologically disturbed. security of tenure.[11] The totality of infractions or the number of violations
committed during the period of employment shall be considered in
Considering the submissions of the parties as well as the records determining the penalty to be imposed upon an erring employee. The
before us, we find the petition without merit. Petitioners dismissal from offenses committed by him should not be taken singly and separately but in
employment is valid and justified. their totality. Fitness for continued employment cannot be
compartmentalized into tight little cubicles of aspects of character, conduct,
For an employees dismissal to be valid, (a) the dismissal must be for a and ability separate and independent of each other.[12]
valid cause and (b) the employee must be afforded due process.[7]
Needless to say, so irresponsible an employee like petitioner does not
Serious misconduct and habitual neglect of duties are among the just deserve a place in the workplace, and it is within the managements
causes for terminating an employee under the Labor Code of the prerogative of WNC to terminate his employment. Even as the law is
solicitous of the welfare of employees, it must also protect the rights of an WHEREFORE, the assailed Decision dated August 22, 2000 and
employer to exercise what are clearly management prerogatives. As long as Resolution dated November 22, 2000 of the Court of Appeals in CA-G.R. SP
the companys exercise of those rights and prerogative is in good faith to No. 55133 are AFFIRMED with MODIFICATION in that the award of attorneys
advance its interest and not for the purpose of defeating or circumventing fees is deleted. No pronouncement as to costs.
the rights of employees under the laws or valid agreements, such exercise
will be upheld.[13] SO ORDERED.

Still, petitioner claims that he was not afforded due process so that COCA-COLA BOTTLERS, PHILS. VS. KAPISANAN NG MANGGAWA
his dismissal from employment should be declared invalid. This contention
deserves scant consideration. The Court of Appeals held that the records
Petitioner Coca-Cola Bottlers Phil., Inc. is a domestic corporation
reveal that petitioner was afforded the twin requirements of notice and
engaged in the manufacture, sale and distribution of softdrinks. It maintains
hearing and was likewise given the opportunity to defend himself before the
plants in various areas of the country, among others, in Calamba and Sta.
investigating committee. We find no reason to set aside these factual
Rosa, Laguna, in Lipa City and Balayan, Batangas; in Sta. Cruz, Gumaca; in San
findings of the Court of Appeals as they are supported by evidence on
Pablo City and Lucena City, Quezon Province; in Las Pias City, and Dasmarias,
record. Besides, we may not review the appellate courts findings of fact in
an appeal via certiorari,[14] since as a rule, the Supreme Courts review is
limited to errors of law allegedly committed by the appellate On July 1, 1982, the petitioner hired Florentino Ramirez as driver-
court.[15] Judicial review of labor cases does not go as far as to evaluate the helper with the following duties:
sufficiency of evidence upon which the Labor Arbiter and National Labor
Relations Commission based their determinations.[16]
(a) as driver, he checks the trucks oil, water, wheels, etc.;
In this case, petitioner was asked to explain his several absences and (b) as helper, he is charged of loading and unloading
tardiness on many occasions. A notice to explain was sent to him regarding the trucks load; putting bottles in the coolers and displays
arrest incident wherein he was able to reply. An investigation committee was company products to each outlet or customers store.[2]
formed by WNC to investigate the arrest incident and the absences and tardiness
of petitioner. It must be emphasized that proceedings of the committee were Ramirez became a member of the respondent Kapisanan ng
duly recorded, and petitioner actively participated therein by answering the Malayang Manggagawa Sales Force Union, the bargaining representative of
various questions interposed by the panel members. Finally, a notice of his the rank- and-file employees of the petitioner company. In 1996, he was the
termination was sent to petitioner, although he claims to have received it late as shop steward of the union at the companys Batangas Sales Office.[3]
he was in jail. It is an undeniable fact, however, that his wife had actually received Sometime in October 1996, it happened that the route salesman for
the notice in his house earlier, even before petitioners termination and this Route M11 was unavailable to make his usual routes. Since Ramirez had
matter was later communicated to him. been driving for the route salesman for so long, the petitioner company
At any rate, petitioner was given enough opportunity to be heard, and decided to assign him as temporary replacement of the regular route
his dismissal was based on valid grounds. The essence of due process is salesman for routes M11, AMC and LPR. Thereafter, in a Letter dated
simply an opportunity to be heard, or as applied to administrative December 5, 1996, the Officer-in-Charge of the Batangas Sales Office, Victor
proceedings, an opportunity to explain ones side or an opportunity to seek C. dela Cruz, informed the Officer-in-Charge of DSS-District 44, Rolando
a reconsideration of the action or ruling complained of. A formal or trial-type Manzanares, that a review of the copies of the invoices relating to the
hearing is not at all times and in all instances essential, as the due process transactions of Ramirez in Rt. M11 revealed the following discrepancies: (a)
requirements are satisfied where the parties are afforded fair and the number of cases delivered to customers; (b) empty bottles retrieved
reasonable opportunity to explain their side of the controversy at from them, and (c) the amounts in Sales Invoices Nos. 3212215, 3288587,
hand. What is frowned upon is the absolute lack of notice and hearing.[17] 3288763, 3288765 and 3288764, thus:

Finally, the Labor Arbiter found that petitioner is entitled to salary a. Finance and Customers Copies of Sales Invoice No. 3288765 showing the
differentials for the period of his preventive suspension, as there is no deliberate omission in the finance copy of the delivery of 25 cases of Sprite
sufficient basis shown to justify his preventive suspension. During the (8 ounces) and the absence in the Customers Copy of the retrieval of 10
pendency of the investigation, the employer may place the worker cases of Coke (1.5 liters).
concerned under preventive suspension if his continued employment poses
a serious and imminent threat to life or property of the employer or of his
co-workers.[18] But in this case, there is no indication that petitioner posed a b. Finance and Customers Copies of Sales Invoice No. 3288764, a comparison
serious threat to the life and property of the employer or his co- of which shows that the retrieval of empty bottles amounting to Two
employees. Neither was it shown that he was in such a position to unduly Thousand Two Hundred Fifty Pesos (P2,250.00) reflected in the Finance
influence the outcome of the investigation. Hence, his preventive Copy as having been collected was not reflected in the Customers Copy.
suspension could not be justified, and the payment of his salary differentials
is in order. c. Finance and Customers Copies of Sales Invoice No. 3212215 which shows
that the refund of thirty-three (33) cases was reflected only in the Finance
However, the award of attorneys fees to him cannot be sustained, in
view of our findings that petitioner was validly dismissed from
employment. Said award lacks legal basis and could not be granted properly
in this case. Ramirez received a Memorandum from District Office Nos. 44 and 45
requiring him to report to the said office starting December 5, 1996 until
such time that he would be notified of the formal investigation of the fictitious sales and falsification of company reports, were normally only for
charges against him.[4] full-fledged salesmen. He pointed out that:

During the formal investigation conducted by a panel of investigators

on December 20, 1996, Ramirez was not represented by counsel. He also Firstly, respondent companys act of grounding individual complainant on
manifested that he was waiving his right to be represented by counsel when alleged shortage in the bodega, has no factual basis, as no actual inventory
the members of the panel asked him about it. Ramirez was then asked to was conducted; and
explain the discrepancies subject of the charges, and narrated the following:
Secondly, individual complainant was terminated for violations which are
(a) Re: Sales Invoice No. 3212215. Ramirez unloaded the products alien to his official functions and designation; and
from the delivery truck in the morning and delivered the same to the
customer. He then gave a copy of the sales invoice to the customer, which
showed the quantity and prices of the products delivered. He told the Lastly, as officer of the union, individual complainant was terminated at the
customer to prepare the payment and that he would return later in the time the collective bargaining negotiations was underway and at its critical
evening to collect the same. Because the customer did not have enough stage.
money on hand, he covered the deficit by returning 33 cases of empty
bottles, which was reflected in the copy of the sales invoice forwarded to the These facts clearly establish a classic case of an employer harassing an official
sales department. Ramirez reasoned that he failed to note the return of the of the union, which we humbly submit as a clear case of interference by an
empty bottles in the copy of sales invoice he later delivered to the customer employer in the right of the workers to self-organization and to collective
because the latter informed him that such copy had been misplaced. bargaining.[6]
Besides, Ramirez and the customer had agreed that he (Ramirez) would just
note the return of the empty bottles on the customers copy of the sales
invoice the following day. Ramirez pointed out that the petitioner company Ramirez likewise claimed that he was denied of his right to due
did not suffer any loss because the empty bottles were turned over to it. process, based on the following grounds:

(b) Re: Sales Invoice No. 3288587 dated October 12, 1996. Ramirez Firstly, individual complainant was dismissed without having been first
admitted that there the customer made an overpayment of P504.00. He issued a notice of dismissal which supposedly should contain the charges
claimed, however, that he returned the amount to the customer from his against him, which would be made as basis for his termination.
own money, and retained the P504.00 by way of reimbursement for the
amount he had earlier given to the customer. Hence, the petitioner company
and the customer did not suffer any loss. Secondly, individual complainant was dismissed without affording him an
ample opportunity to defend himself, as he was not notified in advance of
(c) Re: Sales Invoice No. 3288763 dated October 14, 1996. Ramirez the subject of the administrative investigation.
claimed that he had erroneously written Sales Invoice No. 3288763 instead
of Sales Invoice No. 3288765 (customers copy) in his RHF Report dated
Thirdly, individual complainant was terminated without just and valid cause,
October 14, 1996. He also claimed to have overlooked Sales Invoice No.
and in gross violation of his right to due process.
3288763 when he issued a receipt to customers Iglesia or Dolor Hernandez,
and mistakenly issued Sales Invoice No. 3288763. He also declared that he
failed to include Sales Invoice No. 3288765 in his RHF Report as one of the Lastly, individual complainant was terminated by respondents in utter bad
cancelled invoices because it was already too late in the evening. faith, as the decision on the said termination was arrived at, without any just
and valid cause. Simply put, respondents simply acted oppressively,
(d) Re: Sales Invoice No. 3288764. Ramirez declared that it was only malevolently, and with grave abuse of prerogatives.[7]
after he had unloaded and delivered the products to the customer and had
given a copy of the sales invoice to the latter that he realized that the
customer had returned several cases of empty bottles worth P2,250.00. He For its part, the petitioner company alleged that the dismissal of
pointed out that he indicated the same in the copy of the sales invoice he Ramirez was based on the facts unearthed during the formal investigation,
submitted to the company, but failed to do so in the customers copy of the and that he was guilty of serious misconduct, a valid ground for termination
sales invoice. of employment. Even if he was occupying the position of route driver/helper,
he was nevertheless performing the functions and duties of a route
On February 11, 1997, Ramirez received a notice from the company salesman, and, as such, he not only committed fraud, but also willfully
informing him that his services were being terminated; that based on the breached the trust and confidence reposed on him by the petitioner
investigation, it was clearly established that he violated Sections 10 and 12 company. According to the petitioner company, considering the sanctions
of the CCBPI Employees Code of Disciplinary Rules and Regulations (Red imposed on Ramirez for prior breaches of company rules, his dismissal from
Book); and that coupled with his prior infractions, his employment was employment was with basis. The petitioner company also insisted that
terminated effective February 12, 1997. Ramirez was accorded his right to due process: he was notified of the
charges against him, was subjected to a formal investigation during which he
On March 17, 1997, Ramirez and the union filed a Complaint[5] for was allowed to explain the discrepancies, and was notified of the outcome
unfair labor practice and illegal dismissal against the company with the thereof, as well as the bases of the termination of his employment.
Arbitration Branch of the NLRC, docketed as RAB-IV-3-8862-97-B. Ramirez
claimed that although he was merely an acting salesman, the alleged On July 31, 1998, the Labor Arbiter (LA) rendered
violations for which he was dismissed, i.e., Sections 10 and 12 of the judgment[8] dismissing the complaint for lack of merit. The LA found that
petitioner companys rules and regulations, particularly designated as based on the evidence, there was a justifiable basis for the dismissal of
Ramirez. According to the LA, it was of no moment that the official 2. THE HONORABLE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF
designation of Ramirez was driver-helper, since he committed the DISCRETION, AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION, IN
infractions while he was performing the functions of an acting salesman. The FINDING THAT INDIVIDUAL PETITIONER WAS VALIDLY DISMISSED FOR LOSS
LA further found that due process had been complied with.[9] OF TRUST AND CONFIDENCE, AS, EVEN IF THE SAID GROUND REALLY EXISTS,
Aggrieved, Ramirez appealed the decision to the NLRC, docketed as DRIVER-HELPER HIS OFFICIAL DESIGNATION, A POSITION WHICH DOES NOT
Ramirez argued that any errors or discrepancies he may have
committed while he was assigned as route salesman were excusable. He 3. THE HONORABLE PUBLIC RESPONDENT, LIKE THE HONORABLE LABOR
pointed out that he was merely a driver/helper and had no formal training ARBITER A QUO, COMMITTED GRAVE ABUSE OF DISCRETION, AMOUNTING
as route salesman before such temporary designation. He averred that the TO LACK AND/OR EXCESS OF JURISDICTION, IN DECLARING THAT
petitioner company dismissed him because of the on-going collective COMPLAINANTS DESIGNATION AT THE TIME OF THE INFRACTION IS OF NO
bargaining negotiations which were then in a critical stage. MOMENT.

On September 20, 1999, the NLRC rendered a Resolution[10] affirming

the decision of the LA. It declared that the petitioner company had adduced 4. IN SUM, THE HONORABLE PUBLIC RESPONDENT COMMITTED GRAVE
documentary evidence to show that Ramirez failed to justify why the amount ABUSE OF DISCRETION, AMOUNTING TO LACK AND/OR EXCESS OF
of P2,250.00 was not reflected in the customers copy of Sales Invoice No. JURISDICTION, IN NOT FINDING PRIVATE RESPONDENT GUILTY OF ILLEGAL
3288764. According to the NLRC, Ramirez also failed to justify the omission DISMISSAL AND UNFAIR LABOR PRACTICE; AND IN NOT ORDERING PRIVATE
of the return of 33 cases of company products in the customers copy of Sales RESPONDENT TO REINSTATE INDIVIDUAL PETITIONER TO HIS FORMER
Invoice No. 3212215. The NLRC found the same to be sufficient basis for a POSITION AS DRIVER-HELPER, AND TO PAY FULL BACKWAGES, DAMAGES
finding of grave misconduct, which rendered Ramirez unworthy of the trust AND ATTORNEYS FEES.[12]
and confidence demanded of his position as an acting salesman. Citing the
ruling of this Court in Philippine Commercial International Bank v. In a Decision dated October 25, 2000, the CA dismissed the
Jacinto,[11] the NLRC declared that Ramirezs claim that the penalty of petition.[13] It ruled that the petitioners designation at the time of the
dismissal was too harsh and disproportionate on account of his being a mere infraction was of no moment; when he agreed to be an acting salesman for
acting salesman, was untenable. Route M11, AMC and LPR, he actually performed the duties of a salesman,
and in so doing, assumed the responsibilities of the position. The CA further
The NLRC, likewise, rejected Ramirezs plea of denial of due process, ratiocinated that notwithstanding Ramirezs lack of training, he had assumed
declaring that he was accorded the chance to be heard on the complaint and performed the duties of a salesman; hence, he was obligated to do so
against him and to adduce evidence on his behalf. It ruled that Ramirez failed with due care, dedication, and with due regard to the exercise of the degree
to prove ill-motive on the part of the petitioner company for dismissing him. of diligence to prevent the commission of any serious error, mistake or
Upon the denial of his motion for reconsideration, Ramirez filed a blunder on his part.
petition for certiorari under Rule 65 of the Rules of Court with the Court of The CA also ruled that Ramirez had not been denied his right to due
Appeals (CA), docketed as CA-G.R. SP No. 58012 wherein he alleged the process. It concluded that the falsification of the sales invoices and receipts
following: violated company rules and policy, and that he was guilty of gross
misconduct which also constituted a breach of trust and confidence reposed
AND/OR EXCESS OF JURISDICTION, IN AFFIRMING THE LABOR ARBITERS Undaunted, the petitioner filed a motion for the reconsideration of

This time, the CA found merit in petitioners cause and, on January 30, Irregularities in the Performance
2001, issued a Resolution granting the said motion, and set aside its earlier of His Duties as Route Salesman
We find, as the CA did in its assailed Resolution, that the respondent,
by his acts and omissions, committed irregularities in the performance of his
WHEREFORE, premises considered, the petitioners motion for duties. He made it appear in the customers copy of Sales Invoice No.
reconsideration is hereby GRANTED, and Our decision of 25 October 2000 is 3212215 that the latter returned 33 cases of family-size empty bottles
vacated. The assailed resolutions of public respondent dated September 20, valued at P4,092.00; however, such transaction was not reflected in the
1999 and December 21, 1999 are REVERSED and SET ASIDE, and a new invoice submitted by him to the petitioner company.
judgment is rendered, ordering the respondent company to reinstate
petitioner Florentino A. Ramirez to his job as driver-helper without loss of A perusal of the customers copy of the sales invoice would show that
seniority and other rights, and to pay him his full backwages, allowances and the customer owed the petitioner company P9,045.00. However, in the
other benefits until his retirement, without diminution, or their monetary petitioner companys copy of the sales invoice, the respondent declared that
equivalent, plus 10% as attorneys fees. Costs against private respondent.[17] the customer returned 33 cases of empty bottles valued at P4,092.00;
hence, the customer owed the petitioner only P4,953.40 which the
The CA ratiocinated that as an acting salesman who did not possess customer paid. The respondent failed to indicate the return of the empty
the required basic training of a route salesman, Ramirez was made to bottles in the petitioner companys copy of the sales invoice. The explanation
discharge the duties of a route salesman. It also emphasized that as of the respondent, that while he intended to correct the customers copy of
driver/helper, his job was not a position reposed with trust and confidence. the sales invoice he was unable to do so because such customers copy had
Thus, the CA declared that the petitioner committed a mere oversight of been misplaced by the customer, is unacceptable. The respondent should
certain internal control procedures in the proper recording of his sales and have presented the affidavit of the customer to corroborate such claim. The
other transactions, resulting in the shortage in one transaction, offset by an fact that it turned out that the customer still had his copy of the sales invoice
overage in another. While he was inefficient and incompetent as a route does not sit well with the respondents cause. In fine then, the explanation
salesman, he was not so as a driver/helper. Considering that he was merely given by the respondent during the panel investigation is untrue.
discharging the functions of a salesman in an acting capacity, and that the There is no dispute that the respondent overcharged the customer in
petitioner company did not suffer any loss on account of the violations Sales Invoice No. 3288587 in the amount of P504.00, and that the
and/or omissions of Ramirez, the penalty of dismissal was too harsh. The CA respondent returned the overpayment to the customer. However, the
also ruled that there was no dishonesty or a demonstration of moral respondent was burdened to give a valid explanation for such overcharging
perverseness as would justify the claimed loss of confidence attendant to on the customer, which he failed to do.
the job, and, as such, gave Ramirez the benefit of the doubt.
The respondent also admitted that he failed to indicate in the
On the issue of due process, the CA ruled that the petitioner was not customers copy of Sales Invoice No. 3288764 the customers retrieval of 210
afforded due process because the panel of investigators focused on cases of empty Coca-Cola bottles of varied sizes, amounting to P2,250.00.
Ramirezs violations of internal control procedures instead of the substance The respondent failed to give a valid explanation for his omission, although
of the charges against him.[18] there appears to be no doubt that, indeed, the customer returned the 210
Aggrieved by the appellate courts volte face, the petitioner company empty bottles to the petitioner through him.
filed the instant petition for review on certiorari, alleging that:

THAT: Infraction is, however,
Too Severe

In order to effect a valid dismissal of an employee, the law requires

that there be just and valid cause as provided in Article 282 and that the
employee was afforded an opportunity to be heard and to defend
himself.[20]Pursuant to Article 282 of the Labor Code, an employees services
C. THE FINDINGS OF FACT BY THE COURT OF APPEALS ARE CONTRARY TO can be terminated for the following just causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
The core issue for resolution is whether or not respondent Florentino
Ramirez was dismissed by the petitioner without just or valid cause. (c) Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly-authorized representative.
The Respondent Committed
(d) Commission of a crime or offense by the employee against the person of At the outset, it may be stated that the petitioners positive allegation that
his employer or any immediate member of his family or his duty-authorized the individual petitioner was also an official of the petitioner union, being
representative; and the latters shop steward at respondent companys Batangas Sales Office, as
the real motive for his termination, has not been established by sufficient
proof to justify a finding in their favor.
(e) Other causes analogous to the foregoing.

A quick review of the salient facts shows that individual petitioner Florentino
In termination disputes, the burden of proof is always on the
A. Ramirez was hired by private respondent company on July 1, 1982, as
employer to prove that the dismissal was for a just and valid
driver-helper, with the latest basic salary of P11,285.00 as of February 1997
cause.[21] Considering the nature of the charges and the penalties therefor,
and an average commission of P2,800.00 a month. As such driver-helper, his
the petitioner is bound to adduce clear and convincing evidence to prove the
official duties and responsibilities, among others, are as follows: (a) as driver,
he checks the trucks oil, water, wheels, etc.; (b) as helper, he is tasked with
We have always held that an employer enjoys a wide latitude of loading and unloading trucks load; putting bottles in the coolers and displays
discretion in the promulgation of policies, rules and regulations on work- company products to each outlet or customers store. Obviously, this job did
related activities of the employees.[22] It is recognized that company policies not involve the same amount of trust and confidence as that of a salesman.
and regulations, unless shown to be grossly oppressive or contrary to law, Officially, petitioner Ramirez had no other alternate duties.
are generally valid and binding on the parties and must be complied with
until finally revised or amended, unilaterally or preferably through It is not refuted that individual petitioner did not possess the required basic
negotiation, by competent authority. The Court has upheld a companys training to act as salesman, and that this fact was known to the private
management prerogatives so long as they are exercised in good faith for the respondent company at the time it designated him as acting salesman during
advancement of the employers interest and not for the purpose of defeating those days, particular October 02, 12, and 14, 1996, when no route salesman
or circumventing the rights of the employees under special laws or under was available. It is also self-evident that the job description of the driver-
valid agreements.[23] For misconduct or improper behavior to be a just cause helper hardly includes any task which would significantly overlap with those
for dismissal, the same must be related to the performance of the of the salesman as would afford the driver-helper, through time perhaps, the
employees duties and must show that he has become unfit to continue experience to adequately discharge the duties of a salesman. In fact, as
working for the employer.[24] admitted by the private respondent, because of the amount of trust and
confidence involved in the job of a salesman, rigorous requirements and
In cases when an employer may dismiss an employee on the ground
internal control procedures are enforced, and understandably, as well as
of willful disobedience, there must be concurrence of at least two requisites:
strict accountability.
(1) the employees assailed conduct must have been willful or intentional, the
willfulness being characterized by a wrongful and perverse attitude; and (2)
the order violated must have been reasonable, lawful, made known to the From the parties various pleadings both in this petition, as well as in the case
employee and must pertain to the duties which he had been engaged to below, what becomes clear is that the private respondent suffered no
discharge.[25] damage whatsoever from the actuations of the individual petitioner. His
alleged dishonesty was not proven. What he committed was merely non-
In the present case, the respondent was dismissed for dishonesty, compliance with, or oversight of, certain internal procedures in the proper
more specifically for violation of the company policy, and, more particularly, recording of his sales and other transactions, resulting in a shortage in one
Sections 10 and 12 of Company Rules and Regulation No. 005-85, Fictitious transaction, which was nevertheless offset by an overage in another. It could
sales transactions; Falsification of company be allowed that, indeed, he was inefficient and incompetent for the function
records/data/documents/reports; Conspiring or conniving with, or directing of a salesman which he had to temporarily perform.[26]
others to commit fictitious transactions; and inefficiency in the performance
of duties, negligence and blatant disregard of or deviation from established
control and other policies and procedures. In pointing out that the private respondent suffered no material loss, We
note that it was very possible that the discrepancies found in the documents
However, the petitioner failed to adduce clear and convincing reflecting the individual petitioners transactions as an acting salesman could
evidence that the respondent had fictitious sales transactions, or that he very well have been due to simple inadvertence and the fact that the
falsified company records/documents/reports, or that he connived with customers, who for some reason failed to pay their accounts with exact cash
customers of the petitioner to persuade them to commit fictitious but instead partly with empty bottles, later misplaced their copy of the
transactions. It is undisputed that the respondent entered into the sales invoice. Thus, their copy could not be corrected seasonably. The recording
transactions subject of the complaint of the petitioner for and in behalf of was very likely bungled further by individual petitioners lack of training and
the petitioner. While it is true that the respondent failed to indicate the familiarity with the strict recording procedures. We are inclined to give him
return of the empty bottles made by a customer either in the petitioner this benefit of the doubt.
companys copy of the sales invoice or in his reports on his sales transactions;
and overcharged a customer in one transaction, there is no clear and That the individual petitioner has not been specifically trained as salesman
convincing evidence that the respondent did so intentionally, for a wrong or is undisputed. It is likewise uncontroverted that before an employee could
criminal purpose. There is also no showing that the respondent intentionally qualify as a full-fledge salesman, the respondent company requires as a
defied the lawful orders or regulations of the petitioner. Indeed, as declared condition sine qua nonthat he first undergo basic salesman training and
by the CA in its assailed resolution, the petitioner did not suffer any material several seminars to be acquainted with his specific functions. This is
loss by the respondents actuations: understandable, because the company salesman not only must find
customers, promote and sell its products, but he also must account for his
sales and inventory to the last centavo, every day, according to its internal must be shown that the employee is unfit to continue to work for the
controls and policies. It is obvious that this was not so with the individual employer. Further, well-settled is the rule that for loss of trust and
petitioner. He was tasked with a duty involving trust and specialized skills for confidence to be a valid ground for dismissal of an employee, it must be
which he was never trained. His alleged failure to comply strictly with all the substantial and founded on clearly established facts sufficient to warrant the
procedures, of which he was unfamiliar, was to be expected. employees separation from employment.[31]

We agree that route salesmen are likely individualistic personnel who

Yet Ramirez was penalized as a full-fledge salesman, not as a driver-helper roam around selling softdrinks, deal with customers and are entrusted with
who was forced to perform the functions of acting salesman or perhaps risk large asset and funds and property of the employer. There is a high degree
being charged with insubordination. Then it was not just any penalty meted of trust and confidence reposed on them, and when confidence is breached,
out to him, as if there is only one punishment possible for him: the supreme the employer may take proper disciplinary action on them.[32] The work of a
sanction of dismissal. salesman exposes him to voluminous financial transactions involving his
employers goods. The life of the softdrinks company depends not so much
We cannot but agree that the extreme penalty of dismissal was too harsh on the bottling or production of the product since this is primarily done by
and manifestly disproportionate to the infraction committed, which appears automatic machines and personnel who are easily supervised but upon
to have been fully explained, and, in fact, to be not inexcusable under the mobile and far-ranging salesmen who go from store to store all over the
circumstances. There was no dishonesty, no demonstration of such moral country or region. Salesmen are highly individualistic personnel who have to
perverseness as would have justified the claimed loss of confidence be trusted and left essentially on their own. A high degree of confidence is
attendant to the job. The company must bear a share of the blame for reposed on them because they are entrusted with funds or properties of
entrusting a mere driver-helper with a highly fiduciary task knowing that he their employer.[33]
did not possess the required skills. At most, Ramirez failed to comply with,
or even violated, certain company rules of internal control procedures, but The designation of the respondent, who was employed as driver-
to say that it was deliberate is gratuitous. helper, but temporarily assigned as route salesman for a period of three (3)
days, did not automatically make him an employee on whom the petitioner
reposed trust and confidence, for breach of which he shall be meted the
Perhaps, individual petitioner should first have been given a mere warning, penalty of dismissal. The assumption by the respondent, for only three days,
then a reprimand or even a suspension, but certainly not outright dismissal of some of the duties of a route salesman on orders of the petitioner, did
from employment. One must keep in mind that a workers employment is not automatically make him an employee holding a position of trust and
property in the constitutional sense, and he cannot be deprived thereof confidence. Despite his additional duties, the respondent remained a driver-
without due process and unless it was commensurate to his acts and degree helper of the petitioner. Thus, respondent cannot be dismissed pursuant to
of moral depravity. [27] Article 282 of the Labor Code.

The rulings of the Court in Charles Joseph U. Ramos v. The Honorable

In Charles Joseph U. Ramos v. The Honorable Court of Appeals and
Court of Appeals and Union Bank of the Philippines,[34] cited by the petitioner
Union Bank of the Philippines,[28] the Court held that, in order to validly
are not on all fours applicable in this case. This is so because in Ramos, prior
dismiss an employee on the ground of loss of trust and confidence under
to the dismissed employees appointment as an acting branch manager, he
Article 282 of the Labor Code of the Philippines, the following guidelines
was the branch cashier, the position next to the branch manager. The
must be followed:
positions of branch cashier and branch manager are positions endowed with
trust and confidence. Moreover, upon the appointment of Ramos as Officer-
1. The loss of confidence must not be simulated; In-Charge (OIC) branch manager, another person was appointed to serve as
OIC branch cashier. Thus, for that period of time, Ramos ceased to be a
2. It should not be used as a subterfuge for causes which are illegal, improper branch cashier when he was appointed as OIC branch manager. In this case,
or unjustified; however, the respondent continued to be a driver/helper when he was
designated as an acting salesman. Although barren of experience and
training as route salesman, the respondent had no choice but to comply with
3. It may not be arbitrarily asserted in the face of overwhelming evidence to the petitioners orders and tried his best to do the task assigned to him.
the contrary;
The ruling of the Court in Philippine Commercial International Bank v.
Jacinto,[35] is not also applicable in the present case. In that case, Jacinto was
4. It must be genuine, not a mere afterthought, to justify earlier action taken
a customer relations assistant and was assigned to act as an alternate FX
in bad faith; and
Teller when the FX Teller was not available. Both positions involved trust and
confidence. Moreover, the employee (Jacinto) was not dismissed but only
5. The employee involved holds a position of trust and confidence.[29] meted the penalty of suspension.

In its assailed resolution, the CA ruled:

In Sulpicio Lines, Inc. v. Gulde,[30] the Court emphasized that loss of
trust and confidence as a just cause for termination of employment is
premised on the fact that the employee concerned holds a position of That once, back in 1992, Ramirez had borrowed some empty
responsibility or trust and confidence. As such, he must be invested with bottles from a customer but later returned them the same day
confidence on delicate matters, such as the custody handling or care and and was suspended for it, or that he went AWOL several times in
protection of the property and assets of the employer. In order to constitute 1996 and thus was meted a suspension of 2 days, are the only
a just cause for dismissal, the act complained of must be work-related. It blemishes in his record of any significance. To our mind, coupled
with his present predicament, these could not justify such a
professed loss of confidence as to sever him from his
employment of 14 years.[36]

We agree with the CA. As the Court ruled in Pepsi-Cola Distributors of

the Philippines, Inc. v. NLRC:[37]

Moreover, private respondent was already penalized with suspensions in

some of the infractions imputed to him in this case, like sleeping while on
route rides, incomplete accomplishment of sales report and his failure to
achieve sales commitments. He cannot again be penalized for those
misconduct. The foregoing acts cannot be added to support the imposition
of the ultimate penalty of dismissal which must be based on clear and not
on ambiguous and ambivalent ground.

Considering the factual backdrop in this case, we find and so rule that
for his infractions, the respondent should be meted a suspension of two (2)


The Resolution of the Court of Appeals dated January 30, 2001 affirming the
assailed resolution of the NLRC is SET ASIDE. The Decision of the Court of
Appeals dated October 25, 2000 is AFFIRMED with the MODIFICATION that
the respondent is meted the penalty of Two (2) months suspension. No