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the additional one (1) salary payable every year, the same to be paid at the
ue thereon; rate of P26.30 instead of the following rate computed as follows:
4. office rentals at the rate of US$300.00 or its peso equivalent for
the use of his residence as office of Philmalay for the period July 1997 - P27.66 P1.36 - P7, 480.00
December 1, 1989 to July 1996; and
5. retention of the services of the law firm Quasha Ancheta Pena August 1997 - 29.33 3.02 - 16, 665.00
and Nolasco Law Firm, which was hired by respondents to
defend him in the illegal recruitment case filed against him in September - 32.39 - 6.09 - 33, 495.00
connection with his employment with respondents.[6]
In a letter dated January 19, 1998, respondent Philmalay retrenched October 1997 - 34.46 - 8.16 - 44, 880.00
petitioner effective January 20, 1998 and promised to pay him separation
benefits pursuant to the provisions of the Labor Code. [7] He was, however, November 1997 - 34.51 - 8.21 - 45, 155.00
offered a separation pay equivalent to four months only, or the total amount
of P578,600.00 (P144,650 x 4). The offer was not accepted by petitioner and December 1997 - 37.17 - 10.57- 59, 785.00
efforts to settle the impasse proved futile.
Petitioner filed with the Arbitration Branch of the National Labor P207,460.00
Relations Commission a complaint[8] for underpayment of wages and non-
payment of separation pay, sick leave, vacation leave and other benefits (c) 13th month pay for December 1997 computed as follows: December 1997
against respondents. P37.17 P10.57 P59,785.00.
On December 22, 1999, the Labor Arbiter rendered a decision [9] in
favor of petitioner, the dispositive portion of which reads: 2. To order respondents to pay jointly and severally the complainant the
PREMISES CONSIDERED, judgment is hereby rendered in favor of the
complainant and against the respondents, as follows: (a) Unused vacation and sick leaves from December 01, 1989 to December
31, 1997 based on the same salary, to be computed as follows:
1. To order respondents to pay jointly and severally the complainant, the
following: i) Vacation Leave Fifteen (15) days for every year of services x 9 years =
135 days
(a) Unpaid salary from January 1, 1998 to January 19, 1998, the same to be
computed in the following manner: 135 days % 26 working days a month

19 = days % 31 days of January 98 = 5.2 months

= 0.613 month x US$5,500.00 = US$28,600.00

= US$3,370.00 ii) Sick Leave Fifteen (15) Days for every [year] of service x 9 years = 135
(b) Underpayment of salary, the same to be computed at net US$5,500.00
or its peso-equivalent from July 1, 1997 to December 31, 1997, together with 135 days % 26 working days a month

= 5.2 months x US$5,500.00 / month 6) To order the respondents to pay jointly and severally the complainant in
the sum equivalent to ten percent (10%) of the total claim as and for
= US$28,600.00 attorneys fees.

3) To order respondents to pay jointly and severally the complainant his 7) Respondents counterclaims are hereby dismissed for lack of merit.
separation pay equivalent to one (1) month pay for very year of service at
the rate of US $5,500.00 or its peso equivalent from December 1, 1989 to SO ORDERED.[10]
January 19, 1998, computed as follows:
On appeal by respondents to the National Labor Relations Commission
9 years x US$5,500.00 = US$49,500.00 (NLRC), the Decision of the Labor Arbiter was modified by deleting the
awards of (1) US$3,370.00 representing unpaid salary for the period
4) To order respondents to pay jointly and severally the complainants other January 1, 1998 to January 19, 1998; (2) US$28,600.00 as vacation leave;
claims and benefits: (3) brand new car or its equivalent in the sum of P945,100.00; (4)
US$23,700.00 as office rentals for the period of December 1, 1989 to July
1996; (5) US$100,000.00 life insurance policy or the equivalent premium in
a) A brand new car (Galant super saloon) or its equivalent in the sum of the amount of US$24,628.50; (6) P2.5 million as moral damages; and (7)
P945,100.00; P2.5 million as exemplary damages. The NLRC likewise reduced the
amount of petitioners separation pay to US$44,400.00 after adjusting its
b) Office rentals for the use of his residence situated at No. 38 Don Wilfredo computation based on the length of service of petitioner which it lowered
St., Don Enrique Heights Diliman, Quezon City, [from] 01 December 1989 to from 9 years to 8 years; and by limiting the basis of the 10% attorneys fees
July 1996 at the rate of US$300.00 or its peso equivalent to US$23,700.00; to the total of the awards of underpayment of salary (P207,460.00),
13th month pay differential (P59,785.00) and cash equivalent of sick leave
c) Life insurance policy for US$100,000.00 from December 1, 1989 to (US$28,600.00) only, and excluding therefrom the award of separation pay
December 31, 1997, or if the same was not secured the premiums due in the amount of US$44,400.00. The decretal portion of the said
thereon for the above period, the same to be computed as follows: decision[11] states:

US$2,736.50 x 9 years = US$24,628.50 WHEREORE, premises considered, the Decision dated December 22, 1999
is hereby MODIFIED as follows:

d) The services of the Law firm of Quasha Ancheta Pea and Nolasco be
continued to be retained by the two (2) companies to represent complainant Respondents are hereby ordered to pay jointly and severally the
in the illegal recruitment case before the Regional Trial Court of Quezon complainant, the following:
City, Branch 96, docketed as Crim. Case No. Q-93-46421, entitled People of
the Philippines vs. Dr. Antonio B. Mangahas, et al., filed against him in (a) underpayment of salary as computed in the appealed Decision in the
connection with his employment by Leong Hup, or in default thereof to pay amount of P207, 460.00;
the attorneys fees of the new counsel, that may be hired by the complainant
to defend him in the said case estimated in the sum of P200,000.00, more or (b) 13th month pay differential as computed in the appealed Decision in the
less; amount of P59,785.00;

5) To order the respondents to pay jointly and severally the complainant (c) monetary equivalent of complainants sick leave as computed in the
moral damages in the sum of P2.5 million and exemplary damages of P2.5 appealed Decision in the amount of US$28,600.00;

(d) separation pay in the amount of US$44,000.00 as earlier computed in Decision dated 22 December 1999 penned by Labor Arbiter
this Decision; Ariel Cadiente Santos; and

(e) attorneys fees equivalent to ten (10%) percent of the total award based Memorandum of Appeal filed by the petitioner.
on the awards representing underpayment of salary, 13th month pay, [and]
Respondents are likewise directed to provide legal counsel to complainant THAT THE SUBJECT DOCUMENTS SOUGHT TO BE PRODUCED
as defendant in Criminal Case No. Q-93-46421. HAVE ACTUALLY BEEN REPRODUCED OR SUBSTANTIALLY
The awards of unpaid wages from June 1-19, 1998, vacation leave in the RESOLUTION FILED/SUBMITTED BEFORE IT.
amount of US$28,600, P945,000 for car, US23,700.00, for office rentals, life
insurance policy in the amount of US$100,000.00 and moral and exemplary 2. COURT OF APPEALS COMMITTED A GRAVE ABUSE OF
damages in the amount of 2.5 million pesos are hereby DELETED on DISCRETION IN DISMISSING THE PETITION, AND IN DENYING THE
Petitioner filed a motion for reconsideration, however, the same was WERE FLAWED, A PALPABLE OR PATENT ERROR, WHICH MAY BE
denied.[13] Undaunted, petitioner filed a petition for certiorari with the Court of SUMMARIZED, TO WIT:
Appeals, which was dismissed on January 28, 2002 for failure to attach to
the petition the following: (1) complainants (petitioner) Position Paper filed
before the Labor Arbiter; (2) Decision dated 22 December 1992 penned by (A) IN DECLARING THAT PETITIONER HAD RESIGNED FROM
Labor Arbiter Ariel Cadiente Santos; and (3) Memorandum of Appeal filed by HIS EMPLOYMENT, AND NOT RETRENCHED OR
On February 21, 2002, petitioner filed a motion for reconsideration, RESPONDENTS DATED JANUARY 19, 1998 GIVING
attaching thereto a copy of the Labor Arbiters decision and the pleadings he FORMAL NOTICE TO YOU (PETITIONER) OF YOUR
failed to attach to the petition. The Court of Appeals, however, denied TERMINATION DUE TO RETRENCHMENT EFFECTIVE
petitioners motion for reconsideration. Hence, the instant petition based on JANUARY 20, 1998.
the following grounds:
Complainants (petitioner) Position Paper filed before the FACT ADMITTED NO LESS BY PRIVATE RESPONDENTS OWN

MANAGER OR PHILMALAY) WHO EXECUTED AN AFFIDAVIT subsequently submitted a certified true copy of the decision of the MeTC, we

(2) PETITIONERS ENTITLEMENT AS PER CONTRACT TO A Petitioner is right that the MeTCs decision cannot be considered a disputed
BRAND NEW CAR (OR AT LEAST TO THE CASH EQUIVALENT decision. The phrase is the equivalent of ruling, order or decision appealed
THEREOF); $100,000.00 LIFE INSURANCE POLICY (OR IN DEFAULT from in Rule 32, 2 of the 1964 Rules made applicable to appeals from
THEREOF AT LEAST TO THE PREMIUMS THEREIN), AND OFFICE decisions of the then Courts of First Instance to the Court of Appeals by R.A.
RENTALS FOR THE USE OF THE PETITIONERS PRIVATE RESIDENCE No. 296, as amended by R.A. No. 5433. Since petitioner was not appealing
AS OFFICE OF RESPONDENTS. from the decision of the MeTC in her favor, she was not required to attach a
certified true copy but only a true or plain copy of the aforesaid decision of
(3) PETITIONER IS ENTITLED, TO MORAL AND EXEMPLARY the MeTC. The reason is that inclusion of the decision is part of the
DAMAGES DUE TO PRIVATE RESPONDENTS ACTS OF BAD FAITH IN requirement to attach to the petition for review other material portion of the
REQUIRING PETITIONER TO EXECUTE A LETTER OF RESIGNATION, record as would support the allegations of the petition. Indeed, petitioner
WHEN IN FACT HE WAS ADMITTEDLY TERMINATED THRU referred to the MeTC decision in many parts of her petition for review in the
RETRENCHMENT, AND ITS REFUSAL TO PAY HIM HIS VALID CLAIMS, Court of Appeals for support of her theory.
LETTER OF TERMINATION ISSUED BY PRIVATE RESPONDENTS. Nonetheless, the Court of Appeals should have reconsidered its dismissal of
petitioners appeal after petitioner submitted a certified true copy of the
(4) PETITIONERS ENTITLEMENT TO 10% OF THE TOTAL MeTCs decision. It was clear from the petition for review that the RTC
AMOUNT OF THE AWARD OF ATTORNEYS FEES AS PROVIDED FOR incurred serious errors in awarding damages to private respondents which
BY LAW AND AS PER PETITIONERS CONTRACT WITH COUNSEL, AND were made without evidence to support the award and without any
SICK LEAVE AND IN ORDERING PRIVATE RESPONDENT TO PROVIDE In Jaro v. Court of Appeals,[18] we applied the rule on substantial
LEGAL COUNSEL TO PETITIONER IN CRIM. CASE NO. Q-93-46421, compliance because the petitioner amended his defective petition and
WHEN THE SUBJECT CASE HAD ALREADY BEEN DISMISSED AT THE attached thereto the relevant annexes certified according to the rules.Thus
COUNSEL OF CHOICE FOR THE PURPOSE. There is ample jurisprudence holding that the subsequent and substantial
compliance of an appellant may call for the relaxation of the rules of
The issues for resolution are: (1) whether or not the Court of Appeals procedure. In Cusi-Hernandez vs. Diaz and Piglas-Kamao vs. National
erred in dismissing the petition; and (2) whether or not the decision of the Labor Relations Commission, we ruled that the subsequent submission of
Labor Arbiter should be reinstated. the missing documents with the motion for reconsideration amounts to
substantial compliance. The reasons behind the failure of the petitioners in
The allowance of the petition on the ground of substantial compliance these two cases to comply with the required attachments were no longer
with the Rules is not a novel occurrence in our jurisdiction. As consistently scrutinized. What we found noteworthy in each case was the fact that the
held by the Court, rules of procedure should not be applied in a very petitioners therein substantially complied with the formal requirements [19]
technical sense, for they are adopted to help secure, not override,
substantial justice.[15] In Ramos v. Court of Appeals,[16] the Court of Appeals
dismissed a petition for review of the decision of the Regional Trial Court The same leniency should be applied to the instant case considering
because the petitioner failed to attach to the petition a certified true copy of that petitioner subsequently submitted with his motion for reconsideration the
the Metropolitan Trial Courts decision in addition to the certified true copy of certified true copy of the Labor Arbiters decision, the complainants position
the assailed decision of the RTC. Holding that the Court of Appeals should paper and the respondents memorandum of appeal. Clearly, petitioner had
have given due course to the petition considering that petitioner demonstrated willingness to comply with the requirements set by the rules. If

we are to apply the rules of procedure in a very rigid and technical sense, as The length of service of petitioner, which the NLRC correctly reduced
the Court of Appeals did in this case, the ends of justice would be defeated. to 8 years, as well as the solidary liability of respondent corporations are no
longer assailed here. Whether petitioner is considered resigned on
The pleadings and documents filed extensively discussed the issues December 31, 1997 or retrenched on January 20, 1998, his length of
raised by the parties. Such being the case, there is sufficient basis to resolve employment reckoned from August 24, 1989 would still be 8
the instant controversy.[20] Labor laws mandate the speedy disposition of years. Moreover, respondents did not appeal from the decision of the NLRC
cases, with the least attention to technicalities but without sacrificing the and in fact sought its affirmance in their Opposition to the motion for
fundamental requisites of due process.[21] Remanding the case to the Court reconsideration[25] and Comment to the motion for reconsideration[26] filed
of Appeals will only frustrate speedy justice and, in any event, would be a before the NLRC and the Court of Appeals, respectively. So also, petitioner
futile exercise, as in all probability the case would end up with this is estopped from claiming that he was illegally dismissed and that his
Court.[22] We shall thus rule on the substantial claims of the parties. retrenchment was without basis. His request for benefits granted to
Was the termination of petitioners employment caused by retrenched employees during such time when respondent was in the
retrenchment or by voluntary resignation? process of retrenching its employees is tantamount to a recognition of the
existence of a valid cause for retrenchment. What remains to be resolved by
The Court finds that petitioners dismissal from service was due to the Court is the validity of the NLRCs deletion/modification of the awards of
retrenchment. This is evident from the termination letter sent by Philmalay to (1) unpaid salary; (2) vacation leave; (3) car and insurance policy/premiums;
petitioner, to wit (4) moral and exemplary damages; (5) reimbursement for expenses for legal
services; (6) rental payment; and (7) attorneys fees.
We regret to inform you that in view of the prevailing market conditions and As regards the award of unpaid salary, the NLRC was correct in
the continuous losses being incurred by the company, the management has holding that petitioner is not entitled to compensation from January 1, 1998
decided to cut down on expenses and prevent further losses through to January 19, 1998, because he was not able to prove that he rendered
retrenchment of some of our personnel effective January 19, 1998. services during said period. In the same vein, there is no basis in awarding
moral and exemplary damages, inasmuch as respondents were not shown
In compliance with the requirement of the law, this will serve as a formal to have acted in bad faith in initially refusing to award separation pay
notice to you of your termination due to retrenchment effective January 20, equivalent to 1 month salary for every year of service. Respondents even
1998. To provide you with sufficient time to seek alternative employment, offered to pay petitioner separation pay, albeit in an amount not acceptable
you need not report for work (unless otherwise requested) starting January to petitioner. Moral damages are recoverable only where the act complained
20, 1998. Notwithstanding the above mentioned affectivity date, you may of is tainted by bad faith or fraud, or where it is oppressive to labor, and done
come down to the office and receive your separation benefits pursuant to the in a manner contrary to morals, good customs, or public policy. Exemplary
Labor Code[23] damages may be awarded only if the act was done in a wanton, oppressive,
or malevolent manner.[27] None of these circumstances exist in the present
While it is true that petitioner tendered his resignation letter to
respondents requesting that he be given the same benefits granted by the The NLRC also correctly ruled that the car and insurance benefits are
company to resigned/retrenched employees, there is no showing that granted only during the course of employment; hence, they should not be
respondents accepted his resignation. Acceptance of a resignation tendered part of petitioners separation package. Likewise, petitioners claim for
by an employee is necessary to make the resignation effective. [24] No such payment of rental for the use of his house as office of Philmalay should be
acceptance, however, was shown in the instant case. What appears in the denied for having been ventilated in the wrong forum. Not all money claims
record is a letter terminating the services of petitioner due to retrenchment that may be asserted by an employee against his employer are within the
effective January 20, 1998. Verily, said letter should be interpreted as a non- jurisdiction of the NLRC. Money claims of workers which fall within the
acceptance of petitioners resignation effective December 31, 1997. As jurisdiction of Labor Arbiters are those which arise out of employer-employee
correctly pointed out by the Labor Arbiter, if respondents considered relationship. Obviously, the demand for rental payment is not a labor
petitioner resigned as of December 31, 1997, then there would be no need dispute; rather, it is based on contractual relations independent of employer-
to retrench him.

employee relationship. Hence, the jurisdiction thereon is with the regular paragraph 3 have nothing to do with the retrenchment benefits in paragraph
courts.[28] 4. Note that the 15-day vacation and sick leave with pay in paragraph 4(c)
are not qualified by the word unused. The 15-day vacation and sick leaves
Since respondents did not appeal from the decision of the NLRC, it is are granted to retrenched employees as part of the retrenchment benefits
presumed that they are satisfied with the adjudications therein, including the regardless of whether or not they have unused sick and vacation leaves at
order of NLRC directing them to provide legal services to petitioner in the the time of the retrenchment. Moreover, the applicability of the said
illegal recruitment case filed against the latter while he was still employed by provisions to petitioner was not disputed by respondents. They even invoked
respondents. This is in accord with the doctrine that a party who has not the same in manifesting conformity to the deletion by the NLRC of the award
appealed cannot obtain from the appellate court any affirmative relief other of 15-day vacation leave for every year of service. At any rate, any ambiguity
than the ones granted in the appealed decision. [29] Nonetheless, therein must be resolved strictly against the respondents, who drafted these
respondents cannot be ordered to reimburse the amount of P200,000.00 for provisions.[31] Hence, petitioner is entitled not only to 15 days sick leave but
the legal services of the law firm allegedly hired by petitioner because he also to 15 days vacation leave with pay
failed to establish that he indeed hired the services of a law firm and that he
spent P200,000.00 as a consequence thereof. The Labor Arbiters computation of petitioners 15-day sick leave pay
must be modified. The NLRC, which affirmed the Labor Arbiters decision,
Petitioner is, however, entitled to the award of vacation leave as part of reduced petitioners number of years of service from 9 to 8 years but it did
respondents retrenchment incentives. In granting sick leave but deleting not make the corresponding adjustment in the determination of petitioners
vacation leave benefits, the NLRC based its ruling on the affidavit of one Ms. sick leave pay which used 9 years as the basis in the computation
Rowena Lopez, a former personnel of Philmalay, viz: thereof. Accordingly, the awards of 15-day sick leave and 15-day vacation
leave for every year of service must be computed using 8 years as its basis.
3. That based on company policy and/or practice the rank-and-file
employees are entitled to 15-days vacation leave and 15-days sick Finally, the award of attorneys fees must also be modified. In Traders
leaves. However, the vacation leave must be availed of within the year or Royal Bank Employees Union-Independent v. National Labor Relations
applied to the remaining period of employment for those who resigned or go Commission,[32] it was held that there are two commonly accepted concepts
on terminal leave. In case of sick leaves all unused sick leaves are also of attorney's fees, the so-called ordinary and extraordinary. In its ordinary
commutable to cash; concept, an attorneys fee is the reasonable compensation paid to a lawyer
by his client for the legal services he has rendered to the latter. The basis of
this compensation is the fact of his employment by and his agreement with
4. That employees who were retrenched are entitled to the following the client. In its extraordinary concept, attorneys fees are deemed indemnity
incentives: for damages ordered by the court to be paid by the losing party in a
litigation. The instances where these may be awarded are those enumerated
(a) One (1) month additional leave with pay effective after their last in Article 2208 of the Civil Code, specifically par. 7 thereof which pertains to
day of employment to enable them to look for a new job; actions for recovery of wages, and is payable not to the lawyer but to the
client, unless they have agreed that the award shall pertain to the lawyer as
(b) Plus one (1) month separation pay for every year of service; and additional compensation or as part thereof. The extraordinary concept of
attorneys fees is the one contemplated in Article 111 of the Labor Code,
which provides:
(c) 15-days vacation leave and 15-days sick leave with pay as stated
in paragraph 3 hereof.[30]
Art. 111. Attorneys fees. (a) In cases of unlawful withholding of wages, the
culpable party may be assessed attorneys fees equivalent to ten percent of
The foregoing expressly states that a retrenched employee is entitled the amount of wages recovered
to 15-day vacation leave. Paragraph 4 is the retrenchment package granted
to retrenched employees, whereas paragraph 3 refers to the feasibility of
commutation of unused sick and vacation leaves. Except for the sentence The afore-quoted Article 111 is an exception to the declared policy of
entitling employees to vacation and sick leaves, the last 2 sentences in strict construction in the awarding of attorneys fees. Although an express
finding of facts and law is still necessary to prove the merit of the award,

there need not be any showing that the employer acted maliciously or in bad
faith when it withheld the wages. There need only be a showing that the
lawful wages were not paid accordingly, as in this case.[33]
In carrying out and interpreting the Labor Code's provisions and its
implementing regulations, the employees welfare should be the primordial
and paramount consideration. This kind of interpretation gives meaning and
substance to the liberal and compassionate spirit of the law as provided in
Article 4 of the Labor Code which states that [a]ll doubts in the
implementation and interpretation of the provisions of [the Labor] Code
including its implementing rules and regulations, shall be resolved in favor of
labor, and Article 1702 of the Civil Code which provides that [i]n case of
doubt, all labor legislation and all labor contracts shall be construed in favor
of the safety and decent living for the laborer.[34]
In the case at bar, what was withheld from petitioner was not only his
salary, vacation and sick leave pay, and 13th month pay differential, but also
his separation pay. Hence, pursuant to current jurisprudence, separation pay
must be included in the basis for the computation of attorneys
fees. Petitioner is entitled to attorneys fees equivalent to 10% of his total
monetary award.[35]
WHEREFORE, in view of all the foregoing, the instant petition is
GRANTED. The assailed Resolutions dated January 28, 2002 and July 22,
2002 of the Court of Appeals in CA-G.R. SP No. 67431, are REVERSED
and SET ASIDE. The Decision of the National Labor Relations Commission
in NLRC NCR CA 023679-2000, is MODIFIED. In addition to the awards of
underpayment of salary, 13th month pay differential, sick leave pay and
separation pay, respondents are ordered to pay petitioner vacation leave
pay and 10% attorneys fees, the basis of which shall be the total monetary
award. Petitioners vacation leave and sick leave pay shall be computed on
the basis of his 8 years of service with respondents. For this purpose, the
case is ordered REMANDED to the Labor Arbiter for the computation of the
amounts due petitioner.

(CA), which affirmed the June 16, 1998 Decision of the National Labor
Relations Commission (NLRC).[3]

The Facts

The facts as related by petitioner in his Memorandum [4] are hereunder

reproduced as follows:

Petitioner was employed as a helper/operator of private respondent since

November 8, 1990. From November 23, 1993 until December 5, 1993, he
took a sick leave. When he reported back to work on December 6, 1993, he
was surprised to find out that another worker was recruited to take his place,
and instead, he was transferred to [the] wrapping section where he was
required to work with overtime up to 9:30 PM, from his regular working hours
of from 7:00 a.m., to 4:00 p.m., despite the fact that he had just recovered
from illness. On December 7, 1993, he was given a new assignment where
[G.R. No. 140812. August 28, 2001] the work was even more difficult[;] when he complained o[f] what he felt was
rude treatment or sort of punishment since he was being exposed to hard
labor notwithstanding his predicament of just coming from sickness,
petitioner was told to look for another job because he was dismissed
effective on said date, December 7, 1993, when petitioner was seeking his
CANDIDO ALFARO, petitioner, vs. COURT OF APPEALS, NATIONAL 13th month pay and fifteen (15) days sick leave pay [o]n the afternoon of the
LABOR RELATIONS COMMISSION and STAR PAPER same day, he was ignored when he refused to sign documents which
CORPORATION, respondents. indicated that he was renouncing claims against private respondent. Before
Christmas of 1993, petitioner sought private respondent to pay his 13th
DECISION month pay and [his] 15 days sick leave pay, but he was told to come next
On January 12, 1994, petitioner came to private respondent for his
Generally, separation pay need not be paid to an employee who aforestated money claims. During that occasion, private respondent dangled
voluntarily resigns. However, an employer who agrees to expend such to petitioner a check worth P3,000.00 which [would] be released to him, only
benefit as an incident of the resignation should not be allowed to renege in if he [signed] the documents, being forced upon him to sign on December 7,
the performance of such commitment. 1993. Deperate for the money to support his subsistence, and against his
will, petitioner was constrained to sign the said documents which contained
no amount of money released to him. The actual sum of money received by
petitioner from private respondent amounted to P3,000.00 in the form of
The Case
check, while his claims for 15 days sick leave pay was secured by him from
the Social Security System.
Before us is a Petition for Review on Certiorari[1] under Rule 45 of the
Rules of Court, seeking to set aside the Decision [2] of the Court of Appeals The documents forced upon the petitioner to sign were a resignation letter,
and a Release and Quit Claim. Said resignation letter read, thus:

To the Personal Manager On January 12, 1994, complainant went to the respondent corporation to
Mr. Michael Philip Elizalde claim his 13th month pay and his 15 days sick leave pay. He received the
Star Paper Corporation amount of P3,000.00 but he was allegedly pressured to sign a Quitclaim and
46 Joy St., Grace Village, Q.C. Release with no amount or consideration written on said document. Further,
complainant also alleges that he was also made to sign a prepared
Dear Sir, resignation letter in exchange for the P3,000.00 which he received which
[was] contrary to the claim of the respondent corporation that he
received P8,452.00.
Ako po si Candido Alfaro ay nagbibigay ng aking resignation letter dahilan
po sa aking sakit. Umaasa po ako na mabigyan ng tulong.
On June 14, 1996, the complainant filed a case against the respondent
corporation for non-payment of separation pay. Said complaint was later
Lubos na gumagalang amended on August 1, 1996 by claiming illegal dismissal and damages in
(sgd) Candido Alfaro lieu of separation pay, with a prayer for reinstatement with backwages and
attorneys fees.
As submitted by private respondent in its pleadings on record, petitioner
allegedly tendered said resignation letter on January 12, 1994, on the basis On the other hand, respondent corporation maintains that complainant while
of which, the former maintains that the latter was not illegally dismissed, was still under its employ contracted PTB Minimal Active for which reason he
paid [his] separation pay of P8,455.50, and that he voluntarily resigned from applied for SSS benefits on November 25, 1993. Considering his illness,
his job effective January 12, 1994.[5] complainant asked the respondent corporation that he be allowed to resign
with benefits. After getting a favorable reply, complainant submitted a
Private respondent, in its Memorandum[6], adopts Labor Arbiter Donato resignation letter to the respondent corporation on January 12, 1994.
Quintos findings of fact as follows:
Because of his request for help, separation benefits were likewise given to
Complainant alleges that he was hired by respondent corporation in complainant in the amount of P8,452.50 Complainant, upon receipt of said
November 1990 [as] the latters machine tape operator. Thereafter, or in the benefits, executed a Release and Quitclaim in favor of respondent
month[s] of September and October, 1993, he was suffered to do some corporation.
painting work on pallets guide using [a] spray gun. As a result, in the third
week of October, 1993 he felt general body weakness coupled with constant
coughing and fever.
The CA Ruling
As a consequence of his illness, complainant alleges that he took a vacation
leave from November 22, 1993 to December 5, 1993. However, upon
In denying petitioners claims, the CA ruled as follows:
reporting for work on December 6, 1993, complainant was surprised to find
out that somebody was already recruited to take his place. Instead, he was
transferred to the wrapping section. It is not easy to uphold petitioners submission. For, the Labor Arbiters report
to the National Labor Relations Commission shows that petitioner resigned
voluntarily. Thus, as written in the letter of resignation:
On December 7, 1993, complainant complained of the work being given to
him for being difficult which was interpreted as some sort of a punishment
given to him by the respondent. As a result thereof, complainant alleges that Ako po si candido Alfaro ay nagbibigay ng aking resignation dahilan po sa
he was dismissed without valid cause and without due process of law. He aking sakit.
further alleges that he was not paid his 13th month pay and 15 days sick
leave which he was claiming because he refused to sign a document Umaasa po ako na mabigyan ng tulong.
renouncing all his claim[s] against respondent corporation.

The same report likewise mentioned the Quitclaim and Release (Annex 2, of The Courts Ruling
private respondents position paper) which further strengthened the fact that
petitioner resigned due to his ailment. If petitioners concatenation is true that
he was forced to sign the resignation letter against his better judgment, then The Petition has no merit.
why should he also sign the quitclaim and release[?]

We find no reason to reverse and set aside the findings and

Main Issue: Illegal Dismissal and Separation Pay
recommendation of the Labor Arbiter, and affirmed by the NLRC. As a quasi-
judicial body, the findings of the NLRC deserve respect, even finality (M.
Ramirez Industries vs. Secretary of Labor, 266 SCRA 111; Bataan Shipyard
and Engineering Corporation vs. NLRC, 269 SCRA 199; Naguiat vs. NLRC, At the outset, it bears stressing that in a petition for review on certiorari,
269 SCRA 564; Conti vs. NLRC, 271 SCRA 114.) the scope of the Supreme Courts judicial review of decisions of the Court of
Appeals is generally confined only to errors of law[9]; questions of fact are not
entertained.[10] Thus, only questions of law may be brought by the parties
Hence, this recourse.[7] and passed upon by this Court in the exercise of its power to review. [11]
The Supreme Court is not a trier of facts, and this doctrine applies with
greater force in labor cases.[12] Factual questions are for the labor tribunals
The Issues to resolve.[13] In this case, the factual issues have already been determined
by the labor arbiter and the National Labor Relations Commission. Their
findings were affirmed by the CA. Judicial review by this Court does not
Petitioner submits the following issues for the consideration of this extend to a reevaluation of the sufficiency of the evidence upon which the
Court: proper labor tribunal has based its determination.[14]
1.) Whether or not the Honorable Court of Appeals committed Indeed, factual findings of labor officials who are deemed to have
grave abuse of discretion tantamount to lack or x x x excess acquired expertise in matters within their respective jurisdictions are
of jurisdiction and/or serious reversible error in holding that generally accorded not only respect, but even finality, and are binding on the
petitioner was not illegally dismissed by private respondent; Supreme Court.[15] Verily, their conclusions are accorded great weight upon
appeal, especially when supported by substantial
2.) Whether or not the Honorable Court of Appeals committed evidence.[16] Consequently, the Supreme Court is not duty-bound to delve
grave abuse of discretion tantamount to lack of or x x x into the accuracy of their factual findings, in the absence of a clear showing
excess of jurisdiction, and/or serious reversible error in that the same were arbitrary and bereft of any rational basis. [17]
holding that petitioner voluntarily resigned from employment
The factual findings of the labor arbiter and the NLRC, as affirmed by
3.) Whether or not the Honorable Court of Appeals committed the CA, reveal that petitioner resigned from his work due to his illness, with
grave abuse of discretion tantamount to lack of or x x x the understanding that private respondent would give him separation
excess of jurisdiction and/or reversible error in holding that the pay.Unfortunately, it seems that private respondent did not keep its promise
finding of the NLRC, deserve respect and even finality despite to grant the separation pay, prompting petitioner to institute the present
serious flaws in its appreciation of facts and evidence; action for illegal dismissal. It was only for this reason that the Court gave due
4.) Whether or not the Honorable Court of Appeals committed course to this Petition.
grave abuse of discretion tantamount to lack of or x x x Generally, an employee who voluntarily resigns from employment is
excess of jurisdiction, and/or serious reversible error in not entitled to separation pay.[18] In the present case, however, upon the
dismissing the petition for certiorari[8] request of petitioner, private respondent agreed to a scheme whereby the
former would receive separation pay despite having resigned
voluntarily. Thus, the terms and conditions they both agreed upon

constituted a contract freely entered into, which should be performed in good Hence, the termination of the employment relations of petitioner with
faith, as it constituted the law between the parties. private respondent was ultimately, if not outrightly inevitable. Resignation
with separation pay was the best option for him under the
Not all waivers and quitclaims are invalid as against public policy. If the circumstances. Rightly so, this was the mode adopted and agreed upon by
agreement was voluntarily entered into and represented a reasonable the parties, as evidenced by the Release and Quitclaim petitioner executed
settlement, it is binding on the parties and may not later be disowned, simply in connection with his resignation.
because of a change of mind.[19] The position taken by petitioner on the
alleged illegal dismissal was vacillating and indecisive, as correctly found by Clearly then, the claim of petitioner that he was illegally dismissed
the labor arbiter who provided a ratiocination on the matter as follows: cannot be sustained, considering that his voluntary resignation has been
indubitably established as a fact by the three tribunals below. Indeed, illegal
Thus, after a careful perusal of the evidence on hand, we are of the opinion dismissal and voluntary resignation are adversely opposed modes of
that the position taken by the respondent corporation is more credible than terminating employment relations, in that the presence of one precludes that
that of complainant. This is evident from the fact that the complaint filed by of the other.
complainant on June 14, 1996, or more than two (2) years from his alleged Although the Supreme Court has, more often than not, been inclined
dismissal on December 7, 1993, was only payment of separation pay. It was towards the workers and has upheld their cause in their conflicts with the
only on August 1, 1996 when complainant abandoned his claim for employers, such inclination has not blinded it to the rule that justice is in
separation pay and instead filed an amended complaint claiming that he every case for the deserving, to be dispensed in the light of the established
was, illegally dismissed. facts and applicable law and doctrine.[22] An employee who resigns and
executes a quitclaim in favor of the employer is generally estopped from
To our mind, therefore, the foregoing coupled with the fact that there is filing any further money claims against the employer arising from the
practically no evidence on record which shows that complainant was employment.[23]
pressured and made to sign a resignation letter and Release and Quitclaim
against his will [and] better judgment only shows that his claim of illegal However, private respondent has not complied with its obligation to
dismissal is unsubstantiated and is a mere afterthought. give petitioners separation pay in the amount of P8,542.50. It was this
deliberate withholding of monetary benefits that necessitated the long,
litigious and lethargic proceedings in this case. Had private respondent
Moreover, if indeed complainant was illegally dismissed, he should have simply paid the measly amount of P8,452.50 as separation pay to petitioner,
pursued his claim against the respondent corporation by immediately filing a this legal controversy could have been avoided and the court dockets
complaint for illegal dismissal. As it is, however, complainant filed a unclogged.
complaint for separation pay against the respondent corporation only after
two (2) years from his alleged dismissal which complaint was amended for WHEREFORE, the Petition is hereby DENIED and the assailed
the purpose of claiming illegal dismissal almost two (2) months thereafter. [20] Decision of the Court of Appeals AFFIRMED, with the modification that
private respondent is directed to pay petitioner P8,452.50 plus legal interest
Voluntary resignation is defined as the act of an employee, who finds thereon, computed from December 7, 1993, until fully paid, representing the
himself in a situation in which he believes that personal reasons cannot be unpaid separation pay benefit agreed upon by the parties.
sacrificed in favor of the exigency of the service; thus, he has no other SO ORDERED.
choice but to disassociate himself from his employment. [21] As discussed
above, petitioner negotiated for a resignation with separation pay as the
manner in which his employment relations with private respondent would
end. He was already suffering from a lingering illness at the time he
tendered his resignation. His continued employment would have been
detrimental not only to his health, but also to his performance as an
employee of private respondent.

Petitioner GLOBE TELECOM, INC. (GLOBE) is a corporation duly

organized and existing under the laws of the
Philippines. Petitioners Delfin Lazaro Jr. was its President and Roberto
Galang its former Director-Regional Sales. Respondent Joan Florendo-
Flores was the Senior Account Manager for Northern Luzon.
On 1 July 1998 Joan Florendo-Flores filed with the Regional Arbitration
Branch of the National Labor Relations Commission (NLRC) an amended
complaint for constructive dismissal against GLOBE, Lazaro, Galang, and
Cacholo M. Santos, her immediate superior, Luzon Head-Regional Sales. In
her affidavit submitted as evidence during the arbitration proceedings,
Florendo-Flores bared that Cacholo M. Santos never accomplished and
submitted her performance evaluation report thereby depriving her of salary
increases, bonuses and other incentives which other employees of the same
rank had been receiving; reduced her to a house-to-house selling agent
(person-to-person sales agent or direct sales agent) of company products
("handyphone") despite her rank as supervisor of company dealers and
agents; never supported her in the sales programs and recommendations
she presented; and, withheld all her other benefits, i.e., gasoline allowance,
per diems, representation allowance, and car maintenance, to her extreme
pain and humiliation.[3]
GLOBE and its co-petitioners claimed that after receiving her salary in
the second week of May 1998 Florendo-Flores went AWOL (Absent Without
Leave) without signifying through letter or any other means that she was
[G.R. No. 150092. September 27, 2002] resigning from her position; that notwithstanding her absence and the filing
of her case, respondent Florendo-Flores' employment was not terminated as
shown by the fact that salary was still provided her until July
1998 to be released upon her presentation of the attendance-record sheet
indicating that she already returned and reported for work; that she
GLOBE TELECOM, INC., DELFIN LAZARO, JR., and ROBERTO continued to have the use a of company car and company "handyphone"
GALANG, petitioners, vs. JOAN FLORENDO- unit; that she was replaced only when her absence became indefinite and
FLORES, respondent. intolerable as the marketing operations in Northern Luzon began to suffer;
that during the pre-trial conference it was learned that Florendo-Flores'
DECISION complaint rested on her alleged personal and private disagreement with her
immediate superior Cacholo M. Santos; that there was no official act from
BELLOSILLO, J.: GLOBE or from other officers of the company, including respondents Lazaro
and Galang, which called for Florendo-Flores' termination, diminution in
This is a petition for review under Rule 45 of the Rules of Court seeking rank, seniority and benefits, or would imply, even remotely, any of the same;
to annul and set aside the Decision[1] of the Court of Appeals of 25 May 2001 and, that Florendo-Flores filed the complaint without going through the
in CA-G.R. SP No. 60284 which affirmed the Decision of the National Labor grievance process of GLOBE's Human Resources Department and without
Relations Commission of 28 January 2000 in NLRC RAB-CAR 05-0170-98, informing its officers of her problems with Cacholo M. Santos.
NLRC NCR CA No. 020270-99.[2] Labor Arbiter Monroe C. Tabingan declared Florendo-Flores to have
been illegally dismissed and ordered petitioners to reinstate her without loss
of seniority rights and full benefits; and to pay full back wages, inclusive of

basic pay, allowances and bonuses as prayed for in the complaint conclusive, can the Court of Appeals alter or substitute the findings of fact of
amounting to P307,625.00, exemplary damages in the sum of P200,000.00, the lower court/tribunal? In the face of the finding of the NLRC that
and ten percent (10%) of the total monetary award as attorney's respondent abandoned her employment because of a personal squabble
fees. However, the Labor Arbiter set aside the claim of abandonment as the with her immediate superior, and that petitioners had nothing to do with the
company failed to send the requisite notice to Florendo-Flores,[4] hence, severance of Flores' employment, can petitioners be held legally liable for
there was no adherence to procedural due process.Although he recognized back wages while the guilty party Cacholo M. Santos is legally absolved of
that the problem brewed and eventually boiled over due to the acts of liability?
Cacholo M. Santos, GLOBE's former Head of Regional Sales, Luzon Area,
the Labor Arbiter found the company negligent in monitoring all its key Petitioners submit that the answers to both questions must be in the
personnel, and thus assessed against it exemplary damages at the same negative. They argue that the appellate court can neither alter nor substitute
time deleting actual and moral damages.[5] the factual findings of the NLRC as they are legally deemed to be final and
conclusive in a certiorari proceeding. They contend that a special civil action
Petitioners appealed the decision to the NLRC which modified the for certiorari is an extraordinary remedy created not to correct mistakes in
judgment of the Labor Arbiter. The NLRC ruled that petitioners did not the factual findings or conclusions of the lower court or tribunal, but a
dismiss Florendo-Flores but that the latter actually abandoned her remedy intended to rectify jurisdictional errors and grave abuse of
employment because of a disagreement with her immediate superior which discretion. Thus, the Court of Appeals cannot make its own factual findings
she failed to bring to the attention of GLOBE and its officers, particularly and substitute them for the factual findings of the NLRC, and on such basis
petitioners Lazaro and Galang.[6] However, the NLRC declared that if only as render a decision.
an act of grace for the latter's past services with the company, GLOBE,
Lazaro and Galang should be held accountable for the back wages of Petitioners further note that the appellate court failed to address the
Florendo-Flores amounting to P307,625.00 minus the amount of P63,000.00 issues raised in their petition. They reiterate their position that they cannot
for the value of the company car in Florendo-Flores' possession, or the net be held liable for payment of back wages as an act of grace in view of the
amount of P244,625.00.[7] express finding by the NLRC that respondent abandoned her employment
because of a personal rift with her immediate superior and not due to any act
Both parties elevated the NLRC decision to the Court of Appeals, each attributable to them. They stress that there can be no liability in the absence
side through a petition for certiorari. In its Resolution of 2 September 2000 of any wrongful act.
the appellate court dismissed the petition of Florendo-Flores for failure to
append the required verification and certification of non-forum Invoking the principle of res inter alios acta declaring that the rights of a
shopping,[8] while it gave due course to the petition of GLOBE, Lazaro and party cannot be prejudiced by the act, declaration or omission of another,
Galang. petitioners insist that since the NLRC found that respondent's problems
arose from the acts and deeds of Santos, he alone should be held
In their petition before the appellate court, GLOBE, Lazaro and Galang liable. Petitioners find special exception to the NLRC's application of the
averred that the NLRC committed grave abuse of discretion amounting to concept of "act of grace" to justify the award since an "act of grace is not a
lack or excess of jurisdiction when it ordered them to pay Florendo-Flores source of demandable obligation. They argue that it is not within the power
full back wages and damages despite its express finding that they did not of any judicial or administrative agency to compel an employer to be liberal.
cause the dismissal of Florendo-Flores as the latter had actually abandoned
her employment on account of her personal differences with her superior. In the review of an NLRC decision through a special civil action for
certiorari, resolution is confined only to issues of jurisdiction and grave
In its Decision of 25 May 2001 the Court of Appeals found that abuse of discretion on the part of the labor tribunal. [9] Hence, the Court
Florendo-Flores was constructively dismissed and that payment of back refrains from reviewing factual assessments of lower courts and agencies
wages and damages was in order. On 21 June 2001 GLOBE, Lazaro and exercising adjudicative functions, such as the NLRC. Occasionally, however,
Galang filed a motion for reconsideration but the motion was denied in the the Court is constrained to delve into factual matters where, as in the instant
appellate court's Resolution of 19 September 2001. case, the findings of the NLRC contradict those of the Labor Arbiter.
Petitioners pose the following questions in this petition: In a special civil In this instance, the Court in the exercise of its equity jurisdiction may
action for certiorari where factual findings are deemed to be final and look into the records of the case and re-examine the questioned

findings.[10] As a corollary, this Court is clothed with ample authority to review her to house-to-house sales or direct sales; and withholding from her the
matters, even if they are not assigned as errors in their appeal, if it finds that enjoyment of bonuses, allowances and other similar benefits that were
their consideration is necessary to arrive at a just decision of the necessary for her efficient sales performance. Although respondent
case.[11] The same principles are now necessarily adhered to and are continued to have the rank of a supervisor, her functions were reduced to a
applied by the Court of Appeals in its expanded jurisdiction over labor cases mere house-to-house sales agent or direct sales agent. This was tantamount
elevated through a petition for certiorari; thus, we see no error on its part to a demotion. She might not have suffered any diminution in her basic
when it made anew a factual determination of the matters and on that basis salary but petitioners did not dispute her allegation that she was deprived of
reversed the ruling of the NLRC. all benefits due to another of her rank and position, benefits which she
apparently used to receive.
Glaring however is the discrepancy between the text of the decision of
the appellate court which declares that respondent Florendo-Flores "was Far from pointing to Santos alone as the source of her woes,
unlawfully constructively dismissed" from employment, [12] and its dispositive respondent attributes her degraded state to petitioners as well. Florendo-
portion which declares that "the assailed judgment is Flores cited petitioners' apathy or indifference to her plight as she was twice
affirmed."[13] It should be noted that the "assailed judgment" referred to the left out in a salary increase in August 1987 and May 1998, without
NLRC Decision which declared that respondent was not illegally dismissed petitioners giving her any reason.[17] It eludes belief that petitioners were
but that she abandoned her employment. Even in the award of back wages entirely in the dark as the salary increases were granted to all
and exemplary damages the two (2) decisions are at odds: The award of employees across-the-board but respondent was the only one left receiving
back wages made by the NLRC was a gratuity or an act of grace from a P19,100.00 per month basic salary while the rest received a basic salary
petitioners while the award made by the Court of Appeals could be assumed of almost P35,000.00 per month.[18] It is highly improbable that the exclusion
to be anchored on its finding of illegal dismissal. How should the of respondent had escaped petitioners' notice. The absence of an evaluation
inconsistency be reconciled? report from Santos should have been noted by petitioners and looked into for
proper action to have been made. If a salary increase was unwarranted,
Where there is conflict between the dispositive portion of the decision then it should have been sufficiently explained by petitioners to respondent.
and the body thereof, the dispositive portion controls irrespective of what
appears in the body.[14] While the body of the decision, order or resolution Petitioners argue that respondent Florendo-Flores could have brought
might create some ambiguity in the manner the court's reasoning to their attention the deplorable treatment she received from Santos by
preponderates, it is the dispositive portion thereof that finally invests rights resorting to the company's grievance machinery so that the problems in her
upon the parties, sets conditions for the exercise of those rights, and relationship with Santos could then have been easily ironed out, but she did
imposes the corresponding duties or obligations.[15] Hence, for the Court of not. It remains uncontroverted that respondent had inquired from petitioners
Appeals to have affirmed the assailed judgment is to adopt and uphold the the reason why her other benefits had been withheld and sought clarification
NLRC finding of abandonment and its award of full back wages to for her undeserved treatment but petitioner company and Santos remained
respondent as an "act of grace" from petitioners. mum.[19]
However, we believe this is not the proper view as the records reveal Thus, contrary to the observation of the NLRC, the dispute was not a
that respondent was constructively dismissed from service. mere private spat between respondent Florendo-Flores and her immediate
superior Santos. Granting that this was the case, it had exceeded the
Constructive dismissal exists where there is cessation of work because periphery of simple personal affairs that overflowed into the realm of
"continued employment is rendered impossible, unreasonable or unlikely, as respondent's employment.
an offer involving a demotion in rank and a diminution in pay." [16] All these
are discernible in respondent's situation. She was singularly edged out of Respondent narrates that sometime in June 1997 Santos wrote her a
employment by the unbearable or undesirable treatment she received from baseless accusatory letter, and he together with GLOBE Sales Director
her immediate superior Cacholo M. Santos who discriminated against her Roberto Galang, one of petitioners herein, verbally told her that she should
without reason - not preparing and submitting her performance evaluation resign from her job, but she refused.[20] Thereafter, in July 1997 and the
report that would have been the basis for her increased salary; not months subsequent thereto all of respondent's other benefits were withheld
forwarding her project proposals to management that would have been the without any reason nor explanation from the company. [21] Even as petitioners
source of commendation; diminishing her supervisor stature by assigning endeavored to lay the blame on Santos alone, he would not have been able

to single-handedly mastermind the entire affair as to influence Sales Director It should be noted that the award of back wages in the instant case is
Galang and manipulate the payroll. It only stands to reason that Santos was justified upon the finding of illegal dismissal, and not under the principle of
acting pursuant to a management directive, or if not, then petitioners had "act of grace" for past services rendered. There are occasions when the
condoned it, or at the very least, were negligent in supervising all of their Court exercises liberality in granting financial awards to employees, but even
employees.As aptly observed by the Labor Arbiter - then they contemplate only the award of separation pay and/or financial
assistance, and only as a measure of social justicewhen the circumstances
x x x x it would appear however that the respondent company was negligent of the case so warrant, such as instances of valid dismissal for causes other
in monitoring all its key personnel. For it is the bounden duty of the corporate than serious misconduct or those reflecting on the employees' moral
officialdom to constantly monitor their managerial staff if only to ascertain the character.[27] Proper regard for the welfare of the labor sector should not
smooth flow of work and operations, which includes the inter-personal dissuade us from protecting the rights of management such that an award of
relations of each and every key segment of the corporate machinery. For back wages should be forthcoming only when valid grounds exist to support
such, it must be assessed with just and reasonable exemplary damages. [22] it.
An award of actual and moral damages is not proper as the dismissal
The unauthorized absence of respondent should not lead to the drastic is not shown to be attended by bad faith, or was oppressive to labor, or done
conclusion that she had chosen to abandon her work. To constitute in a manner contrary to morals, good customs or public policy. [28] Exemplary
abandonment, there must be: (a) failure to report for work or absence damages are likewise not proper as these are imposed only if moral,
without valid or justifiable reason; and, (b) a clear intention, as manifested by temperate, liquidated or compensatory damages are awarded.[29]
some overt act, to sever the employer-employee relationship,[23] requisites
that are negated by the immediate filing by respondent Florendo-Flores of a WHEREFORE, the judgment appealed from is MODIFIED. The
complaint for constructive dismissal against petitioners. A charge of Decision of the Court of Appeals of 25 May 2001 in CA-G.R. SP No. 60284
abandonment is totally inconsistent with the immediate filing of a complaint affirming the Decision of the National Labor Relations Commission of 28
for illegal dismissal; more so, when it includes a prayer for reinstatement. [24] January 2000 declaring that respondent Joan Florendo-Flores had
abandoned her work is SET ASIDE. Petitioners Globe Telecom, Inc., Delfin
The reduction of respondent's functions which were originally Lazaro, Jr., and Roberto Galang are ordered to pay respondent Joan
supervisory in nature to a mere house-to-house sales agent or direct sales Florendo-Flores full back wages from the time she was constructively
agent constitutes a demotion in rank. For this act of illegal dismissal, she dismissed on 15 May 1998 until the date of her effective reinstatement,
deserves no less than full back wages starting from the time she had been without qualification or deduction. Accordingly, petitioners are ordered to
illegally dismissed until her actual reinstatement to her former position cause the immediate reinstatement of respondent to her former position,
without loss of seniority rights and other benefits - earned, accrued and without loss of seniority rights and other benefits. No pronouncement as to
demandable. She shall continue to enjoy her benefits, privileges and costs.
incentives including the use of the company car and "handyphone."
The managerial prerogative to transfer personnel must be exercised
without grave abuse of discretion. It must always bear in mind the basic
elements of justice and fair play. Having the right should not be confused
with the manner that right is exercised. Thus, it cannot be used as a
subterfuge by the employer to rid himself of an undesirable worker.[25]
In constructive dismissal, the employer has the burden of proving that
the transfer and demotion of an employee are for just and valid grounds
such as genuine business necessity.[26] The employer must be able to show
that the transfer is not unreasonable, inconvenient, or prejudicial to the
employee. It must not involve a demotion in rank or a diminution of salary
and other benefits. If the employer cannot overcome this burden of proof, the
employee's demotion shall be tantamount to unlawful constructive dismissal.


This case arose from a complaint for illegal dismissal, underpayment

of salaries and wages, overtime pay, holiday pay, 13th month pay and
service incentive leave pay filed by respondent Virgilio D. Dapiton against
petitioner Philippine Industrial Security Agency Corporation and its
President, Isidro Lirag.
The evidence for petitioner shows that on November 2, 1990 petitioner
hired respondent as a security guard. His initial assignment was at PCIBank
in Kalookan City. During his tour of duty at PCIBank on January 25, 1994,
respondent had a heated argument with his fellow security guard, Roderick
Lumen. The incident almost led to a shootout. After investigation, petitioners
chief investigator recommended their dismissal. Lumen was compelled to
resign while respondent was suspended from work for seven (7) days.
Petitioner alleged that respondent did not serve his suspension and
instead went on a leave of absence. Nonetheless, he was assigned at the
BPI Family Bank in Navotas when he reported back for duty. Allegedly,
respondent refused to accept his assignment.
In March 1994, respondent was assigned at Sevilla Candle Factory in
Malabon. Three (3) weeks later, he abandoned his post and went on
absence without leave (AWOL).
Respondent was given another assignment at Security Bank and Trust
Company. He was required to report for an interview and to undergo a
neurological examination. Respondent refused and allegedly again went on
On April 15, 1994, petitioner sent a telegram to respondent to report to
its office for a conference. Respondent did not show up. Instead, on April 22,
1994, respondent filed the present illegal dismissal case.
Respondent denied petitioners allegations. He claimed that after he
served his suspension, he was assigned at BPI Family Bank in Navotas. He
[G.R. No. 127421. December 8, 1999] accepted the new post. However, after a short period, he was relieved and
was transferred to the Mercury Drugstore in Grand Central, Kalookan
City. Again, after a brief tour of duty, he was relieved.
In March 1994, he was posted at Sevilla Candle Factory. While on
PHILIPPINE INDUSTRIAL SECURITY AGENCY duty, he witnessed some shabu dealers doing their illegal trade. Fearful for
CORPORATION, petitioner, vs. VIRGILIO DAPITON and the his life, he left his post and requested petitioner to transfer him to another

He admitted that his assignment at Security Bank did not materialize scheme of petitioner to ease out respondent from work. The labor arbiter
for he failed to take the neurological test. He explained he could not pay the ordered respondents reinstatement with payment of backwages. Moreover,
examination fee in the amount of P250.00. He asked petitioner to pay the petitioner and its president, Isidro Lirag, were required to pay the sum
said amount but it refused. of P74,844.24, representing respondents wage differential, overtime pay,
13th month pay and night shift differential.
Respondent alleged that thereafter, he was reduced to a mere reliever
of absent security guards and was frequently transferred from one post to Petitioner and Lirag appealed to the NLRC.
another. His last assignment was at the Philippine Savings Bank (PSB) in
Makati. It lasted for only one (1) day. Since April 13, 1994, he was not given The NLRC dismissed the appeal, albeit respondent Isidro Lirag was
any assignment. He reported to petitioners office regularly for his posting but held not liable for the money claims of respondent. The fallo of the NLRC
to no avail. Consequently, on April 22, 1994, he sued petitioner for illegal decision reads:[6]
dismissal and asked for separation pay. The case was docketed as NLRC-
NCR Case No. 00-04-03291-94. WHEREFORE, the appealed Decision is hereby AFFIRMED, except the
awards, conformably with this Resolution, shall be solely the liability of
On June 15, 1994, respondent filed an Amended Complaint and (petitioner) appellant agency.
Position Paper.[1] He prayed for reinstatement and further charged petitioner
with underpayment of salaries and wages, overtime pay, holiday pay, 13th
month pay and service incentive leave pay. He alleged that he was only Petitioners motion for reconsideration was denied on July 31,
paid P4,800.00 monthly for 12 hours of work per day. He became a reliever 1996.[7] Hence, this petition. Petitioner contends that the NLRC gravely
of absent security guards and sometimes he worked for more than eight (8) abused its discretion in:
hours. The daily rate before December 1993 was P118.00. The rate
increased by P17.00 in December 1993 and by P10.00 in April 1994. Thus, I
using the rate of P118.00 alone, respondent claimed that petitioner should
have paid him as much as P5,752.50 per month. DENYING PETITIONERS MOTION FOR RECONSIDERATION AND
On August 25, 1994, after further exchange of pleadings, Labor Arbiter AFFIRMING THE LABOR ARBITERS FINDING OF ILLEGAL
Felipe Pati issued an order declaring the case as submitted for DISMISSAL NOTWITHSTANDING THE FACT THAT THERE WERE
decision.[2] Nonetheless, on October 24, 1994, petitioner filed a Motion to OVERWHELMING EVIDENCE TO SHOW THAT IT WAS THE
Admit to rebut respondents money claims.[3] Attached to the motion was a PRIVATE RESPONDENT HIMSELF WHO ABANDONED HIS POST
summary of the computation of the salaries, overtime pay, 13th month pay AND REFUSED PETITIONERS OFFER OF NEW ASSIGNMENT;
and other monetary benefits allegedly received by respondent from 1992-
1994. Petitioner did not submit the employment records and payrolls of II
respondent for the said period allegedly because they were
voluminous. However, petitioner undertook to submit said documents should AFFIRMING THE DECISION OF THE LABOR ARBITER HOLDING
the labor arbiter require it. Additionally, its managing director executed an PETITIONER LIABLE FOR UNDERPAYMENT SOLELY ON THE
affidavit[4] attesting to the truthfulness of its computation per the existing BASIS OF PRIVATE RESPONDENTS UNSUBSTANTIATED
records of the company. The motion was not acted upon. ALLEGATIONS OR CLAIMS AND AT THE SAME TIME, TOTALLY
On December 14, 1994, Labor Arbiter Felipe P. Pati rendered a DISREGARDING PETITIONERS EVIDENCE.
decision[5] finding petitioner liable for constructive dismissal. Essentially, the
labor arbiter found that from 1990 up to 1993, respondent was assigned at The petition is partly meritorious.
PCIBank in Kalookan City. After his suspension on January 26, 1994,
respondent was transferred frequently to different posts and despite its The first issue is substantivewhether petitioner constructively dismissed
accusation that respondent was always absent from work, it continued to the respondent. Petitioner contends that there was no dismissal,
give him new assignments and did not take any disciplinary action against constructive or otherwise. Petitioner claims that respondent abandoned his
him. Thus, the labor arbiter concluded that said transfers were a mere post, refused to accept his new assignments and went on AWOL.

The records belie petitioners posture. submitted the following documents, viz: a letter-petition of respondents
fellow security guards demanding respondents removal from their unit for his
Constructive dismissal is defined as a quitting because continued alleged arrogance (Annex A); the result of petitioners investigation on the
employment is rendered impossible, unreasonable or unlikely; as an offer January 25, 1994 incident at the PCIBank, where its chief investigator
involving a demotion in rank and diminution in pay. [8] On the other recommended the dismissal of respondent and Lumen from the service
hand, abandonment of work means a clear, deliberate and unjustified (Annex B); a memorandum dated January 26, 1994, addressed to
refusal of an employee to resume his employment and a clear intention to respondent, informing the latter of his suspension for seven (7) days due to
sever the employer-employee relationship.[9] Abandonment is his involvement in the January 25, 1994 incident (Annex C); a letter of
incompatible with constructive dismissal.[10] introduction dated April 15, 1994, addressed to Security Bank and Trust
In the case at bar, we hold that there was no deliberate intent on the Company, issued by Mr. Isidro Lirag for the benefit of respondent for his
part of the respondent to abandon his employment with petitioner. The clear possible detail at said bank (Annex D), and a telegram dated April 15, 1994
evidence that respondent did not wish to be separated from work is that, allegedly sent by petitioner to respondent, requiring him to report to
after his last assignment on April 12, 1994, he reported to petitioners office petitioners office for a conference.
regularly for a new posting but to no avail. He then lost no time in filing the By no stretch of the imagination can the foregoing documents prove
illegal dismissal case. An employee who forthwith takes steps to protest his that respondent has abandoned his job or that he unjustifiably refused the
layoff cannot by any logic be said to have abandoned his work.[11] new posts assigned to him. They only show that respondent had bad
Moreover, respondent's failure to assume his posts in Sevilla Candle relationship with his fellow security guards and that petitioner was justified in
Factory and the Security Bank and Trust Company is not without reason. He suspending and subsequently relieving him from his post at PCIBank.
explained that he requested for a transfer of assignment from Sevilla Candle Petitioner contends that respondent was only provisionally relieved
Factory because he feared for his life after he witnessed shabu dealers from his last post and not dismissed from employment. Hence, the filing of
doing their business in his workstation. As regards the Security Bank the illegal dismissal case on April 22, 1994 was premature. If at all, it is
assignment, he failed to take the neurological test for lack of money to pay argued that respondent should be considered on temporary off-detail
for the examination fee. status. Petitioner relies on the case of Superstar Security Agency, Inc. vs.
Petitioner cannot overinflate the significance of the fact that respondent NLRC,[15] where we held that placing an employee on temporary off-detail
often absented himself from work without an approved leave. It is a settled is not equivalent to dismissal provided that such temporary inactivity should
rule that mere absence or failure to report for work is not tantamount to continue only for a period of six (6) months. Otherwise, the security agency
abandonment of work.[12] Even the failure to report for work after a notice to concerned could be held liable for constructive dismissal under Article 287
return to work has been served does not necessarily constitute (now Article 286) of the Labor Code.
abandonment nor does it bar reinstatement.[13] Petitioners argument lacks merit. The case of Superstar Security
The burden of proving that respondent has abandoned his job rests Agency does not apply to the case at bar as it was decided on a different
with petitioner. However, petitioner failed miserably to discharge the factual milieu. In said case, the security guard was temporarily sidelined
burden. The records show no memoranda concerning respondents alleged because the agencys client, SMY, did not renew its security contract
unauthorized absences and refusal to work. Even the telegram petitioner pursuant to its cost-cutting program. The agency was constrained to put the
sent to respondent after he allegedly went on AWOL merely required guard detailed at SMY on a floating status for lack of available post. We then
respondent to report to its office for a conference but did not mention held that there was no constructive dismissal to speak of, taking into
anything about his absences. We find it incredible that petitioner did not consideration that, at times, security guards could be placed on temporary
even write respondent on his alleged refusal to accept the posts assigned to off-detail as their assignments primarily depend on the contracts entered into
him and the abandonment of his posts considering that such acts constitute by the security agency with third parties. The ruling was anchored in Article
willful disobedience and gross neglect of duty which are valid grounds for 286 of the Labor Code. It reads:
Art. 286. When employment not deemed terminated.The bona fide
Petitioner could have also submitted the daily time records of suspension of the operation of a business or undertaking for a period not
respondent to prove that he indeed went on AWOL. It did not. Instead, it only

exceeding six (6) months, or the fulfillment by the employee of a military or Be that as it may, the prerogative of the management to transfer its
civic duty shall not terminate employment. In all such cases, the employer employees must be exercised without grave abuse of discretion. The
shall reinstate the employee to his former position without loss of seniority exercise of the prerogative should not defeat an employee's right to security
rights if he indicates his desire to resume his work not later than one (1) of tenure. The employers privilege to transfer its employees to different
month from the resumption of operations of his employer or from his relief workstations cannot be used as a subterfuge to rid itself of an
from the military or civic duty. undesirable worker.[21]
In the case at bar, the evidence show that respondent enjoyed a single
We stress that Article 286 applies only when there is a bona post at the PCIBank for three (3) years. It changed after his suspension. In a
fide suspension of the employers operation of a business or span of less than three (3) months, respondent was assigned to at least four
undertaking for a period not exceeding six (6) months. In such a case, (4) establishments, namely, BPI Family Bank, Mercury Drugstore, Sevilla
there is no termination of employment but only a temporary displacement of Candle Factory and Philippine Savings Bank. He suddenly found himself
employees, albeit the displacement should not exceed six (6) months. The being tossed to different posts and relieving absent security
paramount consideration should be the dire exigency of the business of the guards. Respondent was then left uncertain as to when and where his next
employer that compels it to put some of its employees temporarily out of assignments would be. Considering the totality of the facts of this case, the
work. In security services, the temporary off-detail of guards takes place labor officials below rightly found that the frequent transfers of respondent to
when the security agencys clients decide not to renew their contracts with different posts on short periods of time were indirect ways of dismissing
the security agency, resulting in a situation where the available posts under him.[22]
its existing contracts are less than the number of guards in its roster. [16]
The second issue is proceduraldid public respondent gravely abuse its
In the case at bar, the records do not show that respondent had to be discretion in affirming petitioners monetary liabilities without considering the
placed on temporary off-detail for lack of available post. Petitioner just evidence it submitted to the labor arbiter?
stopped giving respondent his assignment after his duty at the PSB. It was
the straw that broke the camels back, so to speak, as far as respondent was The settled rule is that the NLRC is not precluded from receiving
concerned. evidence on appeal as technical rules of evidence are not binding in labor
cases.[23] In fact, labor officials are mandated by the Labor Code to use
This is not to denigrate the inherent prerogative of an employer to every and all reasonable means to ascertain the facts in each
transfer and reassign its employees to meet the requirements of its case speedily and objectively, without regard to technicalities of law or
business.[17] For instance, where the rotation of employees from the day shift procedure, all in the interest of due process. [24] Thus, in Lawin Security
to the night shift was a standard operating procedure of management, an Services vs. NLRC[25] and Bristol Laboratories Employees Association-
employee who had been on the day shift for sometime may be transferred to DFA vs. NLRC,[26] we held that even if the evidence was not submitted to
the night shift.[18] Similarly, transfers can be effected pursuant to a company the labor arbiter, the fact that it was duly introduced on appeal to the NLRC
policy to transfer employees from one place of work to another place of is enough basis for the latter to be more judicious in admitting the same,
work owned by the employer to prevent connivance among instead of falling back on the mere technicality that said evidence can no
them.[19] Likewise, we have affirmed the right of an employer to transfer an longer be considered on appeal. Certainly, the first course of action would be
employee to another office in the exercise of what it took to be sound more consistent with equity and the basic notions of fairness.
business judgment and in accordance with pre-determined and
established office policy and practice. Particularly so when no illicit, We find no cogent reason to disregard the above ruling.
improper or underhanded purpose can be ascribed to the employer and the
objection to the transfer was grounded solely on the personal inconvenience We note that the labor arbiters decision hardly mentioned the basis for
or hardship that will be caused to the employee by virtue of the transfer. [20] In allowing the money claims of respondent. The labor arbiter merely held that
security services, the transfer connotes a changing of guards or exchange of
their posts, or their reassignment to other posts. However, all are considered As regards the issue of money claims, we likewise find for the
given their respective posts. complainants. Records show that complainant was not paid the correct
minimum wage, overtime pay, night shift differential and 13th month pay.

WHEREFORE, foregoing premises considered, judgment is hereby Even the computation of the backwages was not specified, although
rendered finding respondents (petitioners) to have illegally dismissed the the labor arbiters decision stated that said claim for backwages was already
complainant. Accordingly, respondents (petitioners) are hereby ordered to included in the sum of P74,844.24. However, judging from the dates
reinstate complainant with backwages. Respondents (Petitioners) are mentioned in the computation, i.e., from April 22, 1991 to March 31, 1994, it
likewise ordered to pay complainant the amount of Seventy Four Thousand appears that no backwages were awarded. Backwages have to be paid by
Eight Hundred Forty Four Pesos and 24/100 (P74,844.24), representing his an employer as part of the price or penalty he has to pay for illegally
wage differential, overtime pay, 13th month pay, night shift differential, dismissing his employee. It is computed from the time of the employees
computation of which is hereto attached. illegal dismissal (or from the time his compensation was withheld from him)
up to the time of his reinstatement.[27]
Other claims are hereby dismissed for lack of merit. Article 291 of the Labor Code should also be considered. It reads:

SO ORDERED. Art. 291. Money claims.All money claims arising from employer-employee
relations accruing during the effectivity of this Code shall be filed within three
The computation of the sum awarded to respondent is also vague, (3) years from the time the cause of action accrued; otherwise, they shall be
thus: forever barred.

RE: COMPUTATION OF UNDERPAYMENT AND OVERTIME PAY AS PER Clearly, respondents money claims should be filed within three (3) years
INSTRUCTION OF L.A. FELIPE P. PATI from the time his cause of action accrued or forever be barred by
prescription. Respondent filed his money claims on June 15, 1994, through
Underpayment 12-hours his Amended Complaint and Position Paper. His money claims from
November 2, 1990 to June 14, 1992, are barred by prescription pursuant to
Article 291 of the Labor Code. Apparently, the labor arbiter mistakenly relied
4/22/91 - 12/15/93 = 31.77 mos. on the date of filing of the original complaint of respondent. It is true that said
complaint was filed on April 22, 1994, however, at that time, respondent
P6,826.37 - P4,800 = P2,026.37 merely accused petitioner of illegal dismissal and has not yet charged
x 31.77 mos = . . . . . . . . . . . . . . . . . . . . . . . . .P64,377.77 petitioner with underpayment of wages or non-payment of overtime pay,
13th month pay, etc.
12/16/93 3/31/94 = 3.5/ mos. Before the labor arbiter decided the case, petitioner had already
submitted its computation of the salaries and other benefits received by
P7,790.42 P4,800 = P2,990.42 respondent during his employment. Yet, the labor arbiter simply ignored
X 3.5 mos. = . . . . . . . . . . . . . . . . . . . . . . . . . . 10,466.47 petitioners evidence and decided the case without even stating the basis of
his decision. The labor arbiters failure to discuss the facts and the law which
Total . . . . . . . . . . . . . . P74,844.24 would support the award of P74,844.24 in favor of the respondent should
have prompted the NLRC to remand the case to the labor arbiter for further
proceedings to determine the monetary liabilities of petitioner to
Manila, Philippines, December 20, 1994. respondent. A stringent application of procedural rules may be relaxed to
meet the ends of substantial justice.
It assumes that respondent rendered overtime work from April 22, 1991 to
March 31, 1994. We could not even tell from said computation which part of
assailed decision of the National Labor Relations Commission in NLRC-NCR
the sum awarded was for the wage differential, 13th month pay, overtime
No. 00-04-03291-94, dated May 10, 1996, is AFFIRMED, subject to the
pay, etc.Moreover, respondents salary and other monetary benefits, if any,
modification that the monetary award in favor of respondent Virgilio Dapiton
from April 1-12, 1994, were not included in the computation.
in the sum of P74,844.24 is SET ASIDE. Accordingly, the case is remanded

to the labor arbiter for further proceedings solely for the purpose of
determining the monetary liabilities of petitioner, if any.