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G.R. No.

158268 April 12, 2006

RHODA CASTOR-GARUPA, herein represented by attorney-in-fact, MS. IMELDA C. ELECTONA, Petitioner,

vs.

EMPLOYEES’ COMPENSATION COMMISSION and GOVERNMENT SERVICE INSURANCE SYSTEM (Bayawan
District Hospital), Respondents.

DECISION

CHICO-NAZARIO, J.:

Workers, whose capabilities have been diminished, if not completely impaired, as a consequence of
their service, ought to be given benefits they deserve under the law. Compassion for them is not a dole-
out, but a right.1

Before Us is a petition for review on certiorari which seeks to set aside the decision2 of the Court of
Appeals in CA-G.R. SP No. 67866 dated 17 December 2002 dismissing petitioner Rhoda Castor-Garupa’s
petition for review and affirming respondent Employees’ Compensation Commission’s (ECC) decision in
ECC Case No. MG-11703-800, and the resolution3 dated 12 May 2003 denying her motion for
reconsideration.

The antecedents are as follows:

Petitioner Rhoda Castor-Garupa joined the government service on 1 January 1979 as Resident Physician
at the Bayawan District Hospital which has a fifty-bed capacity located at Zamora Street, Bagawan City,
Negros Oriental. On 1 January 1990, she was promoted to Medical Officer III.4

Sometime in 1994, petitioner started to experience high blood pressure and started to take medicines
by way of self-medication with the help of her husband, Dr. Patrocino G. Garupa.5 In December 1998,
she started to suffer from extreme fatigue and lost her appetite causing her to lose weight. Fearing that
petitioner might be suffering from a more severe disease, her husband brought her to Cebu City where
she was confined at the Chong Hua Hospital from 1 to 8 February 1999. Petitioner was initially
diagnosed with Chronic Renal Failure secondary to Intrinsic Renal Disease.6 As a result, she underwent
hemodialysis twice a week.7 She was transferred to the National Kidney and Transplant Institute (NKTI)
where she was confined from 9 to 18 March 1999. The diagnosis was End Stage Renal Disease secondary
to Chronic Glomerulonephritis. On 11 March 1999, she underwent a kidney transplant with her brother
as donor.8

On 16 September 1999, petitioner filed with respondent Government Service Insurance System (GSIS) a
claim for compensation benefits under Presidential Decree No. 626, as amended, otherwise known as
the Employees Compensation Act.9

In a letter dated 4 October 1999, respondent GSIS denied the claim in this wise:

Please be informed that the same cannot be given due course on the ground that Chronic Renal Failure
and Chronic Glomerulonephritis are not among those diseases listed under "Annex A" of PD 626, as
amended.

Section 1(b), Rule III of PD 626, as amended, is explicit in its requirements for compensability, to wit:

"For the sickness and the resulting disability to be compensable, the sickness must be the result of an
occupational disease listed under "Annex A" of these Rules with the conditions set therein satisfied,
otherwise, proof must be shown that the risk of contracting the disease is increased by the working
conditions.

A study of Chronic Glomerulonephritis, the disease that led to your Chronic Rental Failure, reveals that
the disease is not a single entity but a mélange of different diseases which predominantly affect the
glomerular tufts, causing inflammatory changes and subsequent scarring. It affects all ages but is more
frequent before forty. Affects both sexes but more common in men.

Only a few patients give a clear-cut history of acute nephritis following infection, some cases of chronic
nephritis probably originate in an inapparent infection with streptococcus following which edema or
bloody urine was not noticed, it seems likely that most instances represent some disease other than
poststreptococcal glomerulonephritis. In other instances evidence for an infectious origin is absent and
the beginning of the disease can be dated only by the last normal examination. Many patients progress
into the terminal stage without even having experienced edema. An occasional patient develops clear-
cut acute glomerulonephritis following respiratory infection, succeeded by a "nephrotic stage" which
yields over a period of years to slowly progressive renal insufficiency and mounting hypertension, but it
is not usual to observe this full sequence of events in one individual.

The explosive course presents fatigue, anemia and breathless quickly appear, hypertension is prominent
eventhough the heart may not be initially enlarged, the urine contains large quantities of proteins and
red blood cells and may be grossly bloody.

In the slowly progressive course, abnormal urinary findings may be detected in a completely
asymptomatic patient in the course of a routine physical examination.

In view of the foregoing, we regret to deny this claim for benefits under PD 626, as amended. Criteria for
compensability under said law has not been satisfied.10

Petitioner filed a letter for reconsideration11 but respondent GSIS treated the same as an appeal and
forwarded the records of the case to respondent ECC.12

The appeal was docketed as ECC Case No. MG-11703-800. In its decision dated 6 April 2001, respondent
ECC affirmed respondent GSIS’s finding of non-compensability of petitioner’s disease and denied the
appealed claim. It stated:

The law, as it now stands requires the claimant to prove a positive thing - that the illness was caused by
employment and that the risk of contracting the disease is increased by the working conditions. To say
that since the proof is not available, therefore, the trust fund has the obligation to pay is contrary to the
legal requirement that proof must be adduced. The existence of otherwise non-existent proof cannot be
presumed.

Glomerulonephritis is not an occupational disease considering her employment as a Resident Physician.
She must, therefore, prove that her ailment was caused by her employment or that her working
conditions increased the risk of contracting her ailment.

Medical literature describes the nature of Glomerulonephritis as follows:

"Of the many observed forms of Glomerulonephritis, most show evidence of deposits of antibody-
antigen complexes in the glomeruli, the kidney’s filtering units; thus one common form of the disease
occurs two (2) to three (3) weeks after an infection of the throat or skin with streptococci (a type of
germ). Most cases are temporary, but a few become chronic, leading to kidney failure and Uremia (a
serious illness caused by the inability of the kidneys to eliminate waste products of metabolism."
(Robbins, Pathologic Basis of Disease, 4th edition)

As can be gleaned from the foregoing medical facts, the predisposing factor that might have given rise
to the development of the ailment is not inherent in her working conditions. Except for the bare
allegation that the disease was caused by her employment and that the risk of contracting the same was
increased by her working conditions, the appellant makes no allegations of essential facts that caused
her disease and how and why her working conditions increased the risk of contracting said disease, nor
was any evidence submitted by appellant to substantiate and support her claim for benefits under PD
626, as amended. Specifically, she failed to allege in her claim as to how her employment caused her to
contract Glomerulonephritis.

As there was not even a single allegation as to these matters, this Commission has no basis at all to rule
that the appellant got the said disease as a result of or from her job, and/or that the risk of her
contracting said disease was increased by her working conditions.13

Aggrieved, petitioner, pursuant to Rule 43 of the Revised Rules of Court, filed her petition for review
with the Court of Appeals raising as the sole issue the compensability of chronic glomerulonephritis
under Presidential Decree No. 626, as amended.14 In its decision15 dated 17 December 2002, the Court
of Appeals dismissed the petition and affirmed in toto the decision of respondent ECC. The motion for
reconsideration16 filed by petitioner was denied in a resolution dated 12 May 2003.17 Hence, this
instant petition for review on certiorari.

Petitioner reiterates the sole issue of whether or not her disease, End Stage Renal Disease secondary to
Chronic Glomerulonephritis, is compensable under Presidential Decree No. 626, as amended. She argues
that (1) she was afflicted with the disease during her employment with the Bayawan District Hospital;
(2) there is substantial evidence to sustain that her employment increased the risk of contracting the
disease; and (3) the law requires merely substantial proof of the risk of contraction and not proof of the
actual or direct causation of the disease.

As required, respondent GSIS filed its Comment on 10 October 200318 to which petitioner filed a
reply19 dated 16 December 2004. As regards respondent ECC, the Court dispensed its filing of a reply.20
Petitioner and respondent GSIS filed their respective memoranda.21

Petitioner maintains that she was afflicted with the disease during her employment with the Bayawan
District Hospital. Though she admits that Chronic Glomerulonephritis that eventually led to End Stage

edema and general fatigue in 1998 consistent with symptoms of chronic glomerulonephritis. for the sickness and the resulting disability or death to be compensable. . She says that respondent ECC found the cause of glomerulonephritis to be the bacterium streptococcus. the sickness must be the result of an occupational disease listed under Annex "A" of these Rules with the conditions set therein satisfied. petitioner asserts that only substantial or reasonable proof. they could have easily found out that same can be easily contracted by mere inhalation. In her case. All these. it is inevitable that her duty exposes her to direct contact with patients. however. otherwise. by aerosol droplets and by secretions from patients and carriers. she alleges that the letter of respondent GSIS already emphasized the attendant risk of contracting the disease in her working environment. there is a need to prove the risk of contracting the disease. said disease is not one of those enumerated as an Occupational Disease under Annex "A" of the ECC Rules. In proving risk of contraction. She explains that if respondents GSIS and ECC. she claims that the increase in risk or probability of contracting the disease is neither a mere allegation nor a product of conjecture when one works in a hospital where a mélange of diseases abound. will not prevent petitioner’s claim from being granted as long as she can show that the risk of contracting said ailment was increased by her working conditions." We find merit in the petition.net She adds that as a practicing rural doctor for almost 20 years. proof must be shown that the risk of contracting the disease is increased by the working conditions. The Court of Appeals declared that since chronic glomerulonephritis is not an occupational disease.Renal Disease is not listed as an Occupational Disease under Annex "A" of the Amended Rules on Employees’ Compensation. It added that since petitioner failed to introduce evidence that would support her position. she claims. she argues that the Court of Appeals and respondent ECC should have considered the nature and character of the bacterium that caused her affliction. she cannot rely on the "Increased Risk Theory. while respondent GSIS declared that chronic glomerulonephritis is not a single entity but a mélange of different diseases which predominantly affect the glomerular tufts. the symptoms thereof may be established and recorded. Thus. by direct contact by hands. Petitioner was diagnosed as having End Stage Renal Disease secondary to Chronic Glomerulonephritis. as well as the Court of Appeals. It posed the question: Was petitioner successful in proving that the disease she contracted was work related or connected? The Court of Appeals ruled that petitioner failed to demonstrate how her working conditions caused her disease and that she did not attempt to show any evidence that would support her claim for benefits. not actual or direct causation of the disease between the work and the ailment. only reviewed the nature and character of the bacterium streptococcus.1avvphil. Admittedly. establish that she contracted the debilitating disease during her employment with the Bayawan District Hospital. is required since probability and not certainty is the touchstone. This fact. Under Section 1(b) of Rule III of the Amended Rules on Employees’ Compensation. In fact. the Physician’s Certification and the Employer’s Certification which she submitted to respondent GSIS clearly established that she suffered hypertension as early as 1994 and displayed sudden loss of appetite. Petitioner argues that there is substantial evidence that shows that her employment increased the risk of contracting the disease. She says that since the origin of Glomerulonephritis is not clear-cut and is hard to determine.

the disease that led to her Chronic Rental Failure. As a doctor who was in direct contact with patients. 626. 626 is merely substantial evidence. From such findings of both respondents. hence. is said to have abandoned the presumption of compensability and the theory of aggravation prevalent under the Workmen’s Compensation Act. which means "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. is not a single entity but a mélange of different diseases which predominantly affect the glomerular tufts. 626. as amended.22 For the increased risk theory to apply in compensation cases. She attached the Physician’s Certification and the Employer’s Certification which clearly established that she suffered hypertension as early as 1994 and displayed sudden loss of appetite. Despite such abandonment.23 Strict rules of evidence are not applicable in claims for compensation. The classic clinical presentation of poststreptococcal glomerulonephritis is full- blown nephritic syndrome with oliguric acute renal failure. it is apparent that glomerulonephritis was caused by an infection. the claimant must adduce reasonable proof between his work and the cause of the disease. as amended. however. Physical examination reveals hypervolemia. We thus find that the probability of petitioner contracting chronic glomerulonephritis in her workstation has been substantiated. edema and hypertension.27 WHEREFORE. especially in light of the compassionate policy towards labor which the 1987 Constitution vivifies and enhances. edema and general fatigue in 1998 consistent with symptoms of chronic glomerulonephritis. not certainty.26 Inasmuch as petitioner’s disease was not listed as an occupational disease. it is incumbent upon her to adduce substantial proof that would show that the nature of her employment or working conditions increased the risk of End Stage Renal Disease or Chronic Glomerulonephritis.24 The degree of proof required under Presidential Decree No. Presidential Decree No. . increased.Respondent GSIS stated that petitioner’s Chronic Glomerulonephritis. and considering further that resident physicians work for extended hours. thus increasing the risk of contracting glomerulonephritis. while respondent ECC found the cause of glomerulonephritis to be the bacterium streptococcus. Respondent Government Service Insurance System is hereby ordered to pay petitioner Rhoda Castor-Garupa the compensation benefits due her under Presidential Decree No. she was more exposed to all kinds of germs and bacteria. the likelihood of petitioner being infected by the streptococcus bacterium is. The evidence presented by petitioner shows that her Chronic Glomerulonephritis that led to End Stage Renal Disease was caused by a streptococcal infection. Given the nature of her work. the present law has not ceased to be an employees’ compensation law or a social legislation. Petitioner is a practicing doctor in a public rural hospital from 1 January 1979 until she underwent a kidney transplant on 11 March 1999.25 It is sufficient that the hypothesis on which the workmen’s claim is based is probable since probability." What the law requires is a reasonable work-connection and not a direct causal relation. the petition for review is GRANTED. without a doubt. and the official agency charged by law to implement the constitutional guarantee of social justice should adopt a liberal attitude in favor of the employee in deciding claims for compensability. the liberality of the law in favor of the working man and woman still prevails. is the touchstone. The decision of the Court of Appeals dated 17 December 2002 is REVERSED and SET ASIDE. or that the risk of contracting the disease was increased by the claimant’s working conditions.

Petitioner.versus – QUISUMBING. SR.R. Present: . 2006 x---------------------------------------------------------------------------------x DECISION TINGA. JJ. ANTONIO DECORION. and Respondent. ALICIA AUSTRIA-MARTINEZ Asscociate Justice ROMEO J. 158637 CORPORATION. Chairperson. MINITA V. Antonio Decorion (Decorion). CALLEJO. CHICO-NAZARIO Associate Justice WE CONCUR: ARTEMIO V. Promulgated: April 12.: This Petition[1] dated July 8. CARPIO MORALES. J.. J. was constructively dismissed and therefore entitled to reinstatement and backwages. No. 2003 filed by Maricalum Mining Corporation (Maricalum Mining) assails the Decision[2] of the Court of Appeals which upheld the labor arbiters finding that respondent. TINGA.SO ORDERED. . Associate Justice MARICALUM MINING G. CARPIO. PANGANIBAN Chief Justice Chairperson CONSUELO YNARES-SANTIAGO Associate Justice MA.

On July 23. the Concentrator Maintenance Supervisor called a meeting which Decorion failed to attend as he was then supervising the workers under him. Jr.. On May 15. Maricalum Minings Chief and Head of Legal and Industrial Relations. he was placed under preventive suspension on the same day. Roman G. Pacia.[3] In the meantime. 1996. He maintained that he has not committed any offense and that his service record would show his efficiency. Because of his alleged insubordination for failure to attend the meeting. He was also not allowed to report for work the following day. 1996. On April 11. 1996. he submitted to the Personnel Department his written reply to the notice. 1996. Decorion filed before the National Labor Relations Commission (NLRC) Regional Arbitration Branch VI of Bacolod City a complaint for illegal dismissal and payment of moral and exemplary damages and attorneys fees. who issued a . 1996 because he was then still assigning work to his men. 1996. during which he manifested that he failed to attend the meeting on April 11. the matter of Decorions suspension and proposed dismissal was referred to Atty. Decorion was served a Notice of Infraction and Proposed Dismissal to enable him to present his side.There is no substantial dispute on the operative facts of this case. Decorion was a regular employee of Maricalum Mining who started out as a Mill Mechanic assigned to the Concentrator Maintenance Department and was later promoted to Foreman I. A grievance meeting was held upon Decorions request on June 5. A month after or on May 12.

1996. Conciliation proceedings having failed to amicably settle the case. with the assurance that in the event of resumption of operations. According to the labor arbiter. 1996. The NLRC. 1996. requesting that he be reinstated to his former position. Decorion. 1996. The request was denied with the explanation that priority for retention and inclusion in the skeleton force was given to employees who are efficient and whose services are necessary during the shutdown. finding Decorions dismissal illegal and ordering his reinstatement with payment of backwages and attorneys fees. 1998. Further. wrote a letter to Maricalum Mining on October 8. during the grievance meeting held on June 5.[5] The reversal was premised on the finding that the case was litigated solely on Decorions allegation that he was dismissed on April 11. However. placing Decorion under definite disciplinary suspension of six (6) months which would include the period of his preventive suspension which was made to take effect retroactively from April 11. he would be reinstated to his former position without loss of seniority rights. Decorions failure to attend the meeting called by his supervisor did not justify his preventive suspension. no preventive suspension should last longer than 30 days. the labor arbiter rendered a decision[4] dated November 26. 1996 to October 9. Decorion was served a memorandum informing him of his temporary lay-off due to Maricalum Minings temporary suspension of operations and shut down of its mining operations for six (6) months. On September 4. however. 1996. reversed the labor arbiters decision and dismissed Decorions complaint. Decorion left it up to management to decide his fate. indicating that as of that time. 1996. 1996. through counsel.memorandum on August 13. recommending that Decorions indefinite suspension be made definite with a warning that a repetition of the same conduct would be punished with dismissal. . According to the NLRC. Maricalum Minings Resident Manager issued a memorandum on August 28. to consider the events that transpired after April 11. there was no decision to terminate his services yet.

He avers that had the intention of Maricalum Mining been to merely suspend him. 2003. since Decorion was suspended for less than six (6) months. The grievance meeting conducted on June 5. Thus. 1996.[7] petitioner contends that constructive dismissal occurs only after the lapse of more than six (6) months from the time an employee is placed on a floating status as a result of temporary preventive suspension from employment. 9. he was not served with any notice relative to why he was disallowed to report for work. it goes on to argue. he had already been under preventive suspension for more than 100 days in violation of Sec. 2003. maintaining that he was dismissed from employment on April 11. The appellate court held that Decorion was placed under preventive suspension immediately after he failed to attend the meeting called by his supervisor on April 11. the decision of the labor arbiter was reinstated. On petition for certiorari with the Court of Appeals. The appellate court denied Maricalum Minings motion for reconsideration in its Resolution[6] dated May 16. 1996. Citing the case of Valdez v. As it happened. his suspension was legal. Decorion filed a Comment[8] dated December 5. 1996 was allegedly called only after he had repeatedly requested reconsideration of his dismissal. 1996. NLRC. Rule XXIII. Maricalum Mining insists that Decorion was not dismissed but merely preventively suspended on April 11. In this petition. At the time he filed the complaint for illegal dismissal on July 23. 1996 as he was then prevented from reporting for work.1996 and make the same the basis for the finding of illegal dismissal would violate Maricalum Minings right to due process. it could have manifested this intention by at least informing him of his suspension. Book V of the Omnibus Rules Implementing the Labor Code (Implementing Rules) which provides that no preventive suspension shall last longer than 30 days. .

2004 in reiteration of its arguments. Preventive suspension. . Book V of the Implementing Rules provide as follows: Section 8. --. Sections 8 and 9 of Rule XXIII. We reject the petition.The employer may place the worker concerned under preventive suspension if his continued employment poses a serious and imminent threat to the life or property of the employer or his co-workers.Maricalum Mining filed a Reply[9] dated April 22.

he had already been suspended for a total of 103 days. preventive suspension is not proper. 1996 up to the time a grievance meeting was conducted on June 5. Period of Suspension --. 55 days had already passed.Section 9.[10] What is more. The Court ruled that preventive suspension which lasts beyond the maximum period allowed by the Implementing Rules amounts to constructive dismissal.[11] private respondents suspension lasted for more than 30 days counted from the time she was placed on preventive suspension on March 13. [Emphasis supplied. NLRC. The employer shall thereafter reinstate the worker in his former or in a substantially equivalent position or the employer may extend the period of suspension provided that during the period of extension. from the time Decorion was placed under preventive suspension on April 11. In this case. 1986. 1986 up to the last day of investigation on April 23. he pays the wages and other benefits due to the worker. 1996. In such case. In Premiere Development Bank v.] The Rules are explicit that preventive suspension is justified where the employees continued employment poses a serious and imminent threat to the life or property of the employer or of the employees co-workers. There is no evidence to indicate that his failure to attend the meeting prejudiced his employer or that his presence in the companys premises posed a serious threat to his employer and co- workers. Decorions suspension persisted beyond the 30-day period allowed by the Implementing Rules. Decorion was suspended only because he failed to attend a meeting called by his supervisor. Another 48 days went by before he filed a complaint for illegal dismissal on July 23. Thus. 1996. . Without this kind of threat. the worker shall not be bound to reimburse the amount paid to him during the extension if the employer decides. after completion of the hearing. to dismiss the worker.No preventive suspension shall last longer than thirty (30) days. Similarly. The preventive suspension was clearly unjustified. at the time Decorion filed a complaint for illegal dismissal.

. the instant case involves the preventive suspension of an employee not by reason of the suspension of the business operations of the employer but because of the employees failure to attend a meeting. In contrast.Maricalum Minings contention that there was as yet no illegal dismissal at the time of the filing of the complaint is evidently unmeritorious. NLRC. The legal basis of the ruling in that case is the principle underlying Article 286 of the Labor Code which provides that the bona fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months shall not terminate employment. unreasonable or unlikely[12] by Maricalum Minings act of preventing him from reporting for work. Petitioners reliance on Valdez v. the legal consequences they generate are identical. The allowable period of suspension in such a case is only 30 days as provided by the Implementing Rules. is misplaced. Decorions employment may not have been actually terminated in the sense that he was not served walking papers but there is no doubt that he was constructively dismissed as he was forced to quit because continued employment was rendered impossible. Decorions preventive suspension had already ripened into constructive dismissal at that time. While actual dismissal and constructive dismissal do take place in different fashion. supra.

NLRC. DANTE O. 2002 and May 16.In sum. the instant petition is hereby DENIED. TINGA Associate Justice WE CONCUR: . The fact is that Decorions preventive suspension was unwarranted and unjustified and lasted for more than the period allowed by law. Costs against petitioner. WHEREFORE. Its theory is based entirely on its erroneous reading of Valdez v. 2003 are hereby AFFIRMED. SO ORDERED. Maricalum Mining cannot feign denial of due process. The challenged Decision and Resolution of the Court of Appeals respectively dated May 29.

.LEONARDO A. QUISUMBING Associate Justice Chairperson ANTONIO T. CARPIO CONCHITA CARPIO MORALES Associate Justice Associate Justice ATTESTATION I attest that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

SANDOVAL-GUTIERREZ.CORONA. Chairman. Third Division BERNARDO REMIGIO. G. J. -versus.. No. Present: PUNO. JJ. AZCUNA. . QUISUMBING Associate Justice Chairperson.LEONARDO A. 159887 Petitioner. and GARCIA.R.

C.00 to petitioner but denying his claim for disability benefits. awarding sickness allowance of US$3.R. April 12. J. INC.: Before us is a petition for review on certiorari seeking the reversal of the decision[2] and resolution[3] of the Court of Appeals (CA) in CA-G. INC. The facts are undisputed. 2006 x--------------------------------------------------x DECISION PUNO. .F. SHARP CREW Promulgated: MGT. 67782 which affirmed the March 22.400. & NEW COMMODORE CRUISE LINE.[1] Respondents.NATIONAL LABOR RELATIONS COMMISSION.. No. 2001 Resolution[4] of the National Labor Relations Commission (NLRC)..

1998." a vessel owned and operated by respondent principal. 1998. He returned to the vessel and experienced another such episode on the same evening. He rejoined the vessel on March 24.[8] and found that he had several blockages in his coronary arteries. Kedia's "impression" was that petitioner's chest pains were "probable secondary to severe coronary artery disease. Armengol Porta conducted a physical examination on petitioner. Thus. A triple coronary artery bypass was performed on petitioner on April 2. petitioner went ashore to attend to some personal matters. including a coronary angiogram. Mexico. 1998. 1998 by a Dr. Sharp Crew Management. Ltd. approved per Department of Labor and Employment's Department Order No. U.S."[7] Dr. Upon the vessel's arrival at the port of New Orleans. petitioner suddenly felt severe chest pain and shortness of breath. On April 8. overtime rate of US$257. petitioner was brought to the West Jefferson Medical Center for a more thorough check-up and evaluation. co-respondent New Commodore Cruise Line. (respondent principal). Inc. at a basic monthly salary of US$857. he was instructed to refrain from performing any kind of physical activity and to have a complete bed rest.00.00 per month and vacation leave with pay of three (3) days per month. Everson. Louisiana. Petitioner was brought and confined for seven (7) days at the Grand Cayman Island Hospital. 33 and the Philippine Overseas Employment Administration's Memorandum Circular No. On March 16.. When his chest pain recurred the following day. After petitioner passed the pre-employment medical examination. 1997. petitioner was transferred to the Marine Medical Unit for observation. while the vessel was docked at the port of Cancun. Dr. petitioner's cardiologist found him "not fit for sea duty" and recommended for him to be "[r]epatriated to home port for follow up with a cardiologist. he went to the vessel's infirmary where he again suffered from chest pain. were to be strictly and faithfully observed.On November 27."[9] He was repatriated to Manila on April 23. petitioner was to work as Musician II on board SS "Enchanted Isle. petitioner Bernardo Remigio entered into a Contract of Employment[5] with respondent C. both Series of 1996 (1996 POEA SEC). 55. While walking. 1998. he joined the vessel and started performing his job as a drummer in December 1997.F. . S. The contract provided that the terms and conditions of the standard employment contract governing the employment of all seafarers. (respondent agency). for and in behalf of its foreign principal.A. His pain worsened upon physical exertion but improved with rest.[6] Under the contract. for ten (10) months. After twelve (12) days of confinement.

00. He has been on ulcer regimen. Abesamis. 1998 shows functional capacity at 8 METS. B. Remigio who had Coronary Bypass (6x) abroad last April 2. 1998.260.[15] No agreement was reached as the parties proceeded to submit their respective position papers and supporting evidence. was refused. Jose Enrique P. Desiderio. petitioner filed the instant complaint[13] for (a) recovery of permanent total disability benefits amounting to US$60.000. however.[12] (emphases supplied) On November 12.000. of the American Outpatient Clinic wrote.00 as evidenced by fax letters.00.[10] On May 13. Henry P. 1998. 1998 to June 25. sent a formal communication[11] to respondent agency demanding payment of unpaid wages. to which petitioner made a counter-proposal of US$40. He was unfit from April 27.00. (b) actual and compensatory damages for loss of earning capacity in the amount of US$154. through counsel. The demand. referred petitioner to the American Outpatient Clinic for medical check-up. the manager of the Crewing Administration and Business Development Department of respondent agency. sickness allowance and permanent total disability benefits. Dr. viz: Mr. petitioner. In a letter dated June 25. Heart Center.000. and (c) moral and exemplary damages and attorney's fees. 1998 addressed to the manager of respondent agency. 1998 has completed his cardiac rehabilitation here at the Phil. the company-designated physician. Lately he has been complaining of epigastric discomfort probably from Ecotrin. Leticia C.In a letter dated April 27. Desiderio. . 1998.[14] Private respondents made an offer to settle the case at US$30. Stress done on June 23. He may go back to sea duty as piano player or guitar player after 8-10 more months. 1998.

his sickness allowance in the amount of US$3.In support of his claims.400. judgment is hereby rendered ordering the respondents jointly and severally to pay complainant." repatriation and replacement. b) communication of respondent principal to respondent agency informing the latter about petitioner's "heart attack. Petitioner was awarded US$3. . petitioner submitted copies of: a) his Contract of Employment with private respondents. c) demand letter dated May 13. Caday rendered his decision. B(3) of the 1996 POEA SEC. Labor Arbiter Manuel R.[17] On September 15. computed on the basis of his monthly wage of US$850. 1998 of respondent agency to the American Outpatient Clinic. as provided under Section 20. private respondents submitted copies of: a) the Contract of Employment. he held that no medical report was presented to show that petitioner's disability was total and permanent as to be classified under Grade 1 of the said schedule of disability. and g) the Discharge Summary of the Marine Medical Unit.00 as sickness allowance. d) receipts from a drugstore and the Philippine Heart Center. Abesamis of the American Outpatient Clinic addressed to the manager of respondent agency.00 multiplied by four (4) months. SO ORDERED. f) filled up form of the Exercise Testing and Cardiac Rehabilitation Laboratory of the Philippine Heart Center showing the results of the tests done on petitioner. e) 2D Echocardiogram-Color Doppler Report. Nonetheless. b) referral letter dated April 27. Labor Arbiter Caday noted that the Schedule of Disability or Impediment for Injuries Suffered and Diseases or Illness Contracted under Section 30 of the 1996 POEA SEC does not provide for the payment of compensation benefits in cases of cardiac catheterization or heart bypass. 1999.[19] In ruling that petitioner is not entitled to disability benefits.00.[16] On the other hand.[18] the dispositive portion of which states: WHEREFORE. 1998 of petitioner's counsel. and d) medical report of Dr. c) History and Physical Report of petitioner and Procedure Report of his cardiac catheterization. Even assuming that it was included.400. petitioner's claim for sickness allowance was granted as there was no showing that private respondents paid petitioner's basic wages after his repatriation. premises considered. Leticia C. All other claims are hereby dismissed for lack of merit.

Petitioner's motion for reconsideration with the CA was denied. to no avail. 1998 that he (petitioner) was "unfit from April 27.428.[22] The CA likewise did not find substantial evidence to prove that the heart ailment incurred by petitioner during the term of his employment resulted to his disability. the CA dismissed the petition.[20] Petitioner filed a motion for reconsideration of the NLRC's resolution. attorney's fees and costs of suit. He assigns as lone error. . Finally.. Accordingly.000. Abesamis's letter dated June 25.00 as sickness allowance. It noted that petitioner's medical records abroad never mentioned that his heart ailment resulted to a disability.00 as permanent total disability benefits. 1998 to June 25. The statement that petitioner "may go back to sea duty as piano player or guitar player after 8-10 more months" was likewise found as insufficient to prove that petitioner was actually "sidelined" or that it was impossible for him to work and earn as a musician during the 8-10 months that he was not on board the vessel. 1998" was found as insufficient to prove that petitioner's earning capacity was either lost or diminished. the following: THE DECISION OF THE HONORABLE COURT OF APPEALS DISMISSING PETITIONER'S PETITION FOR CERTIORARI AND AFFIRMING IN TOTO THE HONORABLE PUBLIC RESPONDENT AND DENYING PETITIONER'S MOTION FOR RECONSIDERATION IS CONTRARY TO LAW. it considered that heart ailment is not included among the compensable sicknesses and injuries under the 1996 POEA SEC. this petition in which petitioner prays that he be awarded US$60. Petitioner's reliance on Dr.[21] On March 31. he filed a petition for certiorari with prayer for the issuance of a writ of preliminary injunction and/or temporary restraining order with the CA. rendered him incapable of further seeking employment as a musician or to follow a substantially gainful occupation. i.e. the NLRC affirmed the decision of the Labor Arbiter in toto.On appeal by petitioner. US$3.[23] Hence.[24] The main issue is whether petitioner is entitled to permanent total disability benefits. 2003.

Private respondents. First." or "heart ailment" is not found in the Schedule of Disability or Impediment for Injuries Suffered and Diseases or Illness Contracted under Section 30 of the 1996 POEA SEC. and 2.At the outset. private respondents' contention that the instant petition must be dismissed outright for being grounded on a question of fact must be rejected. Compensation and Benefits xxx ." "heart bypass. Heart ailment. the Labor Arbiter and the CA considered that "cardiac catheterization. 20."[26] However. viz: Sec. We find merit in petitioner's argument. "this does not mean that the same is not compensable. In ruling that petitioner is not entitled to permanent total disability benefits. he is not entitled to disability benefits. Whether the concept of permanent total disability under the Labor Code applies to the case of a seafarer's claim for disability benefits under the 1996 POEA SEC. on the other hand. The issue of whether petitioner is entitled to permanent total disability benefits is a question of law as it calls for the correct application of the law and jurisprudence on disability benefits to the established facts on record. concede that while petitioner's illness is not listed under the 1996 POEA SEC. since "heart ailment" is not listed under Section 30 of the 1996 POEA SEC. is compensable. Petitioner contends that the schedule of disability under Section 30 of the 1996 POEA SEC is not exclusive. though not listed in the schedule.[25] It raises the following sub-issues. it is not an "occupational disease." It was therefore incumbent upon petitioner to prove by substantial evidence that his illness was work-related. Whether heart ailment suffered during the term of the contract is compensable under the 1996 POEA SEC even if there is no proof of work-connection. to wit: 1. Petitioner bases his claim for disability benefits under Section 20 in relation to Sections 30 and 30-A of the 1996 POEA SEC. Having failed to do so.

12 4. Fracture of four (4) or more ribs resulting to severe limitation of chest expansion .Gr.Gr. Fracture of four (4) or more ribs with intercostal neuralgia resulting in moderate limitation of chest expansion . SCHEDULE OF DISABILITY OR IMPEDIMENT FOR INJURIES SUFFERED AND DISEASES OR ILLNESS CONTRACTED xxx CHEST-TRUNK-SPINE 1. Computation of his benefits arising from an illness or disease shall be governed by the rates and the rules of compensation applicable at the time the illness or disease was contracted. Moderate rigidity or two thirds (2/3) loss of motion or lifting power of the trunk . 6 2. Slight limitation of chest expansion due to simple rib functional without myositis or intercostal neuralgia . 9 3. Sec. Compensation and Benefits for Injury or Illness The liabilities of the employer when the seafarer suffers injury or illness during the term of his contract are as follows: xxx 5. 6 5. In case of permanent total or partial disability of the seafarer during the term of employment caused by either injury or illness[.] the seafarer shall be compensated in accordance with the schedule of benefits enumerated in Section 30 of [t]his Contract.Gr. Fracture of the dorsal or lumber spines resulting to severe or total rigidity of the trunk or total loss of lifting power of heavy objects . 8 .Gr.B.Gr. 30.

15% 11 Maximum Rate x 14.36% 4 Maximum Rate x 68. Injury to the spinal cord as to make walking impossible even with the aid of a pair of crutches . Sec.Gr.45% 13 Maximum Rate x 6.80% 8 Maximum Rate x 33. 30-A. Injury to the spinal cord as to make walking impossible without the aid of a pair of crutches . SCHEDULE OF DISABILITY ALLOWANCES Impediment Grade Impediment 1 Maximum Rate x 120.Gr.Gr.12% 10 Maximum Rate x 20.66% 5 Maximum Rate x 58.81% 3 Maximum Rate x 78. Slight rigidity or one third (1/3) loss of motion or lifting power of the trunk .59% 9 Maximum Rate x 26. 1 9. Injury to the spinal cord resulting to incontinence of urine and feces .72% 14 Maximum Rate x 3.74% . 11 7.00% 2 Maximum Rate x 88.00% 7 Maximum Rate x 41.93% 12 Maximum Rate x 10.96% 6 Maximum Rate x 50. 4 8. 1 xxx NOTE: Any item in the schedule classified under Grade 1 shall be considered or shall constitute total and permanent disability.Gr.6.

NLRC. and in addition to whatever benefits which the seaman is entitled to under Philippine laws. (emphases supplied) "Disability" is generally defined as "loss or impairment of a physical or mental function resulting from injury or sickness. 2. under the contract. Unlike the 2000 POEA SEC. is not meritorious. Series of 1984[30] of respondent POEA was required to be adopted and used by all parties to the employment of any Filipino seamen (sic) on board any ocean-going vessel. Arante to prove that his working conditions increased the risk of contracting the same. 30 of the POEA SEC is a Schedule of Disability or Impediment for Injuries Suffered and Diseases or Illness Contracted." the former being a potential effect of the latter. [29] we categorically held: The argument of petitioners that since cancer of the pancreas is not an occupational disease it was incumbent upon Capt. The schedule in Sec.000 To be paid in Philippine Currency equivalent at the exchange rate prevailing during the time of payment." The unqualified phrase "during the term" in Section 20(B) of the 1996 POEA SEC covers all injury or illness occurring in the lifetime of the contract. The injury or illness need not be shown to be work- related. Inc. In Sealanes Marine Services."[27] Clearly. (emphasis supplied) . It must be noted that his claims arose from the stipulations of the standard format contract entered into between him and SEACORP which.[28] nowhere in the 1996 POEA SEC is there a list of "Occupational Diseases. v. compensability of the death or illness of seam[e]n need not be dependent upon whether it is work connected or not. per Circular No. "disability" is not synonymous with "sickness" or "illness. Therefore. under Section C(2) of the same Circular No. 2. is not required to entitle a seaman who dies during the term thereof by reason of such disease or illness. Significantly. separate and distinct from. It is not a list of compensable sicknesses.Maximum Rate: US$50. proof that the working conditions increased the risk of contracting a disease or illness. of the benefits stipulated thereunder which are. His claims are not rooted from the provisions of the New Labor Code as amended.

public policy. 192 (c) The following disabilities shall be deemed total and permanent: (1) Temporary total disability lasting continuously for more than one hundred twenty days.[34] Second. Again.[36] both of which were decided applying the Labor Code provisions on disability benefits. ECC[35] and Abaya. As a rule. or in the interpretation of agreements and writing should be resolved in the formers favor. Is the Labor Code's concept of permanent total disability applicable to the case at bar? Petitioner claims to have suffered from permanent total disability as defined under Article 192(c)(1) of the Labor Code. except as otherwise provided in the Rules. contend that petitioner erred in applying the definition of "permanent total disability" under the Labor Code and cases decided under the ECC as the instant case involves a contractual claim under the 1996 POEA SEC. we rule for petitioner. the 1996 POEA SEC giving a more liberal provision in favor of the seafarer must apply. the Labor Code's provisions on disability benefits under the Employees' Compensation Commission (ECC) require the element of work-relation for an illness to be compensable.[32] In controversies between a laborer and his master. v. x x x Petitioner likewise cites Vicente v. NLRC. on the other hand. .[33] The policy is to extend the doctrine to a greater number of employees who can avail of the benefits under the law. v.[31] While indeed. in consonance with the avowed policy of the State to give maximum aid and protection of labor. public order or morals have the force of law between the contracting parties. Inc. viz: Art. stipulations in an employment contract not contrary to statutes. Private respondents. Jr. doubts reasonably arising from the evidence. ECC.This principle was reiterated in the recent case of Seagull Shipmanagement and Transport.

strikes and lockouts. ECC[42] that "disability should not be understood more on its medical significance but on the loss of earning capacity. including the annexes thereof. Inc.O. Applying the Labor Code concept of permanent total disability to the facts on record. Natividad. NLRC."[38] Thus. the Court has applied the Labor Code concept of permanent total disability to the case of seafarers. working conditions. or any kind of work which a person of [his] mentality and attainment could do. closed shop. hours of labor and similar subjects. v. regardless of whether or not he loses the use of any part of his body. ECC. No.[41] and Bejerano v.[40] GSIS v. Sanico.[43] that in a disability compensation. treaties and covenants where the Philippines is a signatory. citing ECC v. In Philippine Transmarine Carriers v. collective bargaining. CA[46] that "permanent disability is the inability of a worker to perform his job for more than 120 days.[39] seaman Carlos Nietes was found to be suffering from congestive heart failure and cardiomyopathy and was declared as unfit to work by the company-accredited physician. international conventions. The same principles were cited in the more recent case of Crystal Shipping. but rather it is the incapacity to work resulting in the impairment of one's earning capacity. CA. it is not the injury which is compensated. shall be governed by the laws of the Republic of the Philippines. 247 to "secure the best terms and conditions of employment of Filipino contract workers and ensure compliance therewith" and to "promote and protect the well-being of Filipino workers overseas." Even without this provision.[44] In addition. a contract of labor is so impressed with public interest that the New Civil Code expressly subjects it to "the special laws on labor unions. wages. Cadiz[45] and Ijares v. The Court affirmed the award of disability benefits to the seaman. or work of similar nature that [he] was trained for or accustomed to perform. It does not mean absolute helplessness." Finally." It likewise cited Bejerano v. Permanent total disability means disablement of an employee to earn wages in the same kind of work."[37] Section 29 of the 1996 POEA SEC itself provides that "[a]ll rights and obligations of the parties to [the] Contract.The standard employment contract for seafarers was formulated by the POEA pursuant to its mandate under E. is petitioner entitled to permanent total disability benefit? . the Court cited GSIS v.

There are three kinds of disability benefits under the Labor Code. contend that: 1) petitioner did not present any proof that he suffered from permanent total disability.00 under the 1996 POEA SEC. Rule VII of the Implementing Rules of Book V of the Labor Code differentiates the disabilities as follows: Sec. he may still perform on land. 626: (1) temporary total disability. except as otherwise provided for in Rule X[47] of these Rules. if by reason of the injury or sickness he sustained. (2) permanent total disability. (b) A disability is total and permanent if as a result of the injury or sickness the employee is unable to perform any gainful occupation for a continuous period exceeding 120 days. 3) on the contrary. i. No. 4) even if he could not go back to sea duty.000.-. and (3) permanent partial disability. as amended by P. the employee is unable to perform his .D.(a) A total disability is temporary if as a result of the injury or sickness the employee is unable to perform any gainful occupation for a continuous period not exceeding 120 days. (emphasis supplied) In Vicente v. 2) petitioner did not present any medical certificate showing that he suffered any disability. Disability. that his earning power is now reduced and that he is incapable of performing remunerative employment. this does not mean that his earning capacity is impaired since as a musician.. except as otherwise provided for in Rule X of these Rules. on the other hand. the company-designated physician attested that petitioner could return to further sea duty.e. Thus.Petitioner contends that the certification of the company-designated physician that he may go back to sea duty as a piano or guitar player after 8-10 months even if his job was a drummer proves that he suffered from permanent total disability and thus entitled to permanent total disability benefits of US$60. 2. petitioner is disqualified under Section 20(d) of the 1996 POEA SEC from recovering compensation for any incapacity or disability he suffered. Section 2. Private respondents. (c) A disability is partial and permanent if as a result of the injury or sickness the employee suffers a permanent partial loss of the use of any part of his body. ECC:[48] x x x the test of whether or not an employee suffers from permanent total disability is a showing of the capacity of the employee to continue performing his work notwithstanding the disability he incurred. and 5) having admitted that he was a heavy smoker.

c) petitioner may not return to sea duty within 8-10 months after June 25. 1998 and was repatriated on April 23. in more detailed manner. it is not the injury which is compensated. 1998 of the company-designated physician.[50] Thus. or any kind of work which a person of his mentality and attainments could do. or accustomed to perform. but rather it is the incapacity to work resulting in the impairment of one's earning capacity. or totally paralyzed.[51] we held: Permanent disability is inability of a worker to perform his job for more than 120 days. . on the other hand. Inc. we find that petitioner suffered from permanent total disability.customary job for more than 120 days and he does not come within the coverage of Rule X of the Amended Rules on Employees Compensability (which. Abesamis. (emphases supplied) A total disability does not require that the employee be absolutely disabled. 1998 (date of medical report). v. 1998." The medical report dated June 25. a total disability is considered permanent if it lasts continuously for more than 120 days. Natividad.[52] x x x Total disability. 1998 after having been found as "not fit for duty. 1998. What is necessary is that the injury must be such that the employee cannot pursue her usual work and earn therefrom. In disability compensation.[53] It does not mean absolute helplessness. b) petitioner was "unfit" from April 27. viz: a) petitioner underwent a coronary bypass on April 2. then the said employee undoubtedly suffers from permanent total disability regardless of whether or not he loses the use of any part of his body. means the disablement of an employee to earn wages in the same kind of work of similar nature that he was trained for.[49] On the other hand.[54] Applying the foregoing standards. 1998 (date of referral) to June 25. regardless of whether or not he loses the use of any part of his body. Dr. in the very recent case of Crystal Shipping. establishes the following facts. 1998. and d) petitioner may return to sea duty as a piano or guitar player after 8- 10 months from June 25. It is undisputed that petitioner started to suffer chest pains on March 16. describes what constitutes temporary total disability).

[59] As in the case of Crystal Shipping. respondent was unable to work as a chief mate for almost three years. The law does not require that the illness should be incurable. petitioner's unfitness to work attached to the nature of his job rather than to its place of performance. the certification that petitioner may go back specifically as a piano or guitar player means that the likelihood of petitioner returning to his usual work as a drummer was practically nil. this information does not alter the fact that as a result of his illness. In the first place. what is important is that the facts stated in the medical report clearly constitute permanent total disability as defined by law.These facts clearly prove that petitioner was unfit to work as drummer for at least 11-13 months -. already constitutes permanent total disability. as proven by the communication of respondent principal to respondent agency referring to petitioner as "DRUMMER WITH OUR ENCHANTED ISLE QUARTET.from the onset of his ailment on March 16. Private respondents' contention that it was not shown that it was impossible for petitioner to play the drums during the 8-10 months that he was on land is specious.."[55] Thus.. private respondents were well aware that petitioner was working for them as a drummer. In the same case of Crystal Shipping. by itself. (citation omitted) Nonetheless. To our minds."[57] Moreover. What is more. speed and endurance.[56] (emphasis supplied) That the company-designated physician did not specify that petitioner suffered from any disability should not prejudice petitioner's claim for disability benefits. Indeed. Inc. it is pristine clear that petitioner's disability is total and permanent. 1998. From this. What is important is that he was unable to perform his customary work for more than 120 days which constitutes permanent total disability. This. we held: Petitioners tried to contest the above findings [of permanent total disability] by showing that respondent was able to work again as a chief mate in March 2001.[58] Disability should not be understood more on its medical significance but on the loss of earning capacity. The possibility that petitioner could work as a drummer at sea again does not negate the claim for permanent total disability benefits. has become incapacitated to do. It is well-settled that strict rules of evidence are not applicable in claims for compensation and disability benefits.[60] an award of permanent total disability benefits in the petition at bar would be germane to the purpose of the benefit. Inc. It demands the performance of hitting strokes and repetitive movements that petitioner. which is to help the employee in making ends meet at the time when he is unable to work. 1998 to 8-10 months after June 25. . it is well to note that it was respondent agency which referred petitioner to the American Outpatient Clinic giving only the specific instruction that the designated physician indicate in the medical report "the estimated treatment period and the exam conducted. playing drums per se requires physical exertion. having undergone a triple coronary bypass.

viz: Section 20.[62] Multiplying the 120-day sickness .400. that petitioner's habit of smoking heavily was the willful act which caused his illness and resulting disability. disability or death of the seafarer resulting from his willful or criminal act. heart ailment may be caused by other factors such as working and living under stressful conditions. petitioner prays that private respondents be held jointly and severally liable to pay him US$3. As to the claim for sickness allowance. Ruling otherwise would run contrary to the constitutional mandate to extend full protection to labor. We find this claim warranted by the undisputed fact on record that petitioner's basic salary is US$857. of only US$3. cannot suffice to bar petitioner's claim for disability benefits. incapacity. private respondents' peremptory presumption. disability or death is directly attributable to the seafarer.00 per month.00.428. as affirmed by the NLRC and the CA.000. We have held that a worker brings with him possible infirmities in the course of his employment and while the employer is not the insurer of the health of the employees.00 which is the amount due for permanent total disability under Section 30-A of the 1996 POEA SEC. as opposed to the award of the Labor Arbiter. Having suffered from permanent total disability. petitioner is entitled to US$60. that the employer can prove that such injury. without more. Thus. incapacity. It was likewise not shown that petitioner suffered from any form of ailment prior to the heart ailment he suffered during the course of his employment with private respondents.00. While smoking may contribute to the development of a heart ailment.We do not agree that petitioner's admission that he was a heavy smoker is enough ground to disqualify him from entitlement to disability compensation under Section 20(D) of the 1996 POEA SEC.[61] In the case at bar. he takes them as he finds them and assumes the risk of liability. provided however. No compensation shall be payable in respect of any injury. it is noteworthy that petitioner's habit of smoking was not a consideration when private respondents hired petitioner.D.

2003 and August 14. 67782 dated March 31.R. SO ORDERED. REYNATO S. Attorney's fees is also recoverable when the defendant's act or omission has compelled the plaintiff to incur expenses to protect his interest. Such conditions being present in the case at bar.000. Under Article 2208 of the New Civil Code. the decision and resolution of the Court of Appeals in CA-G.428.00 as sickness allowance. attorney's fees can be recovered in actions for the recovery of wages of laborers and actions for indemnity under employer's liability laws. are REVERSED and SET ASIDE.428. b) sickness allowance of US$3. we find that an award of attorney's fees is warranted.00 at its peso equivalent at the time of actual payment.00 at its peso equivalent at the time of actual payment. 2003. PUNO Associate Justice . and c) attorney's fees of ten percent (10%) of the total monetary award at its peso equivalent at the time of actual payment. IN VIEW WHEREOF. he should be awarded US$3.00. No. respectively. Private respondents are held jointly and severally liable to pay petitioner: a) permanent total disability benefits of US$60.allowance due petitioner on the basis of the correct monthly rate of US$857. Costs against private respondents.

CORONA ADOLFO S.WE CONCUR: ANGELINA SANDOVAL-GUTIERREZ Associate Justice RENATO C. AZCUNA Associate Justice Associate Justice .

GARCIA Associate Justice ATTESTATION I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. .CANCIO C.

PUNO Associate Justice Chairman SUKHOTHAI CUISINE and RESTAURANT. G. COURT OF APPEALS. C.REYNATO S.J. Present: . No.versus - PANGANIBAN..R. . 150437 Petitioner.

PHILIPPINE LABOR CALLEJO.. BERNIE DEL MUNDO. ANALIZA CABLAY.(Chairperson) NATIONAL LABOR YNARES-SANTIAGO. JJ. ARNEL SALVADOR. EDGAR EUGENIO. HERMIE RAZ. ANTONIO ENEBRAD. . JOSE NEIL ARCILLA. LINO SALUBRE. SR. Respondents. RIGOBERTO TUBAON and MERLY NAZ. (PLAC) Local 460 Sukhothai Restaurant Chapter. JOSE LANORIAS. CLAUDIO PANALIGAN. ROEL ESANCHA. BILLY BACUS. LITO ARCE. JOVEN TALIDONG. ALBERT AGBUYA. REY ARSENAL. ROLANDO PUGONG. EMMANUEL CAYNO. ALEX MARTINEZ. ROLANDO FABREGAS. JOVEN LUALHATI. RELATIONS COMMISSION. ROBERTO ECO. JIMMY BALAN. CESAR SANGREO. AUSTRIA-MARTINEZ. JOHN BATHAN. RICKY DEL PRADO. LENY LUCENTE. and ALLIANCE COUNCIL CHICO-NAZARIO.

.

2006 x----------------------------------------x DECISION .Promulgated: July 17.

R. 2001 promulgated by the Court of Appeals (CA) in CA-G.AUSTRIA-MARTINEZ. SP No. the majority of the employees of the petitioner organized themselves into a union which affiliated with the Philippine Labor Alliance Council (PLAC). This case originated from a complaint for illegal strike filed with the NLRC by the petitioner[3] against private respondents due to an alleged wildcat strike and other concerted action staged in the company premises on June 24.: Before this Court is a petition for certiorari under Rule 45 questioning the Decision[1] dated August 8. 2000 of the National Labor Relations Commission (NLRC). J. 63864 which affirmed in toto the Decision dated November 29. and the CA Resolution[2] dated October 18. 25 and 26. and was . 2001 which denied the petitioners Motion for Reconsideration. 1999. The undisputed facts are as follows: Sometime in March 1998.

thereby agreeing to submit the issue of unfair labor practice the subject matter of the foregoing Notice of Strike and the Strike Vote for voluntary arbitration with a view to prevent the strike. with the reservation of the management prerogative to issue memos to erring employees for the infraction. 1998. On March 24. 1999. On December 10. or violation of company policies. and his employment as cook. and particularly. or on December 11. fault-finding. Ernesto Garcia. through its president. respondent Billy Bacus. a Strike Vote was conducted and supervised by NCMB personnel. private respondent Union filed with the NLRC a complaint for illegal dismissal. 1998. In the morning of June 24. and union busting through coercion and interference with union affairs. On the following day. the union vice- . 1999. On January 21. private respondent Jose Lanorias. a union member. dismissed Eugene Lucente. 1998. Subsequently.[4] On December 3. during the pendency of the voluntary arbitration proceedings. the representatives of the petitioner agreed and guaranteed that there will be no termination of the services of private respondents during the pendency of the case. the petitioner. was relieved from his post. In view of this termination. terminated. private respondent Union filed a Notice of Strike with the National Conciliation and Mediation Board (NCMB) on the ground of unfair labor practice.designated as PLAC Local 460 Sukhothai Restaurant Chapter (Union). the petitioner and the Union entered into a Submission Agreement. 1998. acts of harassment. a union member. 1999. and the results of the vote were submitted to the NCMB on December 21. due to an alleged petty quarrel with a co-employee in February 1999. in a conciliation conference.

Having arrived at no amicable settlement. Finally. was converted into a sit-down strike.[5] . according to the respondents. and to declare respondents. all individual respondents are hereby directed to immediately remove their picket lines and all physical obstructions that impede ingress and egress to petitioners premises. On the next day. the same was transformed into an actual strike.president. and photographs. SO ORDERED. affidavits of witnesses. to have lost their employment status. seeking to declare the strike illegal. the petitioner filed a complaint for illegal strike with the NLRC against private respondents. the Labor Arbiter rendered a Decision the dispositive portion of which reads: WHEREFORE. who participated in the commission of illegal acts. respondents staged a wildcat strike. together with supporting documents. respondents are hereby declared to have staged an illegal strike. conferred with Ernesto Garcia and protested Lanoriass dismissal. Shortly thereafter. or on June 26. On June 29. in compliance with the orders of the Labor Arbiter. and the employment of union officers and all individual respondents are deemed validly terminated in accordance with law. premises considered. a Notice of Strike was re-filed by the private respondents and the protest. On June 25. 1999. 1999. the parties submitted their position papers. On October 12. 1999. 1999.

The principal question before the Labor Arbiter was whether the private respondents staged an illegal
strike. Ruling in the affirmative, the Labor Arbiter held that the Notice of Strike dated December 3, 1998
as well as the Strike Vote of December 11, 1998 referred to a prior dispute submitted for voluntary
arbitration and, hence, they cannot apply to the strike staged about six months later, which commenced
on June 24, 1999 and ended on June 26, 1999; that, for these reasons, the Union failed to comply with
the mandatory requisites for a lawful strike; that the issuance of memos by the petitioner to instill
discipline on erring employees is a lawful exercise of management prerogative and do not amount to
acts of unfair labor practice; that, instead of resorting to a strike, private respondents should have
availed of the proper legal remedies such as the filing of complaints for illegal suspension or illegal
dismissal with the NLRC; that, the root causes of the controversy are the petition for certification
election and petition for cancellation of union registration which were then pending before the
Department of Labor as well as the issue on unfair labor practice then pending before the voluntary
arbitrator, and, hence, the parties should have awaited the resolution of the cases in the proper fora;
and that even if private respondents complied with all the requisites of a valid strike, the strike is still
illegal due to the commission of prohibited acts, including the obstruction of free ingress and egress of
the premises, intimidation, and threat inflicted upon non-striking employees.

Private respondents appealed to the NLRC which, on November 29, 2000, promulgated its Decision the
dispositive portion of which states:

WHEREFORE, the appeal is hereby granted. Accordingly, the Decision dated October 12, 1999 in the
above entitled case is hereby vacated and set-aside. Consequently, the complaint of illegal strike is
hereby dismissed for lack of merit.

All striking workers are hereby ordered to return to work immediately and Sukhothai Restaurant to
accept them back to their former or equivalent positions. If the same is no longer possible, Sukhothai
Restaurant is ordered to pay them separation pay equivalent to one month salary for every year of
service reckoned from their initial date of employment up to the present.

SO ORDERED.[6]

In overruling the Labor Arbiter, the NLRC held that the petitioner is guilty of union busting; that the
petitioner violated the Submission Agreement dated December 10, 1998 in that no termination shall be
effected during the voluntary arbitration proceedings and, hence, the strike was justified; that the
Notice of Strike and Strike Vote dated December 3, 1998 and December 11, 1998, respectively, are
applicable to the strike of June 24, 25, and 26, 1999 since the same issues of unfair labor practice were
involved and that unfair labor practices are continuing offenses; that even if the foregoing Notice of
Strike and Strike Vote were not applicable, the Union may take action immediately since the petitioner
is guilty of union busting; and that the re-filing of a Notice of Strike on June 25, 1999 cured the defect of
non-compliance with the mandatory requirements.

After the NLRC denied the Motion for Reconsideration, the petitioner appealed to the CA and raised the
following issues:

I. WHETHER OR NOT THE STRIKE STAGED BY THE

PRIVATE RESPONDENTS IS LEGAL; and

II. WHETHER OR NOT THE PRIVATE RESPONDENTS WHO PARTICIPATED IN THE STRIKE AND COMMITTED
ILLEGAL ACTS WERE PROPERLY AND VALIDLY DECLARED TO HAVE LOST THEIR EMPLOYMENT STATUS.[7]

As stated above, the CA denied the petition and affirmed the NLRC. Petitioner is now before this Court,
raising the following grounds:

I. THE COURT OF APPEALS GRAVELY ERRED AND DECIDED THE ISSUES IN THE INSTANT CASE IN A
MANNER CONTRARY TO ESTABLISHED LAW AND JURISPRUDENCE BY RULING THAT THE WILDCAT STRIKE
OF JUNE 24, 1999 IS VALID AND LEGAL DESPITE CLEAR AND INCONTROVERTIBLE EVIDENCE THAT:

A. PRIVATE RESPONDENTS FAILED TO COMPLY WITH THE REQUISITES FOR A VALID STRIKE AS
PRESCRIBED BY THE PERTINENT PROVISIONS OF THE LABOR CODE;

B. THERE WERE NO STRIKEABLE ISSUES; AND

C. PRIVATE RESPONDENTS COMMITTED ILLEGAL AND PROHIBITED ACTS DURING THE STRIKE.

such as acts of harassment. there is no need to repeat the process. The issue to be resolved under those proceedings pertained to the very same issues stated in the Notice of Strike of December 3. In support of this theory.II. and whether private respondents are deemed to have lost their employment status by participating in the commission of illegal acts during the strike. is that at the time the strike was staged in June 1999. The undisputed fact. Respondents insist that the filing of the Notice of Strike on December 3. The questions before this Court are whether the strike staged by the private respondents is illegal. thus. Furthermore. respondents invoke Article 263(f) in that the decision to strike is valid for the duration of the dispute based on substantially the same grounds considered when the strike vote was taken. these requirements may nonetheless be dispensed with since the petitioner is guilty of union busting and. and union busting through coercion and interference with union affairs. voluntary arbitration between the parties was ongoing by virtue of the January 21. hence. fault-finding. 1998: the commission of unfair labor practices. even assuming for the sake of argument that the Notice of Strike and Strike Vote in December 1998 cannot be made to apply to the concerted actions in June 1999. . THE COURT OF APPEALS GRAVELY ERRED BY FAILING TO ADDRESS THE OTHER ISSUES RAISED BY THE PETITIONER IN ITS PETITION FOR CERTIORARI WHICH FAILURE AMOUNTED TO A DENIAL OF ITS RIGHT TO DUE PROCESS OF LAW. the Strike Vote of December 11. according to the respondents. and their observation of the 15-day cooling-off period in case of unfair labor practice as well as the seven- day reporting period of the results of the strike vote.[8] The petition is meritorious. 1998. all satisfy the mandatory requirements under Article 263[9] of the Labor Code and are applicable to the June 1999 strike. 1998. however. 1998. 1999 Submission Agreement. the submission of the results of the vote to the NCMB on December 21. the Union can take action immediately.

xxxx No strike or lockout shall be declared after assumption of jurisdiction by the President or the Secretary or after certification or submission of the dispute to compulsory or voluntary arbitration or during the pendency of cases involving the same grounds for the strike or lockout. x x x x (emphasis supplied) This Court has held that strikes staged in violation of agreements providing for arbitration are illegal. since these agreements must be strictly adhered to and respected if their ends are to be achieved. Prohibited activities.Article 264 of the Labor Code provides: Art.[10] The rationale of the prohibition under Article 264 is that once jurisdiction over the labor dispute has . 264.

if one is available. the very questions which they also link to the other incidents of unfair labor practices allegedly committed by the petitionerthese matters should have been raised and resolved in the voluntary arbitration proceedings that were commenced precisely to address them. in view of the proscription under Article 264 of the Labor Code. as private respondents so affirm.[12] In Alliance of Government Workers v. subject to the minimum requirements of wage laws and other labor and welfare legislation. which allegedly triggered the wildcat strike. both union members.[11] Indeed it is among the chief policies of the State to promote and emphasize the primacy of free collective bargaining and negotiations.[13] Chief Justice Fernando declared that the principle behind labor unionism in private industry is that industrial peace cannot be secured through compulsion by law. Relations between private employers and their employees rest on an essentially voluntary basis. then they should have availed of the appropriate remedies under the Labor Code. the submission of the cases to the grievance machinery of the CBA. and the prevailing state policy as well as its underlying rationale. The questions that surround their dismissal. are connected to the alleged breach of the guarantee by the petitioner not to dismiss its employees during the pendency of the arbitration case. good faith cannot be invoked as a defense. mediation. by agreement of the parties. that jurisdiction should not be interfered with by the application of the coercive processes of a strike. Minister of Labor. such as the institution of cases of illegal dismissal[15] or. as modes of settling labor.[19] . On the other hand. and conciliation. so that they may be subjected to separate voluntary arbitration proceedings. or industrial disputes. including voluntary arbitration. Private respondents should have availed themselves of any of these alternative remedies instead of resorting to a drastic and unlawful measure. the holding a wildcat strike. this Court declares that the strike staged by the private respondents is illegal. if private respondents believed that the disciplinary measures had nothing to do with the issues under arbitration. specifically.[18] For failing to exhaust all steps in the arbitration proceedings by virtue of the Submission Agreement. are not sufficient grounds to justify the radical recourse on the part of the private respondents.[16] or simply seek to terminate the pending voluntary arbitration case and complete the mandatory procedure for a lawful strike.[14] The alleged dismissals of Lucente and respondent Lanorias.been properly acquired by competent authority.[17] And because of the fact that the Union was fully aware that the arbitration proceedings were pending.

Rule XXII. in case of unfair labor practice involving the dismissal from employment of any union officer duly elected in accordance with the union constitution and by-laws which may constitute union-busting where the existence of the union is threatened.[21] and in case of union busting where the existence of the union is threatened. the union or the employer shall furnish the Department the results of the voting at least seven days before the intended strike or lockout. Book V of the Rules Implementing the Labor Code. as well as the considerations of established doctrine: the language of the law leaves no room for doubt that the cooling-off period and the seven-day strike ban after the strike-vote report were intended to be mandatory. the fifteen-day cooling-off period shall not apply and the union may take action immediately after the strike vote is conducted and the results thereof submitted to the appropriate regional branch of the Board. then applicable at the time of the dispute. and Lockout (January 31. (emphasis supplied) The NCMB Primer on Strike. The foregoing provision of the implementing rules should also be compared to the provisions of the Labor Code under Article 263(c): . This provision should be read with Section 3.With respect to respondents averment that assuming arguendo that the Notice of Strike and Strike Vote in December 1998 cannot be made to apply to the strike in June 1999. subject to the cooling-off period herein provided. the relevant provisions of which state: However.[20] the Court finds it unnecessary to discuss the question at length. especially in view of the foregoing declaration that the strike is illegal. Article 263(f) in part states: In every case. it is only the 15-day cooling-off period that may be dispensed with. the requirements for a valid strike may nonetheless be dispensed with in case of union busting. Picketing. 1992) provide the same wording.

particularly paragraph (e). the strike may still be declared invalid where the means employed are illegal. or intimidation or b) obstruct the free ingress to or egress from the employer's premises for lawful purposes. Well- settled is the rule that even if the strike were to be declared valid because its objective or purpose is lawful. and seven-day report period cannot be dispensed with.[24] where the strikers used unnecessary and obscene language[25] or epithets to prevent other laborers to go to work. coercion. The following acts have been held to be prohibited activities: where the strikers shouted slanderous and scurrilous words against the owners of the vessels. the results thereof submitted in every case at least seven days before the intended strike or lockout. The implementing rules clarify Article 263(c) in that the union may strike immediately provided that the strike vote is conducted. in case of alleged union busting. the 15-day cooling-off period shall not apply and the union may take action immediately. the strike had been attended by the widespread commission of prohibited acts. which states that no person engaged in picketing shall: a) commit any act of violence.[23] Among such limits are the prohibited activities under Article 264 of the Labor Code. or c) obstruct public thoroughfares.[26] and circulated libelous . strike vote.(c) x x x However. in case of dismissal from employment of union officers duly elected in accordance with the union constitution and by-laws. In sum. the three remaining requirements notice. which may constitute union busting where the existence of the union is threatened.[22] What is more.

[39] openly cursing and shouting at the president in front of customers[40] and using loud and abusive language. such as Putang ina niyong lahat!.[33] waving their arms and shouting at the passersby. upakan mo!. 264. Huwag kayong pumasok sa Sukhothai![34] and Nilagyan na namin ng lason ang pagkain dyan![35] as well as numerous other statements made to discredit the reputation of the establishment. toward the rest of the management[41] as well as their co-workers who refused to go on strike. such as the intimidation and harassment of a considerable number of customers to turn them away and discourage them from patronizing the business of the petitioner.[43] as well as deliberately blocking their movements inside the restaurant. such as Pag hindi sila pumayag.[32] The evidence in the record clearly and extensively shows that the individual respondents engaged in illegal acts during the strike.[44] at times by sharply bumping into them[45] or through indecent physical contact. going beyond the mere attempt to persuade customers to withdraw their patronage.[31] Permissible activities of the picketing workers do not include obstruction of access of customers.[27] where the protestors used abusive and threatening language towards the patrons of a place of business or against co-employees.[28] where the strikers formed a human cordon and blocked all the ways and approaches to the launches and vessels of the vicinity of the workplace[29] and perpetrated acts of violence and coercion to prevent work from being performed.[47] and shouting at the security guard Granada! which caused panic among the customers and prompted security to report a possible death threat to management and the security agency.[37] angry and unruly behavior calculated to cause commotion[38] which affected neighboring establishments within the mall.[36] preventing the entry of customers. the applicable provision is Article 264(a) of the Labor Code: Art.statements against the employer which show actual malice.[42] physically preventing non-strikers from entering the premises.[30] and where the strikers shook their fists and threatened non-striking employees with bodily harm if they persisted to proceed to the workplace.[46] openly threatening non- strikers with bodily harm.[48] In the determination of the liabilities of the individual respondents. Prohibited Activities (a) x x x .

[49] this Court explained that the effects of such illegal strikes. when he commits an illegal act during a strike.[51] Liability for prohibited acts is to be determined on an individual basis: .[50] In all cases. which may justify the imposition of the penalty of dismissal. Sulpicio Lines. may suffice. There must be proof that he or she committed illegal acts during a strike. outlined in Article 264. xxxx In Samahang Manggagawa sa Sulpicio Lines. That mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment. even if a replacement had been hired by the employer during such lawful strike. Inc. Inc. the striker must be identified. may be terminated from work when he knowingly participates in an illegal strike. on the other hand. A union officer. make a distinction between workers and union officers who participate therein: an ordinary striking worker cannot be terminated for mere participation in an illegal strike. But proof beyond reasonable doubt is not required.-NAFLU v. Substantial evidence available under the attendant circumstances.xxxx x x x x Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status: Provided. and like other workers.

Private Respondent Rank in Respondent Union Illegal Acts Emmanuel Cayno .

[54] openly threatening non-strikers with bodily harm.[53] publicly denouncing the reputation of the establishment. harassing. and discouraging customers from entering the restaurant. shouting at the security guard Granada! which caused panic among the customers.[52] Intimidating.[55] Billy Bacus .President Knowingly participating in an illegal strike. preventing.

[58] Analiza Cablay Secretary . and discouraging customers from entering the restaurant.[56] use of abusive language towards management or non- strikers.Vice President Knowingly participating in an illegal strike. Intimidating. harassing.[57] deliberately blocking the movements of management or non-strikers inside the restaurant. preventing.

harassing. and discouraging customers from entering the restaurant.[59] Jose Neil Arcilla Treasurer .Knowingly participating in an illegal strike. preventing. Intimidating.

[62] Cursing and use of abusive language towards management.Knowingly participating in an illegal strike. non-strikers.[63] Roel Esancha Auditor Knowingly participating in an illegal strike.[60] publicly denouncing the reputation of the establishment. preventing. Intimidating. harassing.[64] Claudio Panaligan . harassing. or customers. intimidating. and discouraging customers from entering the restaurant. and discouraging customers from entering the restaurant.[61] coercing non-strikers to strike. preventing.

use of abusive language towards management.[67] Rey Arsenal . or customers. and discouraging customers from entering the restaurant. non-strikers. preventing.[65] intimidating.Board Member Knowingly participating in an illegal strike.[66] deliberately blocking the movements of management or non-strikers inside the restaurant. harassing.

Member Intimidating. preventing. harassing. harassing. and discouraging customers from entering the restaurant.[68] Alex Martinez Member Intimidating. preventing.[69] . and discouraging customers from entering the restaurant.

or customers.[71] intimidating.[72] Jose Lanorias .Hermie Raz Member Cursing and use of abusive language towards management. harassing.[70] deliberately blocking the movements of management or non-strikers inside the restaurant. non-strikers. and discouraging customers from entering the restaurant. preventing.

preventing. and discouraging customers from entering the restaurant. harassing.[73] Lito Arce Member Id.[74] Cesar Sangreo .Member Intimidating.

[75] Rolando Fabregas Member Id.Member Id.[76] Jimmy Balan .

[77] deliberately blocking movements of non-strikers inside the restaurant by sharply bumping into them[78] or through indecent physical contact. or customers. non-strikers..[80] Joven Lualhati Member . [79] cursing and use of abusive language towards management.Member Id.

and discouraging customers from entering the restaurant.Intimidating. preventing.[81] Antonio Enebrad Member Id. harassing.[82] Edgar Eugenio .

Member Id.. and discouraging customers from entering the restaurant.[84] Albert Agbuya Member Intimidating. harassing. non-strikers. preventing.[83] cursing and use of abusive language towards management. or customers.[85] Arnel Salvador .

[87] Bernie Del Mundo .[86] Ricky Del Prado Member Id.Member Id.

Member Id.[89] Joven Talidong Member .[88] Roberto Eco Member Id.

Id.[91] threatening non-strikers with bodily harm..[90] Leny Lucente Member Id.[92] Rigoberto Tubaon .

and discouraging customers from entering the restaurant.[93] cursing and use of abusive language towards management. non-strikers. or customers. non-strikers. harassing.[96] . and discouraging customers from entering the restaurant.[94] Merly Naz Member Intimidating.Member Intimidating. or customers. preventing. preventing.[95] cursing and use of abusive language towards management. harassing.

Lino Salubre Member Preventing and discouraging customers from entering the restaurant.[97] Rolando Pugong Member .

harassing.[99] . and discouraging customers from entering the restaurant. preventing.Preventing and discouraging customers from entering the restaurant.[98] John Bathan Member Intimidating.

2000 of the National Labor Relations Commission are REVERSED and SET ASIDE. Arnel Salvador. Emmanuel Cayno. Joven Talidong. Merly Naz. The Decision and Resolution of the Court of Appeals together with the Decision dated November 29. Jose Neil Arcilla. Billy Bacus. The Court finds the strike illegal and. The Decision of the Labor Arbiter dated October 12. Rolando Pugong. 1999 is REINSTATED. Cesar Sangreo. Rigoberto Tubaon. Joven Lualhati. the union officers who participated in the illegal strike and in the commission of illegal acts. Bernie Del Mundo. as well as the union members who participated in the commission of illegal acts during the strike. the Labor Arbiter is correct in ruling that the employment of all individual private respondents are deemed validly terminated. Roel Esancha. Lito Arce. and Claudio Panaligan. . Rolando Fabregas. Albert Agbuya. namely. all private respondents.Thus. namely. Rey Arsenal. as a consequence thereto. SO ORDERED. Hermie Raz. the petition is granted. Lino Salubre. Analiza Cablay. Jimmy Balan. Edgar Eugenio. Leny Lucente. Jose Lanorias. Alex Martinez. Roberto Eco. Ricky Del Prado. No pronouncement as to costs. WHEREFORE. Antonio Enebrad. and John Bathan. are hereby declared to have lost their employment status.

PANGANIBAN Chief Justice Chairperson .MA. ALICIA AUSTRIA-MARTINEZ Associate Justice WE CONCUR: ARTEMIO V.

Petitioner. 81298 reversing the Decision3 of the National Labor Relations Commission (NLRC) in NLRC-NCR (South) Case No.. (PPI) is a domestic corporation engaged in the business of selling pre-need plans.R. CALLEJO.CONSUELO YNARES-SANTIAGO ROMEO J. SP No. SR. 30-07-03393-01. Respondent. INC. Pacific Plans. vs.J.: Before us is a Petition for Review on Certiorari assailing the Decision1 and Resolution2 of the Court of Appeals (CA) in CA-G.4 It maintains regional offices throughout the Philippines. 2006 AGRIPINO V. PACIFIC PLANS. No. DECISION CALLEJO. 165476 March 10. Inc. and memorial plans. MOLINA. CHICO-NAZARIO Associate Justice G. . pension. Associate Justice Associate Justice MINITA V. such as educational.R.. SR.

6 Roy Padiernos then occupied the position of Regional Manager of Metro Manila VI. recommending the creation of additional positions or termination of services of any employee within the Region.5 Among the corporate officers of PPI were Geoffrey Martinez. Molina performed both administrative and marketing functions. PPI hired Agripino Molina as Regional Manager of Metro Manila VI. f. recommending promotions or changes in salaries of personnel within the Region and lateral shifts of supervisor. b.8 Sometime in October 1994. e. the Head of the Legal Department. conducting researches to determine sales potentials and share of the market. Senior Assistant Vice-President. and profitability of Company's products. generating new and conserving existing pre-need plan businesses. whose duties and responsibilities included the following: a. As Regional Manager. formulating and recommending short and long range marketing plans for the Region and executing approved plans. training. pricing. One of them was Ruth Padiernos. and Atty. Luciano Abia.At the time material to this case.7 PPI solicited subscribers and buyers of its pre-need plans through clusters of sales associates. Metro Manila Marketing Division. d. Metro Manila regional offices were divided into two sales divisions - the South Sales Division and the North Sales Division. motivating. Metro Manila VI was part of the North Sales Division. Executive Vice-President for Finance. g. competition and the directing of product development for the Region. their assistants. and developing a dedicated and effective counselor force. hiring and terminating counselors. c. . Manuel Reyes. understudies of positions of equal rank. wife of Roy Padiernos. unit managers or group managers in accordance with policies previously laid out. replacing Roy Padiernos who was promoted as First Vice-President for Marketing Operations.

that radical changes should first be cleared with [the] superior. Manuel Reyes. In the meantime. further enhancing the prestige of the Company and maintaining its position of leadership in its field.10 Caritas Health Shield. keeping [the] superior informed of [the] Region's activities and specially of [the] decision on matters for which he may be held responsible. counselors. government instrumentalities. (Caritas for brevity). Molina was promoted Assistant Vice-President with the same functions as those of a regional manager of the same sales region. Geoffrey Martinez resigned as Executive Vice-President of PPI and became the President and Chief Executive Officer of Caritas. m. and profit. His wife. was established on December 16. 1998. j.12 Molina was hired as Assistant Vice-President and Marketing Head of Area 10. the public.9 Since Metro Manila VI was consistently on top in terms of nationwide sales and productivity. a health maintenance organization (HMO) engaged in selling health and hospitalization plans. provided. realizing the Company’s objective for service. from February 2000. controlling the operations of the Region and establishing a system of periodic work reporting. Fe Molina. training and developing understudies for each position within the Region to provide immediate replacement whenever vacated.13 . there was a considerable decrease in the sales output production of PPI’s Metro Manila Region VI. [and] o. coordinating the Region’s activities with those of the other Regions. was the head of a sales agency of Caritas. employees. n. i. however.11 Among the incorporators and members of the Board of Directors were Luciano Abia and Atty. k.h. Inc. growth. establishing and maintaining harmonious and dignified relationship with plan holders. l. changing methods and procedures not affecting the other Regions. other pre-need plan companies.

initiating talks and enticing associates to join Caritas.15 In a letter addressed to Picazo dated March 22. requested that he be furnished with copies of the alleged written reports to enable him to prepare the required written explanation. to which 12 persons contributed for a total P2. Misappropriation of Funds 1. Inc. for payment of official function during the meeting held at Barrio Fiesta last November 27. Conflict of Interest 1. II.00 per person. He. 2000.14 Molina was also required to submit. Picazo.On March 21. 2000.00. 2000 and Ms. and a number of associates have already signed up. and breach of trust and confidence. through its Senior Assistant Vice- President for Human Relations. and 3) acts of misdemeanor on several occasions. 2000. *Your failure to stop and/or tolerating your wife's activities in recruiting for Caritas Ms. might constitute conduct unbecoming of an officer. citing the particulars of the charges against Molina. and solicited contributions from them for the bill but later asked for reimbursement from the company. Molina was also informed that he was preventively suspended pending formal investigation effective immediately until April 24. however.16 However. and other acts inimical to the company’s interest. it opined. Solicitation of associates' personal funds in the amount of P200. 2) he called for a meeting with his associates sometime in November 1999. Celeste Villena. Lennie Gatmaitan who belongs to Ms. instead of acceding to the request of copies of the written reports. he committed the following: 1) recruiting and pirating activities in favor of Caritas.400. Patricio A. Picazo wrote a letter dated April 3. such as coming to the office under the influence of liquor. Molina categorically denied the acts attributed to him. in particular. . 2000. initiating a smear campaign against PPI. Amount solicited was subsequently reimbursed from the company but not returned to the associates concerned. 2000. conflict of interest. on March 23. informing him that. Eppie Acosta on March 06. based on written reports. Restie Acosta on March 04. 2000. Recruiting and pirating activities in favor of Caritas Health Shield. 1999. * You have acted as conduit for Caritas in recruiting/pirating Mr. a PPI GA. a written explanation why he should not be held administratively liable for said acts which. thus: I. Molina received a Memorandum from PPI.

22 . 2000. conformably with Rule XIV. Roy Padiernos and Mr. 2000. You even encouraged associates to transfer to Caritas. by shouting at him and walking out in one of the meetings called by him after the retirement of Atty. PPI issued a Memorandum advising Molina that he would be reinstated in the payroll effective April 25. IV.20 Molina filed a "Motion to Dismiss Complaints and Motion for Full Reinstatement" on May 2. Often reporting to office under the influence of liquor. 2. Section 4 of the Implementing Rules of the Labor Code." denying him the right to be informed of the exact charges and to confront those who made written reports against him. Roy Padiernos. Mr. 2000 without requiring him to report for work during the pendency of his investigation. Molina reiterated his request to be provided with a copy of the written reports.17 During the investigation the following day. 2. 3.21 He asserted that the charges should be dismissed since he was compelled to prepare a written explanation on the basis of "summarized specific acts.19 Molina failed to submit any written explanation. and reiterated his order for Molina to submit his written explanation on April 11. Dereliction of Duties 1. 2000.III. 2000. he alleged that he should be allowed to report for work.18 Picazo denied the request in a Memorandum dated April 6. Conduct unbecoming of a Company Officer 1. Showing disrespect to immediate superior. Sowing intrigue in the case of Vilma del Rosario which almost caused her early retirement from the company and transfer to Caritas. April 4. You failed to prevent associates from leaving the company in favor of competitors. As to the issue of reinstatement. Abia. Sowing intrigues between Mr. thus causing demoralization among your sales associates. On April 24. 2000. 4. Haceta. 2000. and to address his concerns during the investigation scheduled on April 14.

on June 1.30 . Molina was notified of the termination of administrative investigation. 2000. the trial court issued an Order granting Molina's prayer for temporary restraining order.29 On July 30. Also. PPI filed a Motion to Dismiss.24 Molina and his counsel attended the May 19. PPI considered his failure to submit a written explanation as a waiver of his right to be heard. The trial court denied the motion as well as PPI’s motion for reconsideration. Molina filed.On May 11. the investigating committee had evaluated the evidence at hand and submitted its recommendations to the "higher management" for decision. it confirmed the denial of his Motion to Suspend Proceedings. 2001.25 praying that the administrative investigation be deferred until the resolution of the "prejudicial" issues raised in his previous motion.28 On June 23. 2000.27 Meanwhile. 2000 was likewise denied. in letter dated June 13. 2000. 2000. assailing the writ of preliminary injunction issued by the RTC and its order denying the motion to dismiss the complaint. May 11. 2001. 2000. it filed a petition for certiorari before the CA. He was warned that his non-appearance at the investigation would be considered a waiver of his right to be heard.23 On the same day. 2000. Abia issued an inter-office Memorandum announcing the appointment of Sercy F. Thereafter. the CA rendered judgment in favor of PPI and nullified the writ of preliminary injunction issued by the RTC as well as the order denying the motion of PPI for the dismissal of the complaint. On July 16.26 When Picazo failed to respond. and as such. which was later made permanent per its Order dated July 12. 2000. Picazo wrote Molina that his motion to dismiss the charges would be resolved after the investigation. a complaint for damages with a prayer for a temporary restraining order and preliminary injunction based on Article 19 of the New Civil Code. 2000 investigation and filed a Motion to Suspend Proceedings. PPI resolved to dismiss Molina from employment on its finding that the latter violated its standard operating procedure. maintaining that the courts have no jurisdiction over matters arising from employee-employer relationship. Picache as the Officer-In-Charge (OIC) for Metro VI and XVI effective May 6. The motion for reconsideration filed by PPI on July 26.

P400. of service in lieu of reinstatement . for illegal dismissal and illegal suspension with claim for monetary benefits.000. lacked probative value. In his Position Paper.000[.000[. Profit Bonus for Year 2000 & 2001 .00 (P25. 2000 . Besides. and Certerio B. 2000 to present . his dismissal from employment took effect immediately. and Division Head. his alleged violations of company rules and policies were hearsay and.P125. Thus.000[.00 .00 for 7 years 3. Moral Damages .00 4.P300.31 Molina principally argued that he was denied the right to due process due to the failure of PPI to furnish him a copy of the written reports of the sales associates and co-employees. and that the alleged accusations were merely concocted in order to replace him with someone close to Picazo.00] d) One mo.000[. Molina maintained that since he was denied the opportunity to dispute the authenticity and substantive contents of the reports. he prayed for the following relief: 1.000.Molina forthwith filed a complaint with the NLRC against PPI and Alfredo C.000. Antonio. Total Money Claims a) Salary with (overriding) commission from March 21 to April 24. therefore. only six days after PPI received the CA decision decreeing that the NLRC has the rightful jurisdiction over the case. the termination of his employment was made without the 30-day prior notice. Patricio A.000.P400.00] mo.suspended w/o pay - P45. Uy. Picazo.00] c) Unpaid salary from August 1. 2001 to present . the basis of the accusations against him. Since an OIC for his position was already appointed even before all his pending motions were resolved. he surmised that there were really no such reports. Leave Credits . Senior Assistant Vice-President of Human Resources Development.P100.00] [overriding]) b) Unpaid (overriding) commission from April 25. in their capacity as President. salary & P20. respectively.00 2.000.7 years = P175. salary for every yr.

PPI maintained that. Lydia San Miguel. and Vilma del Rosario. as additional penalty for illegal dismissal. as amended. overriding commission. and including Vilma del Rosario. serious misconduct.00 7. actual. PPI appended to its position paper the statements/affidavits of Marivic Uy. fraud.000. PPI. and disrespected Padiernos.00 for the salary he received during the time when the restraining order/ writ of injunction was erroneously enforced. Lenita Gatmaitan. Some of these sales associates were the spouses Eppie and Restie Acosta.400. profit bonus.P300. disseminated intrigues and created divisiveness among the employees and PPI’s senior officers. and the ruling of this Court in Bañez v. Exemplary Damages . his superior.P12.5. in violation of its policy against conflict of interest.00 9. likewise.00 6. and gross neglect of duty by reason thereof. Amount debited from complainant's ATM [as partial payment for hospitalization expenses incurred by him which PPI had advanced] . Lolita Casaje.35 Molina should be held liable for P1. Ruth and Roy Padiernos. he constantly shouted to lady employees and solicited money from his sales associates in connection with an official company function without returning the same after PPI reimbursed him for the expenses incurred.000 as moral damages and an amount not less than P428.000. Actual Damages .32 For its part. Supporting its claims that Molina committed breach of trust. moral or exemplary damages.36 . the secretary of Roy Padiernos. and attorney’s fees.000. Attorney's Fees .000. and Alice Halili. by shouting at him during one of the meetings with other senior officers.for lifetime medical attendance and medicines at 16 more years life expectancy - P1. Valdevilla.249. averred that Molina had the habit of coming to the office under the influence of liquor.00 8. PPI averred that he was given sufficient opportunity to present his personal submissions before finally issuing the notice of dismissal but Molina persistently refused to submit his explanation. PPI stressed that Caritas was its competitor in the pre-need plans business. and walked out of the meeting afterwards. Retention of complainant's car.384. under Article 217(a) of the Labor Code.33 On the claim of Molina that he was denied due process. Celeste Villena. Lydia Magalso.34 PPI further argued that he was not entitled to the payment of 13th and 14th month salaries. and that Molina and his wife recruited and enticed some of the sales associates of PPI to work for Caritas.P500. Eppie and Restie Acosta.

Del Rosario. Molina admitted having had drinking sessions with Certerio Uy.38 In his Rejoinder39 and Sur-Rejoinder40 Molina submitted the affidavit of Geoffrey Martinez. P2. PPI even failed to present the reports/affidavits before the RTC where his complaint for damages against PPI and its officers was pending. while the latter is into the business of selling pre-need plans and supervised by the Securities and Exchange Commission (SEC).090.000.00 in 1998 to P263. moral and exemplary damages. as the former was engaged in selling health care and is supervised by the Department of Health (DOH). He claimed that his officemates mistook him for being drunk when he went to his office even after office hours because of his "mestizo complexion.643.773. including his overriding commission.000. in one way or another.00. Molina averred that the P200. the acts of Molina caused demoralization of the sales associates. Ilustre Acosta and Reynaldo Villena. Finally. who belied the reports of Uy.46 and that Villena had in her possession a license to sell Caritas products.099. respectively. Reyes were incorporators of Caritas. and P228. He and Roy Padiernos had been at odds because the latter appointed his brother and wife as agency manager and group manager of PPI to which he objected.00.00 in 2000. Molina averred that the affidavits submitted by PPI were antedated since he was never furnished copies of said reports/affidavits despite demands.348.009. and the spouses Padiernos and Acosta. more than the amount collected from the employees.37 PPI insisted that he should be held liable for not less than P507.752.00 which was the balance on his car plan agreement with PPI. based on the sales data. who provided the hard liquor and pulutan. and P273. he averred that the so-called "associates" of PPI were not actually employees but "independent journeymen" who derived income on commission basis.000. Molina further emphasized that Caritas was not a competitor of PPI. To counter the imputations of conflict of interest.44 and Magalso. He contended that he had no motive to recruit sales associates or employees of PPI to be employed by Caritas because the depletion of sales associates would diminish his effectiveness as an area manager.00 collected from each of the employees of PPI during their luncheon meeting was a voluntary contribution. profit bonus and fringe benefits.45 who all disputed.In his Reply. Molina's alleged violations. PPI averred that. but only after office hours.41 He also appended the affidavits of Natividad Gatchalian.43 Gatmaitan. resulting in a sudden decrease of the region's output from P343.600.47 With regard to the declining sales output of his region. . but averred that it should not be considered as disrespect or misdemeanor.000. Villena.000 as actual.00 in 1999.42 San Miguel. He admitted that he may have raised his voice in the heat of arguing a point during meetings. Molina also alleged that Abia and Atty. free to engage in any kind of selling activities not in direct competition with PPI. and that they spent P4. Molina attributed the same to the Asian regional crisis that hit the Philippines sometime in 1997. and P1." In its response. and attorney's fees.

The labor arbiter also ruled that other employees of respondent attested to the fact that they were being recruited and enticed by the complainant to join Caritas.48 PPI stressed its claim that Caritas was a business competitor. including the Release of Mortgage.00 pension benefit per unit purchased by the plan holder. that the same records revealed that despite the financial bane. The labor arbiter ruled that Molina was lawfully dismissed from his employment for serious misconduct in office and fraud or willful breach of trust and confidence. however. PPI adduced in evidence a Deed of Sale to prove that as early as February 1999 he had already divested his stockholdings in Caritas. Caritas offers a continuous five year coverage and sells the same in units payable in five-year installment basis. Metro VI still managed to be on top from 1998 up to 2000 in terms of its sales relative to the other regions. his wife was then an agency manager of Caritas. and some PPI sales associates were with Caritas because they were recruited by Molina. The labor arbiter likewise held that Molina was afforded his right to due process. 2002. Molina’s right to due process was not violated. renewable every year thereafter. and a formal or trial-type hearing is not at all times essential. Reyes with Caritas. With respect to the alleged interest of Atty. payable by installment in certain number of years or lump sum payment. PPI could not legally be compelled to continue Molina’s employment due to breach of trust. and upon maturity also gives P10. and instead insisted that he be furnished a copy of the alleged reports against him.00 for every unit purchased with increment of 10% yearly after the maturity period. which may be withdrawn in cash by its member. Molina denied any liability for the car plan. cancellation. claiming that he already settled the obligation when PPI demanded full payment as. It declared that Molina’s mere denial of the charges against him did not overthrow the overwhelming evidence against him tending to show that he committed the allegations against him. Credit Life Insurance. reinstatement. grace period.000. As such. as may be inferred from the benefits available under its health care agreement and the pre-need contract of PPI. Since he was given ample opportunity to answer the charges and explain his side during the investigation. fraud or willful breach of trust and confidence. Accidental Death Insurance. It stressed that this was similar to the pension program offered by PPI which was also sold in per unit basis. all the papers related thereto. but that he refused to give an answer to the charges leveled against him. it noted the following similarities: (a) Caritas also provides Term Life Insurance. In its Sur-Rejoinder. which are just causes for termination of employment under Article 282 of the Labor Code.000. Labor Arbiter Roma C. Asinas rendered a Decision50 dismissing the complaint and the counterclaims for lack of merit. were already in his possession. (b) there are similarities in the provisions on contract price. Particularly with regard to the pension plan contract. as amended. with maturity period and guaranteed return of investment in the form of Full-Term Medical Expense Fund computed at P10. This act of pirating constituted serious misconduct in office. Moreover. and (c) unlike other health care programs that provide a one-year coverage. in fact. The labor arbiter stressed that the requirements of due .He noted. and Waiver of Installment Due to Disability.49 On November 18. and transfer and termination.

and resolved to deny PPI’s motion in its Order dated September 30. The "loss of trust and confidence" had no factual basis since the alleged acts of Molina did not result to any loss in favor of PPI. did not ipso facto make Caritas a competitor of PPI. it cannot be attributed to the alleged acts of Molina which constituted willful breach of trust or confidence. However. educational.process are satisfied where the parties are afforded fair and reasonable opportunity to explain their side of the controversy at hand. 2003. The NLRC reversed the decision of the Labor Arbiter and ordered Molina’s immediate reinstatement to his former position as Assistant Vice President without demotion in rank and salary. 2003. and the payment of his backwages from August 1. was not persuaded.58 PPI filed a Petition for Certiorari with the CA for the nullification of the decision and resolution of the NLRC and the reinstatement of the decision of the Labor Arbiter. indicating that its HMO Plan was similar to the previous plans offered by pre-need companies. hence. credit life insurance.52 According to the NLRC.55 and the letter of Caritas. 2001 up to his actual reinstatement. Caritas caters to the health care needs of its clients while PPI to the pre-need (pension. and memorial) requirements of its plan holders. Thus. the NLRC ratiocinated that PPI failed to show that Caritas was a competitor of PPI. and other accrued monetary benefits. Moreover. 2002 from the SEC to Caritas. and appended a Letter dated June 13.59 . under the regulatory suspension of the SEC. Any similarity between PPI and Caritas’ extra features like term life insurance. the charges of coming to the office under the influence of liquor and making PPI reimburse the expenses already paid by Molina's co-employees were not supported by the records.54 another letter of SEC ordering Caritas to immediately desist from selling its HMO plan with the full term medial expense fund.56 The NLRC. the drop in the sales and productivity of complainant’s area of responsibility may be due to market forces and depressed economic condition at that time. absent any clear and convincing proof.57 On November 19. which rendered judgment in his favor. the NLRC declared its Decision final and executory as of November 14. there was no conflict of interest in Molina’s act of trying to recruit counselors for Caritas to help his wife. through counsel. PPI failed to establish that recruiting for Caritas affected Molina’s decisions in the performance of his duties with PPI. According to the NLRC. 2003. however.53 PPI filed a motion for reconsideration. endorsing the objectionable features of the HMO plan. the NLRC denied all other claims for damages. accidental death insurance. Anent Molina’s recruitment activities. and waiver of installment due to disability.51 Molina appealed the decision to the NLRC.

The NLRC disagreed with the Labor Arbiter and reversed the latter’s findings. hence. and reinstating the November 18. fraud or willful breach of trust and confidence. The CA. the Court ruled in St. although the 10-day period for finality of the NLRC decision may have elapsed as contemplated in the last paragraph of Section 223 of the Labor Code. there is a need for . the CA may still take cognizance of and resolve a petition for certiorari for the nullification of the decision of the NLRC on jurisdictional and due process considerations.60 Later. The Labor Arbiter and the NLRC act in quasi-judicial capacity in resolving cases after hearing and on appeal. However. in spite of the statutory provision making "final" the decision of the NLRC. concurred with the findings of the Labor Arbiter. and if the motion is denied. 2003. such decision became final and executory on December 3. 2003. NLRC63 that. the CA rendered a decision reversing the Decision and Resolution of the NLRC. PPI received a copy of the NLRC Decision on July 11. In view of the discordance between the findings of the Labor Arbiter and the CA on one hand. for its part. the decision of the NLRC becomes final and executory after ten (10) calendar days from receipt of the same. their findings of facts are oftentimes accorded not only with respect but even finality if supported by substantial evidence. 2004.62 The issues for resolution are the following: whether the decision of the NLRC was already final and executory when PPI filed its petition for certiorari in the CA. violation of due process. Nonetheless. Indeed. On the presumption that they have already acquired expertise in their jurisdiction. the Labor Arbiter declared that there is substantial evidence on record warranting the dismissal of petitioner as Assistant Vice President for serious misconduct in office. which is confined on specific matters. the CA denied Molina’s Motion for Reconsideration61 in its Resolution dated September 27.64 In this case. the remedy of the aggrieved party from an adverse decision of the NLRC is to timely file a motion for reconsideration as a precondition for any further or subsequent remedy. 2003 and filed the Motion for Reconsideration thereof on July 18. 2003.On August 13. respectively. Under Rule VII. 2002 Decision of the Labor Arbiter. the Court has taken cognizance of petitions challenging such decision where there is a clear showing that there is want of jurisdiction. we find and so hold that the decision of the NLRC had become final and executory when PPI filed its Petition for Certiorari in the CA. such party may file a special civil action in accordance with law and jurisprudence considering that these matters are inseparable in resolving the main issue of whether the NLRC committed grave abuse of discretion. On the first issue. grave abuse of discretion. which motion was denied on September 30. or erroneous interpretation of law. and whether the NLRC committed grave abuse of discretion amounting to excess or lack of jurisdiction in issuing the assailed decision and resolution. 2004. Martin Funeral Home v. denial of substantial justice. Section 2 of the NLRC Omnibus Rules of Procedure. 2003. PPI received a copy of the NLRC decision on November 30. and the NLRC on the other.

Fraud or willful breach by the employee of his duties of the trust reposed in him by his employer or duly authorized representative. b. Moreover. As this Court held in Diamond Motors Corporation v. serious. unlawful in character and implies 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. however. d. Misconduct has been defined as improper or wrong conduct. in the exercise of its equity jurisdiction. Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative. when the findings of the National Labor Relations Commission contradict those of the labor arbiter. and e. Other causes analogous to the foregoing. this Court. c. Factual findings of administrative agencies are not infallible and will be set aside when they fail the test of arbitrariness. be in connection with the employee’s work to constitute just cause for his separation. Court of Appeals:65 A disharmony between the factual findings of the Labor Arbiter and the National Labor Relations Commission opens the door to a review thereof by this Court. must nevertheless. a dereliction of duty. 282.66 Article 282 of the Labor Code of the Philippines provides: Art. Termination by employer. a forbidden act. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work. may look into the records of the case and reexamine the questioned findings. Gross and habitual neglect by the employee of his duties. – An employer may terminate an employment for any of the following causes: a. Such misconduct.the Court to review the factual findings and the conclusions based on the said findings. the transgression of some established and definite rule of action.67 .

69 In Samson v. 2. 3. knowingly and purposely without justifiable excuse. heedlessly or inadvertently. 4. A breach of trust is willful if it is done intentionally. it must be genuine. thus: 1. the loss of confidence must not be simulated. or their suggestions and recommendations as to the hiring and firing and as to the promotion or any other change of status of other employees are given particular weight.72 The mere existence of a basis for believing that such employee has breached the trust and confidence of his employer would suffice for his dismissal.70 the Court enumerated the conditions for one to be considered a managerial employee: (1) Their primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof. must be based on the willful breach of the trust reposed in the employee by his employer. (3) They have the authority to hire or fire other employees of lower rank. thoughtlessly.73 . improper or unjustified. as distinguished from an act done carelessly. and 5. Ordinary breach will not suffice. (2) They customarily and regularly direct the work of two or more employees therein. in turn. Court of Appeals. not a mere afterthought.The loss of trust and confidence. to justify earlier action taken in bad faith. employers are allowed wide latitude of discretion in terminating the employment of managerial personnel.71 As a general rule. it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary. it should not be used as a subterfuge for causes which are illegal.68 The Court has laid down the guidelines for the application of the doctrine for loss of confidence. the employee involved holds a position of trust and confidence.

As gleaned from the handwritten statement of Ilustre Acosta. Both claimed that they always saw petitioner drunk during office hours. nor a valid cause for petitioner’s dismissal. the General Manager of the D’MBP General Agency under Metro Manila VI. respondent relied on the statement/affidavit of Celeste Villena. he was one of the top managers of the respondent.386. bound by the more exacting work ethic. nor was he liable for said amount.77 Petitioner admitted having had drinking sessions with Certerio Uy. it appears that. except for Ilustre Acosta. based on Petty Cash Voucher signed by petitioner. Significantly.00. He was the Assistant Vice-President with the same functions of a regional manager of the same sales region. petitioner was not a mere employee of respondent. that the charge of misappropriation of funds was not proven with substantial evidence. Taking into account his job description.00 each. the husband of Marivic Uy.00. To prove its charge of conduct unbecoming of a company officer. there were 10 other attendees during the luncheon conference on November 27. such incident does not constitute proof that the petitioner thereby showed disrespect to Roy Padiernos. aside from him and petitioner. Petitioner received the amount of only P2. the Agency Manager of the Wondrous and Miraculous General Agency under Metro Manila VI.75 The petitioner does not deny having had a heated exchange of words with Roy Padiernos in the course of a meeting. the informations allegedly relayed to her by the petitioner pertaining to Roy Padiernos were confirmed by Zita Domingo. according to petitioner.00 to answer for the difference. and who. We find. Abia has not executed any affidavit to confirm paragraph 9 of the affidavit of Roy Padiernos. however. the other attendees in the conference never complained against petitioner or requested him to return their respective contributions of P200. However. participants may become so assertive to the point of being overbearing or unyielding and in the process lose their temper. more specifically of drinking alcoholic beverages within the premises of the company during office hours or going to work drunk. provided . the husband of Celeste Villena. Metro Manila VI.00 from respondent to pay for the cost of the luncheon for the conference.000.In this case. on their sincere belief of being right. As admitted by del Rosario. Cubao.74 but the conferees spent more than P4. Petitioner had no obligation to return the contributions of the conferees. Ilustre Acosta and Reynaldo Villena. Quezon City. thus.76 and Marivic Uy. Upon petitioner’s suggestion. the General Manager of the Springs and Blessings General Agency under Metro Manila VI. or the total amount of P2000. Regarding the charge that the petitioner peddled false and malicious informations against Abia and Padiernos. tasked to perform key and sensitive functions in the interest of his employer and. the conferees agreed to contribute P200. It does happen that in the course of exchange of views during a meeting. most especially during cut-offs when many sales counselors were present. There is no evidence on record that petitioner committed the same or similar acts thereafter. 1999 at the Barrio Fiesta.

particularly those earning low or modest incomes. Uy’s unexplained silence until March 10. An employee must not. For them. and why she made the charge for the first time in her Affidavit dated January 16. when competition is indirect or minimal. 2000.84 A slight assistance to a direct competitor could constitute a breach of the employee’s duty of loyalty. second sources of income are an economic necessity. Respondent claims that. denied reporting to office drunk and insisted that he reported for work sober. petitioner failed to dedicate his full time on the job with respondent and prevented said sales associates from doing the same. For some employees. the employer may be required to show that the employee received substantial assistance from the competitor.the hard liquor and the pulutan. Conversely. by his acts. while employed. Aside from violating its policy against conflict of interest. An employee’s self-dealing may breach that duty. Assisting an employee’s competitor can even constitute a breach of the employee’s duty of loyalty. employers need the assurance that employees will not disserve them by furthering their own interests or those of competitors at the employers’ expense. However.81 Loyalty of an employee to his employer consists of certain very basic and common sense obligations. a business competitor of the respondent. a second job or "moonlighting" is the only way to make ends meet. the employer may receive the value of the lost opportunity or the secret profit.83 However. 2000 thus renders her report implausible. act contrary to the employer’s interest. one wage earner with two jobs. or both.85 . Villena made no mention of the petitioner going to office drunk. it has been ruled that A reality of contemporary life is that many families will consist of two wage earners. petitioner’s acts adversely affected his decisions in the performance of his duties and obligations to respondent. Respondent avers that petitioner served directly as agent of Caritas. If petitioner’s "drinking problem" had any ring of truth. Employees occupying a position of trust and confidence owe a higher duty than those performing low- level tasks.80 Villena did not explain her failure to report the matter to Gonzales on March 10. 2002 that Villena made such declaration. when he connived with his wife in recruiting Sales Associates of the Metro Sales Division VI to transfer to Caritas as sales associates.78 He. We are inclined to give credence to petitioner’s claim. 2000.82 The scope of the duty of loyalty that an employee owes to his employer may vary with the nature of their relationship. the Senior Vice-President of the Manila North Sales Division of respondent.79 It was only in her affidavit dated January 16. If an employee usurped a corporate opportunity or secretly profited from a competitive activity. Uy is the wife of no less than Certerio Uy. however. 2002. she should have immediately reported the matter to her husband or to other officials concerned. noting that in her handwritten letter-report to Norman Gonzales dated March 10.

an employee occupying a managerial position or office is obliged to protect the trade secret of his employer consisting of formula. . process. Villena has likewise not been prohibited from selling pre-need plans for Caritas. Fe Molina. 1999. it should have meted sanctions not only on petitioner but also on Abia. Petitioner. Belen for P127. we are not persuaded that Caritas is the business competitor of respondent. The so-called sales associates of the respondent are non-salaried employees and are paid on commission basis only. of Caritas. Fe Molina and Villena as well. Area 10.89 In this case. the rule does not apply to a matter of public knowledge or of general knowledge within the industry. The evidence on record shows that while Abia. the Senior Vice-President of respondent’s Metro Manila Marketing. grace period.87 Moreover. is herself licensed by Caritas to sell plans for the latter. Marketing Head. he cannot act inconsistently with his agency or trust. Atty. Petitioner was the Assistant Vice-President. Caritas is an HMO and is directly supervised by the DOH. However. There is no evidence on record whether the transfer of such shares of stocks has already been reflected in the books of Caritas. is one of the incorporators of Caritas and is even a member of the Board of Directors.An employee’s skill. and is entitled to protect itself from the risk that a former employee might appropriate customers by taking unfair advantage of the contract developed while working for the employer. Celeste Villena. That the contracts executed by the beneficiaries of both corporations have similar provisions regarding contract price. If Caritas is a business competitor of the respondent. The truth of the matter is that. one of the Sales Associates of respondent. as averred by Caritas President Geoffrey Martinez. and pre-need plans. the business of Caritas and that of the respondent complement each other. who is the head of a sales agency of Caritas. his wife. and although he appears to have sold his shares to Herminigildo C. Being a fiduciary. he is held accountable for his mischief.86 However. an employer has a protectible interest in the customer relationships of its former employee established and/or nurtured while employed by the employer. cancellation. do not constitute proof that Caritas and respondent are business competitors.312. was also an incorporator of Caritas and a member of its Board of Directors. whereas respondent sells educational. aptitude. while respondent is under the supervision of the SEC. Reyes. and other subjective knowledge obtained in the course of employment are not the property of his employer. he only did so on March 7. pension. device or compilation which it uses in its business and gives it an opportunity to obtain an advantage over competitors who do not know of such trade secret. He cannot solicit his employer’s customers or co-employees for himself or for a business competitor of his employer. without any protest from respondent. respondent did not dismiss him from employment. Caritas is engaged in health care and hospitalization package. Their commissions are based on their individual initiative and industry. and for a while.88 While acting as an agent of his employer.34. an employee owes the duty of fidelity and loyalty. and Villena were not charged nor meted any sanction by the respondent for conflict of interest. There is also no proof that the two corporations compete with each other in the same or similar business. Reyes. in fact. The Head of the Legal Division of the respondent. If such employee or officer connives with and induces another to betray his employer in favor of a business competitor of his employer. transfer and termination. reinstatement. is also a sales agency head of respondent.

and Marivic Uy to prove its charge that Fe Molina pirated sales associates working for respondent and that petitioner tolerated the actuations of his wife and even connived with her. 2000. using "different names. that on March 4. Ruth Padiernos failed to name any such sales associate who was recruited by Fe Molina. it was made to appear that Ruth Padiernos claimed that petitioner’s wife. but the latter denied the charge. and that petitioner did the same.93 However. but rather tolerated her actuations. 2002. and she retorted that he was the cause. only on January 18. Ruth Padiernos. no further action was taken against the petitioner by respondent. 2000 that Fe Molina recruited Lenie Gatmaitan to join Caritas and that she confronted petitioner. 2002. the wife of Ilustre Acosta. for her part. Ilustre Acosta. may have grudges against him. however.Respondent relied on the declarations of Ruth Padiernos. Celeste Villena. and that she (Padiernos) learned that almost all the productive Sales Associates in Metro Manila VI were already connected with Caritas.90 However. the Unit Manager of the Ark Group under Metro Manila Sales Group VI and also an Agency Manager of Caritas. 2000. In an Affidavit dated January 18. the affidavit has no probative weight because it was unsigned. Petitioner failed to stop his wife. 2000. Since then. averred in her written statement dated March 8. Petitioner replied that he and his wife did not interfere with each other’s business dealings. For his part.94 Ilustre maintained this claim in his Affidavit dated January 16.96 Marivic Uy averred that the wife of petitioner had been pirating sales associates of respondent since 1999 to join Caritas and that she tried to recruit Morena Siasoco. 2002."91 Although notarized. 2000. and that petitioner even declared "Mare. that the evidence adduced by respondent insufficient to warrant the petitioner’s dismissal from employment.97 She reiterated her claim in her Affidavit dated January 16. Spouses Eppie and Ilustre Acosta.95 Eppie Acosta. for all you know. The Court finds. the signature of the notary public does not appear in said affidavit. 2000. hence. recruited Gatmaitan to join Caritas. Roy Padiernos confronted petitioner. petitioner commented about their low sales production. petitioner informed him that Geoffrey Martinez called petitioner to inquire if petitioner would have no objection for him (Ilustre) to be with Caritas and that petitioner replied that he had no objection if that was Ilustre’s decision. Roy Padiernos did not explain why he executed his affidavit regarding the matter almost three years later. she had a conference with her husband and Abia where she reported that petitioner connived with his wife in pirating sales associates. until the letter of Picazo dated March 21. Fe Molina. 2000. recruited sales associates under respondent to work for Caritas.98 . Celeste Villena. that as far back as July 1999. 2000 was sent to him. she alleged that petitioner and his wife. 2002. declared in her handwritten statement dated March 10. 2002. that on March 6. ikaw na lang ang hindi nag-ca-Caritas. There is likewise no evidence that Abia ever confronted petitioner relative to the charge." She reiterated her claim in her affidavit dated January 16. averred in her handwritten statement of March 12. averred in his handwritten statement dated March 11. She was assured that something would be done to arrest the problem. wife of Roy Padiernos.92 In her Affidavit dated January 16. one of the Group Managers.

there is no evidence on record to prove that respondent expressly prohibited its Sales Associates from selling for Caritas. and Gatmaitan executed their respective affidavits declaring that neither petitioner nor his wife ever recruited them. on the contrary. He never called petitioner concerning Ilustre Acosta. in his affidavit. through him. and he was not aware that petitioner and his wife recommended them to Caritas. Associate Justice WE CONCUR: ARTEMIO V. Siasoco. San Miguel and Halili. The decision and resolution of the NLRC are reinstated. the instant petition is hereby GRANTED. Magalso. and Halili joined Caritas voluntarily and individually. Geoffrey Martinez declared. but backed out later on. Lenita Gatmaitan called him and inquired if she could join Caritas. SO ORDERED. which she did. SR. that Siasoco. 2004 Resolution of the Court of Appeals are REVERSED AND SET ASIDE. IN LIGHT OF ALL THE FOREGOING. Neither is there evidence on record to prove that Caritas prohibited its sales associates from selling pre-need plans of respondent. ROMEO J.However. Respondent likewise failed to present the affidavits of Siasoco.99 They admitted that they sold plans for Caritas. ALICIA AUSTRIA-MARTINEZ . In contrast to the evidence of respondent. Magalso. but without any prodding from petitioner and his wife. The August 13. He talked to Vilma Del Rosario and convinced her to apply as Branch Manager of Caritas. San Miguel. Casaje. Gatchalian. PANGANIBAN Chief Justice Chairperson CONSUELO YNARES-SANTIAGO Associate Justice MA. and he replied in the affirmative. it was the latter who called to inquire if he was entitled to a discount if he purchased a Caritas health plan. CALLEJO. Casaje. 2004 Decision and September 27. San Miguel.

Petitioners.versus - SILVESTRE ORTEGA. . RICHARD SEVILLANO. ARIEL ALVARO. MARTIN CALLUENG. 160871 . INC. G.R.. and ANTHONY U. Respondents. CHICO-NAZARIO Associate Justice TRIAD SECURITY & ALLIED SERVICES.Asscociate Justice MINITA V. QUE. No. JR. and ISAGANI CAPILA.

... C.......... JJ..... SR.... 2006 x...-x .Present: PANGANIBAN.. Chairperson.. Promulgated: February 6...... and CHICO-NAZARIO................. YNARES-SANTIAGO.... CALLEJO..J... AUSTRIA-MARTINEZ.

SP No.[2] The following are the pertinent facts: . and Anthony U. The temporary restraining order earlier issued on June 12. 77065 entitled. 2003 is LIFTED.: This petition seeks to set aside the Decision[1] dated 31 July 2003 of the Court of Appeals in CA-G.R. J. The dispositive portion of the decision reads: WHEREFORE. Que v. Triad Security & Allied Services. Labor Arbiter Edgar Bisana. Inc.DECISION CHICO-NAZARIO. the petition is DENIED DUE COURSE and is DISMISSED. et al.

and 13th month pay. illegal deductions. Inc. Manila. premium pay for holiday and rest day. On the other hand. respondents filed a complaint against petitioners and a certain Ret. On 25 March 1999. Ariel Alvaro. Martin Callueng. overtime pay. respondents filed a complaint before the Labor Standards Enforcement Division of the Department of Labor on 6 January 1999.[3] The complaint was amended on 20 April 1999 to include the charges of illegal dismissal. Javier D. Carbonell for underpayment/nonpayment of salaries. and attorneys fees. during the time that they were in the employ of petitioners. they were receiving compensation which was below the minimum wage fixed by law. Respondents likewise lamented the fact that petitioners failed to provide them with weekly rest period. (Triad Security) is a duly licensed security agency owned by co-petitioner Anthony U. Quiapo.[5] Upon learning of the complaint. Que. B/Gen.[4] According to respondents. nightshift differential. and claims for 13th month pay. and Isagani Capila were formerly employed by petitioner Triad Security as security guards. It holds office at 672 Carlos Palanca St. Richard Sevillano. .. service incentive leave pay. and holiday pay. They were also made to render services everyday for 12 hours but were not paid the requisite overtime pay. holiday pay.Petitioner Triad Security and Allied Services. moral and exemplary damages as well as night shift differential. separation pay. respondents Silvestre Ortega. Jr. respondents services were terminated without the benefit of notice and hearing.. As a result of these perceived unfairness. service incentive leave pay. underpayment/nonpayment of allowance..

respondents are ordered to pay jointly and solidarily complainants money claims in the aggregate sum of P956. . Petitioners explained that management policies dictate that the security guards be rotated to different assignments to avoid fraternization and that they be required to take refresher courses at their headquarters. de Vera found in favor of respondents. The dispositive portion of his decision states: WHEREFORE. and to such further backwages as they accrue until reinstatement order is complied with by the respondents (petitioners herein).30.25 in the event reinstatement is no longer feasible. 2000 already amount to P473.976. Labor Arbiter Jose G.15.233. petitioners insisted that respondents worked for only eight hours a day. 115. and to pay jointly and solidarily complainants backwages which as of February 24. petitioners denied respondents claim of illegal dismissal.[6] In his decision dated 28 February 2000. Respondents allegedly refused to comply with these policies and instead went on leave or simply refused to report at their headquarters. respondents are ordered to pay jointly and solidarily separation pay computed at the aggregate sum of P232. Further. all the foregoing premises considered judgment is hereby rendered ordering the respondents to reinstate the complainants (respondents herein) to their former jobs as security guards. six days a week and that they received their premium pays for services rendered during holidays and rest day. Furthermore. The service incentive leave of respondents was allegedly made payable as soon as respondents applied for said benefit. As for respondents money claims.For their part.

And finally, respondents are ordered to pay attorneys fees equivalent to ten percent (10%) of the
judgment award.[7]

As petitioners failed to seasonably file an appeal with the National Labor Relations Commission, the
decision of the labor arbiter became final and executory prompting respondents to file a motion for the
issuance of writ of execution on 23 June 2000.[8] The writ of execution was thereafter issued on 25
August 2000.[9]

On 18 September 2000, petitioners filed a motion to recompute money claims as decreed[10] arguing
therein that respondents money claims as contained in the 28 February 2000 decision were baseless and
that their former counsel was not furnished a copy of the computation nor was he allowed to submit
comments thereon.

Pursuant to the writ of execution, petitioner Triad Securitys funds with its clients Remal Enterprises and
Don Pedro Azucarera amounting to one million two hundred twenty-four thousand seven hundred sixty-
two pesos and forty centavos (P1,224,762.40) were garnished.[11]

On 3 October 2000, petitioners filed a motion to lift notices of garnishment[12]

In the order dated 14 November 2000,[13] the labor arbiter denied, for lack of merit, petitioners motion
to recompute respondents money claims as well as their motion to lift notices of garnishment. In the

same order, the garnished receivables were ordered released to the NLRC cashier for proper disposition
to respondents.

On 23 November 2000, respondents filed a motion seeking the release of the funds then in the custody
of the NLRC cashier.[14]

On 13 December 2000, petitioners filed an appeal before the NLRC assailing the denial of their motion to
recompute money claims and the labor arbiters order releasing the garnished funds to respondents.[15]
This appeal was dismissed by the NLRCs first division in its order promulgated on 29 May 2001.[16]

Similarly ill-fated were petitioners petition for injunction which was dismissed by the NLRC in its
resolution of 22 May 2001[17] and their motion for reconsideration of said resolution which was denied
for utter lack of merit on 4 September 2001.[18]

Following petitioners set-backs before the NLRC, the labor arbiter issued the order dated 31 August
2001 decreeing the release of the funds in the possession of the NLRC cashier to respondents.[19]

On 1 October 2002, the labor arbiter issued an alias writ of execution[20] commanding the sheriff to
collect from petitioners the amount of six hundred three thousand seven hundred ninety-four and
seventy-seven centavos (P603,794.77) representing the unsatisfied balance of the judgment award
contained in the 28 February 2000 decision.

Acting on respondents motion dated 15 October 2002, the labor arbiter issued the order dated 9
December 2002 directing the cashier of Don Pedro Azucarera to release to the NLRC cashier the
garnished funds totaling P603,794.77.[21] The funds were eventually ordered released to respondents
pursuant to the labor arbiters order of 17 December 2002.[22]

On 30 September 2002, the Computation and Examination Unit of the NLRC came up with a
computation of monetary award where it appears that petitioners were liable to respondents for the
amount of P2,097,152.26 representing the latters backwages and separation pay.[23]

On 30 January 2003, petitioners filed their comment on the computation prepared by the Computation
and Examination Unit. Petitioners essentially opposed the computation based on the following grounds:

(a) the balance of the unsatisfied award is only Php 603,794.77 and not Php 2,097,152.26
appearing on the computation;

(b) the basis for computing the wage differential is erroneous.[24]

as amended). The respondents failed to comply with the order of reinstatement.[26] Despite petitioners protest. respondents filed a motion for the issuance of 2nd alias writ of execution. . this Office ordered the Computation and Examination Unit to compute complainants accrued backwages. The order of reinstatement is self-executing and should be complied with by the respondents upon receipt of the decision either by payroll or physical reinstatement. complainants backwages accrued. (Pioneer Texturizing Corporation vs.On the basis of the new computation. NLRC. in relation to Article 223 of the Labor Code. As a matter of procedure. 280 SCRA 806.[25] This motion was predictably opposed by petitioners. hence. the labor arbiter issued the 23 April 2003 order stating as follows: The records of the case reveal that the decision ordered the respondents to reinstate the complainants to their former job as security guards and decreed that respondents shall pay to the complainants further backwages as they accrue until the order of reinstatement is complied with.

in view of the foregoing. Let an Alias Writ of Execution for the enforcement of the P2. the Computation and Examination Unit came up with the total amount of TWO MILLION NINETY SEVEN THOUSAND ONE HUNDRED FIFTY TWO and 26/100 (P2. WHEREFORE.152. complainants motion for the execution of their accrued backwages amounting to TWO MILLION NINETY SEVEN THOUSAND ONE HUNDRED FIFTY TWO and 26/100 (P2. We considered and studied respondents arguments in their comment and opposition and We found them inadequate to overcome the presumption of correctness and regularity of the computation.097. 2002. Further. be accordingly issued.26) PESOS as computed by the Computation and Examination Unit of the NLRC is hereby granted less the amount of more or less P72. hence. the argument regarding the supposed prescribed period covering the month 2 February 20 April 1996 appears inconsequential in view of a manifestation during conference that (complainants are) willing to admit the same and deduct them from whatever amount is still due them. The respondents filed their comment on the computation and their opposition to complainants motion for execution.26) PESOS.152.On September 30. 097.805.[27] . as complainants accrued backwages. the same is hereby approved.097.152.26 less the above-mentioned amount.00 covering the wage differential for the period 2 February 20 April 1996.

As petitioners failed to observe said pertinent provision of the law. Moreover.347.024. a 2nd alias writ of execution dated 14 May 2003 was issued by the labor arbiter for the satisfaction of the amount of P2. including attorneys fees. the Court of Appeals ruled that backwages payable to respondents should be computed from the date of their termination from their jobs until actual reinstatement as provided in Article 223 of the Labor Code. however. plus execution fee. the Court of Appeals issued a temporary restraining order enjoining the execution or enforcement of the 23 April 2003 order of the labor arbiter. the Court of Appeals took note of the procedural but fatal flaw[31] committed by petitioners when they immediately elevated their case via petition for certiorari before the Court of Appeals . In the decision now assailed before us. the labor arbiter could not be charged with having committed a grave abuse of discretion when he issued the assailed 23 April 2003 order.[30] Petitioners victory with the Court of Appeals was. petitioners filed before the Court of Appeals a petition for certiorari with prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction. short-lived.Forthwith.[29] In a resolution promulgated on 12 June 2003.[28] On 20 May 2003.26 representing (respondents) unpaid accrued backwages as computed by the Computation and Examination Unit xxx.

Petitioners motion for reconsideration was denied by the Court of Appeals in a resolution dated 20 November 2003. Hence this petition raising the following issues: I WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT DECLARED THAT THE REMEDY ADOPTED BY THE PETITIONERS IS ERRONEOUS II WHETHER OR NOT PETITIONERS SHOULD BE HELD LIABLE TO THE ADDITIONAL AMOUNT AS CONTAINED IN THE 23 APRIL 2003 ORDER CONSIDERING THAT THE 28 FEBRUARY 2000 DECISION HAS ALREADY BEEN FULLY SATISFIED .without first seeking recourse from the NLRC in violation not only of the Rules of Procedure of said body but also of the doctrine of exhaustion of administrative remedies.

First. we shall resolve the procedural issue posed in this petition. It states: Section 1. . or of a particular matter therein when declared by these Rules to be appealable. hence. Subject of appeal An appeal may be taken from a judgment or final order that completely disposes of the case. the pertinent provision of the Revised Rules of Court should apply which in this case is Section 1 of Rule 41. the order granting the issuance of the 2nd alias writ of execution could not have been the proper subject of an appeal before the NLRC neither could petitioners have sought the remedy of certiorari from the NLRC. Petitioners argue that the rules of procedure of the NLRC do not provide for any remedy or procedure for challenging the order granting a writ of execution.III WHETHER OR NOT THE 30 SEPTEMBER 2002 COMPUTATION ISSUE BY THE COMPUTATION AND EXAMINATION UNIT OF THE NLRC IS CORRECT AND PROPER The petition is partially meritorious. Petitioners contend that based on the rules of procedure of the NLRC.

the aggrieved party may file an appropriate special civil action under Rule 65. Moreover. xxxx In all the above instances where the judgment or final order is not appealable. Section 4 of the Rules of Procedure of the NLRC expressly proscribes the filing of a petition for certiorari . Rule III.No appeal may be taken from: xxxx (f) An order of execution.

inasmuch as the NLRC had no authority to issue the writ of certiorari. PROHIBITED PLEADINGS & MOTIONS. In addition. It is a basic tenet of procedural rules that for a special civil action for a petition for certiorari to prosper. the following requisites must concur: (1) the writ is directed against a tribunal. Mandamus or Prohibition. a board or an officer . recourse to the Court of Appeals was only proper.[32] We do not agree. The following pleadings. Therefore. petitioners maintain that the doctrine of exhaustion of administrative remedies is not absolute as it accepts of certain exceptions such as when an appeal would not be an adequate remedy there being an order or execution already issued and the implementation of said writ loomed as a great probability. motions or petitions shall not be allowed in the cases covered by these Rules: xxxx c) Petition for Certiorari.SECTION 4.

Court of Appeals. speedy and adequate remedy in the ordinary course of law.exercising judicial or quasi-judicial functions. Such conclusion. or with grave abuse of discretion amounting to lack or excess of jurisdiction. or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions. petitioners insist that the NLRC is bereft of authority to rule on a matter involving grave abuse of discretion that may be committed by a labor arbiter. awards.[33] In this case. proceeds from a limited understanding of the appellate jurisdiction of the NLRC under Article 223 of the Labor Code which states: ART. (2) such tribunal. and (3) there is no appeal or any plain. however. APPEAL Decisions. 223. In the case of Air Services Cooperative v. board or officer has acted without or in excess of jurisdiction.[34] we had the occasion to explain the scope of said article of the Labor Code to mean . Such appeal may be entertained only on any of the following grounds: (a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter. or orders. awards.

this Court quoted with approval the following observation of the Court of Appeals: We do not see how appeal would have been inadequate or ineffectual under the premises. xxxx Abuse of discretion is admittedly within the ambit of certiorari and its grant thereof to the NLRC indicates the lawmakers intention to broaden the meaning of appeal as that term is used in the Code x x x.[35] Likewise. Neither is there any cause for worry that appeal to the Commission would not be speedy as the Labor Code provides that the Commission shall decide cases before it. while the title of Article 223 seems to provide only for the remedy of appeal as that term is understood in procedural law and as distinguished from the office of certiorari. in the same case.x x x Also. [the NLRC] is in a far better position to determine whether petitioners grounds for certiorari are meritorious. a closer reading thereof reveals that it is not as limited as understood by the petitioners x x x. being the administrative agency especially tasked with the review of labor cases. within twenty (20) calendar days from receipt of the Answer of Appellee x x x.[36] . On the other hand. nonetheless.

Notwithstanding this procedural defect committed by petitioners. as contained in the 28 February 2000 decision of the labor arbiter. respondents had already found new employments and to award them further backwages would be tantamount to unjust enrichment. Thus. petitioners argument is untenable.Given the foregoing. we shall proceed to resolve the other issues presented by petitioners. in the interest of substantial justice. Petitioners insist that their monetary obligation. 279. they had opted not to seek reinstatement to their former jobs and elected instead to sever their employment with petitioner Triad Security. according to petitioners. SECURITY OF TENURE . Again. as amended. had already been fully satisfied. states: ART. Article 279 of the Labor Code. They posit the argument that with respondents receipt of their separation pay. we hold that the Court of Appeals correctly dismissed the petition for certiorari brought before it. In fact. petitioners maintain that there is no more basis to hold them liable for the accrued backwages stated in the 30 September 2002 computation.

These are separate and distinct from each other.In cases of regular employment the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title.[40] In this case. The award of one does not preclude that of the other as this court had. namely: backwages and reinstatement. the payment of separation pay. and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. if viable. ordered the payment of both. the labor arbiter ordered the reinstatement of respondents and the payment of their backwages until their actual reinstatement and in case reinstatement is no longer viable. an illegally dismissed employee is entitled to either reinstatement.[38] In effect. insofar as the reinstatement aspect is concerned. therefore. separation pay is granted where reinstatement is no longer feasible because of strained relations between the employee and the employer. inclusive of allowances.[37] However. even pending appeal. It bears emphasizing that the law mandates the prompt reinstatement of . in proper cases. shall be immediately executory. As the law now stands. The same provision of the law gives the employer the option of either admitting the employee back to work under the same terms and conditions prevailing before his dismissal or separation from employment or the employer may choose to merely reinstate the employee to the payroll. distinct reliefs granted to one who was illegally dismissed from employment. Under Article 223 of the Labor Code.[39] Backwages and separation pay are. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages. or separation pay if reinstatement is no longer viable and backwages. the decision of the Labor Arbiter reinstating a dismissed or separated employee. an illegally dismissed employee is entitled to two reliefs.

to immediately execute the reinstatement aspect of the labor arbiters decision. Instead. Nor can we give credence to petitioners claim that they could not reinstate respondents as the latter had already found jobs elsewhere. Thus. In the meantime.794. albeit with much resistance from petitioners. we could not fault them for their perseverance in looking for and eventually securing new employment opportunities instead of remaining idle and awaiting the outcome of this case. if not outright refusal. It is worthy to note here that respondents were minimum wage earners who were left with no choice after they were illegally dismissed from their employment but to seek new employment in order to earn a decent living.the dismissed or separated employee. insofar as accrued backwages and other benefits are concerned. It should be pointed out that an order of reinstatement by the labor arbiter is not the same as actual reinstatement of a dismissed or separated employee. more than two years after the labor arbiter had issued his decision on the illegal dismissal case filed by respondents. Surely. the illegally dismissed employees entitlement to backwages. They are now before this Court insisting that they have fully disposed of their legal obligation to respondents when they paid the latters separation pay. inclusive of separation pay. Until the payment of separation pay is carried out. the employer should not be allowed to remain unpunished for the delay. the petitioners failed to heed. As the law clearly requires petitioners to pay respondents backwages until actual reinstatement. the full amount of the money judgment stated in the 28 February 2000 decision of the labor arbiter. We do not agree. This. the day before the labor arbiter ordered the release to respondents of P603.77 representing the full satisfaction of 28 February 2000 judgment. they were given. including separation pay. we resolve that petitioners are still liable to respondents for accrued backwages and other benefits from 25 February 2000 until 16 December 2002. their obligation to respondents. It is only when the illegally dismissed employee receives the separation pay that it could be claimed with certainty that the employer-employee relationship has formally ceased thereby precluding the possibility of reinstatement. and other benefits subsists. 13th month pay. . until the employer continuously fails to actually implement the reinstatement aspect of the decision of the labor arbiter. continues to accumulate. The records of this case are bereft of any indication that respondents were actually reinstated to their previous jobs or to the company payroll.

Costs against petitioners. MODIFIED. the amount of respondents basic salary from 25 February 1999 until 30 September 2002 (the date of the computation) was pegged at P250. petitioners are liable for accrued backwages at the rate of P223. they should pay respondents any additional cost of living allowance which may have been prescribed within the period 25 February 2000 until 16 December 2002 and other benefits to which respondents are entitled to during said span of time. with petitioners that the amount of basic salary used by the Computation and Examination Unit of the NLRC was erroneous. this Court AFFIRMS the Decision of the Court of Appeals dated 31 July 2003 and the Order dated 23 April 2003 of the Labor Arbiter declaring petitioners liable for additional accrued backwages. therefore. hold that from 25 February up to 31 October 2000. We. CHICO-NAZARIO .00 per day. Let the records of this case be remanded to the Computation and Examination Unit of the NLRC for proper computation of subject money claims as above-discussed.[42] Clearly. In addition.50 per day and from 1 November 2000 until 16 December 2002. however. the prevailing daily minimum wage on 25 February 2000 was only P223. In said computation. SO ORDERED. they should be held accountable for accrued backwages of P250. MINITA V.50[41] and it was only on 1 November 2000 when the rate was increased to P250.00.We agree. WHEREFORE. However. The amount of money claims due the respondents is. however.00. the Computation and Examination Unit of the NLRC was mistaken in its calculation. premises considered.

ALICIA AUSTRIA-MARTINEZ Associate Justice Associate Justice . PANGANIBAN Chief Justice Chairperson CONSUELO YNARES-SANTIAGO MA.Associate Justice WE CONCUR: ARTEMIO V.

SR.ROMEO J. Associate Justice . CALLEJO.