A.

Women

Labor Code: Articles 130, 132-136

Omnibus Rules: Book III, Rule XII, Sections 1, 4-14

R.A. 9710, Magna Carta of Women, Section 1-3, 4 (b) & k, 22, 35, 41 R.A. 7877, Anti-sexual Harassment Act
of 1995

SECOND DIVISION

[G.R. No. 118978. May 23, 1997.]

PHILIPPINE TELEGRAPH AND TELEPHONE COMPANY, * petitioner,vs.NATIONAL LABOR RELATIONS

COMMISSION and GRACE DE GUZMAN, respondents.

D. P. Mercado & Associates for petitioner.

AC Estrada & Partner for private respondent.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; EMPLOYMENT; EMPLOYER'S POLICY OF NOT ACCEPTING FOR
WORK ANY WOMAN WORKER WHO CONTRACTS MARRIAGE, CONTRARY TO LAW, GOOD MORALS AND PUBLIC POLICY.
— In the case at bar, petitioner's policy of not accepting or considering as disqualified from work any woman worker
who contracts marriage runs afoul of the test of, and the right against, discrimination, afforded all women workers by
our labor laws and by no less than the Constitution. Petitioner's policy is not only in derogation of the provisions of
Article 136 of the Labor Code on the right of a woman to be free from any kind of stipulation against marriage in
connection with her employment, but it likewise assaults good morals and public policy, tending as it does to deprive a
woman of the freedom to choose her status, a privilege that by all accounts inheres in the individual as an intangible and
inalienable right. Hence, while it is true that the parties to a contract may establish any agreements, terms, and
conditions that they may deem convenient the same should not be contrary to law, morals, good customs, public order,
or public policy. Carried to its logical consequences, it may even be said that petitioner's policy against legitimate marital
bonds would encourage illicit or common-law relations and subvert the sacrament of marriage.

2. ID.;ID.;ID.;DISMISSAL; LOSS OF CONFIDENCE, VALID GROUND. — While loss of confidence is a just cause of
termination of employment, it should not be simulated. It must rest on an actual breach of duty committed by the
employee and not on the employer's caprices. Furthermore, it should never be used as a subterfuge for causes which
are improper, illegal, or unjustified.

3. ID.;ID.;ID.;ID.;ID.;CONCEALMENT OF FEMALE EMPLOYEE OF TRUE NATURE OF STATUS FOR FEAR OF BEING

DISQUALIFIED FROM WORK, NOT SUFFICIENT BASIS. — Contrary to petitioner's assertion that it dismissed private
respondent from employment on account of her dishonesty, the record discloses clearly that her ties with the company
were dissolved principally because of the company's policy that married women are not qualified for employment in PT
& T, and not merely because of her supposed acts of dishonesty. Private respondent's act of concealing the true nature
of her status from PT & T could not be properly characterized as willful or in bad faith as she was moved to act the way
she did mainly because she wanted to retain a permanent job in a stable company. In other words, she was practically
forced by that very same illegal company policy into misrepresenting her civil status for fear of being disqualified from
work.

4. ID.;ID.;ID.;ID.;FAILURE TO REMIT COMPANY FUNDS, NOT AN ADDITIONAL GROUND; CASE AT BAR. — Finally,
petitioner's collateral insistence on the admission of private respondent that she supposedly misappropriated company
funds, as an additional ground to dismiss her from employment, is somewhat insincere and self-serving. Concededly,
private respondent admitted in the course of the proceedings that she failed to remit some of her collections, but that is
an altogether different story. The fact is that she was dismissed solely because of her concealment of her marital status,
and not on the basis of that supposed defalcation of company funds. That the labor arbiter would thus consider
petitioner's submissions on this a mere afterthought, just too bolster its supposed dishonesty as case for dismissal, is a
perceptive conclusion born of experience in labor cases. For, there was no showing that private respondent deliberately
misappropriated the amount or whether her failure to remit the same was through negligence and, if so, whether the
negligence was in nature simple or grave. In fact, it was merely agreed that private respondent execute a promissory
note to refund the same, which she did, and the matter was deemed settled as a peripheral issue in the labor case.

5. ID.;ID.;ID.,EMPLOYEE ILLEGALLY DISMISSED A FEW DAYS BEFORE COMPLETION OF HER PROBATIONARY

EMPLOYMENT AND WHO WAS PREVIOUSLY HIRED RELIEVER FOR SEVERAL TIMES GAINED REGULAR STATUS. — Private
respondent, it must be observed, had gained regular status at the time of her dismissal. When she was served her
walking papers on January 29, 1992, she was about to complete the probationary period of 150 days as she was
contracted as a probationary employee on September 2, 1991. That her dismissal would be effected just when her
probationary period was winding down clearly raises the plausible conclusion that it was done in order to prevent her
from earning security of tenure. On the other hand, her earlier stints with the company as reliever were undoubtedly
those of a regular employee, even if the same were for fixed periods, as she performed activities which were essential or
necessary in the usual trade and business of PT & T. The primary standard of determining regular employment is the
reasonable connection between the activity performed by the employee in relation to the business or trade of the
employer.

6. ID.;ID.;ID.;ID.;ENTITLED TO REINSTATEMENT WITHOUT LOSS OF SENIORITY RIGHTS AND OTHER PRIVILEGES. —

As an employee who had therefore gained regular status, and as she had been dismissed without just cause, she is
entitled to reinstatement without loss of seniority rights and other privileges and to full back wages, inclusive of
allowances and other benefits or their monetary equivalent.

7. ID.;ID.;ID.;ID.;ID; PERIOD OF SUSPENSION FOR DISHONESTY DEDUCTED FROM AMOUNT RECOVERABLE FOR
ILLEGAL DISMISSAL. — However, as she had undeniably committed an act of dishonesty, in concealing her status, albeit
under the compulsion of an unlawful imposition of petitioner, the three-month suspension imposed by respondent
NLRC must be upheld to obviate the impression or inference that such act should be condoned. It would be unfair to the
employer if she were to return to its fold without any sanction whatsoever for her act which was not totally, justified.
Thus, her entitlement to back wages, which shall be computed from the time her compensation was withheld up to the
time of her actual reinstatement, shall be reduced by, deducting therefrom the amount corresponding to her three
months suspension.

8. CIVIL LAW; OBLIGATIONS AND CONTRACTS; CONTRACT OF LABOR; IMPRESSED WITH PUBLIC POLICY SHOULD
NOT CONTAIN OPPRESSIVE PROVISIONS NOR IMPAIR THE INTEREST OR CONVENIENCE OF THE PUBLIC; POLICY AGAINST
MARRIAGE, A PROHIBITED PROVISION. — Parenthetically, the Civil Code provisions on the contract of labor state that
the relations between the parties, that is, of capital and labor, are not merely, contractual, impressed as they are with so
much public interest that the same should yield to the common good. It goes on to intone dust neither capital nor labor
should visit acts of oppression against the other, nor impair the interest or convenience of the public. In the final
reckoning, the danger of just such a policy against marriage followed by petitioner PT & T is that it strikes at the very
essence, ideals and purpose of marriage as an inviolable social institution and. ultimately, of the family as the foundation
of the nation. That it must be effectively interdicted here in all its indirect, disguised or dissembled forms as
discriminatory conduct derogatory of the laws of the land is not only in order but imperatively required.

DECISION

REGALADO, J p:

Seeking relief through the extraordinary writ of certiorari, petitioner Philippine Telegraph and Telephone
Company (hereafter, PT&T) invokes the alleged concealment of civil status and defalcation of company funds as grounds
to terminate the services of an employee. That employee, herein private respondent Grace de Guzman, contrarily
argues that what really motivated PT&T to terminate her services was her having contracted marriage during her
employment, which is prohibited by petitioner in its company policies. She thus claims that she was discriminated
against in gross violation of law, such a proscription by an employer being outlawed by Article 136 of the Labor Code.

Grace de Guzman was initially hired by petitioner as a reliever, specifically as a "Supernumerary Project
Worker," for a fixed period from November 21, 1990 until April 20, 1991 vice one C.F. Tenorio who went on maternity
leave. 1 Under the Reliever Agreement which she signed with petitioner company, her employment was to be
immediately terminated upon expiration of the agreed period. Thereafter, from June 10, 1991 to July 1, 1991, and from
July 19, 1991 to August 8, 1991, private respondent' s services as reliever were again engaged by petitioner, this time in
replacement of one Erlinda F. Dizon who went on leave during both periods. 2 After August 8, 1991, and pursuant to
their Reliever Agreement, her services were terminated. LibLex

On September 2, 1991, private respondent was once more asked to join petitioner company as a probationary
employee, the probationary period to cover 150 days. In the job application form that was furnished her to be filled up
for the purpose, she indicated in the portion for civil status therein that she was single although she had contracted
marriage a few months earlier, that is, on May 26, 1991. 3

It now appears that private respondent had made the same representation in the two successive reliever
agreements which she signed on June 10, 1991 and July 8, 1991. When petitioner supposedly learned about the same
later, its branch supervisor in Baguio City, Delia M. Oficial, sent to private respondent a memorandum dated January 15,
1992 requiring her to explain the discrepancy. In that memorandum, she was reminded about the company's policy of
not accepting married women for employment. 4

In her reply letter dated January 17, 1992, private respondent stated that she was not aware of PT&T's policy
regarding married women at the time, and that all along she had not deliberately hidden her true civil status. 5
Petitioner nonetheless remained unconvinced by her explanations. Private respondent was dismissed from the company
effective January 29, 1992, 6 which she readily contested by initiating a complaint for illegal dismissal, coupled with a
claim for non-payment of cost of living allowances (COLA), before the Regional Arbitration Branch of the National Labor
Relations Commission in Baguio City.

At the preliminary conference conducted in connection therewith, private respondent volunteered the
information, and this was incorporated in the stipulation of facts between the parties, that she had failed to remit the
amount of P2,380.75 of her collections. She then executed a promissory note for that amount in favor of petitioner. 7 All
of these took place in a formal proceeding and with the agreement of the parties and/or their counsel.

On November 23, 1993, Labor Arbiter Irenarco R. Rimando handed down a decision declaring that private
respondent, who had already gained the status of a regular employee, was illegally dismissed by petitioner. Her
reinstatement, plus payment of the corresponding back wages and COLA, was correspondingly ordered, the labor arbiter
being of the firmly expressed view that the ground relied upon by petitioner in dismissing private respondent was clearly
insufficient, and that it was apparent that she had been discriminated against on account of her having contracted
marriage in violation of company rules.

On appeal to the National Labor Relations Commission (NLRC),said public respondent upheld the labor arbiter
and, in its decision dated April 29, 1994, it ruled that private respondent had indeed been the subject of an unjust and
unlawful discrimination by her employer, PT&T. However, the decision of the labor arbiter was modified with the
qualification that Grace de Guzman deserved to be suspended for three months in view of the dishonest nature of her
acts which should not be condoned. In all other respects, the NLRC affirmed the decision of the labor arbiter, including
the order for the reinstatement of private respondent in her employment with PT&T.

The subsequent motion for reconsideration filed by petitioner was rebuffed by respondent NLRC in its resolution
of November 9, 1994, hence this special civil action assailing the aforestated decisions. of the labor arbiter and
respondent NLRC, as well as the denial resolution of the latter.

1. Decreed in the Bible itself is the universal norm that women should be regarded with love and respect but,
through the ages, men have responded to that injunction with indifference, on the hubristic conceit that women
constitute the inferior sex. Nowhere has that prejudice against womankind been so pervasive as in the field of labor,
especially on the matter of equal employment opportunities and standards. In the Philippine setting, women have
traditionally been considered as falling within the vulnerable groups or types of workers who must be safeguarded with
preventive and remedial social legislation against discriminatory and exploitative practices in hiring, training, benefits,
promotion and retention.

The Constitution, cognizant of the disparity in rights between men and women in almost all phases of social and
political life, provides a gamut of protective provisions. To cite a few of the primordial ones, Section 14, Article II 8 on
the Declaration of Principles and State Policies, expressly recognizes the role of women in nation-building and
commands the State to ensure, at all times, the fundamental equality before the law of women and men. Corollary
thereto, Section 3 of Article XIII 9 (the progenitor whereof dates back to both the 1935 and 1973 Constitution) pointedly
requires the State to afford full protection to labor and to promote full employment and equality of employment
opportunities for all, including an assurance of entitlement to tenurial security of all workers. Similarly, Section 14 of
Article XIII 10 mandates that the State shall protect working women through provisions for opportunities that would
enable them to reach their full potential.

2. Corrective labor and social laws on gender inequality have emerged with more frequency in the years since
the Labor Code was enacted on May 1, 1974 as Presidential Decree No. 442, largely due to our country's commitment as
a signatory to the United Nations Convention on the Elimination of All Forms of Discrimination Against Women
(CEDAW). 11
 Principal among these laws are Republic Act No. 6727 12 which explicitly prohibits discrimination against women
with respect to terms and conditions of employment, promotion, and training opportunities, Republic Act No. 6955 13
which bans the "mail-order-bride" practice for a fee and the export of female labor to countries that cannot guarantee
protection to the rights of women workers; Republic Act No. 7192, 14 also known as the "Women in Development and
Nation Building Act," which affords women equal opportunities with men to act and to enter into contracts, and for
appointment, admission, training, graduation, and commissioning in all military or similar schools of the Armed Forces of
the Philippines and the Philippine National Police; Republic Act No. 7322 15 increasing the maternity benefits granted to
women in the private sector; Republic Act No. 7877 16 which outlaws and punishes sexual harassment in the workplace
and in the education and training environment; and Republic Act No. 8042, 17 or the "Migrant Workers and Overseas
Filipinos Act of 1995," which prescribes as a matter of policy, inter alia, the deployment of migrant workers, with
emphasis on women, only in countries where their rights are secure. Likewise, it would not be amiss to point out that in
the Family Code, 18 women's rights in the field of civil law have been greatly enhanced and expanded.

In the Labor Code, provisions governing the rights of women workers are found in Articles 130 to 138 thereof.
Article 130 involves the right against particular kinds of night work while Article 132 ensures the right of women to be
provided with facilities and standards which the Secretary of Labor may establish to ensure their health and safety. For
purposes of labor and social legislation, a woman working in a nightclub, cocktail lounge, massage clinic, bar or other
similar establishments shall be considered as an employee under Article 138. Article 135, on the other hand, recognizes
a woman' s right against discrimination with respect to terms and conditions of employment on account simply of sex.
Finally, and this brings us to the issue at hand, Article 136 explicitly prohibits discrimination merely by reason of the
marriage of a female employee.

3. Acknowledged as paramount in the due process scheme is the constitutional guarantee of protection to labor
and security of tenure. Thus, an employer is required, as a condition sine qua non prior to severance of the employment
ties of an individual under his employ, to convincingly establish, through substantial evidence, the existence of a valid
and just cause in dispensing with the services of such employee, one' s labor being regarded as constitutionally
protected property.

On the other hand, it is recognized that regulation of manpower by the company falls within the so-called
management prerogatives, which prescriptions encompass the matter of hiring, supervision of workers, work
assignments, working methods and assignments, as well as regulations on the transfer of employees, lay-off of workers,
and the discipline, dismissal, and recall of employees. 19 As put in a case, an employer is free to regulate, according to
his discretion and best business judgment, all aspects of employment, "from hiring to firing," except in cases of unlawful
discrimination or those which may be provided by law. 20

In the case at bar, petitioner's policy of not accepting or considering as disqualified from work any woman
worker who contracts marriage runs afoul of the test of, and the right against, discrimination, afforded all women
workers by our labor laws and by no less than the Constitution. Contrary to petitioner's assertion that it dismissed
private respondent from employment on account of her dishonesty, the record discloses clearly that her ties with the
company were dissolved principally because of the company's policy that married women are not qualified for
employment in PT&T, and not merely because of her supposed acts of dishonesty.

That it was so can easily be seen from the memorandum sent to private respondent by Delia M. Oficial, the
branch supervisor of the company, with the reminder, in the words of the latter, that "you're fully aware that the
company is not accepting married women employee (sic), as it was verbally instructed to you." 21 Again, in the
termination notice sent to her by the same branch supervisor, private respondent was made to understand that her
severance from the service was not only by reason of her concealment of her married status but, over and on top of
that, was her violation of the company' s policy against marriage ("and even told you that married women employees
are not applicable [sic] or accepted in our company.") 22 Parenthetically, this seems to be the curious reason why it was
made to appear in the initiatory pleadings that petitioner was represented in this case only by its said supervisor and not
by its highest ranking officers who would otherwise be solidarily liable with the corporation. 23

Verily, private respondent's act of concealing the true nature of her status from PT&T could not be properly
characterized as willful or in bad faith as she was moved to act the way she did mainly because she wanted to retain a
permanent job in a stable company. In other words, she was practically forced by that very same illegal company policy
into misrepresenting her civil status for fear of being disqualified from work. While loss of confidence is a just cause for
termination of employment, it should not be simulated. 24 It must rest on an actual breach of duty committed by the
employee and not on the employer's caprices. 25 Furthermore, it should never be used as a subterfuge for causes which
are improper, illegal, or unjustified. 26 LLphil

In the present controversy, petitioner's expostulations that it dismissed private respondent, not because the
latter got married but because she concealed that fact, does have a hollow ring. Her concealment, so it is claimed,
bespeaks dishonesty hence the consequent loss of confidence in her which justified her dismissal. Petitioner would
asseverate, therefore, that while it has nothing against marriage, it nonetheless takes umbrage over the concealment of
that fact. This improbable reasoning, with interstitial distinctions, perturbs the Court since private respondent may well
be minded to claim that the imputation of dishonesty should be the other way around.

Petitioner would have the Court believe that although private respondent defied its policy against its female
employees contracting marriage, what could be an act of insubordination was inconsequential. What it submits as
unforgivable is her concealment of that marriage yet, at the same time, declaring that marriage as a trivial matter to
which it supposedly has no objection. In other words, PT&T says it gives its blessings to its female employees contracting
marriage, despite the maternity leaves and other benefits it would consequently respond for and which obviously it
would have wanted to avoid. If that employee confesses such fact of marriage, there will be no sanction; but if such
employee conceals the same instead of proceeding to the confessional, she will be dismissed. This line of reasoning does
not impress us as reflecting its true management policy or that we are being regaled with responsible advocacy.

This Court should be spared the ennui of strained reasoning and the tedium of propositions which confuse
through less than candid arguments. Indeed, petitioner glosses over the fact that it was its unlawful policy against
married women, both on the aspects of qualification and retention, which compelled private respondent to conceal her
supervenient marriage. It was, however, that very policy alone which was the cause of private respondent's secretive
conduct now complained of. It is then apropos to recall the familiar saying that he who is the cause of the cause is the
cause of the evil caused.

Finally, petitioner's collateral insistence on the admission of private respondent that she supposedly
misappropriated company funds, as an additional ground to dismiss her from employment, is somewhat insincere and
self-serving. Concededly, private respondent admitted in the course of the proceedings that she failed to remit some of
her collections, but that is an altogether different story. The fact is that she was dismissed solely because of her
concealment of her marital status, and not on the basis of that supposed defalcation of company funds. That the labor
arbiter would thus consider petitioner's submissions on this supposed dishonesty as a mere afterthought, just to bolster
its case for dismissal, is a perceptive conclusion born of experience in labor cases. For, there was no showing that private
respondent deliberately misappropriated the amount or whether her failure to remit the same was through negligence
and, if so, whether the negligence was in nature simple or grave. In fact, it was merely agreed that private respondent
execute a promissory note to refund the same, which she did, and the matter was deemed settled as a peripheral issue
in the labor case.

Private respondent, it must be observed, had gained regular status at the time of her dismissal. When she was
served her walking papers on January 29, 1992, she was about to complete the probationary period of 150 days as she
was contracted as a probationary employee on September 2, 1991. That her dismissal would be effected just when her
probationary period was winding down clearly raises the plausible conclusion that it was done in order to prevent her
from earning security of tenure. 27 On the other hand, her earlier stints with the company as reliever were undoubtedly
those of a regular employee, even if the same were for fixed periods, as she performed activities which were essential or
necessary in the usual trade and business of PT&T. 28 The primary standard of determining regular employment is the
reasonable connection between the activity performed by the employee in relation to the business or trade of the
employer. 29

As an employee who had therefore gained regular status, and as she had been dismissed without just cause, she
is entitled to reinstatement without loss of seniority rights and other privileges and to full back wages, inclusive of
allowances and other benefits or their monetary equivalent. 30 However, as she had undeniably committed an act of
dishonesty in concealing her status, albeit under the compulsion of an unlawful imposition of petitioner, the three-
month suspension imposed by respondent NLRC must be upheld to obviate the impression or inference that such act
should be condoned. It would be unfair to the employer if she were to return to its fold without any sanction
whatsoever for her act which was not totally justified. Thus, her entitlement to back wages, which shall be computed
from the time her compensation was withheld up to the time of her actual reinstatement, shall be reduced by deducting
therefrom the amount corresponding to her three months suspension.

4. The government, to repeat, abhors any stipulation or policy in the nature of that adopted by petitioner PT&T.
The Labor Code states, in no uncertain terms, as follows:

"ART. 136. Stipulation against marriage.— It shall be unlawful for an employer to require as a
condition of employment or continuation of employment that a woman shall not get married, or to
stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed resigned
or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee
merely by reason of marriage."

This provision had a studied history for its origin can be traced to Section 8 of Presidential Decree No. 148, 31
better known as the "Women and Child Labor Law," which amended paragraph (c), Section 12 of Republic Act No. 679,
32 entitled "An Act to Regulate the Employment of Women and Children, to Provide Penalties for Violations Thereof,
and for Other Purposes." The forerunner to Republic Act No. 679, on the other hand, was Act No. 3071 which became
law on March 16, 1923 and which regulated the employment of women and children in shops, factories, industrial,
agricultural, and mercantile establishments and other places of labor in the then Philippine Islands.

It would be worthwhile to reflect upon and adopt here the rationalization in Zialcita, et al. vs. Philippine Air
Lines, 33 a decision that emanated from the Office of the President. There, a policy of Philippine Air Lines requiring that
prospective flight attendants must be single and that they will be automatically separated from the service once they
marry was declared void, it being violative of the clear mandate in Article 136 of the Labor Code with regard to
discrimination against married women. Thus:

"Of first impression is the incompatibility of the respondent's policy or regulation with the
codal provision of law. Respondent is resolute in its contention that Article 136 of the Labor Code
applies only to women employed in ordinary occupations and that the prohibition against marriage of
women engaged in extraordinary occupations, like flight attendants, is fair and reasonable,
considering the peculiarities of their chosen profession.

We cannot subscribe to the line of reasoning pursued by respondent. All along, it knew that
the controverted policy has already met its doom as early as March 13, 1973 when Presidential Decree
No. 148, otherwise known as the Women and Child Labor Law, was promulgated. But for the timidity
of those affected or their labor unions in challenging the validity of the policy, the same was able to
obtain a momentary reprieve. A close look at Section 8 of said decree, which amended paragraph (c)
of Section 12 of Republic Act No. 679, reveals that it is exactly the same provision reproduced
verbatim in Article 136 of the Labor Code,which was promulgated on May 1, 1974 to take effect six (6)
months later, or on November 1, 1974.

It cannot be gainsaid that, with the reiteration of the same provision in the new Labor Code,
all policies and acts against it are deemed illegal and therefore abrogated. True, Article 132 enjoins the
Secretary of Labor to establish standards that will ensure the safety and health of women employees
and in appropriate cases shall by regulation require employers to determine appropriate minimum
standards for termination in special occupations, such as those of flight attendants, but that is
precisely the factor that militates against the policy of respondent. The standards have not yet been
established as set forth in the first paragraph, nor has the Secretary of Labor issued any regulation
affecting flight attendants.

It is logical to presume that, in the absence of said standards or regulations which are as yet to
be established, the policy of respondent against marriage is patently illegal. This finds support in
Section 9 of the New Constitution, which provides:

"Sec. 9. The State shall afford protection to labor, promote full employment and
equality in employment, ensure equal work opportunities regardless of sex, race, or creed,
and regulate the relations between workers and employees. The State shall assure the rights
of workers to self-organization, collective bargaining, security of tenure, and just and humane
conditions of work ..."

Moreover, we cannot agree to the respondent's proposition that termination from

employment of flight attendants on account of marriage is a fair and reasonable standard designed for
their own health, safety, protection and welfare, as no basis has been laid therefor. Actually,
respondent claims that its concern is not so much against the continued employment of the flight
attendant merely by reason of marriage as observed by the Secretary of Labor, but rather on the
consequence of marriage-pregnancy. Respondent discussed at length in the instant appeal the
supposed ill effects of pregnancy on flight attendants in the course of their employment. We feel that
this needs no further discussion as it had been adequately explained by the Secretary of Labor in his
decision of May 2, 1976. cdll

In a vain attempt to give meaning to its position, respondent went as far as invoking the
provisions of Articles 52 and 216 of the New Civil Code on the preservation of marriage as an
inviolable social institution and the family as a basic social institution, respectively, as bases for its
policy of non-marriage. In both instances, respondent predicates absence of a flight attendant from
her home for long periods of time as contributory to an unhappy married life. This is pure conjecture
not based on actual conditions, considering that, in this modern world, sophisticated technology has
narrowed the distance from one place to another. Moreover, respondent overlooked the fact that
married flight attendants can program their lives to adapt to prevailing circumstances and events.
 Article 136 is not intended to apply only to women employed in ordinary occupations, or it
should have categorically expressed so. The sweeping intendment of the law, be it on special or
ordinary occupations, is reflected in the whole text and supported by Article 135 that speaks of non-
discrimination on the employment of women.

The judgment of the Court of Appeals in Gualberto, et al. vs. Marinduque Mining & Industrial Corporation 34
considered as void a policy of the same nature. In said case, respondent, in dismissing from the service the complainant,
invoked a policy of the firm to consider female employees in the project it was undertaking as separated the moment
they get married due to lack of facilities for married women. Respondent further claimed that complainant was
employed in the project with an oral understanding that her services would be terminated when she gets married.
Branding the policy of the employer as an example of "discriminatory chauvinism tantamount to denying equal
employment opportunities to women simply on account of their sex, the appellate court struck down said employer
policy as unlawful in view of its repugnance to the Civil Code, Presidential Decree No. 148 and the Constitution.

Under American jurisprudence, job requirements which establish employer preference or conditions relating to
the marital status of an employee are categorized as a "sex-plus" discrimination where it is imposed on one sex and not
on the other. Further, the same should be evenly applied and must not inflict adverse effects on a racial or sexual group
which is protected by federal job discrimination laws. Employment rules that forbid or restrict the employment of
married women, but do not apply to married men, have been held to violate Title VII of the United States Civil Rights Act
of 1964, the main federal statute prohibiting job discrimination against employees and applicants on the basis of, among
other things, sex. 35

Further, it is not relevant that the rule is not directed against all women but just against married women. And,
where the employer discriminates against married women, but not against married men, the variable is sex and the
discrimination is unlawful. 36 Upon the other hand, a requirement that a woman employee must remain unmarried
could be justified as a "bona fide occupational qualification," or BFOQ, where the particular requirements of the job
would justify the same, but not on the ground of a general principle, such as the desirability of spreading work in the
workplace. A requirement of that nature would be valid provided it reflects an inherent quality reasonably necessary for
satisfactory job performance. Thus, in one case, a no-marriage rule applicable to both male and female flight attendants,
was regarded as unlawful since the restriction was not related to the job performance of the flight attendants. 37

5. Petitioner's policy is not only in derogation of the provisions of Article 136 of the Labor Code on the right of a
woman to be free from any kind of stipulation against marriage in connection with her employment, but it likewise
assaults good morals and public policy, tending as it does to deprive a woman of the freedom to choose her status, a
privilege that by all accounts inheres in the individual as an intangible and inalienable right. 38 Hence, while it is true
that the parties to a contract may establish any agreements, terms, and conditions that they may deem convenient, the
same should not be contrary to law, morals, good customs, public order, or public policy. 39 Carried to its logical
consequences, it may even be said that petitioner's policy against legitimate marital bonds would encourage illicit or
common-law relations and subvert the sacrament of marriage.

Parenthetically, the Civil Code provisions on the contract of labor state that the relations between the parties,
that is, of capital and labor, are not merely contractual, impressed as they are with so much public interest that the
same should yield to the common good. 40 It goes on to intone that neither capital nor labor should visit acts of
oppression against the other, nor impair the interest or convenience of the public. 41 In the final reckoning, the danger
of just such a policy against marriage followed by petitioner PT&T is that it strikes at the very essence, ideals and
purpose of marriage as an inviolable social institution and, ultimately, of the family as the foundation of the nation. 42
That it must be effectively interdicted here in all its indirect, disguised or dissembled forms as discriminatory conduct
derogatory of the laws of the land is not only in order but imperatively required.

ON THE FOREGOING PREMISES, the petition of Philippine Telegraph and Telephone Company is hereby
DISMISSED for lack of merit, with double costs against petitioner. llcd

SO ORDERED

||| (Philippine Telegraph and Telephone Co. v. National Labor Relations Commission, G.R. No. 118978, [May 23, 1997],
338 PHIL 1093-1112)

SECOND DIVISION

[G.R. No. 123737. May 28, 1999.]

 CARLOS G. LIBRES, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, NATIONAL STEEL
CORPORATION, OSMUNDO G. WAGA, JR., ANTOINE D. SEVA, PETER J. LOQUILLANO, SATURNINO P.
MEJORADA and ISIDRO F. HYNSON, JR., respondents.

Armi Jane Roa-Borje for petitioner.

Padilla & Padilla for private respondents.

SYNOPSIS

Petitioner, assistant Manager of National Steel Corporation (NSC), was required by Assistant Vice President
Isidro F. Hynson, Jr. his immediate superior, to submit a written explanation on a complaint filed by Hynson's secretary,
Susan Capiral, who claimed that petitioner on the night of May 1992 touched her hand and shoulder, caressed her nape
and told others that she was the one who hugged and kissed or that she responded to his sexual advances. Petitioner
did not deny Capiral's allegation, but claimed that the one year delay in filing the complaint showed that it was merely
an afterthought. The Management Evaluation Committee of the company, after an internal investigation, found
petitioner guilty of violation of Item 2, Table V of the Plant's Rules and Regulations and opined that the sexual advances
of petitioner were unauthorized acts which damaged Capiral's honor. Petitioner was suspended for 30 days without pay.
Hence, his complaint for illegal suspension and unjust discrimination, claiming denial of due process for failure of the
company to grant his request for personal confrontation. The Labor Arbiter, finding that sexual harassment had indeed
transpired, observed that petitioner should welcome the suspension of 30 days as opposed to termination imposed in
Villarama vs. NLRC and Golden Donuts. This was affirmed on appeal by the NLRC. Undaunted, petitioner resorted to this
recourse questioning the findings of the NLRC and further claiming that his acts of fondling the hand and massaging the
shoulders of Capiral did not fall within the definition and criteria of sexual harassment laid down in Section 3 of RA No.
7877. cdasia

This Court ruled that resort to judicial review of the decisions of the NLRC under Rule 65 of the Rules of Court is
confined only to issues of want or excess of jurisdiction and grave abuse of discretion and does not include an inquiry on
the correctness of the evaluation of evidence, as its findings of fact are generally given finality on appeal.

RA No. 7877 has no retroactive application, hence, it cannot be applied to this case. The Labor Arbiter have to
rely on the MEC report and the common connotation of sexual harassment as it is generally understood by the public in
resolving the case brought before it.

As a managerial employee, petitioner is bound by a more exacting ethics and it is the duty of every employer to
protect its employees from oversexed superiors. The Labor Arbiter was in fact lenient in his application of the law and
jurisprudence for which petitioner, found guilty of sexual harassment, must be grateful and not gripe against. TaCDAH

Fear of retaliation and backlash and social humiliation and embarrassment are sufficient justification for delay in
instituting the complaint for sexual harassment.

Due process does not always require a trial type proceeding and is satisfied where a person is notified of the
charge against him and given an opportunity to explain or defend himself. Petitioner, who was given more than
adequate opportunity to explain his side and air his grievances, cannot now claim denial thereof. Further, personal
confrontation was not necessary as litigants may be heard through pleadings, written explanation, position papers,
memoranda or oral arguments.

SYLLABUS

1. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CERTIORARI; ISSUES LIMITED TO WANT OR EXCESS OF JURISDICTION
OR GRAVE ABUSE OF DISCRETION. — In a litany of cases we have ruled that resort to judicial review of the decisions of
the NLRC under Rule 65 of the Rules of Court is confined only to issues of want or excess of jurisdiction and grave abuse
of discretion on the part of the tribunal rendering them. It does not include an inquiry on the correctness of the
evaluation to evidence, which served as basis for the labor official in determining his conclusion. Findings of fact of
administrative officers are generally given finality. ICDSca

2. ID.; ACTIONS; APPEAL; ISSUES CANNOT BE RAISED FOR THE FIRST TIME ON APPEAL. — Petitioner assails the
failure of the NLRC to strictly apply RA No. 7877 to the instant case. We note however that petitioner never raised the
applicability of the law in his appeal to the NLRC nor in his motion for reconsideration. Issues or arguments must chiefly
be raised before the court or agency concerned so as to allow it to pass upon and correct its mistakes without the
intervention of a higher court. Having failed to indicate his effort along this line, petitioner cannot now belatedly raise its
application in this petition.

3. CIVIL LAW; EFFECT AND APPLICATION OF LAWS; PROSPECTIVITY OF LAWS; RA NO. 7877 WITHOUT
RETROACTIVE APPLICATION; CASE AT BAR. — Republic Act No. 7877 was not yet in effect at the time of the occurrence
of the act complained of. It was still being deliberated upon in Congress when petitioner's case was decided by the Labor
Arbiter. As a rule, laws shall have no retroactive effect unless otherwise provided, or except in a criminal case when their
application will favor the accused. Hence, the Labor Arbiter has to rely on the MEC report and the common connotation
of sexual harassment as it is generally understood by the public. Faced with the same predicament, the NLRC did not
commit any abuse of discretion in affirming the decision of the Labor Arbiter.

4. LABOR AND SOCIAL LEGISLATION; LABOR LAWS; SEXUAL HARASSMENT; VILLARAMA CASE APPLICABLE TO
CASE AT BAR; LENIENT APPLICATION MANIFEST BY MERE SUSPENSION OF MANAGERIAL EMPLOYEE. — Petitioner next
trains his gun on the reliance by the NLRC on Villarama and claims it was erroneous. We rule otherwise and hold that it
was both fitting and appropriate since it singularly addressed the issue of a managerial employee committing sexual
harassment on a subordinate. The disparity in the period of filing the complaints in the two (2) cases did not in any way
reduce this case into insignificance. On the contrary, it even invited the attention of the Court to focus on sexual
harassment as a just and valid cause for termination. Whereas petitioner Libres was only meted a 30-day suspension by
the NLRC, Villarama in the other case was penalized with termination. Public respondent therefore is correct in its
observation that the Labor Arbiter was in fact lenient in his application of the law and jurisprudence for which petitioner
must be grateful and not gripe against.

5. ID.; ID.; EMPLOYMENT; MANAGERIAL EMPLOYMENT; SEXUAL HARASSMENT OR MORAL PERVERSITY,

JUSTIFIABLE GROUND FOR DISMISSAL. — As Mr. Justice Puno elucidated, "As a managerial employee, petitioner is
bound by more exacting work ethics. He failed to live up to his higher standard of responsibility when he succumbed to
his moral perversity. And when such moral perversity is perpetrated against his subordinate, he provides a justifiable
ground for his dismissal for lack of trust and confidence. It is the right, nay, the duty of every employer to protect its
employees from oversexed superiors."

6. ID.; ID.; ID.; ID.; ID.; DELAY FOR ONE YEAR IN INSTITUTING COMPLAINT, REASONABLE. — Petitioner further
claims that the delay in instituting the complaint shows that it was only an afterthought. We disagree. As pointed out by
the Solicitor General, it could be expected since Libres was Capiral's immediate superior. Fear of retaliation and
backlash, not to forget the social humiliation and embarrassment that victims of this human frailty usually suffer, are all
realities that Capiral had to contend with. Moreover, the delay did not detract from the truth derived from the facts.
Petitioner Libres never questioned the veracity of Capiral's allegations. In fact his narration even corroborated the
latter's assertion in several material points. He only raised issue on the complaint's protracted filing.

7. ID.; ID.; ID.; ID.; ID.; DUE PROCESS REQUIREMENTS SUFFICIENTLY COMPLIED WITH; CASE AT BAR. — On the
question of due process, we find that the requirements thereof were sufficiently complied with. Due process as a
constitutional precept does not always and in all situations require a trial type proceeding. Due process is satisfied when
a person is notified of the charge against him and given an opportunity to explain or defend himself. The essence of due
process is simply to be heard, or as applied to administrative proceedings, an opportunity to explain one's side, or an
opportunity to seek a reconsideration of the action or ruling complained of. It is undeniable that petitioner was given a
Notice of Investigation informing him to submit a written explanation regarding the matter; that he submitted his
written explanation to his superior, Isidro F. Hynson Jr.; that Hynson Jr. further allowed him to air his grievance in a
private session; and that upon release of the suspension order made by the MEC petitioner requested its
reconsideration but was denied. From the foregoing it can be gleaned that petitioner was given more than adequate
opportunity to explain his side and air his grievances.

8. ID.; ID.; ID.; ID.; ID.; PERSONAL CONFRONTATION NOT NECESSARY. — The personal confrontation with the
MEC officers, which he requested, was not necessary. The parties had already exhaustively presented their claims and
defenses in different fora. As stated in Homeowners Savings and Loan Association v. NLRC, litigations may be heard
through pleadings, written explanations, position papers, memoranda or oral arguments. Petitioner has been afforded
all of the above means to air his side. Due process was therefore properly observed. HEDSIc

DECISION

BELLOSILLO, J p:
 This petition for certiorari seeks to annul the decision of public respondent National Labor Relations
Commission (NLRC) sustaining the Labor Arbiter's finding that petitioner was validly suspended by private
respondents, as well as the NLRC resolution denying petitioner's motion to reconsider its decision. LLphil

Petitioner Carlos G. Libres, an electrical engineer, was holding a managerial position with National Steel
Corporation (NSC) as Assistant Manager. On 3 August 1993 he received a Notice of Investigation from Assistant Vice
President Isidro F. Hynson Jr., his immediate superior, requesting him to submit a written explanation relative to the
charge of sexual harassment made by Susan D. Capiral, Hynson's secretary, allegedly committed by Libres sometime
in May 1992, and subsequently to answer clarificatory questions on the matter. The notice also warned him that
failure to file his written explanation would be construed as a waiver of his right to be heard. On 14 August 1993
petitioner submitted his written explanation denying the accusation against him and offering to submit himself for
clarificatory interrogation.
Subsequently, Hynson Jr. conducted an internal investigation to which Libres and Capiral were invited to
ventilate their respective sides of the issue. They readily responded. Thereafter, Hynson Jr. submitted his report to
the Management Evaluation Committee (MEC).
The MEC, after deliberation, concluded that the charges against petitioner constituted a violation of Item 2,
Table V, of the Plant's Rules and Regulations. 1 It opined that "touching a female subordinate's hand and shoulder,
caressing her nape and telling other people that Capiral was the one who hugged and kissed or that she responded
to the sexual advances are unauthorized acts that damaged her honor." 2 Referring to the Manual of the Philippine
Daily Inquirer in defining sexual harassment, 3 the MEC finally concluded that petitioner's acts clearly constituted
sexual harassment as charged and recommended petitioner's suspension for thirty (30) days without pay.
On 5 January 1994 petitioner wrote Melchor Q. Villamor, Vice President for Manufacturing, requesting
reconsideration of his suspension, but the same was denied. On 12 February 1994 the suspension order was finally
implemented.
Seeking to reverse his misfortune, Libres filed a complaint for illegal suspension and unjust discrimination
against respondent NSC and its officers, private respondents herein, before the Labor Arbiter. Citing the failure of
the MEC to grant him audience despite his offer to answer clarificatory questions, petitioner claimed denial of due
process. Labor Arbiter Nicodemus G. Palangan however ruled that due process was properly observed and that
there was a positive finding of sexual harassment to justify petitioner's suspension. He pointed out that there was
no substantial inconsistency between the narration of complainant Capiral and petitioner regarding the incident in
the evening of May 1992. The Labor Arbiter found that aside from a few facts which were controverted by Capiral in
her complaint-affidavit, petitioner's admissions approximated the truth; consequently, he ruled that the MEC was
correct in concluding that sexual harassment had indeed transpired. The Labor Arbiter observed that petitioner
should welcome that his penalty was only for suspension of thirty (30) days as opposed to termination imposed in
Villarama v. NLRC and Golden Donuts. 4
In this recourse petitioner maintains that public respondent grievously erred amounting to lack or excess of
jurisdiction in finding that he committed sexual harassment justifying his suspension, and in concluding that he was
afforded due process.
Petitioner argues that the issue of sexual harassment was not adequately considered as he noted that the
finding of the NLRC was made without proper basis in fact and in law. He maintains that the NLRC merely adopted
the conclusions of the Labor Arbiter which in turn were simply derived from the report of the MEC. Petitioner
primarily disputes the failure of the NLRC to apply RA No. 7877, "An Act Declaring Sexual Harassment Unlawful in
the Employment, Education or Training Environment and for Other Purposes," in determining whether he actually
committed sexual harassment. He asserts that his acts did not fall within the definition and criteria of sexual
harassment as laid down in Sec. 3 of the law. 5 Specifically, he cites public respondent's failure to show that his acts
of fondling the hand and massaging the shoulders of Capiral "discriminated against her continued employment,"
"impaired her rights and privileges under the Labor Code," or "created a hostile, intimidating or offensive
environment." 6
Petitioner also contends that public respondent's reliance on Villarama v. NLRC and Golden Donuts 7 was
misplaced. He draws attention to victim Divina Gonzaga's immediate filing of her letter of resignation in the
Villarama case as opposed to the one-year delay of Capiral in filing her complaint against him. He now surmises that
the filing of the case against him was merely an afterthought and not borne out of a valid complaint, hence, the
Villarama case should have no bearing on the instant case.
As regards his assertion that he was not afforded due process, petitioner would point to his demand for
personal confrontation which was brushed aside by the MEC. He argues strongly that in rejecting his plea, the MEC
clearly denied him an opportunity to be heard and present his side. LLpr
The issues raised in this petition require this Court to delve into the findings of fact by the public
respondent. We have ruled in a litany of cases that resort to judicial review of the decisions of the NLRC under Rule
65 of the Rules of Court is confined only to issues of want or excess of jurisdiction and grave abuse of discretion on
the part of the tribunal rendering them. It does not include an inquiry on the correctness of the evaluation of
 evidence, which served as basis for the labor official in determining his conclusion. Findings of fact of administrative
officers are generally given finality. 8 Nonetheless, the Court shall discuss the matter if only to emphasize that the
contentions of petitioner are definitely without merit.
Petitioner assails the failure of the NLRC to strictly apply RA No. 7877 to the instant case. We note however,
that petitioner never raised the applicability of the law in his appeal to the NLRC nor in his motion for
reconsideration. Issues or arguments must chiefly be raised before the court or agency concerned so as to allow it to
pass upon and correct its mistakes without the intervention of a higher court. Having failed to indicate his effort
along this line, petitioner cannot now belatedly raise its application in this petition.
Republic Act No. 7877 was not yet in effect at the time of the occurrence of the act complained of. It was
still being deliberated upon in Congress when petitioner's case was decided by the Labor Arbiter. As a rule, laws shall
have no retroactive effect unless otherwise provided, or except in a criminal case when their application will favor
the accused. 9 Hence, the Labor Arbiter have to rely on the MEC report and the common connotation of sexual
harassment as it is generally understood by the public. Faced with the same predicament, the NLRC had to agree
with the Labor Arbiter. In so doing, the NLRC did not commit any abuse of discretion in affirming the decision of the
Labor Arbiter.
Petitioner next trains his gun on the reliance by the NLRC on Villarama and claims it was erroneous. We rule
otherwise and hold that it was both fitting and appropriate since it singularly addressed the issue of a managerial
employee committing sexual harassment on a subordinate. The disparity in the periods of filing the complaints in
the two (2) cases did not in any way reduce this case into insignificance. On the contrary, it even invited the
attention of the Court to focus on sexual harassment as a just and valid cause for termination. Whereas petitioner
Libres was only meted a 30-day suspension by the NLRC, Villarama, in the other case was penalized with
termination. As Mr. Justice Puno elucidated, "As a managerial employee, petitioner is bound by more exacting work
ethics. He failed to live up to his higher standard of responsibility when he succumbed to his moral perversity. And
when such moral perversity is perpetrated against his subordinate, he provides a justifiable ground for his dismissal
for lack of trust and confidence. It is the right, nay, the duty of every employer to protect its employees from
oversexed superiors." 10 Public respondent therefore is correct in its observation that the Labor Arbiter was in fact
lenient in his application of the law and jurisprudence for which petitioner must be grateful and not gripe against.
Petitioner further claims that the delay in instituting the complaint shows that it was only an afterthought.
We disagree. As pointed out by the Solicitor General, it could be expected since Libres was Capiral's immediate
superior. Fear of retaliation and backlash, not to forget the social humiliation and embarrassment that victims of this
human frailty usually suffer, are all realities that Capiral had to contend with. Moreover, the delay did not detract
from the truth derived from the facts. Petitioner Libres never questioned the veracity of Capiral's allegations. In fact
his narration even corroborated the latter's assertion in several material points. He only raised issue on the
complaint's protracted filing.
On the question of due process, we find that the requirements thereof were sufficiently complied with. Due
process as a constitutional precept does not always and in all situations require a trial type proceeding. Due process
is satisfied when a person is notified of the charge against him and given an opportunity to explain or defend
himself. The essence of due process is simply to be heard, or as applied to administrative proceedings, an
opportunity to explain one's side, or an opportunity to seek a reconsideration of the action or ruling complained of.
11 It is undeniable that petitioner was given a Notice of Investigation informing him of the charge of sexual
harassment as well as advising him to submit a written explanation regarding the matter; that he submitted his
written explanation to his superior, Isidro F. Hynson Jr.; that Hynson Jr. further allowed him to air his grievance in a
private session; and, that upon release of the suspension order made by the MEC petitioner requested its
reconsideration but was denied. From the foregoing it can be gleaned that petitioner was given more than adequate
opportunity to explain his side and air his grievances.

The personal confrontation with the MEC officers, which he requested, was not necessary. The parties had
already exhaustively presented their claims and defenses in different fora. As stated in Homeowners Savings and
Loan Association v. NLRC, litigants may be heard through pleadings, written explanations, position papers,
memoranda or oral arguments. 12 Petitioner has been afforded all of the above means to air his side. Due process
was therefore properly observed.
WHEREFORE, the petition is DISMISSED, no grave abuse of discretion having been committed by public
respondent National Labor Relations Commission in upholding the suspension of petitioner Carlos G. Libres as
justified and in accordance with due process. Consequently, its decision of 28 August 1995 as well as its resolution of
31 October 1995 is AFFIRMED. LexLib
SO ORDERED
||| (Libres v. National Labor Relations Commission, G.R. No. 123737, [May 28, 1999], 367 PHIL 180-191)
 SECOND DIVISION

[G.R. No. 162994. September 17, 2004.]

DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A. TECSON, petitioners, vs. GLAXO

WELLCOME PHILIPPINES, INC., respondent.

RESOLUTION

TINGA, J p:

Confronting the Court in this petition is a novel question, with constitutional overtones, involving the validity of
the policy of a pharmaceutical company prohibiting its employees from marrying employees of any competitor
company.

This is a Petition for Review on Certiorari assailing the Decision 1 dated May 19, 2003 and the Resolution dated
March 26, 2004 of the Court of Appeals in CA-G.R. SP No. 62434. 2

Petitioner Pedro A. Tecson (Tecson) was hired by respondent Glaxo Wellcome Philippines, Inc. (Glaxo) as
medical representative on October 24, 1995, after Tecson had undergone training and orientation.

Thereafter, Tecson signed a contract of employment which stipulates, among others, that he agrees to study
and abide by existing company rules; to disclose to management any existing or future relationship by consanguinity or
affinity with co-employees or employees of competing drug companies and should management find that such
relationship poses a possible conflict of interest, to resign from the company.

The Employee Code of Conduct of Glaxo similarly provides that an employee is expected to inform management
of any existing or future relationship by consanguinity or affinity with co-employees or employees of competing drug
companies. If management perceives a conflict of interest or a potential conflict between such relationship and the
employee’s employment with the company, the management and the employee will explore the possibility of a
“transfer to another department in a non-counterchecking position” or preparation for employment outside the
company after six months.

Tecson was initially assigned to market Glaxo’s products in the Camarines Sur-Camarines Norte sales area.
SHADcT

Subsequently, Tecson entered into a romantic relationship with Bettsy, an employee of Astra Pharmaceuticals 3
(Astra), a competitor of Glaxo. Bettsy was Astra’s Branch Coordinator in Albay. She supervised the district managers and
medical representatives of her company and prepared marketing strategies for Astra in that area.

Even before they got married, Tecson received several reminders from his District Manager regarding the
conflict of interest which his relationship with Bettsy might engender. Still, love prevailed, and Tecson married Bettsy in
September 1998.

In January 1999, Tecson’s superiors informed him that his marriage to Bettsy gave rise to a conflict of interest.
Tecson’s superiors reminded him that he and Bettsy should decide which one of them would resign from their jobs,
although they told him that they wanted to retain him as much as possible because he was performing his job well.

Tecson requested for time to comply with the company policy against entering into a relationship with an
employee of a competitor company. He explained that Astra, Bettsy’s employer, was planning to merge with Zeneca,
another drug company; and Bettsy was planning to avail of the redundancy package to be offered by Astra. With
Bettsy’s separation from her company, the potential conflict of interest would be eliminated. At the same time, they
would be able to avail of the attractive redundancy package from Astra.

In August 1999, Tecson again requested for more time resolve the problem. In September 1999, Tecson applied
for a transfer in Glaxo’s milk division, thinking that since Astra did not have a milk division, the potential conflict of
interest would be eliminated. His application was denied in view of Glaxo’s “least-movement-possible” policy.

In November 1999, Glaxo transferred Tecson to the Butuan City-Surigao City-Agusan del Sur sales area. Tecson
asked Glaxo to reconsider its decision, but his request was denied.
 Tecson sought Glaxo’s reconsideration regarding his transfer and brought the matter to Glaxo’s Grievance
Committee. Glaxo, however, remained firm in its decision and gave Tecson until February 7, 2000 to comply with the
transfer order. Tecson defied the transfer order and continued acting as medical representative in the Camarines Sur-
Camarines Norte sales area.

During the pendency of the grievance proceedings, Tecson was paid his salary, but was not issued samples of
products which were competing with similar products manufactured by Astra. He was also not included in product
conferences regarding such products.

Because the parties failed to resolve the issue at the grievance machinery level, they submitted the matter for
voluntary arbitration. Glaxo offered Tecson a separation pay of one-half (½) month pay for every year of service, or a
total of P50,000.00 but he declined the offer. On November 15, 2000, the National Conciliation and Mediation Board
(NCMB) rendered its Decision declaring as valid Glaxo’s policy on relationships between its employees and persons
employed with competitor companies, and affirming Glaxo’s right to transfer Tecson to another sales territory.

Aggrieved, Tecson filed a Petition for Review with the Court of Appeals assailing the NCMB Decision. EHSTcC

On May 19, 2003, the Court of Appeals promulgated its Decision denying the Petition for Review on the ground
that the NCMB did not err in rendering its Decision. The appellate court held that Glaxo’s policy prohibiting its
employees from having personal relationships with employees of competitor companies is a valid exercise of its
management prerogatives. 4

Tecson filed a Motion for Reconsideration of the appellate court’s Decision, but the motion was denied by the
appellate court in its Resolution dated March 26, 2004. 5

Petitioners filed the instant petition, arguing therein that (i) the Court of Appeals erred in affirming the NCMB’s
finding that the Glaxo’s policy prohibiting its employees from marrying an employee of a competitor company is valid;
and (ii) the Court of Appeals also erred in not finding that Tecson was constructively dismissed when he was transferred
to a new sales territory, and deprived of the opportunity to attend products seminars and training sessions. 6

Petitioners contend that Glaxo’s policy against employees marrying employees of competitor companies
violates the equal protection clause of the Constitution because it creates invalid distinctions among employees on
account only of marriage. They claim that the policy restricts the employees’ right to marry. 7

They also argue that Tecson was constructively dismissed as shown by the following circumstances: (1) he was
transferred from the Camarines Sur-Camarines Norte sales area to the Butuan-Surigao-Agusan sales area, (2) he suffered
a diminution in pay, (3) he was excluded from attending seminars and training sessions for medical representatives, and
(4) he was prohibited from promoting respondent’s products which were competing with Astra’s products. 8

In its Comment on the petition, Glaxo argues that the company policy prohibiting its employees from having a
relationship with and/or marrying an employee of a competitor company is a valid exercise of its management
prerogatives and does not violate the equal protection clause; and that Tecson’s reassignment from the Camarines
Norte-Camarines Sur sales area to the Butuan City-Surigao City and Agusan del Sur sales area does not amount to
constructive dismissal. 9

Glaxo insists that as a company engaged in the promotion and sale of pharmaceutical products, it has a genuine
interest in ensuring that its employees avoid any activity, relationship or interest that may conflict with their
responsibilities to the company. Thus, it expects its employees to avoid having personal or family interests in any
competitor company which may influence their actions and decisions and consequently deprive Glaxo of legitimate
profits. The policy is also aimed at preventing a competitor company from gaining access to its secrets, procedures and
policies. 10

It likewise asserts that the policy does not prohibit marriage per se but only proscribes existing or future
relationships with employees of competitor companies, and is therefore not violative of the equal protection clause. It
maintains that considering the nature of its business, the prohibition is based on valid grounds. 11

According to Glaxo, Tecson’s marriage to Bettsy, an employee of Astra, posed a real and potential conflict of
interest. Astra’s products were in direct competition with 67% of the products sold by Glaxo. Hence, Glaxo’s
enforcement of the foregoing policy in Tecson’s case was a valid exercise of its management prerogatives. 12 In any
case, Tecson was given several months to remedy the situation, and was even encouraged not to resign but to ask his
wife to resign from Astra instead. 13
 Glaxo also points out that Tecson can no longer question the assailed company policy because when he signed
his contract of employment, he was aware that such policy was stipulated therein. In said contract, he also agreed to
resign from respondent if the management finds that his relationship with an employee of a competitor company would
be detrimental to the interests of Glaxo. 14

Glaxo likewise insists that Tecson’s reassignment to another sales area and his exclusion from seminars
regarding respondent’s new products did not amount to constructive dismissal.

It claims that in view of Tecson’s refusal to resign, he was relocated from the Camarines Sur-Camarines Norte
sales area to the Butuan City-Surigao City and Agusan del Sur sales area. Glaxo asserts that in effecting the reassignment,
it also considered the welfare of Tecson’s family. Since Tecson’s hometown was in Agusan del Sur and his wife traces her
roots to Butuan City, Glaxo assumed that his transfer from the Bicol region to the Butuan City sales area would be
favorable to him and his family as he would be relocating to a familiar territory and minimizing his travel expenses. 15

In addition, Glaxo avers that Tecson’s exclusion from the seminar concerning the new anti-asthma drug was due
to the fact that said product was in direct competition with a drug which was soon to be sold by Astra, and hence, would
pose a potential conflict of interest for him. Lastly, the delay in Tecson’s receipt of his sales paraphernalia was due to the
mix-up created by his refusal to transfer to the Butuan City sales area (his paraphernalia was delivered to his new sales
area instead of Naga City because the supplier thought he already transferred to Butuan). 16

The Court is tasked to resolve the following issues: (1) Whether the Court of Appeals erred in ruling that Glaxo’s
policy against its employees marrying employees from competitor companies is valid, and in not holding that said policy
violates the equal protection clause of the Constitution; (2) Whether Tecson was constructively dismissed.

The Court finds no merit in the petition.

The stipulation in Tecson’s contract of employment with Glaxo being questioned by petitioners provides: ScaEIT

xxx xxx xxx

10. You agree to disclose to management any existing or future relationship you may have,
either by consanguinity or affinity with co-employees or employees of competing drug companies.
Should it pose a possible conflict of interest in management discretion, you agree to resign voluntarily
from the Company as a matter of Company policy.

xxx xxx xxx 17

The same contract also stipulates that Tecson agrees to abide by the existing company rules of Glaxo, and to
study and become acquainted with such policies. 18 In this regard, the Employee Handbook of Glaxo expressly informs
its employees of its rules regarding conflict of interest:

1. Conflict of Interest

Employees should avoid any activity, investment relationship, or interest that may run counter
to the responsibilities which they owe Glaxo Wellcome.

Specifically, this means that employees are expected:

a. To avoid having personal or family interest, financial or otherwise, in any competitor

supplier or other businesses which may consciously or unconsciously influence their
actions or decisions and thus deprive Glaxo Wellcome of legitimate profit.

b. To refrain from using their position in Glaxo Wellcome or knowledge of Company plans to
advance their outside personal interests, that of their relatives, friends and other
businesses.

c. To avoid outside employment or other interests for income which would impair their
effective job performance.

d. To consult with Management on such activities or relationships that may lead to conflict of
interest.
 1.1. Employee Relationships

Employees with existing or future relationships either by consanguinity or affinity with co-
employees of competing drug companies are expected to disclose such relationship to the
Management. If management perceives a conflict or potential conflict of interest, every effort shall be
made, together by management and the employee, to arrive at a solution within six (6) months, either
by transfer to another department in a non-counter checking position, or by career preparation
toward outside employment after Glaxo Wellcome. Employees must be prepared for possible
resignation within six (6) months, if no other solution is feasible. 19

No reversible error can be ascribed to the Court of Appeals when it ruled that Glaxo’s policy prohibiting an
employee from having a relationship with an employee of a competitor company is a valid exercise of management
prerogative.

Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential
programs and information from competitors, especially so that it and Astra are rival companies in the highly competitive
pharmaceutical industry.

The prohibition against personal or marital relationships with employees of competitor companies upon Glaxo’s
employees is reasonable under the circumstances because relationships of that nature might compromise the interests
of the company. In laying down the assailed company policy, Glaxo only aims to protect its interests against the
possibility that a competitor company will gain access to its secrets and procedures.

That Glaxo possesses the right to protect its economic interests cannot be denied. No less than the Constitution
recognizes the right of enterprises to adopt and enforce such a policy to protect its right to reasonable returns on
investments and to expansion and growth. 20 Indeed, while our laws endeavor to give life to the constitutional policy on
social justice and the protection of labor, it does not mean that every labor dispute will be decided in favor of the
workers. The law also recognizes that management has rights which are also entitled to respect and enforcement in the
interest of fair play. 21

As held in a Georgia, U.S.A case, 22 it is a legitimate business practice to guard business confidentiality and
protect a competitive position by even-handedly disqualifying from jobs male and female applicants or employees who
are married to a competitor. Consequently, the court ruled than an employer that discharged an employee who was
married to an employee of an active competitor did not violate Title VII of the Civil Rights Act of 1964. 23 The Court
pointed out that the policy was applied to men and women equally, and noted that the employer’s business was highly
competitive and that gaining inside information would constitute a competitive advantage.

The challenged company policy does not violate the equal protection clause of the Constitution as petitioners
erroneously suggest. It is a settled principle that the commands of the equal protection clause are addressed only to the
state or those acting under color of its authority. 24 Corollarily, it has been held in a long array of U.S. Supreme Court
decisions that the equal protection clause erects no shield against merely private conduct, however, discriminatory or
wrongful. 25 The only exception occurs when the state 26 in any of its manifestations or actions has been found to have
become entwined or involved in the wrongful private conduct. 27 Obviously, however, the exception is not present in
this case. Significantly, the company actually enforced the policy after repeated requests to the employee to comply
with the policy. Indeed, the application of the policy was made in an impartial and even-handed manner, with due
regard for the lot of the employee. ITDHSE

In any event, from the wordings of the contractual provision and the policy in its employee handbook, it is clear
that Glaxo does not impose an absolute prohibition against relationships between its employees and those of
competitor companies. Its employees are free to cultivate relationships with and marry persons of their own choosing.
What the company merely seeks to avoid is a conflict of interest between the employee and the company that may arise
out of such relationships. As succinctly explained by the appellate court, thus:

The policy being questioned is not a policy against marriage. An employee of the company
remains free to marry anyone of his or her choosing. The policy is not aimed at restricting a personal
prerogative that belongs only to the individual. However, an employee’s personal decision does not
detract the employer from exercising management prerogatives to ensure maximum profit and
business success . . . 28

The Court of Appeals also correctly noted that the assailed company policy which forms part of respondent’s
Employee Code of Conduct and of its contracts with its employees, such as that signed by Tecson, was made known to
him prior to his employment. Tecson, therefore, was aware of that restriction when he signed his employment contract
and when he entered into a relationship with Bettsy. Since Tecson knowingly and voluntarily entered into a contract of
employment with Glaxo, the stipulations therein have the force of law between them and, thus, should be complied
with in good faith.” 29 He is therefore estopped from questioning said policy.

The Court finds no merit in petitioners’ contention that Tecson was constructively dismissed when he was
transferred from the Camarines Norte-Camarines Sur sales area to the Butuan City-Surigao City-Agusan del Sur sales
area, and when he was excluded from attending the company’s seminar on new products which were directly
competing with similar products manufactured by Astra. Constructive dismissal is defined as a quitting, an involuntary
resignation resorted to when continued employment becomes impossible, unreasonable, or unlikely; when there is a
demotion in rank or diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes
unbearable to the employee. 30 None of these conditions are present in the instant case. The record does not show that
Tecson was demoted or unduly discriminated upon by reason of such transfer. As found by the appellate court, Glaxo
properly exercised its management prerogative in reassigning Tecson to the Butuan City sales area:

. . . In this case, petitioner’s transfer to another place of assignment was merely in keeping
with the policy of the company in avoidance of conflict of interest, and thus valid . . . Note that
[Tecson’s] wife holds a sensitive supervisory position as Branch Coordinator in her employer-company
which requires her to work in close coordination with District Managers and Medical Representatives.
Her duties include monitoring sales of Astra products, conducting sales drives, establishing and
furthering relationship with customers, collection, monitoring and managing Astra’s inventory . . . she
therefore takes an active participation in the market war characterized as it is by stiff competition
among pharmaceutical companies. Moreover, and this is significant, petitioner’s sales territory covers
Camarines Sur and Camarines Norte while his wife is supervising a branch of her employer in Albay.
The proximity of their areas of responsibility, all in the same Bicol Region, renders the conflict of
interest not only possible, but actual, as learning by one spouse of the other’s market strategies in the
region would be inevitable. [Management’s] appreciation of a conflict of interest is therefore not
merely illusory and wanting in factual basis . . . 31

In Abbott Laboratories (Phils.), Inc. v. National Labor Relations Commission, 32 which involved a complaint filed
by a medical representative against his employer drug company for illegal dismissal for allegedly terminating his
employment when he refused to accept his reassignment to a new area, the Court upheld the right of the drug company
to transfer or reassign its employee in accordance with its operational demands and requirements. The ruling of the
Court therein, quoted hereunder, also finds application in the instant case: STaCcA

By the very nature of his employment, a drug salesman or medical representative is expected
to travel. He should anticipate reassignment according to the demands of their business. It would be a
poor drug corporation which cannot even assign its representatives or detail men to new markets
calling for opening or expansion or to areas where the need for pushing its products is great. More so
if such reassignments are part of the employment contract. 33

As noted earlier, the challenged policy has been implemented by Glaxo impartially and disinterestedly for a long
period of time. In the case at bar, the record shows that Glaxo gave Tecson several chances to eliminate the conflict of
interest brought about by his relationship with Bettsy. When their relationship was still in its initial stage, Tecson’s
supervisors at Glaxo constantly reminded him about its effects on his employment with the company and on the
company’s interests. After Tecson married Bettsy, Glaxo gave him time to resolve the conflict by either resigning from
the company or asking his wife to resign from Astra. Glaxo even expressed its desire to retain Tecson in its employ
because of his satisfactory performance and suggested that he ask Bettsy to resign from her company instead. Glaxo
likewise acceded to his repeated requests for more time to resolve the conflict of interest. When the problem could not
be resolved after several years of waiting, Glaxo was constrained to reassign Tecson to a sales area different from that
handled by his wife for Astra. Notably, the Court did not terminate Tecson from employment but only reassigned him to
another area where his home province, Agusan del Sur, was included. In effecting Tecson’s transfer, Glaxo even
considered the welfare of Tecson’s family. Clearly, the foregoing dispels any suspicion of unfairness and bad faith on the
part of Glaxo. 34

WHEREFORE, the Petition is DENIED for lack of merit. Costs against petitioners.

SO ORDERED

||| (Duncan Association of Detailman-PTGWO v. Glaxo Wellcome Philippines, Inc., G.R. No. 162994 (Resolution),
[September 17, 2004], 481 PHIL 687-705)
 SECOND DIVISION

[G.R. No. 164774. April 12, 2006.]

STAR PAPER CORPORATION, JOSEPHINE ONGSITCO & SEBASTIAN CHUA, petitioners,vs.RONALDO D.

SIMBOL, WILFREDA N. COMIA & LORNA E. ESTRELLA, respondents.

DECISION

PUNO, J p:

We are called to decide an issue of first impression: whether the policy of the employer banning spouses from
working in the same company violates the rights of the employee under the Constitution and the Labor Code or is a valid
exercise of management prerogative.

At bar is a Petition for Review on Certiorari of the Decision of the Court of Appeals dated August 3, 2004 in CA-
G.R. SP No. 73477 reversing the decision of the National Labor Relations Commission (NLRC) which affirmed the ruling of
the Labor Arbiter.

Petitioner Star Paper Corporation (the company) is a corporation engaged in trading — principally of paper
products. Josephine Ongsitco is its Manager of the Personnel and Administration Department while Sebastian Chua is its
Managing Director.

The evidence for the petitioners show that respondents Ronaldo D. Simbol (Simbol), Wilfreda N. Comia (Comia)
and Lorna E. Estrella (Estrella) were all regular employees of the company. 1

Simbol was employed by the company on October 27, 1993. He met Alma Dayrit, also an employee of the
company, whom he married on June 27, 1998. Prior to the marriage, Ongsitco advised the couple that should they
decide to get married, one of them should resign pursuant to a company policy promulgated in 1995, 2 viz.:

1. New applicants will not be allowed to be hired if in case he/she has [a] relative, up to [the]
3rd degree of relationship, already employed by the company.

2. In case of two of our employees (both singles [sic],one male and another female) developed
a friendly relationship during the course of their employment and then decided to get married, one of
them should resign to preserve the policy stated above. 3

Simbol resigned on June 20, 1998 pursuant to the company policy. 4

Comia was hired by the company on February 5, 1997. She met Howard Comia, a co-employee, whom she
married on June 1, 2000. Ongsitco likewise reminded them that pursuant to company policy, one must resign should
they decide to get married. Comia resigned on June 30, 2000. 5

Estrella was hired on July 29, 1994. She met Luisito Zuñiga (Zuñiga), also a co-worker. Petitioners stated that
Zuñiga, a married man, got Estrella pregnant. The company allegedly could have terminated her services due to
immorality but she opted to resign on December 21, 1999. 6

The respondents each signed a Release and Confirmation Agreement. They stated therein that they have no
money and property accountabilities in the company and that they release the latter of any claim or demand of
whatever nature. 7

Respondents offer a different version of their dismissal. Simbol and Comia allege that they did not resign
voluntarily; they were compelled to resign in view of an illegal company policy. As to respondent Estrella, she alleges
that she had a relationship with co-worker Zuñiga who misrepresented himself as a married but separated man. After he
got her pregnant, she discovered that he was not separated. Thus, she severed her relationship with him to avoid
dismissal due to the company policy. On November 30, 1999, she met an accident and was advised by the doctor at the
Orthopedic Hospital to recuperate for twenty-one (21) days. She returned to work on December 21, 1999 but she found
out that her name was on-hold at the gate. She was denied entry. She was directed to proceed to the personnel office
where one of the staff handed her a memorandum. The memorandum stated that she was being dismissed for immoral
conduct. She refused to sign the memorandum because she was on leave for twenty-one (21) days and has not been
given a chance to explain. The management asked her to write an explanation. However, after submission of the
explanation, she was nonetheless dismissed by the company. Due to her urgent need for money, she later submitted a
letter of resignation in exchange for her thirteenth month pay. 8

Respondents later filed a complaint for unfair labor practice, constructive dismissal, separation pay and
attorney's fees. They averred that the aforementioned company policy is illegal and contravenes Article 136 of the Labor
Code. They also contended that they were dismissed due to their union membership. aESIDH

On May 31, 2001, Labor Arbiter Melquiades Sol del Rosario dismissed the complaint for lack of merit, viz.:

[T]his company policy was decreed pursuant to what the respondent corporation perceived as
management prerogative. This management prerogative is quite broad and encompassing for it covers
hiring, work assignment, working method, time, place and manner of work, tools to be used,
processes to be followed, supervision of workers, working regulations, transfer of employees, work
supervision, lay-off of workers and the discipline, dismissal and recall of workers. Except as provided
for or limited by special law, an employer is free to regulate, according to his own discretion and
judgment all the aspects of employment. 9 (Citations omitted.)

On appeal to the NLRC, the Commission affirmed the decision of the Labor Arbiter on January 11, 2002. 10

Respondents filed a Motion for Reconsideration but was denied by the NLRC in a Resolution 11 dated August 8,
2002. They appealed to respondent court via Petition for Certiorari.

In its assailed Decision dated August 3, 2004, the Court of Appeals reversed the NLRC decision, viz.:

WHEREFORE, premises considered, the May 31, 2002 (sic) 12 Decision of the National Labor
Relations Commission is hereby REVERSED and SET ASIDE and a new one is entered as follows:

(1) Declaring illegal, the petitioners' dismissal from employment and ordering private
respondents to reinstate petitioners to their former positions without loss of seniority rights
with full backwages from the time of their dismissal until actual reinstatement; and

(2) Ordering private respondents to pay petitioners attorney's fees amounting to 10%
of the award and the cost of this suit. 13

On appeal to this Court, petitioners contend that the Court of Appeals erred in holding that:

1. ...THE SUBJECT 1995 POLICY/REGULATION IS VIOLATIVE OF THE CONSTITUTIONAL RIGHTS

TOWARDS MARRIAGE AND THE FAMILY OF EMPLOYEES AND OF ARTICLE 136 OF THE LABOR CODE;
AND

2. ...RESPONDENTS' RESIGNATIONS WERE FAR FROM VOLUNTARY. 14

We affirm.

The 1987 Constitution 15 states our policy towards the protection of labor under the following provisions, viz.:

Article II, Section 18. The State affirms labor as a primary social economic force. It shall protect
the rights of workers and promote their welfare.

xxx xxx xxx

Article XIII, Sec. 3. The State shall afford full protection to labor, local and overseas, organized
and unorganized, and promote full employment and equality of employment opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in accordance with law.
They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall
also participate in policy and decision-making processes affecting their rights and benefits as may be
provided by law. aIHCSA
 The State shall promote the principle of shared responsibility between workers and
employers, recognizing the right of labor to its just share in the fruits of production and the right of
enterprises to reasonable returns on investments, and to expansion and growth.

The Civil Code likewise protects labor with the following provisions:

Art. 1700. The relation between capital and labor are not merely contractual. They are so
impressed with public interest that labor contracts must yield to the common good. Therefore, such
contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts,
closed shop, wages, working conditions, hours of labor and similar subjects.

Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in
favor of the safety and decent living for the laborer.

The Labor Code is the most comprehensive piece of legislation protecting labor. The case at bar involves Article
136 of the Labor Code which provides:

Art. 136. It shall be unlawful for an employer to require as a condition of employment or

continuation of employment that a woman employee shall not get married, or to stipulate expressly
or tacitly that upon getting married a woman employee shall be deemed resigned or separated, or to
actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason
of her marriage.

Respondents submit that their dismissal violates the above provision. Petitioners allege that its policy "may appear
to be contrary to Article 136 of the Labor Code" but it assumes a new meaning if read together with the first
paragraph of the rule. The rule does not require the woman employee to resign. The employee spouses have the
right to choose who between them should resign. Further, they are free to marry persons other than co-employees.
Hence, it is not the marital status of the employee, per se, that is being discriminated. It is only intended to carry out
its no-employment-for-relatives-within-the-third-degree-policy which is within the ambit of the prerogatives of
management. 16

It is true that the policy of petitioners prohibiting close relatives from working in the same company takes the
nature of an anti-nepotism employment policy. Companies adopt these policies to prevent the hiring of unqualified
persons based on their status as a relative, rather than upon their ability. 17 These policies focus upon the potential
employment problems arising from the perception of favoritism exhibited towards relatives.

With more women entering the workforce, employers are also enacting employment policies specifically
prohibiting spouses from working for the same company. We note that two types of employment policies involve
spouses: policies banning only spouses from working in the same company (no-spouse employment policies),and those
banning all immediate family members, including spouses, from working in the same company (anti-nepotism
employment policies). 18

Unlike in our jurisdiction where there is no express prohibition on marital discrimination, 19 there are twenty
state statutes 20 in the United States prohibiting marital discrimination. Some state courts 21 have been confronted
with the issue of whether no-spouse policies violate their laws prohibiting both marital status and sex discrimination.

In challenging the anti-nepotism employment policies in the United States, complainants utilize two theories of
employment discrimination: the disparate treatment and the disparate impact.Under the disparate treatment
analysis,the plaintiff must prove that an employment policy is discriminatory on its face. No-spouse employment
policies requiring an employee of a particular sex to either quit, transfer, or be fired are facially discriminatory. For
example, an employment policy prohibiting the employer from hiring wives of male employees, but not husbands of
female employees, is discriminatory on its face. 22

On the other hand, to establish disparate impact, the complainants must prove that a facially neutral policy has
a disproportionate effect on a particular class. For example, although most employment policies do not expressly
indicate which spouse will be required to transfer or leave the company, the policy often disproportionately affects one
sex. 23

The state courts' rulings on the issue depend on their interpretation of the scope of marital status discrimination
within the meaning of their respective civil rights acts. Though they agree that the term "marital status" encompasses
discrimination based on a person's status as either married, single, divorced, or widowed, they are divided on whether
the term has a broader meaning. Thus, their decisions vary. 24

The courts narrowly 25 interpreting marital status to refer only to a person's status as married, single, divorced,
or widowed reason that if the legislature intended a broader definition it would have either chosen different language or
specified its intent. They hold that the relevant inquiry is if one is married rather than to whom one is married. They
construe marital status discrimination to include only whether a person is single, married, divorced, or widowed and not
the "identity, occupation, and place of employment of one's spouse." These courts have upheld the questioned policies
and ruled that they did not violate the marital status discrimination provision of their respective state statutes. ADScCE

The courts that have broadly 26 construed the term "marital status" rule that it encompassed the identity,
occupation and employment of one's spouse. They strike down the no-spouse employment policies based on the broad
legislative intent of the state statute. They reason that the no-spouse employment policy violate the marital status
provision because it arbitrarily discriminates against all spouses of present employees without regard to the actual effect
on the individual's qualifications or work performance. 27 These courts also find the no-spouse employment policy
invalid for failure of the employer to present any evidence of business necessity other than the general perception that
spouses in the same workplace might adversely affect the business. 28 They hold that the absence of such a bona fide
occupational qualification 29 invalidates a rule denying employment to one spouse due to the current employment of
the other spouse in the same office. 30 Thus, they rule that unless the employer can prove that the reasonable demands
of the business require a distinction based on marital status and there is no better available or acceptable policy which
would better accomplish the business purpose, an employer may not discriminate against an employee based on the
identity of the employee's spouse. 31 This is known as the bona fide occupational qualification exception.

We note that since the finding of a bona fide occupational qualification justifies an employer's no-spouse rule,
the exception is interpreted strictly and narrowly by these state courts. There must be a compelling business necessity
for which no alternative exists other than the discriminatory practice. 32 To justify a bona fide occupational qualification,
the employer must prove two factors: (1) that the employment qualification is reasonably related to the essential
operation of the job involved; and, (2) that there is a factual basis for believing that all or substantially all persons
meeting the qualification would be unable to properly perform the duties of the job. 33

The concept of a bona fide occupational qualification is not foreign in our jurisdiction. We employ the standard
of reasonableness of the company policy which is parallel to the bona fide occupational qualification requirement. In the
recent case of Duncan Association of Detailman-PTGWO and Pedro Tecson v. Glaxo Wellcome Philippines, Inc., 34 we
passed on the validity of the policy of a pharmaceutical company prohibiting its employees from marrying employees of
any competitor company. We held that Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing
strategies and other confidential programs and information from competitors. We considered the prohibition against
personal or marital relationships with employees of competitor companies upon Glaxo's employees reasonable under
the circumstances because relationships of that nature might compromise the interests of Glaxo. In laying down the
assailed company policy, we recognized that Glaxo only aims to protect its interests against the possibility that a
competitor company will gain access to its secrets and procedures. 35

The requirement that a company policy must be reasonable under the circumstances to qualify as a valid
exercise of management prerogative was also at issue in the 1997 case of Philippine Telegraph and Telephone
Company v. NLRC. 36 In said case, the employee was dismissed in violation of petitioner's policy of disqualifying from
work any woman worker who contracts marriage. We held that the company policy violates the right against
discrimination afforded all women workers under Article 136 of the Labor Code, but established a permissible exception,
viz.:

[A] requirement that a woman employee must remain unmarried could be justified as a "bona
fide occupational qualification," or BFOQ, where the particular requirements of the job would justify
the same, but not on the ground of a general principle, such as the desirability of spreading work in
the workplace. A requirement of that nature would be valid provided it reflects an inherent quality
reasonably necessary for satisfactory job performance. 37 (Emphases supplied.)

The cases of Duncan and PT&T instruct us that the requirement of reasonableness must be clearly established
to uphold the questioned employment policy. The employer has the burden to prove the existence of a reasonable
business necessity. The burden was successfully discharged in Duncan but not in PT&T.

We do not find a reasonable business necessity in the case at bar.

Petitioners' sole contention that "the company did not just want to have two (2) or more of its employees
related between the third degree by affinity and/or consanguinity" 38 is lame. That the second paragraph was meant to
give teeth to the first paragraph of the questioned rule 39 is evidently not the valid reasonable business necessity
required by the law.

It is significant to note that in the case at bar, respondents were hired after they were found fit for the job, but
were asked to resign when they married a co-employee. Petitioners failed to show how the marriage of Simbol, then a
Sheeting Machine Operator, to Alma Dayrit, then an employee of the Repacking Section, could be detrimental to its
business operations. Neither did petitioners explain how this detriment will happen in the case of Wilfreda Comia, then
a Production Helper in the Selecting Department, who married Howard Comia, then a helper in the cutter-machine. The
policy is premised on the mere fear that employees married to each other will be less efficient. If we uphold the
questioned rule without valid justification, the employer can create policies based on an unproven presumption of a
perceived danger at the expense of an employee's right to security of tenure.

Petitioners contend that their policy will apply only when one employee marries a co-employee, but they are
free to marry persons other than co-employees. The questioned policy may not facially violate Article 136 of the Labor
Code but it creates a disproportionate effect and under the disparate impact theory, the only way it could pass judicial
scrutiny is a showing that it is reasonable despite the discriminatory, albeit disproportionate, effect. The failure of
petitioners to prove a legitimate business concern in imposing the questioned policy cannot prejudice the employee's
right to be free from arbitrary discrimination based upon stereotypes of married persons working together in one
company. 40

Lastly, the absence of a statute expressly prohibiting marital discrimination in our jurisdiction cannot benefit the
petitioners. The protection given to labor in our jurisdiction is vast and extensive that we cannot prudently draw
inferences from the legislature's silence 41 that married persons are not protected under our Constitution and declare
valid a policy based on a prejudice or stereotype. Thus, for failure of petitioners to present undisputed proof of a
reasonable business necessity, we rule that the questioned policy is an invalid exercise of management prerogative.
Corollarily, the issue as to whether respondents Simbol and Comia resigned voluntarily has become moot and academic.
cAaDHT

As to respondent Estrella, the Labor Arbiter and the NLRC based their ruling on the singular fact that her
resignation letter was written in her own handwriting. Both ruled that her resignation was voluntary and thus valid. The
respondent court failed to categorically rule whether Estrella voluntarily resigned but ordered that she be reinstated
along with Simbol and Comia.

Estrella claims that she was pressured to submit a resignation letter because she was in dire need of money. We
examined the records of the case and find Estrella's contention to be more in accord with the evidence. While findings
of fact by administrative tribunals like the NLRC are generally given not only respect but, at times, finality, this rule
admits of exceptions, 42 as in the case at bar.

Estrella avers that she went back to work on December 21, 1999 but was dismissed due to her alleged immoral
conduct. At first, she did not want to sign the termination papers but she was forced to tender her resignation letter in
exchange for her thirteenth month pay.

The contention of petitioners that Estrella was pressured to resign because she got impregnated by a married
man and she could not stand being looked upon or talked about as immoral 43 is incredulous. If she really wanted to
avoid embarrassment and humiliation, she would not have gone back to work at all. Nor would she have filed a suit for
illegal dismissal and pleaded for reinstatement. We have held that in voluntary resignation, the employee is compelled
by personal reason(s) to dissociate himself from employment. It is done with the intention of relinquishing an office,
accompanied by the act of abandonment. 44 Thus, it is illogical for Estrella to resign and then file a complaint for illegal
dismissal. Given the lack of sufficient evidence on the part of petitioners that the resignation was voluntary, Estrella's
dismissal is declared illegal.

IN VIEW WHEREOF, the Decision of the Court of Appeals in CA-G.R. SP No. 73477 dated August 3, 2004 is
AFFIRMED.

SO ORDERED

||| (Star Paper Corp. v. Simbol, G.R. No. 164774, [April 12, 2006], 521 PHIL 364-379)

D. Househelpers
 R.A. 10361, Batas Kasambahay

FIRST DIVISION

[G.R. No. 94951. April 22, 1991.]

APEX MINING COMPANY, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and
SINCLITICA CANDIDO, respondents.

Bernabe B. Alabastro for petitioner.

Angel Fernandez for private respondent.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; HOUSEHELPER; DEFINED. — The term 'househelper' as used herein is
synonymous to the term `domestic servant' and shall refer to any person, whether male or female, who renders services
in and about the employer's home and which services are usually necessary or desirable for the maintenance and
enjoyment thereof, and ministers exclusively to the personal comfort and enjoyment of the employer's family.

2. ID.; ID.; ID.; PERSONS COVERED. — The foregoing definition clearly contemplates such househelper or domestic
servant who is employed in the employer's home to minister exclusively to the personal comfort and enjoyment of the
employer's family. Such definition covers family drivers, domestic servants, laundry women, yayas, gardeners,
houseboys and other similar househelps.

3. ID.; ID.; ID.; PERSONS WORKING IN STAFFHOUSES OF A COMPANY, BEYOND THE SCOPE. — The definition cannot be
interpreted to include househelp or laundrywoman working in staffhouses of a company, like petitioner who attends to
the needs of the company's guests and other persons availing of said facilities. By the same token, it cannot be
considered to extend to the driver, houseboy, or gardener exclusively working in the company, the staffhouses and its
premises. They may not be considered as within the meaning of a "househelper" or "domestic servant" as above-defined
by law.

4. ID.; ID.; ID.; CRITERIA. — The criteria is the personal comfort and enjoyment of the family of the employer in the home
of said employer. While it may be true that the nature of the work of a househelper, domestic servant or laundrywoman
in a home or in a company staffhouse may be similar in nature, the difference in their circumstances is that in the former
instance they are actually serving the family while in the latter case, whether it is a corporation or a single proprietorship
engaged in business or industry or any other agricultural or similar pursuit, service is being rendered in the staffhouses
or within the premises of the business of the employer. In such instance, they are employees of the company or
employer in the business concerned entitled to the privileges of a regular employee.

5. ID.; ID.; ID.; CONSIDERED A REGULAR EMPLOYEE WHEN WORKING WITHIN THE PREMISES OF THE BUSINESS OF THE
EMPLOYER AND IN RELATION TO OR IN CONNECTION WITH ITS BUSINESS. — The mere fact that the househelper or
domestic servant is working within the premises of the business of the employer and in relation to or in connection with
its business, as in its staffhouses for its guests or even for its officers and employees, warrants the conclusion that such
househelper or domestic servant is and should be considered as a regular employee of the employer and not as a mere
family househelper or domestic servant as contemplated in Rule XIII, Section 1(b), Book 3 of the Labor Code, as
amended.

6. ID.; ID.; ID.; ID.; ENTITLED TO SEPARATION PAY WHEN ILLEGALLY DISMISSED; CASE AT BAR. — Because of an accident
which took place while private respondent was performing her laundry services, she was not able to work and was
ultimately separated from the service. She is, therefore entitled to appropriate relief as a regular employee of petitioner.
Inasmuch as private respondent appears not to be interested in returning to her work for valid reasons, the payment of
separation pay to her is in order.

DECISION
GANCAYCO, J p:

Is the househelper in the staff houses of an industrial company a domestic helper or a regular employee of the said firm?
This is the novel issue raised in this petition.

Private respondent Sinclitica Candido was employed by petitioner Apex Mining Company, Inc. on May 18, 1973 to
perform laundry services at its staff house located at Masara, Maco, Davao del Norte. In the beginning, she was paid on
a piece rate basis. However, on January 17, 1982, she was paid on a monthly basis at P250.00 a month which was
ultimately increased to P575.00 a month.

On December 18, 1987, while she was attending to her assigned task and she was hanging her laundry, she accidentally
slipped and hit her back on a stone. She reported the accident to her immediate supervisor Mila de la Rosa and to the
personnel officer, Florendo D. Asirit. As a result of the accident she was not able to continue with her work. She was
permitted to go on leave for medication. De la Rosa offered her the amount of P2,000.00 which was eventually
increased to P5,000.00 to persuade her to quit her job, but she refused the offer and preferred to return to work.
Petitioner did not allow her to return to work and dismissed her on February 4, 1988.

On March 11, 1988, private respondent filed a request for assistance with the Department of Labor and Employment.
After the parties submitted their position papers as required by the labor arbiter assigned to the case on August 24,
1988 the latter rendered a decision, the dispositive part of which reads as follows:

"WHEREFORE, Conformably With The Foregoing, judgment is hereby rendered ordering the
respondent, Apex Mining Company, Inc., Masara, Davao del Norte, to pay the complainant, to wit:

1. Salary Differential — P16,289.20

2. Emergency Living Allowance — 12,430.00

3. 13th Month Pay Differential — 1,322.32.

4. Separation Pay

(One-month for every year of service [1973-1988]) — 25,119.30or in the total of FIFTY FIVE
THOUSAND ONE HUNDRED SIXTY ONE PESOS AND 42/100 (P55,161.42).

SO ORDERED." 1

Not satisfied therewith, petitioner appealed to the public respondent National Labor Relations Commission (NLRC),
wherein in due course a decision was rendered by the Fifth Division thereof on July 20, 1989 dismissing the appeal for
lack of merit and affirming the appealed decision. A motion for reconsideration thereof was denied in a resolution of the
NLRC dated June 29, 1990.

Hence, the herein petition for review by certiorari, which appropriately should be a special civil action for certiorari, and
which in the interest of justice, is hereby treated as such. 2 The main thrust of the petition is that private respondent
should be treated as a mere househelper or domestic servant and not as a regular employee of petitioner. LLphil

The petition is devoid of merit.

Under Rule XIII, Section 1(b), Book 3 of the Labor Code, as amended, the terms "househelper" or "domestic servant" are
defined as follows:

"The term 'househelper' as used herein is synonymous to the term 'domestic servant' and shall refer
to any person, whether male or female, who renders services in and about the employer's home and
which services are usually necessary or desirable for the maintenance and enjoyment thereof, and
ministers exclusively to the personal comfort and enjoyment of the employer's family." 3

The foregoing definition clearly contemplates such househelper or domestic servant who is employed in the employer's
home to minister exclusively to the personal comfort and enjoyment of the employer's family. Such definition covers
family drivers, domestic servants, laundry women, yayas, gardeners, houseboys and other similar househelps.

The definition cannot be interpreted to include househelp or laundry women working in staffhouses of a company, like
petitioner who attends to the needs of the company's guest and other persons availing of said facilities. By the same
token, it cannot be considered to extend to the driver, houseboy, or gardener exclusively working in the company, the
staffhouses and its premises. They may not be considered as within the meaning of a "househelper" or "domestic
servant" as above-defined by law.

The criteria is the personal comfort and enjoyment of the family of the employer in the home of said employer. While it
may be true that the nature of the work of a househelper, domestic servant or laundrywoman in a home or in a
company staffhouse may be similar in nature, the difference in their circumstances is that in the former instance they
are actually serving the family while in the latter case, whether it is a corporation or a single proprietorship engaged in
business or industry or any other agricultural or similar pursuit, service is being rendered in the staffhouses or within the
premises of the business of the employer. In such instance, they are employees of the company or employer in the
business concerned entitled to the privileges of a regular employee.

Petitioner contends that it is only when the househelper or domestic servant is assigned to certain aspects of the
business of the employer that such househelper or domestic servant may be considered as such an employee. The Court
finds no merit in making any such distinction. The mere fact that the househelper or domestic servant is working within
the premises of the business of the employer and in relation to or in connection with its business, as in its staffhouses
for its guest or even for its officers and employees, warrants the conclusion that such househelper or domestic servant is
and should be considered as a regular employee of the employer and not as a mere family househelper or domestic
servant as contemplated in Rule XIII, Section 1(b), Book 3 of the Labor Code, as amended. cdphil

Petitioner denies having illegally dismissed private respondent and maintains that respondent abandoned her work. This
argument notwithstanding, there is enough evidence to show that because of an accident which took place while private
respondent was performing her laundry services, she was not able to work and was ultimately separated from the
service. She is, therefore, entitled to appropriate relief as a regular employee of petitioner. Inasmuch as private
respondent appears not to be interested in returning to her work for valid reasons, the payment of separation pay to
her is in order.

WHEREFORE, the petition is DISMISSED and the appealed decision and resolution of public respondent NLRC are hereby
AFFIRMED. No pronouncement as to costs. SO ORDERED

||| (Apex Mining Co., Inc. v. National Labor Relations Commission, G.R. No. 94951, [April 22, 1991], 273 PHIL 477-482)

SECOND DIVISION

[G.R. Nos. 169295-96. November 20, 2006.]

REMINGTON INDUSTRIAL SALES CORPORATION, petitioner, vs. ERLINDA CASTANEDA, respondent.

DECISION

PUNO, J p:

Before this Court is the Petition for Review on Certiorari 1 filed by Remington Industrial Sales Corporation to
reverse and set aside the Decision 2 of the Fourth Division of the Court of Appeals in CA-G.R. SP Nos. 64577 and 68477,
dated January 31, 2005, which dismissed petitioner's consolidated petitions for certiorari, and its subsequent Resolution,
3 dated August 11, 2005, which denied petitioner's motion for reconsideration.

The antecedent facts of the case, as narrated by the Court of Appeals, are as follows:

The present controversy began when private respondent, Erlinda Castaneda ("Erlinda")
instituted on March 2, 1998 a complaint for illegal dismissal, underpayment of wages, non-payment of
overtime services, non-payment of service incentive leave pay and non-payment of 13th month pay
against Remington before the NLRC, National Capital Region, Quezon City. The complaint impleaded
Mr. Antonio Tan in his capacity as the Managing Director of Remington.

Erlinda alleged that she started working in August 1983 as company cook with a salary of Php
4,000.00 for Remington, a corporation engaged in the trading business; that she worked for six (6)
 days a week, starting as early as 6:00 a.m. because she had to do the marketing and would end at
around 5:30 p.m., or even later, after most of the employees, if not all, had left the company
premises; that she continuously worked with Remington until she was unceremoniously prevented
from reporting for work when Remington transferred to a new site in Edsa, Caloocan City. She averred
that she reported for work at the new site in Caloocan City on January 15, 1998, only to be informed
that Remington no longer needed her services. Erlinda believed that her dismissal was illegal because
she was not given the notices required by law; hence, she filed her complaint for reinstatement
without loss of seniority rights, salary differentials, service incentive leave pay, 13th month pay and
10% attorney's fees. DISEaC

Remington denied that it dismissed Erlinda illegally. It posited that Erlinda was a domestic
helper, not a regular employee; Erlinda worked as a cook and this job had nothing to do with
Remington's business of trading in construction or hardware materials, steel plates and wire rope
products. It also contended that contrary to Erlinda's allegations that the (sic) she worked for eight (8)
hours a day, Erlinda's duty was merely to cook lunch and "merienda", after which her time was hers to
spend as she pleased. Remington also maintained that it did not exercise any degree of control and/or
supervision over Erlinda's work as her only concern was to ensure that the employees' lunch and
"merienda" were available and served at the designated time. Remington likewise belied Erlinda's
assertion that her work extended beyond 5:00 p.m. as she could only leave after all the employees
had gone. The truth, according to Remington, is that Erlinda did not have to punch any time card in
the way that other employees of Remington did; she was free to roam around the company premises,
read magazines, and to even nap when not doing her assigned chores. Remington averred that the
illegal dismissal complaint lacked factual and legal bases. Allegedly, it was Erlinda who refused to
report for work when Remington moved to a new location in Caloocan City.

In a Decision 4 dated January 19, 1999, the labor arbiter dismissed the complaint and ruled that the respondent
was a domestic helper under the personal service of Antonio Tan, finding that her work as a cook was not usually
necessary and desirable in the ordinary course of trade and business of the petitioner corporation, which operated as a
trading company, and that the latter did not exercise control over her functions. On the issue of illegal dismissal, the
labor arbiter found that it was the respondent who refused to go with the family of Antonio Tan when the corporation
transferred office and that, therefore, respondent could not have been illegally dismissed.

Upon appeal, the National Labor Relations Commission (NLRC) rendered a Decision, 5 dated November 23, 2000,
reversing the labor arbiter, ruling, viz:

We are not inclined to uphold the declaration below that complainant is a domestic helper of
the family of Antonio Tan. There was no allegation by respondent that complainant had ever worked
in the residence of Mr. Tan. What is clear from the facts narrated by the parties is that complainant
continuously did her job as a cook in the office of respondent serving the needed food for lunch and
merienda of the employees. Thus, her work as cook inured not for the benefit of the family members
of Mr. Tan but solely for the individual employees of respondent.

Complainant as an employee of respondent company is even bolstered by no less than the

certification dated May 23, 1997 issued by the corporate secretary of the company certifying that
complainant is their bonafide employee. This is a solid evidence which the Labor Arbiter simply
brushed aside. But, such error would not be committed here as it would be at the height of injustice if
we are to declare that complainant is a domestic helper.

Complainant's work schedule and being paid a monthly salary of P4,000.00 are clear indication
that she is a company employee who had been employed to cater to the food needed by the
employees which were being provided by respondent to form part of the benefit granted them.

With regard to the issue of illegal dismissal, we believe that there is more reason to believe
that complainant was not dismissed because allegedly she was the one who refused to work in the
new office of respondent. However, complainant's refusal to join the workforce due to poor eyesight
could not be considered abandonment of work or voluntary resignation from employment.

Under the Labor Code as amended, an employee who reaches the age of sixty years old (60
years) has the option to retire or to separate from the service with payment of separation
pay/retirement benefit.

In this case, we notice that complainant was already 60 years old at the time she filed the
complaint praying for separation pay or retirement benefit and some money claims. DISEaC
 Based on Article 287 of the Labor Code as amended, complainant is entitled to be paid her
separation pay/retirement benefit equivalent to one-half (1/2) month for every year of service. The
amount of separation pay would be based on the prescribed minimum wage at the time of dismissal
since she was then underpaid. In as much as complainant is underpaid of her wages, it behooves that
she should be paid her salary differential for the last three years prior to separation/retirement.

xxx xxx xxx

WHEREFORE, premises considered, the assailed decision is hereby, SET ASIDE, and a new one
is hereby entered ordering respondents to pay complainant the following:

1. Salary differential P12,021.12

2. Service Incentive Leave Pay 2,650.00
3. 13th Month Pay differential 1,001.76
4. Separation Pay/retirement benefit 36,075.00
—————
Total P51,747.88

SO ORDERED.

Petitioner moved to reconsider this decision but the NLRC denied the motion. This denial of its motion
prompted petitioner to file a Petition for Certiorari 6 with the Court of Appeals, docketed as CA-G.R. SP No. 64577, on
May 4, 2001, imputing grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the NLRC in (1)
reversing in toto the decision of the labor arbiter, and (2) awarding in favor of respondent salary differential, service
incentive leave pay, 13th month pay differential and separation benefits in the total sum of P51,747.88.

While the petition was pending with the Court of Appeals, the NLRC rendered another Decision 7 in the same
case on August 29, 2001. How and why another decision was rendered is explained in that decision as follows:

On May 17, 2001, complainant filed a Manifestation praying for a resolution of her Motion for
Reconsideration and, in support thereof, alleges that, sometime December 18, 2000, she mailed her
Manifestation and Motion for Reconsideration registered as Registered Certificate No. 188844; and
that the said mail was received by the NLRC, through a certain Roland Hernandez, on December 26,
2000. Certifications to this effect was issued by the Postmaster of the Sta. Mesa Post Office bearing
the date May 11, 2001 (Annexes A and B, Complainant's Manifestation).

Evidence in support of complainant's having actually filed a Motion for Reconsideration within
the reglementary period having been sufficiently established, a determination of its merits is thus, in
order.

On the merits, the NLRC found respondent's motion for reconsideration meritorious leading to the issuance of
its second decision with the following dispositive portion:

WHEREFORE, premises considered, the decision dated November 23, 2000, is MODIFIED by
increasing the award of retirement pay due the complainant in the total amount of SIXTY TWO
THOUSAND FOUR HUNDRED THIRTY-SEVEN and 50/100 (P62,437.50). All other monetary relief so
adjudged therein are maintained and likewise made payable to the complainant.

SO ORDERED.

Petitioner challenged the second decision of the NLRC, including the resolution denying its motion for
reconsideration, through a second Petition for Certiorari 8 filed with the Court of Appeals, docketed as CA-G.R. SP No.
68477 and dated January 8, 2002, this time imputing grave abuse of discretion amounting to lack of or excess of
jurisdiction on the part of the NLRC in (1) issuing the second decision despite losing its jurisdiction due to the pendency
of the first petition for certiorari with the Court of Appeals, and (2) assuming it still had jurisdiction to issue the second
decision notwithstanding the pendency of the first petition for certiorari with the Court of Appeals, that its second
decision has no basis in law since respondent's motion for reconsideration, which was made the basis of the second
decision, was not filed under oath in violation of Section 14, Rule VII 9 of the New Rules of Procedure of the NLRC and
that it contained no certification as to why respondent's motion for reconsideration was not decided on time as also
required by Section 10, Rule VI 10 and Section 15, Rule VII 11 of the aforementioned rules. ITScHa
 Upon petitioner's motion, the Court of Appeals ordered the consolidation of the two (2) petitions, on January
24, 2002, pursuant to Section 7, par. b(3), Rule 3 of the Revised Rules of the Court of Appeals. It summarized the
principal issues raised in the consolidated petitions as follows:

1. Whether respondent is petitioner's regular employee or a domestic helper;

2. Whether respondent was illegally dismissed; and

3. Whether the second NLRC decision promulgated during the pendency of the first petition for certiorari has
basis in law.

On January 31, 2005, the Court of Appeals dismissed the consolidated petitions for lack of merit, finding no
grave abuse of discretion on the part of the NLRC in issuing the assailed decisions.

On the first issue, it upheld the ruling of the NLRC that respondent was a regular employee of the petitioner
since the former worked at the company premises and catered not only to the personal comfort and enjoyment of Mr.
Tan and his family, but also to that of the employees of the latter. It agreed that petitioner enjoys the prerogative to
control respondent's conduct in undertaking her assigned work, particularly the nature and situs of her work in relation
to the petitioner's workforce, thereby establishing the existence of an employer-employee relationship between them.

On the issue of illegal dismissal, it ruled that respondent has attained the status of a regular employee in her
service with the company. It noted that the NLRC found that no less than the company's corporate secretary certified
that respondent is a bonafide company employee and that she had a fixed schedule and routine of work and was paid a
monthly salary of P4,000.00; that she served with petitioner for 15 years starting in 1983, buying and cooking food
served to company employees at lunch and merienda; and that this work was usually necessary and desirable in the
regular business of the petitioner. It held that as a regular employee, she enjoys the constitutionally guaranteed right to
security of tenure and that petitioner failed to discharge the burden of proving that her dismissal on January 15, 1998
was for a just or authorized cause and that the manner of dismissal complied with the requirements under the law.

Finally, on petitioner's other arguments relating to the alleged irregularity of the second NLRC decision, i.e., the
fact that respondent's motion for reconsideration was not under oath and had no certification explaining why it was not
resolved within the prescribed period, it held that such violations relate to procedural and non-jurisdictional matters
that cannot assume primacy over the substantive merits of the case and that they do not constitute grave abuse of
discretion amounting to lack or excess of jurisdiction that would nullify the second NLRC decision.

The Court of Appeals denied petitioner's contention that the NLRC lost its jurisdiction to issue the second
decision when it received the order indicating the Court of Appeals' initial action on the first petition for certiorari that it
filed. It ruled that the NLRC's action of issuing a decision in installments was not prohibited by its own rules and that the
need for a second decision was justified by the fact that respondent's own motion for reconsideration remained
unresolved in the first decision. Furthermore, it held that under Section 7, Rule 65 of the Revised Rules of Court, 12 the
filing of a petition for certiorari does not interrupt the course of the principal case unless a temporary restraining order
or a writ of preliminary injunction has been issued against the public respondent from further proceeding with the case.
acHDTA

From this decision, petitioner filed a motion for reconsideration on February 22, 2005, which the Court of
Appeals denied through a resolution dated August 11, 2005.

Hence, the present petition for review.

The petitioner raises the following errors of law: (1) the Court of Appeals erred in affirming the NLRC's ruling
that the respondent was petitioner's regular employee and not a domestic helper; (2) the Court of Appeals erred in
holding that petitioner was guilty of illegal dismissal; and (3) the Court of Appeals erred when it held that the issuance of
the second NLRC decision is proper.

The petition must fail. We affirm that respondent was a regular employee of the petitioner and that the latter
was guilty of illegal dismissal.

Before going into the substantive merits of the present controversy, we shall first resolve the propriety of the
issuance of the second NLRC decision.

The petitioner contends that the respondent's motion for reconsideration, upon which the second NLRC
decision was based, was not under oath and did not contain a certification as to why it was not decided on time as
required under the New Rules of Procedure of the NLRC. 13 Furthermore, the former also raises for the first time the
contention that respondent's motion was filed beyond the ten (10)-calendar day period required under the same Rules,
14 since the latter received a copy of the first NLRC decision on December 6, 2000, and respondent filed her motion only
on December 18, 2000. Thus, according to petitioner, the respondent's motion for reconsideration was a mere scrap of
paper and the second NLRC decision has no basis in law.

We do not agree.

It is well-settled that the application of technical rules of procedure may be relaxed to serve the demands of
substantial justice, particularly in labor cases. 15 Labor cases must be decided according to justice and equity and the
substantial merits of the controversy. 16 Rules of procedure are but mere tools designed to facilitate the attainment of
justice. 17 Their strict and rigid application, which would result in technicalities that tend to frustrate rather than
promote substantial justice, must always be avoided. 18

This Court has consistently held that the requirement of verification is formal, and not jurisdictional. Such
requirement is merely a condition affecting the form of the pleading, non-compliance with which does not necessarily
render it fatally defective. Verification is simply intended to secure an assurance that the allegations in the pleading are
true and correct and not the product of the imagination or a matter of speculation, and that the pleading is filed in good
faith. 19 The court may order the correction of the pleading if verification is lacking or act on the pleading although it is
not verified, if the attending circumstances are such that strict compliance with the rules may be dispensed with in order
that the ends of justice may thereby be served. 20

Anent the argument that respondent's motion for reconsideration, on which the NLRC's second decision was
based, was filed out of time, such issue was only brought up for the first time in the instant petition where no new issues
may be raised by a party in his pleadings without offending the right to due process of the opposing party. ACEIac

Nonetheless, the petitioner asserts that the respondent received a copy of the NLRC's first decision on
December 6, 2000, and the motion for reconsideration was filed only on December 18, 2000, or two (2) days beyond the
ten (10)-calendar day period requirement under the New Rules of Procedure of the NLRC and should not be allowed. 21

This contention must fail.

Under Article 223 22 of the Labor Code, the decision of the NLRC shall be final and executory after ten (10)
calendar days from the receipt thereof by the parties.

While it is an established rule that the perfection of an appeal in the manner and within the period prescribed by
law is not only mandatory but jurisdictional, and failure to perfect an appeal has the effect of rendering the judgment
final and executory, it is equally settled that the NLRC may disregard the procedural lapse where there is an acceptable
reason to excuse tardiness in the taking of the appeal. 23 Among the acceptable reasons recognized by this Court are (a)
counsel's reliance on the footnote of the notice of the decision of the Labor Arbiter that "the aggrieved party may
appeal . . . within ten (10) working days"; 24 (b) fundamental consideration of substantial justice; 25 (c) prevention of
miscarriage of justice or of unjust enrichment, as where the tardy appeal is from a decision granting separation pay
which was already granted in an earlier final decision; 26 and (d) special circumstances of the case combined with its
legal merits 27 or the amount and the issue involved. 28

We hold that the particular circumstances in the case at bar, in accordance with substantial justice, call for a
liberalization of the application of this rule. Notably, respondent's last day for filing her motion for reconsideration fell
on December 16, 2000, which was a Saturday. In a number of cases, 29 we have ruled that if the tenth day for perfecting
an appeal fell on a Saturday, the appeal shall be made on the next working day. The reason for this ruling is that on
Saturdays, the office of the NLRC and certain post offices are closed. With all the more reason should this doctrine apply
to respondent's filing of the motion for reconsideration of her cause, which the NLRC itself found to be impressed with
merit. Indeed, technicality should not be permitted to stand in the way of equitably and completely resolving the rights
and obligations of the parties for the ends of justice are reached not only through the speedy disposal of cases but, more
importantly, through a meticulous and comprehensive evaluation of the merits of a case.

Finally, as to petitioner's argument that the NLRC had already lost its jurisdiction to decide the case when it filed
its petition for certiorari with the Court of Appeals upon the denial of its motion for reconsideration, suffice it to state
that under Section 7 of Rule 65 30 of the Revised Rules of Court, the petition shall not interrupt the course of the
principal case unless a temporary restraining order or a writ of preliminary injunction has been issued against the public
respondent from further proceeding with the case. Thus, the mere pendency of a special civil action for certiorari, in
connection with a pending case in a lower court, does not interrupt the course of the latter if there is no writ of
injunction. 31 Clearly, there was no grave abuse of discretion on the part of the NLRC in issuing its second decision which
modified the first, especially since it failed to consider the respondent's motion for reconsideration when it issued its
first decision.
 Having resolved the procedural matters, we shall now delve into the merits of the petition to determine
whether respondent is a domestic helper or a regular employee of the petitioner, and whether the latter is guilty of
illegal dismissal.

Petitioner relies heavily on the affidavit of a certain Mr. Antonio Tan and contends that respondent is the latter's
domestic helper and not a regular employee of the company since Mr. Tan has a separate and distinct personality from
the petitioner. It maintains that it did not exercise control and supervision over her functions; and that it operates as a
trading company and does not engage in the restaurant business, and therefore respondent's work as a cook, which was
not usually necessary or desirable to its usual line of business or trade, could not make her its regular employee.

This contention fails to impress.

In Apex Mining Company, Inc. v. NLRC, 32 this Court held that a househelper in the staff houses of an industrial
company was a regular employee of the said firm. We ratiocinated that:

Under Rule XIII, Section 1(b), Book 3 of the Labor Code, as amended, the terms "househelper"
or "domestic servant" are defined as follows:

"The term 'househelper' as used herein is synonymous to the term 'domestic servant' and
shall refer to any person, whether male or female, who renders services in and about the employer's
home and which services are usually necessary or desirable for the maintenance and enjoyment
thereof, and ministers exclusively to the personal comfort and enjoyment of the employer's family."

The foregoing definition clearly contemplates such househelper or domestic servant who is
employed in the employer's home to minister exclusively to the personal comfort and enjoyment of
the employer's family. Such definition covers family drivers, domestic servants, laundry women, yayas,
gardeners, houseboys and similar househelps. THIASE

xxx xxx xxx

The criteria is the personal comfort and enjoyment of the family of the employer in the home
of said employer. While it may be true that the nature of the work of a househelper, domestic servant
or laundrywoman in a home or in a company staffhouse may be similar in nature, the difference in
their circumstances is that in the former instance they are actually serving the family while in the
latter case, whether it is a corporation or a single proprietorship engaged in business or industry or
any other agricultural or similar pursuit, service is being rendered in the staffhouses or within the
premises of the business of the employer. In such instance, they are employees of the company or
employer in the business concerned entitled to the privileges of a regular employee.

Petitioner contends that it is only when the househelper or domestic servant is assigned to
certain aspects of the business of the employer that such househelper or domestic servant may be
considered as such an employee. The Court finds no merit in making any such distinction. The mere
fact that the househelper or domestic servant is working within the premises of the business of the
employer and in relation to or in connection with its business, as in its staffhouses for its guest or
even for its officers and employees, warrants the conclusion that such househelper or domestic
servant is and should be considered as a regular employee of the employer and not as a mere family
househelper or domestic servant as contemplated in Rule XIII, Section 1(b), Book 3 of the Labor Code,
as amended.

In the case at bar, the petitioner itself admits in its position paper 33 that respondent worked at the company
premises and her duty was to cook and prepare its employees' lunch and merienda. Clearly, the situs, as well as the
nature of respondent's work as a cook, who caters not only to the needs of Mr. Tan and his family but also to that of the
petitioner's employees, makes her fall squarely within the definition of a regular employee under the doctrine
enunciated in the Apex Mining case. That she works within company premises, and that she does not cater exclusively
to the personal comfort of Mr. Tan and his family, is reflective of the existence of the petitioner's right of control over
her functions, which is the primary indicator of the existence of an employer-employee relationship.

Moreover, it is wrong to say that if the work is not directly related to the employer's business, then the person
performing such work could not be considered an employee of the latter. The determination of the existence of an
employer-employee relationship is defined by law according to the facts of each case, regardless of the nature of the
activities involved. 34 Indeed, it would be the height of injustice if we were to hold that despite the fact that respondent
was made to cook lunch and merienda for the petitioner's employees, which work ultimately redounded to the benefit
of the petitioner corporation, she was merely a domestic worker of the family of Mr. Tan.

We note the findings of the NLRC, affirmed by the Court of Appeals, that no less than the company's corporate
secretary has certified that respondent is a bonafide company employee; 35 she had a fixed schedule and routine of
work and was paid a monthly salary of P4,000.00; 36 she served with the company for 15 years starting in 1983, buying
and cooking food served to company employees at lunch and merienda, and that this service was a regular feature of
employment with the company. 37

Indubitably, the Court of Appeals, as well as the NLRC, correctly held that based on the given circumstances, the
respondent is a regular employee of the petitioner.

Having determined that the respondent is petitioner's regular employee, we now proceed to ascertain the
legality of her dismissal from employment.

Petitioner contends that there was abandonment on respondent's part when she refused to report for work
when the corporation transferred to a new location in Caloocan City, claiming that her poor eyesight would make long
distance travel a problem. Thus, it cannot be held guilty of illegal dismissal. TcaAID

On the other hand, the respondent claims that when the petitioner relocated, she was no longer called for duty
and that when she tried to report for work, she was told that her services were no longer needed. She contends that the
petitioner dismissed her without a just or authorized cause and that she was not given prior notice, hence rendering the
dismissal illegal.

We rule for the respondent.

As a regular employee, respondent enjoys the right to security of tenure under Article 279 38 of the Labor Code
and may only be dismissed for a just 39 or authorized 40 cause, otherwise the dismissal becomes illegal and the
employee becomes entitled to reinstatement and full backwages computed from the time compensation was withheld
up to the time of actual reinstatement.

Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. 41 It is a form
of neglect of duty; hence, a just cause for termination of employment by the employer under Article 282 of the Labor
Code, which enumerates the just causes for termination by the employer. 42 For a valid finding of abandonment, these
two factors should be present: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a
clear intention to sever employer-employee relationship, with the second as the more determinative factor which is
manifested by overt acts from which it may be deduced that the employee has no more intention to work. 43 The intent
to discontinue the employment must be shown by clear proof that it was deliberate and unjustified. 44 This, the
petitioner failed to do in the case at bar.

Alongside the petitioner's contention that it was the respondent who quit her employment and refused to
return to work, greater stock may be taken of the respondent's immediate filing of her complaint with the NLRC. Indeed,
an employee who loses no time in protesting her layoff cannot by any reasoning be said to have abandoned her work,
for it is well-settled that the filing of an employee of a complaint for illegal dismissal with a prayer for reinstatement is
proof enough of her desire to return to work, thus, negating the employer's charge of abandonment. 45

In termination cases, the burden of proof rests upon the employer to show that the dismissal is for a just and
valid cause; failure to do so would necessarily mean that the dismissal was illegal. 46 The employer's case succeeds or
fails on the strength of its evidence and not on the weakness of the employee's defense. 47 If doubt exists between the
evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter. 48

IN VIEW WHEREOF, the petition is DENIED for lack of merit. The assailed Decision dated January 31, 2005, and
the Resolution dated August 11, 2005, of the Court of Appeals in CA-G.R. SP Nos. 64577 and 68477 are AFFIRMED. Costs
against petitioner.

SO ORDERED

||| (Remington Industrial Sales Corp. v. Castaneda, G.R. Nos. 169295-96, [November 20, 2006], 537 PHIL 549-571)

F. Handicapped/Disabled

R.A. 7277, Magna Carta for the Disabled, Sections 4 (a-d, i), 5-11, 32-33
 Labor Code: Articles 78-81

Omnibus Rules: Book II, Rule VIII

THIRD DIVISION

[G.R. No. 122917. July 12, 1999.]

MARITES BERNARDO, ELVIRA GO DIAMANTE, REBECCA E. DAVID, DAVID P. PASCUAL, RAQUEL

ESTILLER, ALBERT HALLARE, EDMUND M. CORTEZ, JOSELITO O. AGDON, GEORGE P. LIGUTAN JR.,
CELSO M. YAZAR, ALEX G. CORPUZ, RONALD M. DELFIN, ROWENA M. TABAQUERO, CORAZON C.
DELOS REYES, ROBERT G. NOORA, MILAGROS O. LEQUIGAN, ADRIANA F. TATLONGHARI, IKE
CABANDUCOS, COCOY NOBELLO, DORENDA CANTIMBUHAN, ROBERT MARCELO, LILIBETH Q.
MARMOLEJO, JOSE E. SALES, ISABEL MAMAUAG, VIOLETA G. MONTES, ALBINO TECSON, MELODY V.
GRUELA, BERNADETH D. AGERO, CYNTHIA DE VERA, LANI R. CORTEZ, MA. ISABEL B. CONCEPCION,
DINDO VALERIO, ZENAIDA MATA, ARIEL DEL PILAR, MARGARET CECILIA CANOZA, THELMA
SEBASTIAN, MA. JEANETTE CERVANTES, JEANNIE RAMIL, ROZAIDA PASCUAL, PINKY BALOLOA,
ELIZABETH VENTURA, GRACE S. PARDO and RICO TIMOSA, petitioners, vs. NATIONAL LABOR
RELATIONS COMMISSION & FAR EAST BANK AND TRUST COMPANY,respondents.

Sentro ng Alternatibong Lingap Panlegal (SALIGAN) for petitioners.

Picazo Buyco Tan Fider & San for private respondent.

SYNOPSIS

This petition sought the reversal of the decision of the National Labor Relations Commission affirming the ruling
of the labor arbiter that they could not be deemed regular employees under Article 280 of the Labor Code.

The Court granted the petition. Respondent bank entered into employment contracts with handicapped workers
and renewed the contracts of 37 of them. This showed that these workers were qualified to perform the responsibilities
of their positions. The Magna Carta for Disabled Persons mandates that a qualified disabled employee should be given
the same terms of employment as a qualified able-bodied person. This being so, petitioners are thus covered by Art. 280
of the Labor Code which defines regular employment to be that the employee has been engaged to perform activities
usually necessary or desirable in the usual business or trade of the employer. The task of counting and sorting bills is
necessary to the business of respondent bank. With the exception of sixteen of them, petitioners performed these tasks
for more than six months. Therefore, the 27 petitioners should be deemed regular employees entitled to security of
tenure. Their services may only be terminated for a just and authorized cause. Because respondents failed to show such
cause, these 27 petitioners are deemed illegally dismissed and hence entitled to backwages and separation pay.

SYLLABUS

1. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CERTIORARI; FACTUAL FINDINGS, NOT SUBJECT TO REVIEW. — True,
the Court, as a rule, does not review the factual findings of public respondents in a certiorari proceeding. In resolving
whether the petitioners have become regular employees, we shall not change the facts found by the public respondent.
Our task is merely to determine whether the NLRC committed grave abuse of discretion in applying the law to the
established facts, as above-quoted from the assailed Decision.

2. LABOR AND SOCIAL LEGISLATION; LABOR CODE; EMPLOYMENT CONTRACTS; QUALIFIED DISABLED PERSONS
REMOVE CONTRACT FROM AMBIT OF ARTICLE 80 OF LABOR CODE. — The Magna Carta for Disabled Persons mandates
that a qualified disabled employee should be given the same terms and conditions of employment as a qualified able-
bodied person. The fact that the employees were qualified disabled persons necessarily removes the employment
contracts from the ambit of Article 80. Since the Magna Carta accords them the rights of qualified able-bodied persons,
they are thus covered by Article 280 of the Labor Code.

3. ID.; ID.; EMPLOYMENT; TEST WHETHER EMPLOYEE IS REGULAR. — The test of whether an employee is regular
was laid down in De Leon v. NLRC, in which this Court held: "The primary standard, therefore, of determining regular
employment is the reasonable connection between the particular activity performed by the employee in relation to the
usual trade or business of the employer. The test is whether the former is usually necessary or desirable in the usual
business or trade of the employer. The connection can be determined by considering the nature of the work performed
and its relation to the scheme of the particular business or trade in its entirety. Also if the employee has been
performing the job for at least one year, even if the performance is not continuous and merely intermittent, the law
deems repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of
that activity to the business. Hence, the employment is considered regular, but only with respect to such activity, and
while such activity exists."

4. ID.; ID.; ID.; ID.; CASE AT BAR. — Without a doubt, the task of counting and sorting bills is necessary and
desirable to the business of respondent bank. With the exception of sixteen of them, petitioners performed these tasks
for more than six months. Thus, the twenty-seven petitioners should be deemed regular employees. As held by the
Court, "Articles 280 and 281 of the Labor Code put an end to the pernicious practice of making permanent casuals of our
lowly employees by the simple expedient of extending to them probationary appointments, ad infinitum." The contract
signed by petitioners is akin to a probationary employment, during which the bank determined the employees' fitness
for the job. When the bank renewed the contract after the lapse of the six-month probationary period, the employees
thereby became regular employees. No employer is allowed to determine indefinitely the fitness of its employees.

5. ID.; ID.; ID.; REGULAR EMPLOYEES ENTITLED TO SECURITY OF TENURE; ILLEGALLY DISMISSED EMPLOYEE
ENTITLED TO SEPARATION PAY IN LIEU OF REINSTATEMENT. — As regular employees, the twenty-seven petitioners are
entitled to security of tenure; that is, their services may be terminated only for a just or authorized cause. Because
respondent failed to show such cause, these twenty-seven petitioners are deemed illegally dismissed and therefore
entitled to back wages and reinstatement without loss of seniority rights and other privileges. Considering the allegation
of respondent that the job of money sorting is no longer available because it has been assigned back to the tellers to
whom it originally belonged, petitioners are hereby awarded separation pay in lieu of reinstatement. Because the other
sixteen worked only for six months, they are not deemed regular employees and hence not entitled to the same
benefits.

6. ID.; ID.; ID.; EMPLOYMENT CONTRACT WITH FIXED TERM; RULING IN BRENT CASE NOT APPLICABLE IN CASE
AT BAR. — Respondent bank, citing Brent School v. Zamora in which the Court upheld the validity of an employment
contract with a fixed term, argues that the parties entered into the contract on equal footing. It adds that the petitioners
had in fact an advantage, because they were backed by then DSWD Secretary Mita Pardo de Tavera and Representative
Arturo Borjal. We are not persuaded. The term limit in the contract was premised on the fact that the petitioners were
disabled, and that the bank had to determine their fitness for the position. Indeed, its validity is based on Article 80 of
the Labor Code. But as noted earlier, petitioners proved themselves to be qualified disabled persons who, under the
Magna Carta for Disabled Persons, are entitled to terms and conditions of employment enjoyed by qualified able-bodied
individuals; hence, Article 80 does not apply because petitioners are qualified for their positions. The validation of the
limit imposed on their contracts, imposed by reason of their disability, was a glaring instance of the very mischief sought
to be addressed by the new law.

7. ID.; ID.; EMPLOYMENT CONTRACT; IMPRESSED WITH PUBLIC INTEREST; PARTIES ARE NOT AT LIBERTY TO
INSULATE THEMSELVES. — It must be emphasized that a contract of employment is impressed with public interest.
Provisions of applicable statutes are deemed written into the contract, and the "parties are not at liberty to insulate
themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other."
Clearly, the agreement of the parties regarding the period of employment cannot prevail over the provisions of the
Magna Carta for Disabled Persons, which mandate that petitioners must be treated as qualified able-bodied employees.
DTEIaC

8. ID.; ID.; EMPLOYMENT; CHARACTER OF EMPLOYMENT; HOW DETERMINED. — As earlier noted, an employee
is regular because of the nature of work and the length of service, not because of the mode or even the reason for hiring
them. In L.T. Datu v. NLRC, the Court held that "the determination of whether employment is casual or regular does not
depend on the will or word of the employer, and the procedure of hiring . . . but on the nature of the activities
performed by the employee, and to some extent, the length of performance and its continued existence." The character
of employment is determined not by stipulations in the contract, but by the nature of the work performed. Otherwise,
no employee can become regular by the simple expedient of incorporating this condition in the contract of employment.

9. ID.; MAGNA CARTA FOR DISABLED PERSONS; OBJECTIVES BASED NOT MERELY ON CHARITY BUT ON JUSTICE
AND EQUAL TREATMENT OF QUALIFIED PERSONS. — In rendering this Decision, the Court emphasizes not only the
constitutional bias in favor of the working class, but also the concern of the State for the plight of the disabled. The
noble objectives of Magna Carta for Disabled Persons are not based merely on charity or accommodation, but on justice
and the equal treatment of qualified persons, disabled or not. In the present case, the handicap of petitioners (deaf-
mutes) is not a hindrance to their work. The eloquent proof of this statement is the repeated renewal of their
employment contracts. Why then should they be dismissed, simply because they are physically impaired? The Court
believes, that, after showing their fitness for the work assigned to them, they should be treated and granted the same
rights like any other regular employees.
 DECISION

PANGANIBAN, J p:

The Magna Carta for Disabled Persons mandates that qualified disabled persons be granted the same terms and
conditions of employment as qualified able-bodied employees. Once they have attained the status of regular workers,
they should be accorded all the benefits granted by law, notwithstanding written or verbal contracts to the contrary.
This treatment is rooted not merely on charity or accommodation, but on justice for all. LLjur

The Case

Challenged in the Petition for Certiorari 1 before us is the June 20, 1995 Decision 2 of the National Labor
Relations Commission (NLRC), 3 which affirmed the August, 22 1994 ruling of Labor Arbiter Cornelio L. Linsangan. The
labor arbiter's Decision disposed as follows: 4

"WHEREFORE, judgment is hereby rendered dismissing the above-mentioned complaint for

lack of merit."

Also assailed is the August 4, 1995 Resolution 5 of the NLRC, which denied the Motion for Reconsideration.

The Facts

The facts were summarized by the NLRC in this wise: 6

"Complainants numbering 43 (p. 176, Records) are deaf-mutes who were hired on various
periods from 1988 to 1993 by respondent Far East Bank and Trust Co. as Money Sorters and Counters
through a uniformly worded agreement called 'Employment Contract for Handicapped Workers'. (pp.
68 & 69, Records) The full text of said agreement is quoted below:

'EMPLOYMENT CONTRACT FOR HANDICAPPED WORKERS

This Contract, entered into by and between:

FAR EAST BANK AND TRUST COMPANY, a universal banking corporation duly
organized and existing under and by virtue of the laws of the Philippines, with business
address at FEBTC Building, Muralla, Intramuros, Manila, represented herein by its Assistant
Vice President, MR. FLORENDO G. MARANAN, (hereinafter referred to as the 'BANK');

- and -

__________________________, _______ years old, of legal age, _____________, and

residing at ______________________ (hereinafter referred to as the ('EMPLOYEE').

WITNESSETH: That

WHEREAS, the BANK, cognizant of its social responsibility, realizes that there is a need
to provide disabled and handicapped persons gainful employment and opportunities to realize
their potentials, uplift their socio-economic well being and welfare and make them
productive, self-reliant and useful citizens to enable them to fully integrate in the mainstream
of society; cdtai

WHEREAS, there are certain positions in the BANK which may be filled-up by disabled
and handicapped persons, particularly deaf-mutes, and the BANK ha[s] been approached by
some civic-minded citizens and authorized government agencies [regarding] the possibility of
hiring handicapped workers for these positions;

WHEREAS, the EMPLOYEE is one of those handicapped workers who [were]

recommended for possible employment with the BANK;

NOW, THEREFORE, for and in consideration of the foregoing premises and in

compliance with Article 80 of the Labor Code of the Philippines as amended, the BANK and the
EMPLOYEE have entered into this Employment Contract as follows:
 1. The BANK agrees to employ and train the EMPLOYEE, and the EMPLOYEE agrees to
diligently and faithfully work with the BANK, as Money Sorter and Counter.

2. The EMPLOYEE shall perform among others, the following duties and
responsibilities:

i. Sort out bills according to color;

ii. Count each denomination per hundred, either manually or with the aid of a counting
machine;

iii. Wrap and label bills per hundred;

iv. Put the wrapped bills into bundles; and

v. Submit bundled bills to the bank teller for verification.

3. The EMPLOYEE shall undergo a training period of one (1) month, after which the
BANK shall determine whether or not he/she should be allowed to finish the remaining term
of this Contract.

4. The EMPLOYEE shall be entitled to an initial compensation of P118.00 per day,

subject to adjustment in the sole judgment of the BANK, payable every 15th and end of the
month.

5. The regular work schedule of the EMPLOYEE shall be five (5) days per week, from
Mondays thru Fridays, at eight (8) hours a day. The EMPLOYEE may be required to perform
overtime work as circumstance may warrant, for which overtime work he/she [shall] be paid
an additional compensation of 125% of his daily rate if performed during ordinary days and
130% if performed during Saturday or [a] rest day.

6. The EMPLOYEE shall likewise be entitled to the following benefits:

i. Proportionate 13th month pay based on his basic daily wage.

ii. Five (5) days incentive leave.

iii. SSS premium payment.

7. The EMPLOYEE binds himself/herself to abide [by] and comply with all the BANK
Rules and Regulations and Policies, and to conduct himself/herself in a manner expected of all
employees of the BANK.

8. The EMPLOYEE acknowledges the fact that he/she had been employed under a
special employment program of the BANK, for which reason the standard hiring requirements
of the BANK were not applied in his/her case. Consequently, the EMPLOYEE acknowledges and
accepts the fact that the terms and conditions of the employment generally observed by the
BANK with respect to the BANK's regular employee are not applicable to the EMPLOYEE, and
that therefore, the terms and conditions of the EMPLOYEE's employment with the BANK shall
be governed solely and exclusively by this Contract and by the applicable rules and regulations
that the Department of Labor and Employment may issue in connection with the employment
of disabled and handicapped workers. More specifically, the EMPLOYEE hereby acknowledges
that the provisions of Book Six of the Labor Code of the Philippines as amended, particularly
on regulation of employment and separation pay are not applicable to him/her. dctai

9. The Employment Contract shall be for a period of six (6) months or from ____ to
____ unless earlier terminated by the BANK for any just or reasonable cause. Any continuation
or extension of this Contract shall be in writing and therefore this Contract will automatically
expire at the end of its terms unless renewed in writing by the BANK.

IN WITNESS WHEREOF, the parties, have hereunto affixed their signature[s] this ____
day of _________________, ____________ at Intramuros, Manila, Philippines.'
 "In 1988, two (2) deaf-mutes were hired under this Agreement; in 1989 another two (2); in
1990, nineteen (19); in 1991 six (6); in 1992, six (6) and in 1993, twenty-one (21). Their employment[s]
were renewed every six months such that by the time this case arose, there were fifty-six (56) deaf-
mutes who were employed by respondent under the said employment agreement. The last one was
Thelma Malindoy who was employed in 1992 and whose contract expired on July 1993.

xxx xxx xxx

"Disclaiming that complainants were regular employees, respondent Far East Bank and Trust
Company maintained that complainants who are a special class of workers — the hearing impaired
employees were hired temporarily under [a] special employment arrangement which was a result of
overtures made by some civic and political personalities to the respondent Bank; that complainant[s]
were hired due to 'pakiusap' which must be considered in the light of the context of the respondent
Bank's corporate philosophy as well as its career and working environment which is to maintain and
strengthen a corps of professionals trained and qualified officers and regular employees who are
baccalaureate degree holders from excellent schools which is an unbending policy in the hiring of
regular employees; that in addition to this, training continues so that the regular employee grows in
the corporate ladder; that the idea of hiring handicapped workers was acceptable to them only on a
special arrangement basis; that it adopted the special program to help tide over a group of
handicapped workers such as deaf-mutes like the complainants who could do manual work for the
respondent Bank; that the task of counting and sorting of bills which was being performed by tellers
could be assigned to deaf-mutes; that the counting and sorting of money are tellering works which
were always logically and naturally part and parcel of the tellers' normal functions; that from the
beginning there have been no separate items in the respondent Bank plantilla for sorters or counters;
that the tellers themselves already did the sorting and counting chore as a regular feature and integral
part of their duties (p. 97, Records); that through the 'pakiusap' of Arturo Borjal, the tellers were
relieved of this task of counting and sorting bills in favor of deaf-mutes without creating new positions
as there is no position either in the respondent or in any other bank in the Philippines which deals
with purely counting and sorting of bills in banking operations." cda

Petitioners specified when each of them was hired and dismissed, viz: 7

"NAME OF PETITIONER WORKPLACE Date Hired Date Dismissed

1. MARITES BERNARDO Intramuros 12 NOV 90 17 NOV 93

2. ELVIRA GO DIAMANTE Intramuros 24 JAN 90 11 JAN 94
3. REBECCA E. DAVID Intramuros 16 APR 90 23 OCT 93
4. DAVID P. PASCUAL Bel-Air 15 OCT 88 21 NOV 94
5. RAQUEL ESTILLER Intramuros 2 JUL 92 4 JAN 94
6. ALBERT HALLARE West 4 JAN 91 9 JAN 94
7. EDMUND M. CORTEZ Bel-Air 15 JAN 91 3 DEC 93
8. JOSELITO O. AGDON Intramuros 5 NOV 90 17 NOV 93
9. GEORGE P. LIGUTAN, JR. Intramuros 6 SEPT 89 19 JAN 94
10. CELSO M. YAZAR Intramuros 8 FEB 93 8 AUG 93
11. ALEX G. CORPUZ Intramuros 15 FEB 93 15 AUG 93
12. RONALD M. DELFIN Intramuros 22 FEB 93 22 AUG 93
13. ROWENA M. TABAQUERO Intramuros 22 FEB 93 22 AUG 93
14. CORAZON C. DELOS REYES Intramuros 8 FEB 93 8 AUG 93
15. ROBERT G. NOORA Intramuros 15 FEB 93 15 AUG 93
16. MILAGROS O. LEQUIGAN Intramuros 1 FEB 93 1 AUG 93
17. ADRIANA F. TATLONGHARI Intramuros 22 JAN 93 22 JUL 93
18. IKE CABANDUCOS Intramuros 24 FEB 93 24 AUG 93
19. COCOY NOBELLO Intramuros 22 FEB 93 22 AUG 93
20. DORENDA CATIMBUHAN Intramuros 15 FEB 93 15 AUG 93
21. ROBERT MARCELO West 31 JUL 93 8 1 AUG 93
22. LILIBETH Q. MARMOLEJO West 15 JUN 90 21 NOV 93
23. JOSE E. SALES West 6 AUG 92 12 OCT 93
24. ISABEL MAMAUAG West 8 MAY 92 10 NOV 93
25. VIOLETA G. MONTES Intramuros 2 FEB 90 15 JAN 94
26. ALBINO TECSON Intramuros 7 NOV 91 10 NOV 93
 27. MELODY V. GRUELA West 28 OCT 91 3 NOV 93
28. BERNADETH D. AGERO West 19 DEC 90 27 DEC 93
29. CYNTHIA DE VERA Bel-Air 26 JUN 90 3 DEC 93
30. LANI R. CORTEZ Bel-Air 15 OCT 88 10 DEC 93
31. MA. ISABEL B. CONCEPCION West 6 SEPT 90 6 FEB 94
32. DINDO VALERIO Intramuros 30 MAY 93 30 NOV 93
33. ZENAIDA MATA Intramuros 10 FEB 93 10 AUG 93
34. ARIEL DEL PILAR Intramuros 24 FEB 93 24 AUG 93
35. MARGARET CECILIA CANOZA Intramuros 27 JUL 90 4 FEB 94
36. THELMA SEBASTIAN Intramuros 12 NOV 90 17 NOV 93
37. MA. JEANETTE CERVANTES West 6 JUN 92 7 DEC 93
38. JEANNIE RAMIL Intramuros 23 APR 90 12 OCT 93
39. ROZAIDA PASCUAL Bel-Air 20 APR 89 29 OCT 93
40. PINKY BALOLOA West 3 JUN 91 2 DEC 93
41. ELIZABETH VENTURA West 12 MAR 90 FEB 94 [sic]
42. GRACE S. PARDO West 4 APR 90 13 MAR 94
43. RICO TIMOSA Intramuros 28 APR 93 28 OCT 93"

As earlier noted, the labor arbiter and, on appeal, the NLRC ruled against herein petitioners. Hence, this
recourse to this Court. 9

The Ruling of the NLRC

In affirming the ruling of the labor arbiter that herein petitioners could not be deemed regular employees under
Article 280 of the Labor Code, as amended, Respondent Commission ratiocinated as follows:

"We agree that Art. 280 is not controlling herein. We give due credence to the conclusion that
complainants were hired as an accommodation to [the] recommendation of civic oriented
personalities whose employment[s] were covered by . . . Employment Contract[s] with special
provisions on duration of contract as specified under Art. 80. Hence, as correctly held by the Labor
Arbiter a quo, the terms of the contract shall be the law between the parties." 10

The NLRC also declared that the Magna Carta for Disabled Persons was not applicable, "considering the
prevailing circumstances/milieu of the case."

Issues

In their Memorandum, petitioners cite the following grounds in support of their cause:

"I. The Honorable Commission committed grave abuse of discretion in holding that the
petitioners — money sorters and counters working in a bank — were not regular employees.

"II. The Honorable Commission committed grave abuse of discretion in holding that the
employment contracts signed and renewed by the petitioners — which provide for a period of six (6)
months — were valid.

"III. The Honorable Commission committed grave abuse of discretion in not applying the
provisions of the Magna Carta for the Disabled (Republic Act No. 7277), on proscription against
discrimination against disabled persons." 11

In the main, the Court will resolve whether petitioners have become regular employees.

This Court's Ruling

The petition is meritorious. However, only the employees, who worked for more than six months and whose
contracts were renewed are deemed regular. Hence, their dismissal from employment was illegal.

Preliminary Matter:
Propriety of Certiorari
 Respondent Far East Bank and Trust Company argues that a review of the findings of facts of the NLRC is not
allowed in a petition for certiorari. Specifically, it maintains that the Court cannot pass upon the findings of public
respondents that petitioners were not regular employees. prcd

True, the Court, as a rule, does not review the factual findings of public respondents in a certiorari proceeding.
In resolving whether the petitioners have become regular employees, we shall not change the facts found by the public
respondent. Our task is merely to determine whether the NLRC committed grave abuse of discretion in applying the law
to the established facts, as above-quoted from the assailed Decision.

Main Issue:
Are Petitioners Regular Employees?

Petitioners maintain that they should be considered regular employees, because their task as money sorters and
counters was necessary and desirable to the business of respondent bank. They further allege that their contracts served
merely to preclude the application of Article 280 and to bar them from becoming regular employees.

Private respondent, on the other hand, submits that petitioners were hired only as "special workers and should
not in any way be considered as part of the regular complement of the Bank." 12 Rather, they were "special" workers
under Article 80 of the Labor Code. Private respondent contends that it never solicited the services of petitioners, whose
employment was merely an "accommodation" in response to the requests of government officials and civic-minded
citizens. They were told from the start, "with the assistance of government representatives," that they could not
become regular employees because there were no plantilla positions for "money sorters," whose task used to be
performed by tellers. Their contracts were renewed several times, not because of need "but merely for humanitarian
reasons." Respondent submits that "as of the present, the 'special position' that was created for the petitioners no
longer exist[s] in private respondent [bank], after the latter had decided not to renew anymore their special
employment contracts." cdphil

At the outset, let it be known that this Court appreciates the nobility of private respondent's effort to provide
employment to physically impaired individuals and to make them more productive members of society. However, we
cannot allow it to elude the legal consequences of that effort, simply because it now deems their employment
irrelevant. The facts, viewed in light of the Labor Code and the Magna Carta for Disabled Persons, indubitably show that
the petitioners, except sixteen of them, should be deemed regular employees. As such, they have acquired legal rights
that this Court is duty-bound to protect and uphold, not as a matter of compassion but as a consequence of law and
justice.

The uniform employment contracts of the petitioners stipulated that they shall be trained for a period of one
month, after which the employer shall determine whether or not they should be allowed to finish the 6-month term of
the contract. Furthermore, the employer may terminate the contract at any time for a just and reasonable cause. Unless
renewed in writing by the employer, the contract shall automatically expire at the end of the term.

According to private respondent, the employment contracts were prepared in accordance with Article 80 of the
Labor Code, which provides:

"ARTICLE 80. Employment agreement. — Any employer who employs handicapped workers
shall enter into an employment agreement with them, which agreement shall include:

(a) The names and addresses of the handicapped workers to be employed;

(b) The rate to be paid the handicapped workers which shall be not less than seventy five
(75%) per cent of the applicable legal minimum wage;

(c) The duration of employment period; and

(d) The work to be performed by handicapped workers.

The employment agreement shall be subject to inspection by the Secretary of Labor or his
duly authorized representatives."

The stipulations in the employment contracts indubitably conform with the aforecited provision. Succeeding
events and the enactment of RA No. 7277 (the Magna Carta for Disabled Persons), 13 however, justify the application of
Article 280 of the Labor Code.
 Respondent bank entered into the aforesaid contract with a total of 56 handicapped workers and renewed the
contracts of 37 of them. In fact, two of them worked from 1988 to 1993. Verily, the renewal of the contracts of the
handicapped workers and the hiring of others lead to the conclusion that their tasks were beneficial and necessary to
the bank. More important, these facts show that they were qualified to perform the responsibilities of their positions. In
other words, their disability did not render them unqualified or unfit for the tasks assigned to them.

In this light, the Magna Carta for Disabled Persons mandates that a qualified disabled employee should be given
the same terms and conditions of employment as a qualified able-bodied person. Section 5 of the Magna Carta provides:
cdll

"SECTION 5. Equal Opportunity for Employment. — No disabled person shall be denied access
to opportunities for suitable employment. A qualified disabled employee shall be subject to the same
terms and conditions of employment and the same compensation, privileges, benefits, fringe benefits,
incentives or allowances as a qualified able bodied person."

The fact that the employees were qualified disabled persons necessarily removes the employment contracts
from the ambit of Article 80. Since the Magna Carta accords them the rights of qualified able-bodied persons, they are
thus covered by Article 280 of the Labor Code, which provides:

"ARTICLE 280. Regular and Casual Employment. — The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be
deemed to be regular where the employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the season.

"An employment shall be deemed to be casual if it is not covered by the preceding paragraph:
Provided, That, any employee who has rendered at least one year of service, whether such service is
continuous or broken, shall be considered as regular employee with respect to the activity in which he
is employed and his employment shall continue while such activity exists."

The test of whether an employee is regular was laid down in De Leon v. NLRC , 14 in which this Court held:

"The primary standard, therefore, of determining regular employment is the reasonable

connection between the particular activity performed by the employee in relation to the usual trade
or business of the employer. The test is whether the former is usually necessary or desirable in the
usual business or trade of the employer. The connection can be determined by considering the nature
of the work performed and its relation to the scheme of the particular business or trade in its entirety.
Also if the employee has been performing the job for at least one year, even if the performance is not
continuous and merely intermittent, the law deems repeated and continuing need for its performance
as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the
employment is considered regular, but only with respect to such activity, and while such activity
exists."

Without a doubt, the task of counting and sorting bills is necessary and desirable to the business of respondent
bank. With the exception of sixteen of them, petitioners performed these tasks for more than six months. Thus, the
following twenty-seven petitioners should be deemed regular employees: Marites Bernardo, Elvira Go Diamante,
Rebecca E. David, David P. Pascual, Raquel Estiller, Albert Hallare, Edmund M. Cortez, Joselito O. Agdon, George P.
Ligutan Jr., Lilibeth Q. Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta G. Montes, Albino Tecson, Melody V. Gruela,
Bernadeth D. Agero, Cynthia de Vera, Lani R. Cortez, Ma. Isabel B. Concepcion, Margaret Cecilia Canoza, Thelma
Sebastian, Ma. Jeanette Cervantes, Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and Grace S. Pardo.
Cdpr

As held by the Court, "Articles 280 and 281 of the Labor Code put an end to the pernicious practice of making
permanent casuals of our lowly employees by the simple expedient of extending to them probationary appointments,
ad infinitum." 15 The contract signed by petitioners is akin to a probationary employment, during which the bank
determined the employees' fitness for the job. When the bank renewed the contract after the lapse of the six-month
probationary period, the employees thereby became regular employees. 16 No employer is allowed to determine
indefinitely the fitness of its employees.

As regular employees, the twenty-seven petitioners are entitled to security of tenure; that is, their services may
be terminated only for a just or authorized cause. Because respondent failed to show such cause, 17 these twenty-seven
petitioners are deemed illegally dismissed and therefore entitled to back wages and reinstatement without loss of
seniority rights and other privileges. 18 Considering the allegation of respondent that the job of money sorting is no
longer available because it has been assigned back to the tellers to whom it originally belonged, 19 petitioners are
hereby awarded separation pay in lieu of reinstatement. 20

Because the other sixteen worked only for six months, they are not deemed regular employees and hence not
entitled to the same benefits.

Applicability of the Brent Ruling

Respondent bank, citing Brent School v. Zamora, 21 in which the Court upheld the validity of an employment
contract with a fixed term, argues that the parties entered into the contract on equal footing. It adds that the petitioners
had in fact an advantage, because they were backed by then DSWD Secretary Mita Pardo de Tavera and Representative
Arturo Borjal.

We are not persuaded. The term limit in the contract was premised on the fact that the petitioners were
disabled, and that the bank had to determine their fitness for the position. Indeed, its validity is based on Article 80 of
the Labor Code. But as noted earlier, petitioners proved themselves to be qualified disabled persons who, under the
Magna Carta for Disabled Persons, are entitled to terms and conditions of employment enjoyed by qualified able-bodied
individuals; hence, Article 80 does not apply because petitioners are qualified for their positions. The validation of the
limit imposed on their contracts, imposed by reason of their disability, was a glaring instance of the very mischief sought
to be addressed by the new law.

Moreover, it must be emphasized that a contract of employment is impressed with public interest. 22 Provisions
of applicable statutes are deemed written into the contract, and the "parties are not at liberty to insulate themselves
and their relationships from the impact of labor laws and regulations by simply contracting with each other." 23 Clearly,
the agreement of the parties regarding the period of employment cannot prevail over the provisions of the Magna Carta
for Disabled Persons, which mandate that petitioners must be treated as qualified able-bodied employees. Cdpr

Respondent's reason for terminating the employment of petitioners is instructive. Because the Bangko Sentral
ng Pilipinas (BSP) required that cash in the bank be turned over to the BSP during business hours from 8:00 a.m. to 5:00
p.m., respondent resorted to nighttime sorting and counting of money. Thus, it reasons that this task "could not be done
by deaf mutes because of their physical limitations as it is very risky for them to travel at night." 24 We find no basis for
this argument. Travelling at night involves risks to handicapped and able-bodied persons alike. This excuse cannot justify
the termination of their employment.

Other Grounds Cited by Respondent

Respondent argues that petitioners were merely "accommodated" employees. This fact does not change the
nature of their employment. As earlier noted, an employee is regular because of the nature of work and the length of
service, not because of the mode or even the reason for hiring them.

Equally unavailing are private respondent's arguments that it did not go out of its way to recruit petitioners, and
that its plantilla did not contain their positions. In L. T . Datu v. NLRC, 25 the Court held that "the determination of
whether employment is casual or regular does not depend on the will or word of the employer, and the procedure of
hiring . . . but on the nature of the activities performed by the employee, and to some extent, the length of performance
and its continued existence."

Private respondent argues that the petitioners were informed from the start that they could not become regular
employees. In fact, the bank adds, they agreed with the stipulation in the contract regarding this point. Still, we are not
persuaded. The well-settled rule is that the character of employment is determined not by stipulations in the contract,
but by the nature of the work performed. 26 Otherwise, no employee can become regular by the simple expedient of
incorporating this condition in the contract of employment.

In this light, we iterate our ruling in Romares v. NLRC : 27

"Article 280 was emplaced in our statute books to prevent the circumvention of the
employee's right to be secure in his tenure by indiscriminately and completely ruling out all written
and oral agreements inconsistent with the concept of regular employment defined therein. Where an
employee has been engaged to perform activities which are usually necessary or desirable in the usual
business of the employer, such employee is deemed a regular employee and is entitled to security of
tenure notwithstanding the contrary provisions of his contract of employment. cda
 "xxx xxx xxx

"At this juncture, the leading case of Brent School, Inc. v. Zamora proves instructive. As
reaffirmed in subsequent cases, this Court has upheld the legality of fixed-term employment. It ruled
that the decisive determinant in 'term employment' should not be the activities that the employee is
called upon to perform but the day certain agreed upon the parties for the commencement and
termination of their employment relationship. But this Court went on to say that where from the
circumstances it is apparent that the periods have been imposed to preclude acquisition of tenurial
security by the employee, they should be struck down or disregarded as contrary to public policy and
morals."

In rendering this Decision, the Court emphasizes not only the constitutional bias in favor of the working class,
but also the concern of the State for the plight of the disabled. The noble objectives of Magna Carta for Disabled Persons
are not based merely on charity or accommodation, but on justice and the equal treatment of qualified persons,
disabled or not. In the present case, the handicap of petitioners (deaf-mutes) is not a hindrance to their work. The
eloquent proof of this statement is the repeated renewal of their employment contracts. Why then should they be
dismissed, simply because they are physically impaired? The Court believes, that, after showing their fitness for the work
assigned to them, they should be treated and granted the same rights like any other regular employees.

In this light, we note the Office of the Solicitor General's prayer joining the petitioners' cause. 28

WHEREFORE, premises considered, the Petition is hereby GRANTED. The June 20, 1995 Decision and the August
4, 1995 Resolution of the NLRC are REVERSED and SET ASIDE. Respondent Far East Bank and Trust Company is hereby
ORDERED to pay back wages and separation pay to each of the following twenty-seven (27) petitioners, namely, Marites
Bernardo, Elvira Go Diamante, Rebecca E. David, David P. Pascual, Raquel Estiller, Albert Hallare, Edmund M. Cortez,
Joselito O. Agdon, George P. Ligutan Jr., Lilibeth Q. Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta G. Montes, Albino
Tecson, Melody V. Gruela, Bernadeth D. Agero, Cynthia de Vera, Lani R. Cortez, Ma. Isabel B. Concepcion, Margaret
Cecilia Canoza, Thelma Sebastian, Ma. Jeanette Cervantes, Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth
Ventura and Grace S. Pardo. The NLRC is hereby directed to compute the exact amount due each of said employees,
pursuant to existing laws and regulations, within fifteen days from the finality of this Decision. No costs. LibLex

SO ORDERED

||| (Bernardo v. National Labor Relations Commission, G.R. No. 122917, [July 12, 1999], 369 PHIL 443-464)

B. Apprenticeship and Learnership

Labor Code: Articles 57-77

Omnibus Rules: Book II, Rules VI-VII

R.A. 7687, The Dual Training System Act

FIRST DIVISION

[G.R. No. 114337. September 29, 1995.]

NITTO ENTERPRISES, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and ROBERTO
CAPILI, respondents.

Sinforoso R. Pagunsan for petitioner. aisadc

Ma. Elena Enly B. Nazareta representative of private respondent.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; APPRENTICESHIP AGREEMENT; SHALL BE ENTERED ONLY IN ACCORDANCE WITH
THE APPRENTICESHIP PROGRAM DULY APPROVED BY THE MINISTER OF LABOR AND EMPLOYMENT. — In the case at
bench, the apprenticeship agreement between petitioner and private respondent was executed on May 28, 1990
allegedly employing the latter as an apprentice in the trade of "core maker/molder." On the same date, an
apprenticeship program was prepared by petitioner and submitted to the Department of Labor and Employment.
However, the apprenticeship Agreement was filed only on June 7, 1990. Notwithstanding the absence of approval by the
Department of Labor and Employment, the apprenticeship agreement was enforced the day it was signed. Based on the
evidence before us, petitioner did not comply with the requirements of the law. It is mandated that apprenticeship
agreements entered into by the employer and apprentice shall be entered only in accordance with the apprenticeship
program duly approved by the Minister of Labor and Employment. Prior approval by the Department of Labor and
Employment of the proposed apprenticeship program is, therefore, a condition sine qua non before an apprenticeship
agreement can be validly entered into. The act of filing the proposed apprenticeship program with the Department of
Labor and Employment is a preliminary step towards its final approval and does not instantaneously give rise to an
employer-apprentice relationship. Article 57 of the Labor Code provides that the State aims to "establish a national
apprenticeship program through the participation of employers, workers and government and non-government
agencies" and "to establish apprenticeship standards for the protection of apprentices." To translate such objectives into
existence, prior approval of the DOLE to any apprenticeship program has to be secured as a condition sine qua non
before any such apprenticeship agreement can be fully enforced. The role of the DOLE in apprenticeship programs and
agreements cannot be debased. cdlex

2. ID.; ID.; ID.; EMPLOYEES CONSIDERED REGULAR IN CASE OF VIOLATION THEREOF. — Since the apprenticeship
agreement between petitioner and private respondent has no force and effect in the absence of a valid apprenticeship
program duly approved by the DOLE, private respondent's assertion that he was hired not as an apprentice but as a
delivery boy ("kargador" or "pahinante") deserves credence. He should rightly be considered as a regular employee or
petitioner as defined by Article 280 of the Labor Code and pursuant to the constitutional mandate to "protect the rights
of workers and promote their welfare."

3. ID.; TERMINATION OF EMPLOYMENT; TWIN REQUIREMENTS OF DUE PROCESS; DEFINED. — There is an abundance of
cases wherein the Court ruled that the twin requirements of due process, substantive and procedural, must be complied
with, before valid dismissal exists. Without which, the dismissal becomes void. The twin requirements of notice and
hearing constitute the essential elements of due process. This simply means that the employer shall afford the worker
ample opportunity to be heard and to defend himself with the assistance of his representative, if he so desires. Ample
opportunity connotes every kind of assistance that management must accord the employee to enable him to prepare
adequately for his defense including legal representation. As held in the case of Pepsi-Cola Bottling Co., Inc. v. NLRC: The
law requires that the employer must furnish the worker sought to be dismissed with two (2) written notices before
termination of employee can be legally effected: (1) notice which apprises the employee of the particular acts or
omissions for which his dismissal is sought; and (2) the subsequent notice which informs the employee of the employer's
decision to dismiss him (Sec. 13, BP 130; Sec. 2-6, Rule XIV, Book V, Rules and Regulations Implementing the Labor Code
as amended). Failure to comply with the requirements taints the dismissal with illegality. This procedure is mandatory;
in the absence of which, any judgment reached by management is void and inexistent (Tingson, Jr. vs. NLRC, 185 SCRA
498 [1990]; National Service Corp. vs. NLRC, 168 SCRA 122; Ruffy vs. NLRC, 182 SCRA 365 [1990]).

DECISION

KAPUNAN, J p:

This petition for certiorari under Rule 65 of the Rules of Court seeking to annul the decision 1 rendered by
public respondent National Labor Relations Commission, which reversed the decision of the Labor Arbiter.
Briefly, the facts of the case are as follows:
Petitioner Nitto Enterprises, a company engaged in the sale of glass and aluminum products, hired Roberto
Capili sometime in May 1990 as an apprentice machinist, molder and core maker as evidenced by an apprenticeship
agreement 2 for a period of six (6) months from May 28, 1990 to November 28, 1990 with a daily wage rate of
P66.75 which was 75% of the applicable minimum wage.
At around 1:00 p.m. of August 2, 1990, Roberto Capili who was handling a piece of glass which he was
working on, accidentally hit and injured the leg of an office secretary who was treated at a nearby hospital.
Later that same day, after office hours, private respondent entered a workshop within the office premises
which was not his work station. There, he operated one of the power press machines without authority and in the
process injured his left thumb. Petitioner spent the amount of P1,023.04 to cover the medication of private
respondent.

The following day, Roberto Capili was asked to resign in a letter 3 which reads:
 August 2, 1990

Wala siyang tanggap ng utos mula sa superbisor at wala siyang experiensa kung papaano gamitin and
"TOOL" sa pagbuhat ng salamin, sarili niyang desisyon ang paggamit ng tool at may disgrasya at
nadamay pa ang isang sekretarya ng kompanya.

Sa araw ding ito limang (5) minuto ang nakakalipas mula alas-singko ng hapon siya ay pumasok sa
shop na hindi naman sakop ng kanyang trabaho. Pinakialaman at kinalikot ang makina at nadisgrasya
niya ang kanyang sariling kamay.

Nakagastos ang kompanya ng mga sumusunod:

Emergency and doctor fee P715.00

Medecines (sic) and others 317.04

Bibigyan siya ng kompanya ng Siyam na araw na libreng sahod hanggang matanggal ang tahi
ng kanyang kamay.
Tatanggapin niya ang sahod niyang anim na araw, mula ika-30 ng Hulyo at ika-4 ng Agosto,
1990.
Ang kompanya ang magbabayad ng lahat ng gastos pagtanggal ng tahi ng kanyang kamay,
pagkatapos ng siyam na araw mula ika-2 ng Agosto.
Sa lahat ng nakasulat sa itaas, hinihingi ng kompanya ang kanyang resignasyon, kasama ng
kanyang confirmasyon at pag-ayon na ang lahat sa itaas ay totoo.
xxx xxx xxx
Naiintindihan ko ang lahat ng nakasulat sa itaas, at ang lahat ng ito ay aking pagkakasala sa
hindi pagsunod sa alintuntunin ng kompanya.
(Sgd.) Roberto Capili

Roberto Capili
On August 3, 1990 private respondent executed a Quitclaim and Release in favor of petitioner for and in
consideration of the sum of P1,912.79. 4
Three days after, or on August 6, 1990, private respondent formally filed before the NLRC Arbitration
Branch, National Capital Region a complaint for illegal dismissal and payment of other monetary benefits.
On October 9, 1991, the Labor Arbiter rendered his decision finding the termination of private respondent
as valid and dismissing the money claim for lack of merit. The dispositive portion of the ruling reads:

WHEREFORE, premises considered, the termination is valid and for cause, and the money claims
dismissed for lack of merit.

The respondent however is ordered to pay the complainant the amount of P500.00 as financial
assistance.

SO ORDERED. 5

Labor Arbiter Patricio P. Libo-on gave two reasons for ruling that the dismissal of Roberto Capili was valid.
First, private respondent who was hired as an apprentice violated the terms of their agreement when he acted with
gross negligence resulting in the injury not only to himself but also to his fellow worker. Second, private respondent
had shown that "he does not have the proper attitude in employment particularly the handling of machines without
authority and proper training." 6
On July 26, 1993, the National Labor Relations Commission issued an order reversing the decision of the
Labor Arbiter, the dispositive portion of which reads:

WHEREFORE, the appealed decision is hereby set aside. The respondent is hereby directed to reinstate
complainant to his work last performed with backwages computed from the time his wages were
withheld up to the time he is actually reinstated. The Arbiter of origin is hereby directed to further
hear complainant's money claims and to dispose them on the basis of law and evidence obtaining.

SO ORDERED. 7

The NLRC declared that private respondent was a regular employee of petitioner by ruling thus:
 As correctly pointed out by the complainant, we cannot understand how an apprenticeship agreement
filed with the Department of Labor only on June 7, 1990 could be validly used by the Labor Arbiter as
basis to conclude that the complainant was hired by respondent as a plain 'apprentice' on May 28,
1990. Clearly, therefore, the complainant was respondent's regular employee under Article 280 of the
Labor Code, as early as May 28, 1990, who thus enjoyed the security of tenure guaranteed in Section
3, Article XIII of our 1987 Constitution.

The complaint being for illegal dismissal (among others) it then behooves upon respondent, pursuant
to Art. 277(b) and as ruled in Edwin Gesulgon vs. NLRC, et al. (G.R. No. 90349, March 5, 1993, 3rd Div.,
Feliciano, J.) to prove that the dismissal of complainant was for a valid cause. Absent such proof, we
cannot but rule that the complainant was illegally dismissed. 8

On January 28, 1994, Labor Arbiter Libo-on called for a conference at which only private respondent's
representative was present.
On April 22, 1994, a Writ of Execution was issued, which reads:

NOW, THEREFORE, finding merit in [private respondent's] Motion for Issuance of the Writ, you are
hereby commanded to proceed to the premises of [petitioner] Nitto Enterprises and Jovy Foster
located at No. 174 Araneta Avenue, Potrero, Malabon, Metro Manila or at any other places where
their properties are located and effect the reinstatement of herein [private respondent] to his work
last performed or at the option of the respondent by payroll reinstatement. LexLib

You are also to collect the amount of P122,690.85 representing his backwages as called for in the
dispositive portion, and turn over such amount to this Office for proper disposition.

Petitioner filed a motion for reconsideration but the same was denied.
Hence, the instant petition for certiorari.
The issues raised before us are the following:

WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN

HOLDING THAT PRIVATE RESPONDENT WAS NOT AN APPRENTICE.

II

WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN

HOLDING THAT PETITIONER HAD NOT ADEQUATELY PROVEN THE EXISTENCE OF A VALID CAUSE IN
TERMINATING THE SERVICE OF PRIVATE RESPONDENT.

We find no merit in the petition.

Petitioner assails the NLRC's finding that private respondent Roberto Capili cannot plainly be considered an apprentice
since no apprenticeship program had yet been filed and approved at the time the agreement was executed.

Petitioner further insists that the mere signing of the apprenticeship agreement already established an employer-
apprentice relationship.

Petitioner's argument is erroneous.

The law is clear on this matter. Article 61 of the Labor Code provides:

Contents of apprenticeship agreement. — Apprenticeship agreements, including the main rates of

apprentices, shall conform to the rules issued by the Minister of Labor and Employment. The period of
apprenticeship shall not exceed six months. Apprenticeship agreements providing for wage rates
below the legal minimum wage, which in no case shall start below 75% per cent of the applicable
minimum wage, may be entered into only in accordance with apprenticeship program duly approved
by the Minister of Labor and Employment. The Ministry shall develop standard model programs of
apprenticeship. (Emphasis supplied)
 In the case at bench, the apprenticeship agreement between petitioner and private respondent was
executed on May 28, 1990 allegedly employing the latter as an apprentice in the trade of "core maker/molder." On
the same date, an apprenticeship program was prepared by petitioner and submitted to the Department of Labor
and Employment. However, the apprenticeship agreement was filed only on June 7, 1990. Notwithstanding the
absence of approval by the Department of Labor and Employment, the apprenticeship agreement was enforced the
day it was signed. LLcd
Based on the evidence before us, petitioner did not comply with the requirements of the law. It is mandated
that apprenticeship agreements entered into by the employer and apprentice shall be entered only in accordance
with the apprenticeship program duly approved by the Minister of Labor and Employment.
Prior approval by the Department of Labor and Employment of the proposed apprenticeship program is,
therefore, a condition sine qua non before an apprenticeship agreement can be validly entered into.
The act of filing the proposed apprenticeship program with the Department of Labor and Employment is a
preliminary step towards its final approval and does not instantaneously give rise to an employer-apprentice
relationship.
Article 57 of the Labor Code provides that the State aims to "establish a national apprenticeship program
through the participation of employers, workers and government and non-government agencies" and "to establish
apprenticeship standards for the protection of apprentices." To translate such objectives into existence, prior
approval of the DOLE to any apprenticeship program has to be secured as a condition sine qua non before any such
apprenticeship agreement can be fully enforced. The role of the DOLE in apprenticeship programs and agreements
cannot be debased.
Hence, since the apprenticeship agreement between petitioner and private respondent has no force and
effect in the absence of a valid apprenticeship program duly approved by the DOLE, private respondent's assertion
that he was hired not as an apprentice but as a delivery boy ("kargador" or "pahinante") deserve credence. He
should rightly be considered as a regular employee of petitioner as defined by Article 280 of the Labor Code:

ARTICLE 280. Regular and Casual Employment. — The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed
to be regular where the employee has been engaged to perform activities which are usually necessary
or desirable in the usual business or trade of the employer, except where the employment has been
fixed for a specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph:

Provided, That, any employee who has rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee with respect to the activity in which he
is employed and his employment shall continue while such activity exists. (Emphasis supplied)

and pursuant to the constitutional mandate to "protect the rights of workers and promote their welfare." 9
Petitioner further argues that, there is a valid cause for the dismissal of private respondent.
There is an abundance of cases wherein the Court ruled that the twin requirements of due process,
substantive and procedural, must be complied with, before valid dismissal exists. 10 Without which, the dismissal
becomes void.

The twin requirements of notice and hearing constitute the essential elements of due process. This simply means that
the employer shall afford the worker ample opportunity to be heard and to defend himself with the assistance of his
representative, if he so desires.

Ample opportunity connotes every kind of assistance that management must accord the employee to enable him to
prepare adequately for his defense including legal representation. 11

As held in the case of Pepsi-Cola Bottling Co., Inc. v. NLRC: 12

The law requires that the employer must furnish the worker sought to be dismissed with two (2)
written notices before termination of employee can be legally effected: (1) notice which apprises the
employee of the particular acts or omissions for which his dismissal is sought; and (2) the subsequent
notice which informs the employee of the employer's decision to dismiss him (Sec. 13, BP 130; Sec. 2-
6, Rule XIV, Book V, Rules and Regulations Implementing the Labor Code as amended). Failure to
comply with the requirements taints the dismissal with illegality. This procedure is mandatory; in the
absence of which, any judgment reached by management is void and inexistent (Tingson, Jr. vs. NLRC,
 185 SCRA 498 [1990]; National Service Corp. vs. NLRC, 168 SCRA 122; Ruffy vs. NLRC, 182 SCRA 365
[1990]).

The fact is private respondent filed a case of illegal dismissal with the Labor Arbiter only three days after he
was made to sign a Quitclaim, a clear indication that such resignation was not voluntary and deliberate.
Private respondent averred that he was actually employed by petitioner as a delivery boy ("kargador" or
"pahinante").
He further asserted that petitioner "strong-armed" him into signing the aforementioned resignation letter
and quitclaim without explaining to him the contents thereof. Petitioner made it clear to him that anyway, he did
not have a choice. 13
Petitioner cannot disguise the summary dismissal of private respondent by orchestrating the latter's alleged
resignation and subsequent execution of a Quitclaim and Release. A judicious examination of both events belies any
spontaneity on private respondent's part.
WHEREFORE, finding no abuse of discretion committed by public respondent National Labor Relations
Commission, the appealed decision is hereby AFFIRMED. cdlex
SO ORDERED
||| (Nitto Enterprises v. National Labor Relations Commission, G.R. No. 114337, [September 29, 1995], 318 PHIL 780-
791)

THIRD DIVISION

[G.R. No. 75112. August 17, 1992.]

FILAMER CHRISTIAN INSTITUTE, petitioner, vs. HON. INTERMEDIATE APPELLATE COURT, HON.
ENRIQUE P. SUPLICO, in his capacity as Judge of the Court of Appeals, Branch XIV, Roxas City and
POTENCIANO KAPUNAN SR., respondents.

Bedona & Bedona Law Office for petitioner.

Rhodora G. Kapunan for private respondent.

SYLLABUS

1. CIVIL LAW; QUASI-DELICTS; ART. 2180 OF THE CIVIL CODE; APPLICABLE IN CASE AT BAR; INJURED PARTY SHALL HAVE
RECOURSE AGAINST THE SERVANT AS WELL AS THE EMPLOYER FOR WHOM SERVANT WAS ACTING IN FURTHERANCE OF
THE INTEREST OF THE LATTER. — The private respondents assert that the circumstances obtaining in the present case
call for the application of Article 2180 of the Civil Code since Funtecha is no doubt an employee of the petitioner. The
private respondents maintain that under Article 2180 an injured party shall have recourse against the servant as well as
the petitioner for whom, at the time of the incident, the servant was performing an act in furtherance of the interest
and for the benefit of the petitioner. Funtecha allegedly did not steal the school jeep nor use it for a joy ride without the
knowledge of the school authorities. In learning how to drive while taking the vehicle home in the direction of Allan's
house, Funtecha definitely was not, having a joy ride Funtecha was not driving for the purpose of his enjoyment or for a
"frolic of his own" but ultimately, for the service for which the jeep was intended by the petitioner school. (See L.
Battistoni v. Thomas, Can SC 144, 1 D.L.R. 577, 80 ALR 722 [1932]; See also Association of Baptists for World Evangelism,
Inc. v. Fieldmen's Insurance Co., Inc. 124 SCRA 618 [1983]). Therefore, the Court is constrained to conclude that the act
of Funtecha in taking over the steering wheel was one done for and in behalf of his employer for which act the
petitioner-school cannot deny any responsibility by arguing that it was done beyond the scope of his janitorial duties.
The clause "within the scope of their assigned tasks" for purposes of raising the presumption of liability of an employer,
includes any act done by an employee, in furtherance of the interests of the employer or for the account of the
employer at the time of the infliction of the injury or damage. (Manuel Casada, 190 Va 906, 59 SE 2d 47 [1950]) Even if
somehow, the employee driving the vehicle derived some benefit from the act, the existence of a presumptive liability
of the employer is determined by answering the question of whether or not the servant was at the time of the accident
performing any act in furtherance of his master's business. (Kohlman v. Hyland, 210 NW 643, 50 ALR 1437 [1926];
Jameson v. Gavett, 71 P 2d 937 [1937])

2. LABOR LAW; SEC. 14, RULE X, BOOK III OF RULES IMPLEMENTING THE LABOR CODE; NOT THE DECISIVE LAW IN A CIVIL
SUIT FOR DAMAGES UNDER THE CIVIL CODE. — Section 14, Rule X, Book III of the Rules implementing the Labor Code,
on which the petitioner anchors its defense, was promulgated by the Secretary of Labor and Employment only for the
purpose of administering and enforcing the provisions of the Labor Code on conditions of employment. Particularly, Rule
X of Book III provides guidelines on the manner by which the powers of the Labor Secretary shall be exercised; on what
records should be kept, maintained and preserved; on payroll; and on the exclusion of working scholars from, and
inclusion of resident physicians in the employment coverage as far as compliance with the substantive labor provisions
on working conditions, rest periods, and wages, is concerned. In other words, Rule X is merely a guide to the
enforcement of the substantive law on labor. The Court, thus, makes the distinction and so holds that Section 14, Rule X,
Book III of the Rules is not the decisive law in a civil suit for damages instituted by an injured person during a vehicular
accident against a working student of a school and against the school itself. The present case does not deal with a labor
dispute on conditions of employment between an alleged employee and an alleged employer. It invokes a claim brought
by one for damages for injury caused by the patently negligent acts of a person, against both doer-employee and his
employer. Hence, the reliance on the implementing rule on labor to disregard the primary liability of an employer under
Article 2180 of the Civil Code is misplaced. An implementing rule on labor cannot be used by an employer as a shield to
void liability under the substantive provisions of the Civil Code.

3. CIVIL LAW; QUASI-DELICTS, EXTRA-CONTRACTUAL OBLIGATION ARISING FROM NEGLIGENCE OF AN EMPLOYEE;

DILIGENCE OF A GOOD FATHER OF A FAMILY; PETITIONER FAILED TO SHOW PROOF OF HAVING EXERCISED IT. —
Funtecha is an employee of petitioner Filamer. He need not have an official appointment for a driver's position in order
that the petitioner may be held responsible for his grossly negligent act, it being sufficient that the act of driving at the
time of the incident was for the benefit of the petitioner. Hence, the fact that Funtecha was not the school driver or was
not acting with the scope of his janitorial duties does not relieve the petitioner of the burden of rebutting the
presumption juris tantum that there was negligence on its part either in the selection of a servant or employee, or in the
supervision over him. The petitioner has failed to show proof of its having exercised the required diligence of a good
father of a family over its employees Funtecha and Allan.

4. ID.; ID.; SUPERVISION; WHAT IT INCLUDES; FAILURE OF PETITIONER TO SET FORTH SUCH RULES AND GUIDELINES;
CASE AT BAR. — The Court reiterates that supervision includes the formulation of suitable rules and regulation for the
guidance of its employees and the issuance of proper instructions intended for the protection of the public and persons
with whom the employer has relations through his employees. (Bahia v. Litonjua and Leynes, supra, at p. 628; Phoenix
Construction, Inc. v. Intermediate Appellate Court, 148 SCRA 353 [1987]) An employer is expected to impose upon its
employees the necessary discipline called for in the performance of any act indispensable to the business and beneficial
to their employer. In the present case, the petitioner has not shown that it has set forth such rules and guidelines as
would prohibit any one of its employees from taking control over its vehicles if one is not the official driver or prohibiting
the driver and son of the Filamer president from authorizing another employee to drive the school vehicle. Furthermore,
the petitioner has failed to prove that it had imposed sanctions or warned its employees against the use of its vehicles
by persons other than the driver.

5. ID.; ID.; LIABILITY OF EMPLOYER UNDER ART. 2180 IS PRIMARY AND SOLIDARY; RECOURSE AGAINST NEGLIGENT
EMPLOYEE. — The liability of the employer is, under Article 2180, primary and solidary. However, the employer shall
have recourse against the negligent employee for whatever damages are paid to the heirs of the plaintiff.

DECISION

GUTIERREZ, JR., J p:

The private respondents, heirs of the late Potenciano Kapunan, seek reconsideration of the decision rendered by this
Court on October 16, 1990 (Filamer Christian Institute v. Court Appeals, 190 SCRA 477) reviewing the appellate court's
conclusion that there exists an employer-employee relationship between the petitioner and its co-defendant Funtecha.
The Court ruled that the petitioner is not liable for the injuries caused by Funtecha on the grounds that the latter was
not an authorized driver for whose acts the petitioner shall be directly and primarily answerable, and that Funtecha was
merely a working scholar who, under Section 14, Rule X, Book III of the Rules and Regulations Implementing the Labor
Code is not considered an employee of the petitioner.

The private respondents assert that the circumstances obtaining in the present case call for the application of Article
2180 of the Civil Code since Funtecha is no doubt an employee of the petitioner. The private respondents maintain that
under Article 2180 an injured party shall have recourse against the servant as well as the petitioner for whom, at the
time of the incident, the servant was performing an act in furtherance of the interest and for the benefit of the
petitioner. Funtecha allegedly did not steal the school jeep nor use it for a joy ride without the knowledge of the school
authorities.
After a re-examination of the laws relevant to the facts found by the trial court and the appellate court, the Court
reconsiders its decision. We reinstate the Court of Appeals' decision penned by the late Justice Desiderio Jurado and
concurred in by Justices Jose G. Campos, Jr. and Serafin E. Camilon. Applying Civil Code provisions, the appellate court
affirmed the trial court decision which ordered the payment of the P20,000.00 liability in the Zenith Insurance
Corporation policy, P10,000.00 moral damages, P4,000.00 litigation and actual expenses, and P3,000.00 attorney's fees.
LexLib

It is undisputed that Funtecha was a working student, being a part-time Janitor and a scholar of petitioner Filamer. He
was, in relation to the school, an employee even if he was assigned to clean the school premises for only two (2) hours in
the morning of each school day.

Having a student driver's license, Funtecha requested the driver, Allan Masa, and was allowed, to take over the vehicle
while the latter was on his way home one late afternoon. It is significant to note that the place where Allan lives is also
the house of his father, the school president, Agustin Masa. Moreover, it is also the house where Funtecha was allowed
free board while he was a student of Filamer Christian Institute.

Allan Masa turned over the vehicle to Funtecha only after driving down a road, negotiating a sharp dangerous curb, and
viewing that the road was clear. (TSN, April 4, 1983, pp. 78-79) According to Allan's testimony, a fast moving truck with
glaring lights nearly hit them so that they had to swerve to the right to avoid a collision. Upon swerving, they heard a
sound as if something had bumped against the vehicle, but they did not stop to check. Actually, the Pinoy jeep swerved
towards the pedestrian, Potenciano Kapunan who was walking in his lane in the direction against vehicular traffic, and
hit him. Allan affirmed that Funtecha followed his advise to swerve to the right. (Ibid., p. 79) At the time of the incident
(6:30 P.M.) in Roxas City, the jeep had only one functioning headlight.

Allan testified that he was the driver and at the same time a security guard of the petitioner-school. He further said that
there was no specific time for him to be off-duty and that after driving the students home at 5:00 in the afternoon, he
still had to go back to school and then drive home using the same vehicle.

Driving the vehicle to and from the house of the school president where both Allan and Funtecha reside is an act in
furtherance of the interest of the petitioner-school. Allan's job demands that he drive home the school jeep so he can
use it to fetch students in the morning of the next school day.

It is indubitable under the circumstances that the school president had knowledge that the jeep was routinely driven
home for the said purpose. Moreover, it is not improbable that the school president also had knowledge of Funtecha's
possession of a student driver's license and his desire to undergo driving lessons during the time that he was not in his
classrooms.

In learning how to drive while taking the vehicle home in the direction of Allan's house, Funtecha definitely was not,
having a joy ride. Funtecha was not driving for the purpose of his enjoyment or for a "frolic of his own" but ultimately,
for the service for which the jeep was intended by the petitioner school. (See L. Battistoni v. Thomas, Can SC 144, 1
D.L.R. 577, 80 ALR 722 [1932]; See also Association of Baptists for World Evangelism, Inc. v. Fieldmen's Insurance Co.,
Inc. 124 SCRA 618 [1983]). Therefore, the Court is constrained to conclude that the act of Funtecha in taking over the
steering wheel was one done for and in behalf of his employer for which act the petitioner-school cannot deny any
responsibility by arguing that it was done beyond the scope of his janitorial duties. The clause "within the scope of their
assigned tasks" for purposes of raising the presumption of liability of an employer, includes any act done by an
employee, in furtherance of the interests of the employer or for the account of the employer at the time of the infliction
of the injury or damage. (Manuel Casada, 190 Va 906, 59 SE 2d 47 [1950]) Even if somehow, the employee driving the
vehicle derived some benefit from the act, the existence of a presumptive liability of the employer is determined by
answering the question of whether or not the servant was at the time of the accident performing any act in furtherance
of his master's business. (Kohlman v. Hyland, 210 NW 643, 50 ALR 1437 [1926]; Jameson v. Gavett, 71 P 2d 937 [1937])
LexLib

Section 14, Rule X, Book III of the Rules implementing the Labor Code, on which the petitioner anchors its defense, was
promulgated by the Secretary of Labor and Employment only for the purpose of administering and enforcing the
provisions of the Labor Code on conditions of employment. Particularly, Rule X of Book III provides guidelines on the
manner by which the powers of the Labor Secretary shall be exercised; on what records should be kept, maintained and
preserved; on payroll; and on the exclusion of working scholars from, and inclusion of resident physicians in the
employment coverage as far as compliance with the substantive labor provisions on working conditions, rest periods,
and wages, is concerned.
In other words, Rule X is merely a guide to the enforcement of the substantive law on labor. The Court, thus, makes the
distinction and so holds that Section 14, Rule X, Book III of the Rules is not the decisive law in a civil suit for damages
instituted by an injured person during a vehicular accident against a working student of a school and against the school
itself.

The present case does not deal with a labor dispute on conditions of employment between an alleged employee and an
alleged employer. It invokes a claim brought by one for damages for injury caused by the patently negligent acts of a
person, against both doer-employee and his employer. Hence, the reliance on the implementing rule on labor to
disregard the primary liability of an employer under Article 2180 of the Civil Code is misplaced. An implementing rule on
labor cannot be used by an employer as a shield to void liability under the substantive provisions of the Civil Code.

There is evidence to show that there exists in the present case an extra-contractual obligation arising from the
negligence or reckless imprudence of a person "whose acts or omissions are imputable, by a legal fiction, to other(s)
who are in a position to exercise an absolute or limited control over (him)." (Bahia v. Litonjua and Leynes, 30 Phil. 624
[1915])

Funtecha is an employee of petitioner Filamer. He need not have an official appointment for a driver's position in order
that the petitioner may be held responsible for his grossly negligent act, it being sufficient that the act of driving at the
time of the incident was for the benefit of the petitioner. Hence, the fact that Funtecha was not the school driver or was
not acting with the scope of his janitorial duties does not relieve the petitioner of the burden of rebutting the
presumption juris tantum that there was negligence on its part either in the selection of a servant or employee, or in the
supervision over him. The petitioner has failed to show proof of its having exercised the required diligence of a good
father of a family over its employees Funtecha and Allan.

The Court reiterates that supervision includes the formulation of suitable rules and regulation for the guidance of its
employees and the issuance of proper instructions intended for the protection of the public and persons with whom the
employer has relations through his employees. (Bahia v. Litonjua and Leynes, supra, at p. 628; Phoenix Construction, Inc.
v. Intermediate Appellate Court, 148 SCRA 353 [1987])

An employer is expected to impose upon its employees the necessary discipline called for in the performance of any act
indispensable to the business and beneficial to their employer. cdll

In the present case, the petitioner has not shown that it has set forth such rules and guidelines as would prohibit any
one of its employees from taking control over its vehicles if one is not the official driver or prohibiting the driver and son
of the Filamer president from authorizing another employee to drive the school vehicle. Furthermore, the petitioner has
failed to prove that it had imposed sanctions or warned its employees against the use of its vehicles by persons other
than the driver.

The petitioner, thus, has an obligation to pay damages for injury arising from the unskilled manner by which Funtecha
drove the vehicle. (Cangco v. Manila Railroad Co. 38 Phil. 760, 772 [1918]) In the absence of evidence that the petitioner
had exercised the diligence of a good father of a family in the supervision of its employees, the law imposes upon it the
vicarious liability for acts or omissions of its employees. (Umali v. Bacani, 69 SCRA 263 [1976]; Poblete v. Fabros, 93 SCRA
200 [1979]; Kapalaran Bus Liner v. Coronado, 176 SCRA 792 [1989]; Franco v. Intermediate Appellate Court, 178 SCRA
331 [1989]; Pantranco North Express, Inc. v. Baesa, 179 SCRA 384 (1989]) The liability of the employer is, under Article
2180, primary and solidary. However, the employer shall have recourse against the negligent employee for whatever
damages are paid to the heirs of the plaintiff.

It is an admitted fact that the actual driver of the school jeep, Allan Masa, was not made a party defendant in the civil
case for damages. This is quite understandable considering that as far as the injured pedestrian, plaintiff Potenciano
Kapunan, was concerned, it was Funtecha who was the one driving the vehicle and presumably was one authorized by
the school to drive. The plaintiff and his heirs should not now be left to suffer without simultaneous recourse against the
petitioner for the consequent injury caused by a janitor doing a driving chore for the petitioner even for a short while.
For the purpose of recovering damages under the prevailing circumstances, it is enough that the plaintiff and the private
respondent heirs were able to establish the existence of employer-employee relationship between Funtecha and
petitioner Filamer and the fact that Funtecha was engaged in an act not for an independent purpose of his own but in
furtherance of the business of his employer. A position of responsibility on the part of the petitioner has thus been
satisfactorily demonstrated.

WHEREFORE, the motion for reconsideration of the decision dated October 16, 1990 is hereby GRANTED. The decision of
the respondent appellate court affirming the trial court decision is REINSTATED.

SO ORDERED
||| (Filamer Christian Institute v. Intermediate Appellate Court, G.R. No. 75112, [August 17, 1992], 287 PHIL 704-713)

THIRD DIVISION

[G.R. No. 187320. January 26, 2011.]

ATLANTA INDUSTRIES, INC. and/or ROBERT CHAN, petitioners, vs. APRILITO R. SEBOLINO, KHIM V.
COSTALES, ALVIN V. ALMOITE, and JOSEPH S. SAGUN, respondents.

DECISION

BRION, J p:

For resolution is the petition for review on certiorari 1 assailing the decision 2 and the resolution 3 of the
Court of Appeals (CA) rendered on November 4, 2008 and March 25, 2009, respectively, in CA-G.R. SP. No. 99340. 4
DHSACT
The Antecedents

The facts are summarized below.

In the months of February and March 2005, complainants Aprilito R. Sebolino, Khim V. Costales, Alvin V.
Almoite, Joseph S. Sagun, Agosto D. Zaño, Domingo S. Alegria, Jr., Ronie Ramos, Edgar Villagomez, Melvin
Pedregoza, Teofanes B. Chiong, Jr., Leonardo L. dela Cruz, Arnold A. Magalang, and Saturnino M. Mabanag filed
several complaints for illegal dismissal, regularization, underpayment, nonpayment of wages and other money
claims, as well as claims for moral and exemplary damages and attorney's fees against the petitioners Atlanta
Industries, Inc. (Atlanta) and its President and Chief Operating Officer Robert Chan. Atlanta is a domestic
corporation engaged in the manufacture of steel pipes.
The complaints were consolidated and were raffled to Labor Arbiter Daniel Cajilig, but were later transferred
to Labor Arbiter Dominador B. Medroso, Jr.
The complainants alleged that they had attained regular status as they were allowed to work with Atlanta
for more than six (6) months from the start of a purported apprenticeship agreement between them and the
company. They claimed that they were illegally dismissed when the apprenticeship agreement expired.
In defense, Atlanta and Chan argued that the workers were not entitled to regularization and to their money
claims because they were engaged as apprentices under a government-approved apprenticeship program. The
company offered to hire them as regular employees in the event vacancies for regular positions occur in the section
of the plant where they had trained. They also claimed that their names did not appear in the list of employees
(Master List) 5 prior to their engagement as apprentices.
On May 24, 2005, dela Cruz, Magalang, Zaño and Chiong executed a Pagtalikod at Pagwawalang Saysay
before Labor Arbiter Cajilig.
The Compulsory Arbitration Rulings
On April 24, 2006, Labor Arbiter Medroso dismissed the complaint with respect to dela Cruz, Magalang,
Zaño and Chiong, but found the termination of service of the remaining nine to be illegal. 6 Consequently, the
arbiter awarded the dismissed workers backwages, wage differentials, holiday pay and service incentive leave pay
amounting to P1,389,044.57 in the aggregate.
Atlanta appealed to the National Labor Relations Commission (NLRC). In the meantime, or on October 10,
2006, Ramos, Alegria, Villagomez, Costales and Almoite allegedly entered into a compromise agreement with
Atlanta. 7 The agreement provided that except for Ramos, Atlanta agreed to pay the workers a specified amount as
settlement, and to acknowledge them at the same time as regular employees.
On December 29, 2006, 8 the NLRC rendered a decision, on appeal, modifying the ruling of the labor arbiter,
as follows: (1) withdrawing the illegal dismissal finding with respect to Sagun, Mabanag, Sebolino and Pedregoza; (2)
affirming the dismissal of the complaints of dela Cruz, Zaño, Magalang and Chiong; (3) approving the compromise
agreement entered into by Costales, Ramos, Villagomez, Almoite and Alegria, and (4) denying all other claims.
STcAIa
 Sebolino, Costales, Almoite and Sagun moved for the reconsideration of the decision, but the NLRC denied
the motion in its March 30, 2007 9 resolution. The four then sought relief from the CA through a petition for
certiorari under Rule 65 of the Rules of Court. They charged that the NLRC committed grave abuse of discretion in:
(1) failing to recognize their prior employment with Atlanta; (2) declaring the second apprenticeship agreement
valid; (3) holding that the dismissal of Sagun, Mabanag, Sebolino and Melvin Pedregoza is legal; and (4) upholding
the compromise agreement involving Costales, Ramos, Villagomez, Almoite and Alegria.
The CA Decision
The CA granted the petition based on the following findings: 10
1. The respondents were already employees of the company before they entered into the first and second
apprenticeship agreements — Almoite and Costales were employed as early as December 2003 and, subsequently,
entered into a first apprenticeship agreement from May 13, 2004 to October 12, 2004; before this first agreement
expired, a second apprenticeship agreement, from October 9, 2004 to March 8, 2005 was executed. The same is true
with Sebolino and Sagun, who were employed by Atlanta as early as March 3, 2004. Sebolino entered into his first
apprenticeship agreement with the company from March 20, 2004 to August 19, 2004, and his second
apprenticeship agreement from August 20, 2004 to January 19, 2005. Sagun, on the other hand, entered into his
first agreement from May 28, 2004 to October 8, 2004, and the second agreement from October 9, 2004 to March 8,
2005.
2. The first and second apprenticeship agreements were defective as they were executed in violation of the
law and the rules. 11 The agreements did not indicate the trade or occupation in which the apprentice would be
trained; neither was the apprenticeship program approved by the Technical Education and Skills Development
Authority (TESDA).
3. The positions occupied by the respondents — machine operator, extruder operator and scaleman — are
usually necessary and desirable in the manufacture of plastic building materials, the company's main business.
Costales, Almoite, Sebolino and Sagun were, therefore, regular employees whose dismissals were illegal for lack of a
just or authorized cause and notice.
4. The compromise agreement entered into by Costales and Almoite, together with Ramos, Villagomez and
Alegria, was not binding on Costales and Almoite because they did not sign the agreement.
The petitioners themselves admitted that Costales and Almoite were initially planned to be a part of the
compromise agreement, but their employment has been regularized as early as January 11, 2006; hence, the
company did not pursue their inclusion in the compromise agreement. 12
The CA faulted the NLRC for failing to appreciate the evidence regarding the respondents' prior employment
with Atlanta. The NLRC recognized the prior employment of Costales and Almoite on Atlanta's monthly report for
December 2003 for the CPS Department/Section dated January 6, 2004. 13 This record shows that Costales and
Almoite were assigned to the company's first shift from 7:00 a.m. to 3:00 p.m. The NLRC ignored Sebolino and
Sagun's prior employment under the company's Production and Work Schedule for March 7 to 12, 2005 dated
March 3, 2004, 14 as they had been Atlanta's employees as early as March 3, 2004, with Sebolino scheduled to work
on March 7-12, 2005 at 7:00 a.m. to 7:00 p.m., while Sagun was scheduled to work for the same period but from
7:00 p.m. to 7:00 a.m. The CA noted that Atlanta failed to challenge the authenticity of the two documents before it
and the labor authorities. AaEcDS
Atlanta and Chan moved for reconsideration, but the CA denied the motion in a resolution rendered on
March 25, 2009. 15 Hence, the present petition.
The Petition
Atlanta seeks a reversal of the CA decision, contending that the appellate court erred in (1) concluding that
Costales, Almoite, Sebolino and Sagun were employed by Atlanta before they were engaged as apprentices; (2)
ruling that a second apprenticeship agreement is invalid; (3) declaring that the respondents were illegally dismissed;
and (4) disregarding the compromise agreement executed by Costales and Almoite. It submits the following
arguments:
First. The CA's conclusion that the respondent workers were company employees before they were engaged
as apprentices was primarily based on the Monthly Report 16 and the Production and Work Schedule for March 7-
12, 2005, 17 in total disregard of the Master List 18 prepared by the company accountant, Emelita M. Bernardo. The
names of Costales, Almoite, Sebolino and Sagun do not appear as employees in the Master List which "contained the
names of all the persons who were employed by and at petitioner." 19
Atlanta faults the CA for relying on the Production and Work Schedule and the Monthly Report which were
not sworn to, and in disregarding the Master List whose veracity was sworn to by Bernardo and by Alex Go who
headed the company's accounting division. It maintains that the CA should have given more credence to the Master
List.
Second. In declaring invalid the apprenticeship agreements it entered into with the respondent workers, the
CA failed to recognize the rationale behind the law on apprenticeship. It submits that under the law, 20
apprenticeship agreements are valid, provided they do not exceed six (6) months and the apprentices are paid the
appropriate wages of at least 75% of the applicable minimum wage.
The respondents initially executed a five-month apprenticeship program with Atlanta, at the end of which,
they "voluntarily and willingly entered into another apprenticeship agreement with the petitioner for the training of
a second skill" 21 for five months; thus, the petitioners committed no violation of the apprenticeship period laid
down by the law.
Further, the apprenticeship agreements, entered into by the parties, complied with the requisites under
Article 62 of the Labor Code; the company's authorized representative and the respondents signed the agreements
and these were ratified by the company's apprenticeship committee. The apprenticeship program itself was
approved and certified by the TESDA. 22 The CA, thus, erred in overturning the NLRC's finding that the
apprenticeship agreements were valid.
Third. There was no illegal dismissal as the respondent workers' tenure ended with the expiration of the
apprenticeship agreement they entered into. There was, therefore, no regular employer-employee relationship
between Atlanta and the respondent workers.
The Case for Costales, Almoite, Sebolino and Sagun
In a Comment filed on August 6, 2009, 23 Costales, Almoite, Sebolino and Sagun pray for a denial of the
petition for being procedurally defective and for lack of merit.
The respondent workers contend that the petition failed to comply with Section 4, Rule 45 of the Rules of
Court which requires that the petition be accompanied by supporting material portions of the records. The
petitioners failed to attach to the petition a copy of the Production and Work Schedule despite their submission that
the CA relied heavily on the document in finding the respondent workers' prior employment with Atlanta. They also
did not attach a copy of the compromise agreement purportedly executed by Costales and Almoite. For this reason,
the respondent workers submit that the petition should be dismissed. CSaITD
The respondents posit that the CA committed no error in holding that they were already Atlanta's
employees before they were engaged as apprentices, as confirmed by the company's Production and Work
Schedule. 24 They maintain that the Production and Work Schedule meets the requirement of substantial evidence
as the petitioners failed to question its authenticity. They point out that the schedule was prepared by Rose A. Quirit
and approved by Adolfo R. Lope, head of the company's PE/Spiral Section. They argue that it was highly unlikely that
the head of a production section of the company would prepare and assign work to the complainants if the latter
had not been company employees.
The respondent workers reiterate their mistrust of the Master List 25 as evidence that they were not
employees of the company at the time they became apprentices. They label the Master List as "self-serving, dubious
and even if considered as authentic, its content contradicts a lot of petitioner's claim and allegations," 26 thus —
1. Aside from the fact that the Master List is not legible, it contains only the names of inactive employees.
Even those found by the NLRC to have been employed in the company (such as Almoite, Costales and Sagun) do not
appear in the list. If Costales and Almoite had been employed with Atlanta since January 11, 2006, as the company
claimed, 27 their names would have been in the list, considering that the Master List accounts for all employees "as
of May 2006" — the notation carried on top of each page of the document.
2. There were no entries of employees hired or resigned in the years 2005 and 2006 despite the "as of May
2006" notation; several pages making up the Master List contain names of employees for the years 1999-2004.
3. The fact that Atlanta presented the purported Master List instead of the payroll raised serious doubts on
the authenticity of the list.
In sum, the respondent workers posit that the presentation of the Master List revealed the "intention of the
herein petitioner[s] to perpetually hide the fact of [their] prior employment." 28
On the supposed apprenticeship agreements they entered into, Costales, Almoite, Sebolino and Sagun
refuse to accept the agreements' validity, contending that the company's apprenticeship program is merely a ploy
"to continually deprive [them] of their rightful wages and benefits which are due them as regular employees." 29
They submit the following "indubitable facts and ratiocinations:" 30
1. The apprenticeship agreements were submitted to TESDA only in 2005 (with dates of receipt on "1/4/05"
& "2/22/05"), 31 when the agreements were supposed to have been executed in April or May 2004. Thus, the
submission was made long after the starting date of the workers' apprenticeship or even beyond the agreement's
completion/termination date, in violation of Section 23, Rule VI, Book II of the Labor Code.
2. The respondent workers were made to undergo apprenticeship for occupations different from those
allegedly approved by TESDA. TESDA approved Atlanta's apprenticeship program on "Plastic Molder" 32 and not for
extrusion molding process, engineering, pelletizing process and mixing process.
3. The respondents were already skilled workers prior to the apprenticeship program as they had been
employed and made to work in the different job positions where they had undergone training. Sagun and Sebolino,
together with Mabanag, Pedregoza, dela Cruz, Chiong, Magalang and Alegria were even given production
assignments and work schedule at the PE/Spiral Section from May 11, 2004 to March 23, 2005, and some of them
were even assigned to the 3:00 p.m.-11:00 p.m. and graveyard shifts (11:00 p.m. — 7:00 a.m.) during the period. 33
TaDAIS
4. The respondent workers were required to continue as apprentices beyond six months. The TESDA
certificate of completion indicates that the workers' apprenticeship had been completed after six months. Yet, they
were suffered to work as apprentices beyond that period.
Costales, Almoite, Sebolino and Sagun resolutely maintain that they were illegally dismissed, as the reason
for the termination of their employment — notice of the completion of the second apprenticeship agreement — did
not constitute either a just or authorized cause under Articles 282 and 283 of the Labor Code.
Finally, Costales and Almoite refuse to be bound by the compromise agreement 34 that Atlanta presented to
defeat the two workers' cause of action. They claim that the supposed agreement is invalid as against them,
principally because they did not sign it.
The Court's Ruling
The procedural issue
The respondent workers ask that the petition be dismissed outright for the petitioners' failure to attach to
the petition a copy of the Production and Work Schedule and a copy of the compromise agreement Costales and
Almoite allegedly entered into — material portions of the record that should accompany and support the petition,
pursuant to Section 4, Rule 45 of the Rules of Court.
In Mariners Polytechnic Colleges Foundation, Inc. v. Arturo J. Garchitorena 35 where the Court addressed
essentially the same issue arising from Section 2 (d), Rule 42 of the Rules of Court, 36 we held that the phrase "of
the pleadings and other material portions of the record . . . as would support the allegation of the petition clearly
contemplates the exercise of discretion on the part of the petitioner in the selection of documents that are deemed
to be relevant to the petition. The crucial issue to consider then is whether or not the documents accompanying the
petition sufficiently supported the allegations therein." 37
As in Mariners, we find that the documents attached to the petition sufficiently support the petitioners'
allegations. The accompanying CA decision 38 and resolution, 39 as well as those of the labor arbiter 40 and the
NLRC, 41 referred to the parties' position papers and even to their replies and rejoinders. Significantly, the CA
decision narrates the factual antecedents, defines the complainants' cause of action, and cites the arguments,
including the evidence the parties adduced. If any, the defect in the petition lies in the petitioners' failure to provide
legible copies of some of the material documents mentioned, especially several pages in the decisions of the labor
arbiter and of the NLRC. This defect, however, is not fatal as the challenged CA decision clearly summarized the
labor tribunal's rulings. We, thus, find no procedural obstacle in resolving the petition on the merits. AHCETa
The merits of the case
We find no merit in the petition. The CA committed no reversible error in nullifying the NLRC decision 42
and in affirming the labor arbiter's ruling, 43 as it applies to Costales, Almoite, Sebolino and Sagun. Specifically, the
CA correctly ruled that the four were illegally dismissed because (1) they were already employees when they were
required to undergo apprenticeship and (2) apprenticeship agreements were invalid.
The following considerations support the CA ruling.
First. Based on company operations at the time material to the case, Costales, Almoite, Sebolino and Sagun
were already rendering service to the company as employees before they were made to undergo apprenticeship.
The company itself recognized the respondents' status through relevant operational records — in the case of
Costales and Almoite, the CPS monthly report for December 2003 44 which the NLRC relied upon and, for Sebolino
and Sagun, the production and work schedule for March 7 to 12, 2005 45 cited by the CA.
Under the CPS monthly report, Atlanta assigned Costales and Almoite to the first shift (7:00 a.m. to 3:00
p.m.) of the Section's work. The Production and Work Schedules, in addition to the one noted by the CA, showed
that Sebolino and Sagun were scheduled on different shifts vis-à-vis the production and work of the company's
PE/Spiral Section for the periods July 5-10, 2004; 46 October 25-31, 2004; 47 November 8-14, 2004; 48 November
16-22, 2004; 49 January 3-9, 2005; 50 January 10-15, 2005; 51 March 7-12, 2005 52 and March 17-23, 2005. 53
We stress that the CA correctly recognized the authenticity of the operational documents, for the failure of
Atlanta to raise a challenge against these documents before the labor arbiter, the NLRC and the CA itself. The
appellate court, thus, found the said documents sufficient to establish the employment of the respondents before
their engagement as apprentices.
Second. The Master List 54 (of employees) that the petitioners heavily rely upon as proof of their position
that the respondents were not Atlanta's employees, at the time they were engaged as apprentices, is unreliable and
does not inspire belief.
 The list, consisting of several pages, is hardly legible. It requires extreme effort to sort out the names of the
employees listed, as well as the other data contained in the list. For this reason alone, the list deserves little or no
consideration. As the respondents also pointed out, the list itself contradicts a lot of Atlanta's claims and allegations,
thus: it lists only the names of inactive employees; even the names of those the NLRC found to have been employed
by Atlanta, like Costales and Almoite, and those who even Atlanta claims attained regular status on January 11,
2006, 55 do not appear in the list when it was supposed to account for all employees "as of May 6, 2006." Despite
the "May 6, 2006" cut off date, the list contains no entries of employees who were hired or who resigned in 2005
and 2006. We note that the list contains the names of employees from 1999 to 2004. ITSaHC
We cannot fault the CA for ignoring the Master List even if Bernardo, its head office accountant, swore to its
correctness and authenticity. 56 Its substantive unreliability gives it very minimal probative value. Atlanta would
have been better served, in terms of reliable evidence, if true copies of the payroll (on which the list was based,
among others, as Bernardo claimed in her affidavit) were presented instead.
Third. The fact that Costales, Almoite, Sebolino and Sagun were already rendering service to the company
when they were made to undergo apprenticeship (as established by the evidence) renders the apprenticeship
agreements irrelevant as far as the four are concerned. This reality is highlighted by the CA finding that the
respondents occupied positions such as machine operator, scaleman and extruder operator — tasks that are usually
necessary and desirable in Atlanta's usual business or trade as manufacturer of plastic building materials. 57 These
tasks and their nature characterized the four as regular employees under Article 280 of the Labor Code. Thus, when
they were dismissed without just or authorized cause, without notice, and without the opportunity to be heard,
their dismissal was illegal under the law. 58
Even if we recognize the company's need to train its employees through apprenticeship, we can only
consider the first apprenticeship agreement for the purpose. With the expiration of the first agreement and the
retention of the employees, Atlanta had, to all intents and purposes, recognized the completion of their training and
their acquisition of a regular employee status. To foist upon them the second apprenticeship agreement for a
second skill which was not even mentioned in the agreement itself, 59 is a violation of the Labor Code's
implementing rules 60 and is an act manifestly unfair to the employees, to say the least. This we cannot allow.
Fourth. The compromise agreement 61 allegedly entered into by Costales and Almoite, together with
Ramos, Villagomez and Alegria, purportedly in settlement of the case before the NLRC, is not binding on Costales
and Almoite because they did not sign it. The company itself admitted 62 that while Costales and Almoite were
initially intended to be a part of the agreement, it did not pursue their inclusion "due to their regularization as early
as January 11, 2006." 63
WHEREFORE, premises considered, we hereby DENY the petition for lack of merit. The assailed decision and
resolution of the Court of Appeals are AFFIRMED. Costs against the petitioner Atlanta Industries, Inc.

SO ORDERED

||| (Atlanta Industries, Inc. v. Sebolino, G.R. No. 187320, [January 26, 2011], 655 PHIL 678-694)

B. Employment of Aliens

Labor Code: Articles 40-42

Omnibus Rules: Book I, Rule XIV

THIRD DIVISION

[G.R. No. 93666. April 22, 1991.]

GENERAL MILLING CORPORATION and EARL TIMOTHY CONE, petitioners, vs. HON. RUBEN D. TORRES, in his capacity as
Secretary of Labor and Employment, HON. BIENVENIDO E. LAGUESMA, in his capacity as Acting Secretary of Labor and
Employment, and BASKETBALL COACHES ASSOCIATION OF THE PHILIPPINES, respondents.

Sobrevinas, Diaz, Hayudini & Bodegon Law Office for petitioners.

Rodrigo, Cuevas & De Borja for respondent BCAP.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; EMPLOYMENT; PROCEDURAL DUE PROCESS; FAILURE TO NOTIFY
PARTY OF APPEAL, CURED WHEN OPPOSING PARTY FILED THEIR MOTION FOR RECONSIDERATION. — The alleged failure
to notify petitioners of the appeal filed by private respondent BCAP was cured when petitioners were allowed to file
their Motion for Reconsideration before respondent Secretary of Labor.

2. ID.; ID.; EMPLOYMENT OF ALIEN; EMPLOYMENT PERMIT FROM THE DEPARTMENT OF LABOR; INDISPENSABLE. —
Petitioner GMC's claim that hiring of a foreign coach is an employer's prerogative has no legal basis at all. Under Article
40 of the Labor Code, an employer seeking employment of an alien must first obtain an employment permit from the
Department of Labor. Petitioner GMC's right to choose whom to employ is, of course, limited by the statutory
requirement of an alien employment permit.

3. CONSTITUTIONAL LAW; BILL OF RIGHTS; EQUAL PROTECTION CLAUSE; DISTINCTION BETWEEN NON-RESIDENT ALIEN
AND RESIDENT ALIEN; CASE AT BAR. — Petitioners will not find solace in the equal protection clause of the Constitution.
As pointed out by the Solicitor-General, no comparison can be made between petitioner Cone and Mr. Norman Black as
the latter is "a long time resident of the country," and thus, not subject to the provisions of Article 40 of the Labor Code
which apply only to "non-resident aliens." In any case, the term "non-resident alien" and its obverse "resident alien,"
here must be given their technical connotation under our law on immigration.

4. ID.; ID.; PROHIBITION AGAINST IMPAIRMENT OF OBLIGATIONS; NOT INFRINGED WHERE LEGAL PROVISIONS
REQUIRING ALIEN EMPLOYMENT PERMITS WERE IN EXISTENCE LONG BEFORE PETITIONERS ENTERED INTO THEIR
EMPLOYMENT CONTRACTS. — Neither can petitioners validly claim that implementation of respondent Secretary's
decision would amount to an impairment of the obligations of contracts. The provisions of the Labor Code and its
Implementing Rules and Regulations requiring alien employment permits were in existence long before petitioners
entered into their contract of employment. It is firmly settled that provisions of applicable laws, especially provisions
relating to matters affected with public policy, are deemed written into contracts. Private parties cannot constitutionally
contract away the otherwise applicable provisions of law.

5. LABOR AND SOCIAL LEGISLATION; LABOR CODE; SECRETARY OF LABOR; VESTED WITH JURISDICTION TO DETERMINE
THE QUESTION OF AVAILABILITY OF LOCAL WORKER. — The Labor Code itself specifically empowers respondent
Secretary to make a determination as to the availability of the services of a "person in the Philippines who is competent,
able and willing at the time of application to perform the services for which an alien is desired." In short, the
Department of Labor is the agency vested with jurisdiction to determine the question of availability of local workers. The
constitutional validity of legal provisions granting such jurisdiction and authority and requiring proof of non-availability
of local nationals able to carry out the duties of the position involved, cannot be seriously questioned.

6. ID.; ID.; ID.; MAY TAKE INTO ACCOUNT THE QUESTION OF WHETHER OR NOT EMPLOYMENT OF AN ALIEN WOULD
REDOUND TO THE NATIONAL INTEREST. — Petitioners apparently suggest that the Secretary of Labor is not authorized
to take into account the question of whether or not employment of an alien applicant would "redound to the national
interest" because Article 40 does not explicitly refer to such assessment. This argument (which seems impliedly to
concede that the relationship of basketball coaching and the national interest is tenuous and unreal) is not persuasive. In
the first place, the second paragraph of Article 40 says: "[t]he employment permit may be issued to a non-resident alien
or to the applicant employer after a determination of the non-availability of a person in the Philippines who is
competent, able and willing at the time of application to perform the services for which the alien is desired." The
permissive language employed in the Labor Code indicates that the authority granted involves the exercise of discretion
on the part of the issuing authority. In the second place, Article 12 of the Labor Code sets forth a statement of objectives
that the Secretary of Labor should, and indeed must, take into account in exercising his authority and jurisdiction
granted by the Labor Code.

7. REMEDIAL LAW; SPECIAL CIVIL ACTION; CERTIORARI; MOOT AND ACADEMIC; DISMISSAL OF PETITION NOT
AUTOMATIC. — While ordinarily this Court would dismiss a petition that clearly appears to have become moot and
academic, the circumstances of this case and the nature of the questions raised by petitioners are such that we do not
feel justified in leaving those questions unanswered. Moreover, assuming that an alien employment permit has in fact
been issued to petitioner Cone, the basis of the reversal by the Secretary of Labor of his earlier decision does not appear
on the record. If such reversal is based on some view of constitutional law or labor law different from those here set out,
then such employment permit, if one has been issued, would appear open to serious legal objections.

RESOLUTION

FELICIANO, J p:

On 1 May 1989, the National Capital Region of the Department of Labor and Employment issued Alien Employment
Permit No. M-0689-3-535 in favor of petitioner Earl Timothy Cone, a United States citizen, as sports consultant and
assistant coach for petitioner General Milling Corporation ("GMC").

On 27 December 1989, petitioners GMC and Cone entered into a contract of employment whereby the latter undertook
to coach GMC's basketball team.

On 15 January 1990, the Board of Special Inquiry of the Commission on Immigration and Deportation approved
petitioner Cone's application for a change of admission status from temporary visitor to prearranged employee.
On 9 February 1990, petitioner GMC requested renewal of petitioner Cone's alien employment permit. GMC also
requested that it be allowed to employ Cone as full-fledged coach. The DOLE Regional Director, Luna Piezas, granted the
request on 15 February 1990.

On 18 February 1990, Alien Employment Permit No. M-02903-881, valid until 25 December 1990, was issued.

Private respondent Basketball Coaches Association of the Philippines ("BCAP") appealed the issuance of said alien
employment permit to the respondent Secretary of Labor who, on 23 April 1990, issued a decision ordering cancellation
of petitioner Cone's employment permit on the ground that there was no showing that there is no person in the
Philippines who is competent, able and willing to perform the services required nor that the hiring of petitioner Cone
would redound to the national interest.

Petitioner GMC filed a Motion for Reconsideration and two (2) Supplemental Motions for Reconsideration but said
Motions were denied by Acting Secretary of Labor Bienvenido E. Laguesma in an Order dated 8 June 1990.

Petitioners are now before the Court on a Petition for Certiorari, dated 14 June 1990, alleging that: cdrep

1. respondent Secretary of Labor gravely abused his discretion when he revoked petitioner Cone's alien employment
permit; and

2. Section 6 (c), Rule XIV, Book I of the Omnibus Rules Implementing the Labor Code is null and void as it is in violation of
the enabling law as the Labor Code does not empower respondent Secretary to determine if the employment of an alien
would redound to national interest.

Deliberating on the present Petition for Certiorari, the Court considers that petitioners have failed to show any grave
abuse of discretion or any act without or in excess of jurisdiction on the part of respondent Secretary of Labor in
rendering his decision, dated 23 April 1990, revoking petitioner Cone's Alien Employment Permit.

The alleged failure to notify petitioners of the appeal filed by private respondent BCAP was cured when petitioners were
allowed to file their Motion for Reconsideration before respondent Secretary of Labor. 1

Petitioner GMC's claim that hiring of a foreign coach is an employer's prerogative has no legal basis at all. Under Article
40 of the Labor Code, an employer seeking employment of an alien must first obtain an employment permit from the
Department of Labor. Petitioner GMC's right to choose whom to employ is, of course, limited by the statutory
requirement of an alien employment permit.

Petitioners will not find solace in the equal protection clause of the Constitution. As pointed out by the Solicitor-General,
no comparison can be made between petitioner Cone and Mr. Norman Black as the latter is "a long time resident of the
country," and thus, not subject to the provisions of Article 40 of the Labor Code which apply only to "non-resident
aliens." In any case, the term "non-resident alien" and its obverse "resident alien," here must be given their technical
connotation under our law on immigration.

Neither can petitioners validly claim that implementation of respondent Secretary's decision would amount to an
impairment of the obligations of contracts. The provisions of the Labor Code and its Implementing Rules and Regulations
requiring alien employment permits were in existence long before petitioners entered into their contract of
employment. It is firmly settled that provisions of applicable laws, especially provisions relating to matters affected with
public policy, are deemed written into contracts. 2 Private parties cannot constitutionally contract away the otherwise
applicable provisions of law.

Petitioners' contention that respondent Secretary of Labor should have deferred to the findings of Commission on
Immigration and Deportation as to the necessity of employing petitioner Cone, is, again, bereft of legal basis. The Labor
Code itself specifically empowers respondent Secretary to make a determination as to the availability of the services of a
"person in the Philippines who is competent, able and willing at the time of application to perform the services for which
an alien is desired." 3 In short, the Department of Labor is the agency vested with jurisdiction to determine the question
of availability of local workers. The constitutional validity of legal provisions granting such jurisdiction and authority and
requiring proof of non-availability of local nationals able to carry out the duties of the position involved, cannot be
seriously questioned. prLL

Petitioners apparently also question the validity of the Implementing Rules and Regulations, specifically Section 6 (c),
Rule XIV, Book I of the Implementing Rules, as imposing a condition not found in the Labor Code itself Section 6 (c), Rule
XIV, Book I of the Implementing Rules, provides as follows:

"Section 6. Issuance of Employment Permit — The Secretary of Labor may issue an employment permit to the applicant
based on:

(a) Compliance by the applicant and his employer with the requirements of Section 2 hereof;
(b) Report of the Bureau Director as to the availability or non-availability of any person in the Philippines who is
competent and willing to do the job for which the services of the applicant are desired.

(c) His assessment as to whether or not the employment of the applicant will redound to the national interest;

(d) Admissibility of the alien as certified by the Commission on Immigration and Deportation;

(e) The recommendation of the Board of Investments or other appropriate government agencies if the applicant will be
employed in preferred areas of investments or in accordance with the imperative of economic development;

xxx xxx xxx"

(Emphasis supplied)

Article 40 of the Labor Code reads as follows:

"ART. 40. Employment permit of non-resident aliens. — Any alien seeking admission to the Philippines for employment
purposes and any domestic or foreign employer who desires to engage an alien for employment in the Philippines shall
obtain an employment permit from the Department of Labor.

The employment permit may be issued to a non-resident alien or to the applicant employer after a determination of the
non-availability of a person in the Philippines who is competent, able and willing at the time of application to perform
the services for which the alien is desired.

For an enterprise registered in preferred areas of investments, said employment permit may be issued upon
recommendation of the government agency charged with the supervision of said registered enterprise." (Emphasis
supplied)

Petitioners apparently suggest that the Secretary of Labor is not authorized to take into account the question of whether
or not employment of an alien applicant would "redound to the national interest" because Article 40 does not explicitly
refer to such assessment. This argument (which seems impliedly to concede that the relationship of basketball coaching
and the national interest is tenuous and unreal) is not persuasive. In the first place, the second paragraph of Article 40
says: "[t]he employment permit may be issued to a non-resident alien or to the applicant employer after a
determination of the non-availability of a person in the Philippines who is competent, able and willing at the time of
application to perform the services for which the alien is desired." The permissive language employed in the Labor Code
indicates that the authority granted involves the exercise of discretion on the part of the issuing authority. In the second
place, Article 12 of the Labor Code sets forth a statement of objectives that the Secretary of Labor should, and indeed
must, take into account in exercising his authority and jurisdiction granted by the Labor Code.

"ART. 12. Statement of Objectives. — It is the policy of the State:

a) To promote and maintain a state of full employment through improved manpower training, allocation and utilization;

xxx xxx xxx

c) To facilitate a free choice of available employment by persons seeking work in conformity with the national interest;

d) To facilitate and regulate the movement of workers in conformity with the national interest;

e) To regulate the employment of aliens, including the establishment of a registration and or work permit system;

xxx xxx xxx"

Thus, we find petitioners' arguments on the above points of constitutional law too insubstantial to require further
consideration. LexLib

Petitioners have very recently manifested to this Court that public respondent Secretary of Labor has reversed his earlier
decision and has issued an Employment Permit to petitioner Cone. Petitioners seek to withdraw their Petition for
Certiorari on the ground that it has become moot and academic.

While ordinarily this Court would dismiss a petition that clearly appears to have become moot and academic, the
circumstances of this case and the nature of the questions raised by petitioners are such that we do not feel justified in
leaving those questions unanswered. 4 Moreover, assuming that an alien employment permit has in fact been issued to
petitioner Cone, the basis of the reversal by the Secretary of Labor of his earlier decision does not appear on the record.
If such reversal is based on some view of constitutional law or labor law different from those here set out, then such
employment permit, if one has been issued, would appear open to serious legal objections.

ACCORDINGLY, the Court Resolved to DISMISS the Petition for Certiorari for lack of merit. Costs against petitioners
||| (General Milling Corp. v. Torres, G.R. No. 93666 (Resolution), [April 22, 1991], 273 PHIL 434-442)

FIRST DIVISION

[G.R. No. 128845. June 1, 2000.]

INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS (ISAE), petitioner, vs. HON. LEONARDO A. QUISUMBING in his
capacity as the Secretary of Labor and Employment; HON. CRESENCIANO B. TRAJANO in his capacity as the Acting
Secretary of Labor and Employment; DR. BRIAN MACCAULEY in his capacity as the Superintendent of International
School-Manila; and INTERNATIONAL SCHOOL, INC., respondents.

Azcuna Yorac Sarmiento Arroyo & Chua Law Offices for petitioner.

The Solicitor General for public respondent.

Bernas Law Office for private respondent.

SYNOPSIS

Private respondent International School, Inc. is a domestic educational institution established primarily for dependents
of foreign diplomatic personnel and other temporary residents. It hires both foreign and local teachers as members of its
faculty classifying them as foreign-hires and local-hires. It grants foreign-hires certain benefits as housing,
transportation, shipping costs, taxes and home leave travel allowance which are not accorded to local-hires. Foreign-
hires are also paid a salary rate of twenty-five percent (25%) more than the local-hires. The school justified the
difference on two "significant economic disadvantages" foreign-hires have to endure, namely: (a) the "dislocation
factor" and (b) limited tenure. When negotiations for a new collective bargaining agreement were held in June 1995,
petitioner International School Alliance of Educators (ISAE) as a legitimate labor union and the collective bargaining
representative of all the faculty members of the school contested the difference in salary rates between foreign and
local hires. This issue, as well as the question of whether foreign-hires should be included in the appropriate bargaining
unit, eventually caused a deadlock between the parties. The Department of Labor and Employment (DOLE) assumed
jurisdiction over the dispute. It subsequently issued an Order resolving the issues in favor of the school. The motion for
reconsideration of ISAE was also denied. Hence, this petition.

The Court ruled that the point-of-hire classification employed by respondent School to justify the distinction in the salary
rates of foreign-hires and local-hires was an invalid classification. There is no reasonable distinction between the
services rendered by foreign-hires and local-hires. The practice of the School of according higher salaries to foreign-hires
contravenes public policy and, certainly, does not deserve the sympathy of the Court.

The Court agreed, however, that foreign-hires do not belong to the same bargaining unit as the local-hires. The basic
test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the combination which will best
assure to all employees the exercise of their collective bargaining rights. It does not appear that foreign-hires have
indicated their intention to be grouped together with local-hires for purposes of collective bargaining. The collective
bargaining history in the School also showed that these groups were always treated separately. Foreign-hires have
limited tenure; local-hires enjoy security of tenure. Although foreign-hires perform similar functions under the same
working conditions as the local-hires, foreign-hires are accorded certain benefits not granted to local-hires. These
benefits, such as housing, transportation, shipping costs, taxes, and home leave travel allowance, are reasonably related
to their status as foreign-hires, and justified the exclusion of the former from the latter. To include foreign-hires in a
bargaining unit with local-hires would not assure either group the exercise of their respective collective bargaining
rights. The orders of the Secretary of Labor were reversed and set aside insofar as they upheld the practice of
respondent School of according foreign-hires higher salaries than local-hires.

SYLLABUS

1. POLITICAL LAW; CONSTITUTIONAL LAW; PUBLIC POLICY ABHORS INEQUALITY AND DISCRIMINATION. — That public
policy abhors inequality and discrimination is beyond contention. Our Constitution and laws reflect the policy against
these evils. The Constitution in the Article on Social Justice and Human Rights exhorts Congress to "give highest priority
to the enactment of measures that protect and enhance the right of all people to human dignity, reduce social,
economic, and political inequalities." The very broad Article 19 of the Civil Code requires every person, "in the exercise
of his rights and in the performance of this duties, [to] act with justice, give everyone his due, and observe honesty and
good faith."

2. INTERNATIONAL LAW; SPRINGS FROM GENERAL PRINCIPLES OF LAW WHICH PROSCRIBE DISCRIMINATION. —
International law, which springs from general principles of law, likewise proscribes discrimination. General principles of
law include principles of equity, i.e., the general principles of fairness and justice, based on the test of what is
reasonable. The Universal Declaration of Human Rights, the International Covenant on Economic, Social, and Cultural
Rights, the International Convention on the Elimination of All Forms of Racial Discrimination, the Convention against
Discrimination in Education, the Convention (No. 111) Concerning Discrimination in Respect of Employment and
Occupation — all embody the general principle against discrimination, the very antithesis of fairness and justice. The
Philippines, through its Constitution, has incorporated this principle as part of its national laws.

3. POLITICAL LAW; CONSTITUTIONAL LAW; SOCIAL JUSTICE AND HUMAN RIGHTS; LABOR; HUMANE CONDITIONS OF
WORK INCLUDES THE MANNER BY WHICH EMPLOYERS TREAT THEIR EMPLOYEES. — The Constitution specifically
provides that labor is entitled to "humane conditions of work." These conditions are not restricted to the physical
workplace — the factory, the office or the field — but include as well the manner by which employers treat their
employees.

4. LABOR AND SOCIAL LEGISLATION; LABOR CODE; THE STATE SHALL ENSURE EQUAL WORK OPPORTUNITIES
REGARDLESS OF SEX, RACE OR CREED. — The Constitution also directs the State to promote "equality of employment
opportunities for all." Similarly, the Labor Code provides that the State shall "ensure equal work opportunities regardless
of sex, race or creed." It would be an affront to both the spirit and letter of these provisions if the State, in spite of its
primordial obligation to promote and ensure equal employment opportunities, closes its eyes to unequal and
discriminatory terms and conditions of employment.

5. ID.; ID.; PROHIBITS DISCRIMINATION IN TERMS OF WAGES. — Discrimination, particularly in terms of wages, is
frowned upon by the Labor Code. Article 135, for example, prohibits and penalizes the payment of lesser compensation
to a female employee as against a male employee for work of equal value. Article 248 declares it an unfair labor practice
for an employer to discriminate in regard to wages in order to encourage or discourage membership in any labor
organization.

6. INTERNATIONAL LAW; INTERNATIONAL COVENANT ON ECONOMIC, SOCIAL AND CULTURAL RIGHTS;

INSTITUTIONALIZED THE LONG HONORED LEGAL TRUISM OF "EQUAL PAY FOR EQUAL WORK." — [T]he International
Covenant on Economic, Social, and Cultural Rights, in Article 7 thereof, provides: The States Parties to the present
Covenant recognize the right of everyone to the enjoyment of just and favourable conditions of work, which ensure, in
particular: a. Remuneration which provides all workers, as a minimum, with: i. Fair wages and equal remuneration for
work of equal value without distinction of any kind, in particular women being guaranteed conditions of work not
inferior to those enjoyed by men, with equal pay for equal work; . . . . The foregoing provisions impregnably
institutionalize in this jurisdiction the long honored legal truism of "equal pay for equal work." Persons who work with
substantially equal qualifications, skill, effort and responsibility, under similar conditions, should be paid similar salaries.

7. LABOR AND SOCIAL LEGISLATION; LABOR CODE; CONDITIONS OF EMPLOYMENT; EQUAL WORK FOR EQUAL PAY;
APPLIED IN CASE AT BAR. — This rule applies to the School, its "international character" notwithstanding. The School
contends that petitioner has not adduced evidence that local-hires perform work equal to that of foreign-hires. The
Court finds this argument a little cavalier. If an employer accords employees the same position and rank, the
presumption is that these employees perform equal work. This presumption is borne by logic and human experience. If
the employer pays one employee less than the rest, it is not for that employee to explain why he receives less or why
the others receive more. That would be adding insult to injury. The employer has discriminated against that employee; it
is for the employer to explain why the employee is treated unfairly. The employer in this case has failed to discharge this
burden. There is no evidence here that foreign-hires perform 25% more efficiently or effectively than the local-hires.
Both groups have similar functions and responsibilities, which they perform under similar working conditions. The
School cannot invoke the need to entice foreign-hires to leave their domicile to rationalize the distinction in salary rates
without violating the principle of equal work for equal pay.

8. ID.; ID.; ID.; SALARY; DEFINED. — "Salary" is defined in Black's Law Dictionary (5th ed.) as "a reward or recompense for
services performed." Similarly, the Philippine Legal Encyclopedia states that "salary" is the "[c]onsideration paid at
regular intervals for the rendering of services." In Songco v. National Labor Relations Commission, we said that: "salary"
means a recompense or consideration made to a person for his pains or industry in another man's business. Whether it
be derived from "salarium," or more fancifully from "sal," the pay of the Roman soldier, it carries with it the
fundamental idea of compensation for services rendered.

9. ID.; ID.; ID.; ID.; "DISLOCATION FACTOR" AND FOREIGN HIRES' LIMITED TENURE CANNOT SERVE AS VALID BASES FOR
DISTINCTION IN SALARY RATES. — While we recognize the need of the School to attract foreign-hires, salaries should not
be used as an enticement to the prejudice of local-hires. The local-hires perform the same services as foreign-hires and
they ought to be paid the same salaries as the latter. For the same reason, the "dislocation factor" and the foreign-hires'
limited tenure also cannot serve as valid bases for the distinction in salary rates. The dislocation factor and limited
tenure affecting foreign-hires are adequately compensated by certain benefits accorded them which are not enjoyed by
local-hires, such as housing, transportation, shipping costs, taxes and home leave travel allowances.

10. ID.; ID.; THE STATE HAS THE RIGHT AND DUTY TO REGULATE THE RELATIONS BETWEEN LABOR AND CAPITAL. — The
Constitution enjoins the State to "protect the rights of workers and promote their welfare," "to afford labor full
protection." The State, therefore, has the right and duty to regulate the relations between labor and capital. These
relations are not merely contractual but are so impressed with public interest that labor contracts, collective bargaining
agreements included, must yield to the common good. Should such contracts contain stipulations that are contrary to
public policy, courts will not hesitate to strike down these stipulations.

11. ID.; ID.; CONDITIONS OF EMPLOYMENT; POINT-OF-HIRE CLASSIFICATION TO JUSTIFY THE DISTINCTION IN THE
SALARY RATES OF FOREIGN-HIRES AND LOCAL-HIRES IS AN INVALID CLASSIFICATION. — [W]e find the point-of-hire
classification employed by respondent School to justify the distinction in the salary rates of foreign-hires and local-hires
to be an invalid classification. There is no reasonable distinction between the services rendered by foreign-hires and
local-hires. The practice of the School of according higher salaries to foreign-hires contravenes public policy and,
certainly, does not deserve the sympathy of this Court.

12. ID.; ID.; LABOR RELATIONS; COLLECTIVE BARGAINING UNIT; ELUCIDATED. — A bargaining unit is "a group of
employees of a given employer, comprised of all or less than all of the entire body of employees, consistent with equity
to the employer, indicate to be the best suited to serve the reciprocal rights and duties of the parties under the
collective bargaining provisions of the law." The factors in determining the appropriate collective bargaining unit are (1)
the will of the employees (Globe Doctrine); (2) affinity and unity of the employees' interest, such as substantial similarity
of work and duties, or similarity of compensation and working conditions (Substantial Mutual Interests Rule); (3) prior
collective bargaining history; and (4) similarity of employment status. The basic test of an asserted bargaining unit's
acceptability is whether or not it is fundamentally the combination which will best assure to all employees the exercise
of their collective bargaining rights. cADEHI

13. ID.; ID.; ID.; ID.; FOREIGN-HIRES SHOULD NOT BELONG TO THE SAME BARGAINING UNIT AS LOCAL-HIRES. — We
agree, however, that foreign-hires do not belong to the same bargaining unit as the local-hires. . . . It does not appear
that foreign-hires have indicated their intention to be grouped together with local-hires for purposes of collective
bargaining. The collective bargaining history in the School also shows that these groups were always treated separately.
Foreign-hires have limited tenure; local-hires enjoy security of tenure. Although foreign-hires perform similar functions
under the same working conditions as the local-hires, foreign-hires are accorded certain benefits not granted to local-
hires. These benefits, such as housing, transportation, shipping costs, taxes, and home leave travel allowance, are
reasonably related to their status as foreign-hires, and justify the exclusion of the former from the latter. To include
foreign-hires in a bargaining unit with local-hires would not assure either group the exercise of their respective collective
bargaining rights.

DECISION

KAPUNAN, J p:

Receiving salaries less than their counterparts hired abroad, the local-hires of private respondent School, mostly
Filipinos, cry discrimination. We agree. That the local-hires are paid more than their colleagues in other schools is, of
course, beside the point. The point is that employees should be given equal pay for work of equal value. That is a
principle long honored in this jurisdiction. That is a principle that rests on fundamental notions of justice. That is the
principle we uphold today.

Private respondent International School, Inc. (the School, for short), pursuant to Presidential Decree 732, is a domestic
educational institution established primarily for dependents of foreign diplomatic personnel and other temporary
residents. 1 To enable the School to continue carrying out its educational program and improve its standard of
instruction, Section 2(c) of the same decree authorizes the School to

employ its own teaching and management personnel selected by it either locally or abroad, from Philippine or other
nationalities, such personnel being exempt from otherwise applicable laws and regulations attending their employment,
except laws that have been or will be enacted for the protection of employees.

Accordingly, the School hires both foreign and local teachers as members of its faculty, classifying the same into two: (1)
foreign-hires and (2) local-hires. The School employs four tests to determine whether a faculty member should be
classified as a foreign-hire or a local hire:

a. What is one's domicile?

b. Where is one's home economy?

c. To which country does one owe economic allegiance?

d. Was the individual hired abroad specifically to work in the School and was the School responsible for bringing that
individual to the Philippines? 2

Should the answer to any of these queries point to the Philippines, the faculty member is classified as a local hire;
otherwise, he or she is deemed a foreign-hire. llcd

The School grants foreign-hires certain benefits not accorded local-hires. These include housing, transportation, shipping
costs, taxes, and home leave travel allowance. Foreign-hires are also paid a salary rate twenty-five percent (25%) more
than local-hires. The School justifies the difference on two "significant economic disadvantages" foreign-hires have to
endure, namely: (a) the "dislocation factor" and (b) limited tenure. The School explains:

A foreign-hire would necessarily have to uproot himself from his home country, leave his family and friends, and take
the risk of deviating from a promising career path — all for the purpose of pursuing his profession as an educator, but
this time in a foreign land. The new foreign hire is faced with economic realities: decent abode for oneself and/or for
one's family, effective means of transportation, allowance for the education of one's children, adequate insurance
against illness and death, and of course the primary benefit of a basic salary/retirement compensation.

Because of a limited tenure, the foreign hire is confronted again with the same economic reality after his term: that he
will eventually and inevitably return to his home country where he will have to confront the uncertainty of obtaining
suitable employment after a long period in a foreign land.

The compensation scheme is simply the School's adaptive measure to remain competitive on an international level in
terms of attracting competent professionals in the field of international education. 3

When negotiations for a new collective bargaining agreement were held on June 1995, petitioner International School
Alliance of Educators, "a legitimate labor union and the collective bargaining representative of all faculty members" 4 of
the School, contested the difference in salary rates between foreign and local-hires. This issue, as well as the question of
whether foreign-hires should be included in the appropriate bargaining unit, eventually caused a deadlock between the
parties.

On September 7, 1995, petitioner filed a notice of strike. The failure of the National Conciliation and Mediation Board to
bring the parties to a compromise prompted the Department of Labor and Employment (DOLE) to assume jurisdiction
over the dispute. On June 10, 1996, the DOLE Acting Secretary, Cresenciano B. Trajano, issued an Order resolving the
parity and representation issues in favor of the School. Then DOLE Secretary Leonardo A. Quisumbing subsequently
denied petitioner's motion for reconsideration in an Order dated March 19, 1997. Petitioner now seeks relief in this
Court.

Petitioner claims that the point-of-hire classification employed by the School is discriminatory to Filipinos and that the
grant of higher salaries to foreign-hires constitutes racial discrimination.

The School disputes these claims and gives a breakdown of its faculty members, numbering 38 in all, with nationalities
other than Filipino, who have been hired locally and classified as local hires. 5 The Acting Secretary of Labor found that
these non-Filipino local-hires received the same benefits as the Filipino local-hires:

The compensation package given to local-hires has been shown to apply to all, regardless of race. Truth to tell, there are
foreigners who have been hired locally and who are paid equally as Filipino local hires. 6

The Acting Secretary upheld the point-of-hire classification for the distinction in salary rates:

The principle "equal pay for equal work" does not find application in the present case. The international character of the
School requires the hiring of foreign personnel to deal with different nationalities and different cultures, among the
student population.

We also take cognizance of the existence of a system of salaries and benefits accorded to foreign hired personnel which
system is universally recognized. We agree that certain amenities have to be provided to these people in order to entice
them to render their services in the Philippines and in the process remain competitive in the international market.

Furthermore, we took note of the fact that foreign hires have limited contract of employment unlike the local hires who
enjoy security of tenure. To apply parity therefore, in wages and other benefits would also require parity in other terms
and conditions of employment which include the employment contract. cda

A perusal of the parties' 1992-1995 CBA points us to the conditions and provisions for salary and professional
compensation wherein the parties agree as follows:

All members of the bargaining unit shall be compensated only in accordance with Appendix C hereof provided that the
Superintendent of the School has the discretion to recruit and hire expatriate teachers from abroad, under terms and
conditions that are consistent with accepted international practice.

Appendix C of said CBA further provides:

The new salary schedule is deemed at equity with the Overseas Recruited Staff (OSRS) salary schedule. The 25%
differential is reflective of the agreed value of system displacement and contracted status of the OSRS as differentiated
from the tenured status of Locally Recruited Staff (LRS).

To our mind, these provisions demonstrate the parties' recognition of the difference in the status of two types of
employees, hence, the difference in their salaries.
The Union cannot also invoke the equal protection clause to justify its claim of parity. It is an established principle of
constitutional law that the guarantee of equal protection of the laws is not violated by legislation or private covenants
based on reasonable classification. A classification is reasonable if it is based on substantial distinctions and apply to all
members of the same class. Verily, there is a substantial distinction between foreign hires and local hires, the former
enjoying only a limited tenure, having no amenities of their own in the Philippines and have to be given a good
compensation package in order to attract them to join the teaching faculty of the School. 7

We cannot agree.

That public policy abhors inequality and discrimination is beyond contention. Our Constitution and laws reflect the
policy against these evils. The Constitution 8 in the Article on Social Justice and Human Rights exhorts Congress to "give
highest priority to the enactment of measures that protect and enhance the right of all people to human dignity, reduce
social, economic, and political inequalities." The very broad Article 19 of the Civil Code requires every person, "in the
exercise of his rights and in the performance of his duties, [to] act with justice, give everyone his due, and observe
honesty and good faith."

International law, which springs from general principles of law, 9 likewise proscribes discrimination. General principles of
law include principles of equity, 10 i.e., the general principles of fairness and justice, based on the test of what is
reasonable. 11 The Universal Declaration of Human Rights, 12 the International Covenant on Economic, Social and
Cultural Rights, 13 the International Convention on the Elimination of All Forms of Racial Discrimination, 14 the
Convention against Discrimination in Education, 15 the Convention (No. 111) Concerning Discrimination in Respect of
Employment and Occupation 16 — all embody the general principle against discrimination, the very antithesis of
fairness and justice. The Philippines, through its Constitution, has incorporated this principle as part of its national laws.

In the workplace, where the relations between capital and labor are often skewed in favor of capital, inequality and
discrimination by the employer are all the more reprehensible.

The Constitution 17 specifically provides that labor is entitled to "humane conditions of work." These conditions are not
restricted to the physical workplace — the factory, the office or the field — but include as well the manner by which
employers treat their employees.

The Constitution 18 also directs the State to promote "equality of employment opportunities for all." Similarly, the Labor
Code 19 provides that the State shall "ensure equal work opportunities regardless of sex, race or creed." It would be an
affront to both the spirit and letter of these provisions if the State, in spite of its primordial obligation to promote and
ensure equal employment opportunities, closes its eyes to unequal and discriminatory terms and conditions of
employment. 20

Discrimination, particularly in terms of wages, is frowned upon by the Labor Code. Article 135, for example, prohibits
and penalizes 21 the payment of lesser compensation to a female employee as against a male employee for work of
equal value. Article 248 declares it an unfair labor practice for an employer to discriminate in regard to wages in order to
encourage or discourage membership in any labor organization.

Notably, the International Covenant on Economic, Social, and Cultural Rights, supra, in Article 7 thereof, provides:

The States Parties to the present Covenant recognize the right of everyone to the enjoyment of just and favorable
conditions of work, which ensure, in particular:

a. Remuneration which provides all workers, as a minimum, with:

i. Fair wages and equal remuneration for work of equal value without distinction of any kind, in particular women being
guaranteed conditions of work not inferior to those enjoyed by men, with equal pay for equal work;

xxx xxx xxx

The foregoing provisions impregnably institutionalize in this jurisdiction the long honored legal truism of "equal pay for
equal work." Persons who work with substantially equal qualifications, skill, effort and responsibility, under similar
conditions, should be paid similar salaries. 22 This rule applies to the School, its "international character"
notwithstanding.

The School contends that petitioner has not adduced evidence that local-hires perform work equal to that of foreign-
hires. 23 The Court finds this argument a little cavalier. If an employer accords employees the same position and rank,
the presumption is that these employees perform equal work. This presumption is borne by logic and human
experience. If the employer pays one employee less than the rest, it is not for that employee to explain why he receives
less or why the others receive more. That would be adding insult to injury. The employer has discriminated against that
employee; it is for the employer to explain why the employee is treated unfairly.
The employer in this case has failed to discharge this burden. There is no evidence here that foreign-hires perform 25%
more efficiently or effectively than the local-hires. Both groups have similar functions and responsibilities, which they
perform under similar working conditions.

The School cannot invoke the need to entice foreign-hires to leave their domicile to rationalize the distinction in salary
rates without violating the principle of equal work for equal pay.

"Salary" is defined in Black's Law Dictionary (5th ed.) as "a reward or recompense for services performed." Similarly, the
Philippine Legal Encyclopedia states that "salary" is the "[c]onsideration paid at regular intervals for the rendering of
services." In Songco v. National Labor Relations Commission, 24 we said that:

"salary" means a recompense or consideration made to a person for his pains or industry in another man's business.
Whether it be derived from "salarium," or more fancifully from "sal," the pay of the Roman soldier, it carries with it the
fundamental idea of compensation for services rendered. (Emphasis supplied.)

While we recognize the need of the School to attract foreign-hires, salaries should not be used as an enticement to the
prejudice of local-hires. The local-hires perform the same services as foreign-hires and they ought to be paid the same
salaries as the latter. For the same reason, the "dislocation factor" and the foreign-hires' limited tenure also cannot
serve as valid bases for the distinction in salary rates. The dislocation factor and limited tenure affecting foreign-hires
are adequately compensated by certain benefits accorded them which are not enjoyed by local-hires, such as housing,
transportation, shipping costs, taxes and home leave travel allowances.

The Constitution enjoins the State to "protect the rights of workers and promote their welfare," 25 "to afford labor full
protection." 26 The State, therefore, has the right and duty to regulate the relations between labor and capital. 27 These
relations are not merely contractual but are so impressed with public interest that labor contracts, collective bargaining
agreements included, must yield to the common good. 28 Should such contracts contain stipulations that are contrary to
public policy, courts will not hesitate to strike down these stipulations.

In this case, we find the point-of-hire classification employed by respondent School to justify the distinction in the salary
rates of foreign-hires and local hires to be an invalid classification. There is no reasonable distinction between the
services rendered by foreign-hires and local-hires. The practice of the School of according higher salaries to foreign-hires
contravenes public policy and, certainly, does not deserve the sympathy of this Court.

We agree, however, that foreign-hires do not belong to the same bargaining unit as the local-hires. LLjur

A bargaining unit is "a group of employees of a given employer, comprised of all or less than all of the entire body of
employees, consistent with equity to the employer indicate to be the best suited to serve the reciprocal rights and
duties of the parties under the collective bargaining provisions of the law." 29 The factors in determining the
appropriate collective bargaining unit are (1) the will of the employees (Globe Doctrine); (2) affinity and unity of the
employees' interest, such as substantial similarity of work and duties, or similarity of compensation and working
conditions (Substantial Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of employment
status. 30 The basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the
combination which will best assure to all employees the exercise of their collective bargaining rights. 31

It does not appear that foreign-hires have indicated their intention to be grouped together with local-hires for purposes
of collective bargaining. The collective bargaining history in the School also shows that these groups were always treated
separately. Foreign-hires have limited tenure; local-hires enjoy security of tenure. Although foreign-hires perform similar
functions under the same working conditions as the local-hires, foreign-hires are accorded certain benefits not granted
to local-hires. These benefits, such as housing, transportation, shipping costs, taxes, and home leave travel allowance,
are reasonably related to their status as foreign-hires, and justify the exclusion of the former from the latter. To include
foreign-hires in a bargaining unit with local-hires would not assure either group the exercise of their respective collective
bargaining rights.

WHEREFORE, the petition is GIVEN DUE COURSE. The petition is hereby GRANTED IN PART. The Orders of the Secretary
of Labor and Employment dated June 10, 1996 and March 19, 1997, are hereby REVERSED and SET ASIDE insofar as they
uphold the practice of respondent School of according foreign-hires higher salaries than local hires.

SO ORDERED

||| (International School Alliance of Educators v. Quisumbing, G.R. No. 128845, [June 1, 2000], 388 PHIL 661-678)