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G.R. No.

193897 January 23, 2013 Foundation but these could no longer be credited to her
because she failed to continue with her studies within five
UNIVERSITY OF THE EAST, DEAN ELEANOR JAVIER, years.
RONNIE GILLEGO and DR. JOSE C.
BENEDICTO,Petitioners, In 2001 UE and the UE Faculty Association entered into a
vs. new CBA7 that would have the school extend probationary
ANALIZA F. PEPANIO and MARITI D. full-time appointments to full-time faculty members who
BUENO, Respondents. did not yet have the required postgraduate degrees
provided that the latter comply with such requirement
DECISION within their probationary period. The CBA granted UE,
however, the option to replace these appointees during
ABAD, J.: their probationary period if a qualified teacher becomes
available at the end of the semester.8
This case is about the employment status of college
teachers with no postgraduate degrees who have been Pursuant to the new CBA, UE extended probationary
repeatedly extended semester-to-semester appointments appointments to respondents Bueno and Pepanio. Two
as such. years later in October 2003, the Dean of the UE College of
Arts and Sciences, petitioner Eleanor Javier, sent
notices9 to probationary faculty members, reminding them
The Facts and the Case of the expiration of the probationary status of those
lacking in postgraduate qualification by the end of the first
In 1992, the Department of Education, Culture and Sports semester of the School Year 2003-2004. Pepanio replied
(DECS) issued the Revised Manual of Regulations for that she was enrolled at the Polytechnic University of the
Private Schools,1 Article IX, Section 44, paragraph 1 (a), of Philippines Graduate School. Bueno, on the other hand,
which requires college faculty members to have a master's replied that she was not interested in acquiring tenure as
degree as a minimum educational qualification for she was returning to her province.
acquiring regular status.2
In any event, Dean Javier subsequently issued a
In 1994 petitioner University of the East (UE) and the UE memorandum, stating that she would recommend the
Faculty Association executed a five-year Collective extension of the probationary appointees for two more
Bargaining Agreement (CBA) with effect up to 1999 which semesters for those who want it based on the wishes of the
provided, among others, that UE shall extend only University President. Respondent Pepanio requested a
semester-to-semester appointments to college faculty three-semester extension but Dean Javier denied this
staffs who did not possess the minimum qualifications. request and directed Pepanio to ask for just a two-
Those with such qualifications shall be given probationary semester extension. The records do not show if Bueno
appointments and their performance on a full-time or full- submitted a request for extension. At any rate, the school
load basis shall be reviewed for four semesters.3 eventually wrote respondents, extending their
probationary period but neither Pepanio nor Bueno
Meantime, on February 7, 1996 several concerned reported for work.
government agencies issued DECS-CHED-TESDA-DOLE
Joint Order 14 which reiterated the policy embodied in the Bueno later wrote UE, demanding that it consider her a
Manual of Regulations that "teaching or academic regular employee based on her six-and-a-half-year service
personnel who do not meet the minimum academic on a full-load basis, given that UE hired her in 1997 when
qualifications shall not acquire tenure or regular status." In what was in force was still the 1994 CBA. Pepanio made
consonance with this, the UE President issued a University the same demand, citing her three-and-a-half years of
Policy stating that, beginning the School Year 1996-1997, it service on a full-load basis.10 When UE did not heed their
would hire those who have no postgraduate units or demands, respondents filed cases of illegal dismissal
master’s degree for its college teaching staffs, in the against the school before the Labor Arbiter ’s (LA) office.
absence of qualified applicants, only on a semester-to-
semester basis. For its defense, UE countered that it never regarded
respondents as regular employees since they did not hold
UE hired respondent Mariti D. Bueno in 19975 and the required master’s degree that government rules
respondent Analiza F. Pepanio in 2000,6 both on a required as minimum educational qualification for their
semester-to-semester basis to teach in its college. They kind of work.
could not qualify for probationary or regular status
because they lacked postgraduate degrees. Bueno enrolled On March 10, 2005 the LA held that Bueno and Pepanio
in six postgraduate subjects at the Philippine Normal were regular employees, given that they taught at UE for at
University’s graduate school but there is no evidence that least four semesters under the old CBA.11 The new CBA,
she finished her course. Pepanio earned 27 units in her said the LA, could not deprive them of the employment
graduate studies at the Gregorio Araneta University benefits they already enjoyed. Since UE enjoined Pepanio
from attending her classes and since it did not give Bueno The Court’s Rulings
any teaching load, they were dismissed without just cause.
The LA directed UE to reinstate respondents with One. Respondents Bueno and Pepanio contend that UE
backwages.12 Dissatisfied, UE appealed to the National filed its appeal to the NLRC beyond the required 10-day
Labor Relations Commission (NLRC). period. They point out that the postmaster gave notice to
Atty. Mison on March 17, 2005 to claim his mail that
Bueno and Pepanio questioned the timeliness of the appeal contained the LA Decision. He was deemed in receipt of
to the NLRC. They pointed to the postmaster’s certification that decision five days after the notice or on March 22,
that its office received the mail containing the LA’s 2005. UE had 10 days from the latter date or until April 1,
Decision on March 17, 2005 and "informed the Office of 2005 within which to file its appeal from that decision. UE
Atty. Mison right away but they only got the letter on April contends, on the other hand, that the period of appeal
4, 2005." Bueno and Pepanio claim that the 10-day period should be counted from April 4, 2005, the date appearing
for appeal should be counted from March 22, 2005, five on the registry return receipt of the mail addressed to its
days after the postmaster’s first notice to Atty. Mison to counsel.
claim his mail.
For completeness of service by registered mail, the
On September 27, 2006 the NLRC Third Division set aside reckoning period starts either (a) from the date of actual
the LA Decision.1âwphi1 It rejected the technical objection receipt of the mail by the addressee or (b) after five days
and ruled that the four-semester probationary period from the date he received the first notice from the
provided under the old CBA did not automatically confer postmaster.14There must be a conclusive proof, however,
permanent status to Bueno and Pepanio. They still had to that the registry notice was received by or at least served
meet the standards for permanent employment provided on the addressee before the five-day period begins to
under the Manual of Regulations and the Joint Order run.15
mentioned above. The non-renewal of their contract was
based on their failure to obtain the required postgraduate Here, the records fail to show that Atty. Mison in fact
degrees and cannot, therefore, be regarded as illegal. received the alleged registry notice from the post office on
March 22, 2005 that required him to claim his mail.
On petition for certiorari, the Court of Appeals (CA) Respondents have not presented a copy of the receipt
rendered a Decision13 on July 9, 2010, reinstating the LA’s evidencing that notice. The Court has no choice but to
Decision by reason of technicality. It held that the 10-day consider the registry return receipt bearing the date April
period for appeal already lapsed when UE filed it on April 4, 2005 which showed the date of Atty. Mison’s receipt of a
14, 2005 since the reckoning period should be counted five copy of the LA Decision a conclusive proof of service on
days from March 17, when the postmaster gave notice to that date. Reckoned from April 4, UE filed its appeal to the
UE’s legal counsel to claim his mail or from March 22, NLRC on time.
2005. This prompted UE to file the present petition.
Two. Respondents alleged that UE failed to attach to its
Respondents point out, however, that the petition should petition a Secretary’s Certificate evidencing the resolution
be denied since it failed to enclose a certification from the from its Board of Trustees, authorizing a representative or
UE Board of Trustees, authorizing petitioner Dean Javier to agent to sign the verification and certification of non-
sign the verification and certification of non-forum forum shopping.
shopping.
As a general rule, the Board of Directors or Board of
The Issues Trustees of a corporation must authorize the person who
signs the verification and certification against non-forum
The following issues are presented for the Court’s shopping of its petition. But the Court has held16 that such
resolution: authorization is not necessary when it is self-evident that
the signatory is in a position to verify the truthfulness and
1. Whether or not UE filed a timely appeal to the correctness of the allegations in the petition. Here the
NLRC from the Decision of the LA; verification and certification were signed by petitioner
Dean Javier who, based on the given facts of the case, was
"in a position to verify the truthfulness and correctness of
2. Whether or not UE’s petition before this Court the allegations in the petition."17
can be given due course given its failure to enclose
a certification from the UE Board of Trustees’
empowering petitioner Dean Javier to execute the Three. Respondents argue that UE hired them in 1997 and
verification and certification of non-forum 2000, when what was in force was the 1994 CBA between
shopping; and UE and the faculty union. Since that CBA did not yet
require a master’s degree for acquiring a regular status
and since respondents had already complied with the
3. Whether or not UE illegally dismissed Bueno three requirements of the CBA, namely, (a) that they
and Pepanio. served full-time; (b) that they rendered three consecutive
years of service; and (c) that their services were master's degree. It was only when UE and the faculty union
satisfactory,18 they should be regarded as having attained signed their 2001 CBA that the school extended petitioners
permanent or regular status. a conditional probationary status subject to their obtaining
a master's degree within their probationary period. It is
But the policy requiring postgraduate degrees of college clear, therefore, that the parties intended to subject
teachers was provided in the Manual of Regulations as respondents' permanent status appointments to the
early as 1992. Indeed, recognizing this, the 1994 CBA standards set by the law and the university.
provided even then that UE was to extend only semester-
to-semester appointments to college faculty staffs, like Here, UE gave respondents Bueno and Pepanio more than
respondents, who did not possess the minimum ample opportunities to acquire the postgraduate degree
qualifications for their positions. required of them. But they did not take advantage of such
opportunities. Justice, fairness, and due process demand
Besides, as the Court held in Escorpizo v. University of that an employer should not be penalized for situations
Baguio,19 a school CBA must be read in conjunction with where it had little or no participation or control.23
statutory and administrative regulations governing faculty
qualifications. Such regulations form part of a valid CBA WHEREFORE, the Court GRANTS the petition and
without need for the parties to make express reference to REVERSES the Decision of the Court of Appeals in CA-G.R.
it. While the contracting parties may establish such SP 98872 dated July 9, 2010 and REINSTATES the Decision
stipulations, clauses, terms and conditions, as they may see of the National Labor Relations Commission dated
fit, the right to contract is still subject to the limitation that September 27, 2006 as well as its Resolutions dated
the agreement must not be contrary to law or public December 29, 2006 and February 27, 2007 that dismissed
policy. the complaints of respondents Analiza F. Pepanio and
Mariti D. Bueno.
The State through Batas Pambansa Bilang 232 (The
Education Act of 1982) delegated the administration of the SO ORDERED.
education system and the supervision and regulation of
educational institutions to the Ministry of Education,
Culture and Sports (now Department of Education). G.R. No. 188914 December 11, 2013
Accordingly, in promulgating the Manual of Regulations, JOCELYN HERRERA-MANAOIS, Petitioner,
DECS was exercising its power of regulation over vs.
educational institutions, which includes prescribing the ST. SCHOLASTICA'S COLLEGE, Respondent
minimum academic qualifications for teaching personnel. 20
FACTS:The present case concerns the academic
In 1994 the legislature transferred the power to prescribe qualifications required in attaining the status of a
such qualifications to the Commission on Higher Education permanent full-time faculty member in the tertiary level of
(CHED). CHED’s charter authorized it to set minimum a private educational institution. Petitioner Jocelyn
standards for programs and institutions of higher Herrera-Manaois (Manaois) assails the judgments1 of the
learning.21 The Manual of Regulations continued to apply Court of Appeals (CA), which reversed the Resolution2 of
to colleges and universities and suppletorily the Joint the National Labor Relations Commission (NLRC) and
Order until 2010 when CHED issued a Revised Manual of ruled that respondent St. Scholastica's College (SSC) was
Regulations which specifically applies only to institutions not guilty of illegal dismissal. SSC did not extend to
involved in tertiary education. Manaois the position of permanent full-time faculty
member with the rank of instructor because she failed to
The requirement of a masteral degree for tertiary acquire a master's degree and because her specialization
education teachers is not unreasonable. The operation of could no longer be maximized by the institution due to the
educational institutions involves public interest. The changes in its curriculum and streamlining.
government has a right to ensure that only qualified
persons, in possession of sufficient academic knowledge THE FACTS
and teaching skills, are allowed to teach in such
institutions. Government regulation in this field of human SSC, situated in the City of Manila, is a private educational
activity is desirable for protecting, not only the students, institution offering elementary, secondary, and tertiary
but the public as well from ill-prepared teachers, who are education. Manaois graduated from SSC in October 1992
lacking in the required scientific or technical knowledge. with a degree in Bachelor of Arts in English. In 1994, she
They may be required to take an examination22or to returned to her alma mater as a part-time English teacher.
possess postgraduate degrees as prerequisite to After taking a leave of absence for one year, she was again
employment. rehired by SSC for the same position. Four years into the
service, she was later on recommended by her Department
Respondents were each given only semester-to-semester Chairperson to become a full-time faculty member of the
appointments from the beginning of their employment English Department.
with UE precisely because they lacked the required
Manaois thus applied for a position as full-time instructor Manaois sought clarification and reconsideration of the
for school year 2000-2001. She mentioned in her decision of SSC to terminate her services. SSC denied her
application letter3 that she had been taking the course request in a letter dated 11 July 2003. Consequently, she
Master of Arts in English Studies, Major in Creative filed a complaint for illegal dismissal, payment of 13th
Writing, at the University of the Philippines, Diliman (UP); month pay, damages, and attorney’s fees against SSC.
that she was completing her master’s thesis; and that her
oral defense was scheduled for June 2000. In a reply SSC explained that upon consideration of the written
letter4 dated 17 April 2000, the Dean of Arts and Sciences application of Manaois, the Dean of Arts and Sciences
informed her of the SSC Administrative Council’s approval wrote the following notation at the bottom of her letter of
of her application. She was then advised to maintain the application – "APPROVED: on the basis that she finishes
good performance that she had shown for the past years her MA."8 The college clarified that the application for full-
and to submit the necessary papers pertaining to her time faculty status of Manaois was accepted with the
master’s degree. Accordingly, SSC hired her as a specific qualification that she would submit the necessary
probationary fulltime faculty member with the assigned papers pertaining to her master’s degree. It stressed that
rank of instructor for the school year 2000-2001.5 Her permanency may only be extended to full-time faculty
probationary employment continued for a total of three members if they had fulfilled the criteria provided in the
consecutive years. Throughout her service as a SSC Faculty Manual. According to SSC, the Chair of the
probationary full-time faculty member with no derogatory English Department did not endorse the application for
record, she was given above-satisfactory ratings by both permanency of Manaois, since the latter had not finished
the Department Chairperson and the Dean of Arts and her master’s degree within the three-year probationary
Sciences. period. SSC then refuted the supposed performance ratings
of Manaois and instead pointed out that she had merely
Because of the forthcoming completion of her third year of received an average rating from her students. Finally, it
probationary employment, Manaois wrote the Dean of Arts asserted that her specialization was the subject of writing
and Sciences requesting an extension of her teaching load and not English Literature, which was the subject area that
for the school year 2003-2004. She again mentioned in her they needed a faculty member for.
letter that she was a candidate for a master’s degree in
English Studies; that the schedule of her oral defense may THE ISSUE
actually materialize anytime within the first academic
semester of 2003; and that she intended to fully earn her Whether the completion of a master’s degree is required in
degree that year. She also furnished the school with a order for a tertiary level educator to earn the status of
Certification from UP, stating that she had already finished permanency in a private educational institution.
her coursework in her master’s studies. Furthermore, she
indicated that it was her long-term goal to apply for a
return to full-time faculty status by then and for SSC to OUR RULING
consider the aforesaid matters.6
Probationary employment refers to the trial stage or
Manaois eventually received a letter from the Dean of period during which the employer examines the
College and Chairperson of the Promotions and competency and qualifications of job applicants, and
Permanency Board officially informing her of the board’s determines whether they are qualified to be extended
decision not to renew her contract. The letter provides as permanent employment status.11 Such an arrangement
follows:7 affords an employer the opportunity – before the full force
of the guarantee of security of tenure comes into play – to
fully scrutinize and observe the fitness and worth of
The Permanency Board reviewed your case and after a probationers while on the job and to determine whether
thorough deliberation, the members decided not to renew they would become proper and efficient employees.12 It
your contract for school year 2003-2004. also gives the probationers the chance to prove to the
employer that they possess the necessary qualities and
With due consideration to your services, the institution qualifications to meet reasonable standards for permanent
had granted your request for a three-year extension to employment.13 Article 281 of the Labor Code, as amended,
finish your master’s degree. However, you failed to comply provides as follows:
with the terms which you yourself had requested. In
addition, your specialization cannot be maximized at SSC Art. 281. Probationary employment. Probationary
due to the college’s curriculum changes and streamlining. employment shall not exceed six (6) months from the date
the employee started working, unless it is covered by an
It is with your best interest in mind and deep regret on our apprenticeship agreement stipulating a longer period. The
part that we have to let you go. A new environment may be services of an employee who has been engaged on a
able to provide you more avenues and opportunities probationary basis may be terminated for a just cause
where you can utilize your graduate studies in Creative or when he fails to qualify as a regular employee in
Writing to the fullest. accordance with reasonable standards made known
by the employer to the employee at the time of his
engagement. An employee who is allowed to work after a xxxx
probationary period shall be considered a regular
employee. (Emphases supplied) CRITERIA FOR PERMANENCY

We agree with the CA in setting aside the NLRC Decision 1. The faculty member must have completed at
and in ruling that the requirement to obtain a master’s least a master’s degree.
degree was made known to Manaois. The contract she
signed clearly incorporates the rules, regulations, and 2. The faculty member must manifest behavior
employment conditions contained in the SSC Faculty reflective of the school’s mission-vision and goals.
Manual, viz:14
3. The faculty member must have consistently
I. EMPLOYMENT received above average rating for teaching
performance as evaluated by the Academic Dean,
A. x x x x Department Chair/Coordinator and the students.

B. After having read and understood in full the 4. The faculty member must have manifested
contents of the COLLEGE UNIT’s current FACULTY more than satisfactory fulfillment of duties and
MANUAL, the FACULTY MEMBER agrees responsibilities as evidenced by official records
to faithfully perform all the duties and especially in the areas of: x x x
responsibilities attendant to her position as
PROBATIONARY FULL-TIME FACULTY MEMBER 5. The faculty member must manifest awareness
and comply with all the rules, regulations and of and adherence to the school’s code of ethics for
employment conditions of the SCHOOL, as faculty.
provided in said FACULTY MANUAL including
any amendment/s pertinent to her position as
may be hereinafter incorporated therein. 6. The faculty member must be in good physical
health and manifest positive well being.
(Emphasis supplied)
xxxx
Viewed next to the statements and actions of Manaois – i.e.,
IV. EFFECTIVITY the references to obtaining a master’s degree in her
application letter, in the subsequent correspondences
A. The SCHOOL has the right to terminate the between her and SSC, and in the letter seeking the
FACULTY MEMBER’S services for just cause such extension of a teaching load for the school year 2003-
as, among others, failure to comply with any of 2004; and her submission of certifications from UP and
the provisions of the FACULTY MANUAL from her thesis adviser – we find that there is indeed
pertinent to her status as FULL-TIME substantial evidence proving that she knew about the
PROBATIONARY FACULTY MEMBER. (Emphases necessary academic qualifications to obtain the status of
supplied) permanency.

The SSC Faculty Manual in turn provides for the We also agree with the CA that the labor arbiter and the
following conditions in order for a faculty member NLRC gravely misinterpreted the section in the SSC Faculty
to acquire permanent employment status:15 Manual, which purportedly provided for a lower academic
requirement for full-time faculty members with the rank of
B. PERMANENCY instructor, regardless of whether they have attained
permanency or are still on probation. The labor arbiter
1. Prior to the end of the probationary period, the refers to the following section in the SSC Manual:16
faculty member formally applies for permanency
to her/his Department Chair/Coordinator. The B. ACCORDING TO RANK
Department Chair/Coordinator, in consultation
with the faculty member, reviews the applicant’s Only full-time and half-time faculty members are
over-all performance. If the records show that the ranked. Subsidiary faculty members follow a separate
criteria for permanency are met, the applicant is ranking system. Based on academic preparation,
recommended for permanency to the Promotions fulfillment of duties and responsibilities, performance,
and Permanency Board by the Department research, output and/or community service, a full-time or
Chair/Coordinator. In certain instances (i.e., when half-time faculty member may be appointed to any of the
the Department Chair/Coordinator does not give a following ranks:
recommendation for permanency), the Academic
Dean can exercise her prerogative to recommend 1. INSTRUCTOR
the applicant.
There are 4 probationary ranks and 8 permanent ranks automatically assert the acquisition of security of tenure
and force the employer to renew the employment contract.
a. Minimum Requirements In the case at bar, Manaois failed to comply with the stated
academic qualifications required for the position of a
1. A bachelor’s degree with at least 25% permanent full-time faculty member.
masteral units completed
Notwithstanding the existence of the SSC Faculty Manual,
2. At least 2 years of teaching experience or its Manaois still cannot legally acquire a permanent status of
equivalent employment. Private educational institutions must still
supplementarily refer19 to the prevailing standards,
qualifications, and conditions set by the appropriate
(i.e., 1 year supervisory or professional government agencies (presently the Department of
experience) Education, the Commission on Higher Education, and the
Technical Education and Skills Development Authority).
b. Promotion within the Rank This limitation on the right of private schools, colleges, and
universities to select and determine the employment
1. A minimum of 1 year in the present status of their academic personnel has been imposed by
level for promotion to Instructor 2, 3, 4, the state in view of the public interest nature of
and 5; a minimum of 2 years for educational institutions, so as to ensure the quality and
promotion to Instructor 6, 7 and 8. competency of our schools and educators.

2. An Instructor at any level may be The applicable guidebook20 at the time petitioner was
promoted to the rank of Assistant engaged as a probationary full-time instructor for the
Professor upon fulfillment of all the school year 2000 to 2003 is the 1992 Manual of
qualifications and requirements of the Regulations for Private Schools (1992 Manual).21 It
said rank. (Emphases supplied) provides the following conditions of a probationary
employment:
As correctly pointed out by the CA, the aforecited
minimum requirements provided for the rank of instructor Section 89. Conditions of Employment. Every private
merely refer to how instructors are ranked, and not to the school shall promote the improvement of the economic,
academic qualifications required to attain permanency. It social and professional status of all its personnel.
must be noted that the section in the SSC Faculty Manual
on the ranking of instructors cover those who are still on In recognition of their special employment status and
probationary employment and those who have already their special role in the advancement of knowledge,
attained permanency. It would therefore be erroneous to the employment of teaching and non-teaching
simply read the section on the ranking of instructors – academic personnel shall be governed by such rules as
without taking into consideration the previously quoted may from time to time be promulgated, in
section on permanency – in order to determine the coordination with one another, by the Department of
academic qualifications for the position of permanent full- Education, Culture and Sports and the Department of
time faculty member with the rank of instructor. Thus, to Labor and Employment.
properly arrive at the criteria, the sections on both the
permanency and the ranking of an instructor, as provided Conditions of employment of non-academic non-teaching
in the SSC Manual, must be read in conjunction with each school personnel, including compensation, hours of work,
another. security of tenure and labor relations, shall be governed by
the appropriate labor laws and regulations.
At this juncture, we reiterate the rule that mere
completion of the three-year probation, even with an Section 92. Probationary Period. Subject in all instances
above-average performance, does not guarantee that the to compliance with Department and school
employee will automatically acquire a permanent requirements, the probationary period for academic
employment status.17 It is settled jurisprudence18 that the personnel shall not be more than three (3) consecutive
probationer can only qualify upon fulfillment of the years of satisfactory service for those in the elementary
reasonable standards set for permanent employment as a and secondary levels, six (6) consecutive regular
member of the teaching personnel. In line with academic semesters of satisfactory service for those in the
freedom and constitutional autonomy, an institution of tertiary level, and nine (9) consecutive trimesters of
higher learning has the discretion and prerogative to satisfactory service for those in the tertiary level where
impose standards on its teachers and determine whether collegiate courses are offered on the trimester basis.
these have been met. Upon conclusion of the probation
period, the college or university, being the employer, has
the sole prerogative to make a decision on whether or not Section 93. Regular or Permanent Status. Those who have
to re-hire the probationer. The probationer cannot served the probationary period shall be made regular
or permanent. Fulltime teachers who have
satisfactorily completed their probationary period xxxx
shall be considered regular or permanent. (Emphases
supplied) Section 47. Faculty Classification and Ranking. At the
tertiary level, the academic teaching positions shall be
Considering that petitioner ultimately sought for the classified in accordance with academic qualifications,
position of a permanent full-time instructor, we must training and scholarship preferably into academic ranks of
further look into the following provisions under the 1992 Professor, Associate Professor, Assistant Professor, and
Manual, which set out the minimum requirements for such Instructor, without prejudice to a more simplified or
status: expanded system of faculty ranking, at the option of the
school.
Section 44. Minimum Faculty Qualifications. The minimum
qualifications for faculty for the different grades and levels Any academic teaching personnel who does not fall under
of instruction duly supported by appropriate any of the classes or ranks indicated in the preceding
credentials on file in the school shall be as follows: paragraph shall be classified preferably as professorial
lecturer, guest lecturer, or any other similar academic
xxxx designation on the basis of his qualifications. (Emphases
supplied)
c. Tertiary
Thus, pursuant to the 1992 Manual, private educational
(1) For undergraduate courses, other than vocational: institutions in the tertiary level may extend "full-time
faculty" status only to those who possess, inter alia, a
master’s degree in the field of study that will be taught.
(a) Holder of a master’s degree, to teach largely in his This minimum requirement is neither subject to the
major field; or, for professional courses, holder of the prerogative of the school nor to the agreement between
appropriate professional license required for at least a the parties. For all intents and purposes, this qualification
bachelor's degree. Any deviation from this requirement must be deemed impliedly written in the employment
will be subject to regulation by the Department. contracts between private educational institutions and
prospective faculty members. The issue of whether
Section 45. Full-time and Part-time Faculty. As a general probationers were informed of this academic requirement
rule, all private schools shall employ full-time academic before they were engaged as probationary employees is
personnel consistent with the levels of instruction. thus no longer material, as those who are seeking to be
educators are presumed to know these mandated
Full-time academic personnel are those meeting all the qualifications. Thus, all those who fail to meet the criteria
following requirements: under the 1992 Manual cannot legally attain the status of
permanent full-time faculty members, even if they have
a. Who possess at least the minimum academic completed three years of satisfactory service.
qualifications prescribed by the
Department under this Manual for all academic In the light of the failure of Manaois to satisfy the academic
personnel; requirements for the position, she may only be considered
as a part-time instructor pursuant to Section 45 of the
b. Who are paid monthly or hourly, based on the 1992 Manual. In turn, as we have enunciated in a line of
regular teaching loads as provided for in the cases,22 a part-time member of the academic personnel
policies, rules and standards of the Department cannot acquire permanence of employment and security of
and the school; tenure under the Manual of Regulations in relation to the
Labor Code. We thus quote the ruling of this Court
c. Whose total working day of not more than eight in Lacuesta, viz:23
hours a day is devoted to the school;
Section 93 of the 1992 Manual of Regulations for Private
d. Who have no other remunerative occupation Schools provides that full-time teachers who have
elsewhere requiring regular hours of work that satisfactorily completed their probationary period shall be
will conflict with the working hours in the school; considered regular or permanent. Moreover, for those
and teaching in the tertiary level, the probationary period shall
not be more than six consecutive regular semesters of
satisfactory service. The requisites to acquire permanent
e. Who are not teaching full-time in any other
employment, or security of tenure, are (1) the teacher is a
educational institution.
full-time teacher; (2) the teacher must have rendered
three consecutive years of service; and (3) such service
All teaching personnel who do not meet the foregoing must have been satisfactory.
qualifications are considered part-time.
As previously held, a part-time teacher cannot acquire Relations Commission (NLRC). The dispositive portion of
permanent status.1âwphi1 Only when one has served as a the assailed decision reads:
full-time teacher can he acquire permanent or regular
status. The petitioner was a part-time lecturer before she WHEREFORE, premises
was appointed as a full-time instructor on probation. As a considered, the Decision dated March 31,
parttime lecturer, her employment as such had ended 2004 rendered by the National Labor
when her contract expired. Thus, the three semesters she Relations Commission is
served as part-time lecturer could not be credited to her in hereby REVERSED and SET ASIDE. In lieu
computing the number of years she has served to qualify thereof, the Decision of the Labor Arbiter
her for permanent status. is hereby REINSTATED, except as to the
award of attorneys fees, which is
Petitioner posits that after completing the three-year [full- ordered DELETED.[3]
time instructor on] probation with an above-average
performance, she already acquired permanent status. On The version of the petitioners follows:
this point, we are unable to agree with petitioner.
1. Lynvil Fishing Enterprises, Inc. (Lynvil) is a
Completing the probation period does not automatically company engaged in deep-sea fishing, operating along the
qualify her to become a permanent employee of the shores of Palawan and other outlying islands of the
university. Petitioner could only qualify to become a Philippines.[4] It is operated and managed by Rosendo S. de
permanent employee upon fulfilling the reasonable Borja.
standards for permanent employment as faculty member.
Consistent with academic freedom and constitutional 2. On 1 August 1998, Lynvil received a report from
autonomy, an institution of higher learning has the Romanito Clarido, one of its employees, that on 31 July
prerogative to provide standards for its teachers and 1998, he witnessed that while on board the company
determine whether these standards have been met. At the vessel Analyn VIII, Lynvil employees, namely: Andres G.
end of the probation period, the decision to re-hire an Ariola (Ariola), the captain; Jessie D. Alcovendas
employee on probation, belongs to the university as the (Alcovendas), Chief Mate; Jimmy B. Calinao (Calinao), Chief
employer alone. (Emphases supplied) Engineer; Ismael G. Nubla (Nubla), cook; Elorde Baez
(Baez), oiler; and Leopoldo D. Sebullen
(Sebullen), bodegero, conspired with one another and stole
For the foregoing reasons, we rule that there is no legal eight (8) tubs of pampano and tangigue fish and delivered
obligation on the part of SSC to reappoint Manaois after them to another vessel, to the prejudice of Lynvil.[5]
the lapse of her temporary appointn:ient. We thus affirm in
toto the findings of fact of the CA and rule that SSC is not 3. The said employees were engaged on a per trip
guilty of illegal dismissal. basis or por viaje which terminates at the end of each
trip. Ariola, Alcovendas and Calinao were managerial field
WHEREFORE, the petition is DENIED for lack of merit. personnel while the rest of the crew were field
Accordingly, the Court of Appeals Decision dated 27 personnel.[6]
February 2009 and the Resolution dated 22 July 2009 in
CA-G.R. SP. No. 101382 are hereby AFFIRMED. 4. By reason of the report and after initial
investigation, Lynvils General Manager Rosendo S. De
SO ORDERED. Borja (De Borja) summoned respondents to explain within
five (5) days why they should not be dismissed from
YNVIL FISHING ENTERPRISES, INC. and/or ROSENDO S. service. However, except for Alcovendas and Baez,[7] the
DE BORJA, respondents refused to sign the receipt of the notice.
Petitioners,
-versus- 5. Failing to explain as required, respondents
ANDRES G. ARIOLA, JESSIE D. ALCOVENDAS, JIMMY B. employment was terminated.
CALINAO AND LEOPOLDO G. SEBULLEN,
Respondents. 6. Lynvil, through De Borja, filed a criminal
complaint against the dismissed employees for violation of
PEREZ, J.: P.D. 532, or the Anti-Piracy and Anti-Highway Robbery
Law of 1974 before the Office of the City Prosecutor of
Before the Court is a Petition for Review on Malabon City.[8]
Certiorari[1] of the Decision[2] of the Fourteenth Division of
the Court of Appeals in CA-G.R. SP No. 95094 dated 10 7. On 12 November 1998, First Assistant City
September 2007, granting the Writ of Certiorari prayed for Prosecutor Rosauro Silverio found probable cause for the
under Rule 65 of the 1997 Revised Rules of Civil Procedure indictment of the dismissed employees for the crime of
by herein respondents Andres G. Ariola, Jessie D. qualified theft[9] under the Revised Penal Code.
Alcovendas, Jimmy B. Calinao and Leopoldo Sebullen
thereby reversing the Resolution of the National Labor
Aggrieved, the employees filed with the The Court of Appeals found merit in the petition
Arbitration Branch of the National Labor Relations and reinstated the Decision of the Labor Arbiter except as
Commission-National Capital Region on 25 August 1998 a to the award of attorneys fees. The appellate court held
complaint for illegal dismissal with claims for backwages, that the allegation of theft did not warrant the dismissal of
salary differential reinstatement, service incentive leave, the employees since there was no evidence to prove the
holiday pay and its premium and 13th month pay from actual quantities of the missing kinds of fish loaded to
1996 to1998. They also claimed for moral, exemplary Analyn VIII.[25]It also reversed the finding of the NLRC that
damages and attorneys fees for their dismissal with bad the dismissed employees were merely contractual
faith.[14] employees and added that they were regular ones
performing activities which are usually necessary or
They added that the unwarranted accusation of desirable in the business and trade of Lynvil. Finally, it
theft stemmed from their oral demand of increase of ruled that the two-notice rule provided by law and
salaries three months earlier and their request that they jurisprudence is mandatory and non-compliance therewith
should not be required to sign a blank payroll and rendered the dismissal of the employees illegal.
vouchers.[15]
The following are the assignment of errors
On 5 June 2002, Labor Arbiter Ramon Valentin C. presented before this Court by Lynvil:
Reyes found merit in complainants charge of illegal
dismissal.[16] I

All other claims are dismissed for lack of merit.[17] THE HONORABLE COURT OF APPEALS
ERRED IN FAILING TO CONSIDER THE
The Labor Arbiter found that there was no evidence ESTABLISHED DOCTRINE LAID DOWN
showing that the private respondents received the IN NASIPIT LUMBER COMPANY V.
41 baeras of pampano as alleged by De Borja in his reply- NLRC HOLDING THAT THE FILING OF A
affidavit; and that no proof was presented that the CRIMINAL CASE BEFORE THE
8 baeras of pampano [and tangigue] were missing at the PROSECUTORS OFFICE CONSTITUTES
place of destination.[18] SUFFICIENT BASIS FOR A VALID
TERMINATION OF EMPLOYMENT ON
The Labor Arbiter disregarded the Resolution of Assistant THE GROUNDS OF SERIOUS
City Prosecutor Rosauro Silverio on the theft case. He MISCONDUCT AND/OR LOSS OF TRUST
reasoned out that the Labor Office is governed by different AND CONFIDENCE.
rules for the determination of the validity of the dismissal
of employees.[19] II

The Labor Arbiter also ruled that the contractual provision THE HONORABLE COURT OF APPEALS
that the employment terminates upon the end of each trip ERRED IN RULING THAT THE
does not make the respondents dismissal legal. He pointed TERMINATION OF RESPONDENTS
out that respondents and Lynvil did not negotiate on equal EMPLOYMENT WAS NOT SUPPORTED BY
terms because of the moral dominance of the employer.[20] SUBSTANTIAL EVIDENCE.
The Labor Arbiter found that the procedural due process III
was not complied with and that the mere notice given to
the private respondents fell short of the requirement of THE HONORABLE COURT OF APPEALS
ample opportunity to present the employees side.[21] ERRED IN FAILING TO CONSIDER THAT
THE RESPONDENTS EMPLOYMENT, IN
On appeal before the National Labor Relations ANY EVENT, WERE CONTRACTUAL IN
Commission, petitioners asserted that private respondents NATURE BEING ON A PER VOYAGE BASIS.
were only contractual employees; that they were not THUS, THEIR RESPECTIVE EMPLOYMENT
illegally dismissed but were accorded procedural due TERMINATED AFTER THE END OF EACH
process and that De Borja did not commit bad faith in VOYAGE
dismissing the employees so as to warrant his joint
liability with Lynvil.[22] IV

On 31 March 2004, the NLRC reversed and set THE HONORABLE COURT OF APPEALS
aside the Decision of the Labor Arbiter. ERRED IN RULING THAT THE
RESPONDENTS WERE NOT ACCORDED
The private respondents except Elorde Baez filed a PROCEDURAL DUE PROCESS.
Petition for Certiorari[24] before the Court of Appeals
alleging grave abuse of discretion on the part of NLRC. V
THE HONORABLE COURT OF APPEALS for judicial review, at first instance by the appellate court,
ERRED IN RULING THAT THE and on final study through the present petition.
RESPONDENTS ARE ENTITLED TO THE
PAYMENT OF THEIR MONEY CLAIMS. In the first assignment of error, Lynvil contends
that the filing of a criminal case before the Office of the
VI Prosecutor is sufficient basis for a valid termination of
employment based on serious misconduct and/or loss of
THE HONORABLE COURT OF APPEALS trust and confidence relying on Nasipit Lumber Company v.
ERRED IN FAILING TO CONSIDER THAT NLRC.[29]
PETITIONER ROSENDO S. DE BORJA IS
NOT JOINTLY AND SEVERALLY LIABLE Nasipit is about a security guard who was charged
FOR THE JUDGMENT WHEN THERE WAS with qualified theft which charge was dismissed by the
NO FINDING OF BAD FAITH.[26] Office of the Prosecutor. However, despite the dismissal of
the complaint, he was still terminated from his
The Courts Ruling employment on the ground of loss of confidence. We ruled
that proof beyond reasonable doubt of an employee's
The Supreme Court is not a trier of facts. Under misconduct is not required when loss of confidence is the
Rule 45,[27] parties may raise only questions of law. We are ground for dismissal. It is sufficient if the employer has
not duty-bound to analyze again and weigh the evidence "some basis" to lose confidence or that the employer has
introduced in and considered by the tribunals below. reasonable ground to believe or to entertain the moral
Generally when supported by substantial evidence, the conviction that the employee concerned is responsible for
findings of fact of the CA are conclusive and binding on the the misconduct and that the nature of his participation
parties and are not reviewable by this Court, unless the therein rendered him absolutely unworthy of the trust and
case falls under any of the following recognized confidence demanded by his position.[30] It added that the
exceptions: dropping of the qualified theft charges against the
respondent is not binding upon a labor tribunal.[31]
(1) When the conclusion is a finding
grounded entirely on speculation, In Nicolas v. National Labor Relations
surmises and conjectures; Commission,[32] we held that a criminal conviction is not
(2) When the inference made is manifestly necessary to find just cause for employment termination.
mistaken, absurd or impossible; Otherwise stated, an employees acquittal in a criminal
(3) Where there is a grave abuse of case, especially one that is grounded on the existence of
discretion; reasonable doubt, will not preclude a determination in a
(4) When the judgment is based on a labor case that he is guilty of acts inimical to the employers
misapprehension of facts; interests.[33] In the reverse, the finding of probable cause is
(5) When the findings of fact are not followed by automatic adoption of such finding by the
conflicting; labor tribunals.
(6) When the Court of Appeals, in making
its findings, went beyond the issues In other words, whichever way the public
of the case and the same is contrary prosecutor disposes of a complaint, the finding does not
to the admissions of both appellant bind the labor tribunal.
and appellee;
(7) When the findings are contrary to Thus, Lynvil cannot argue that since the Office of
those of the trial court; the Prosecutor found probable cause for theft the Labor
(8) When the findings of fact are Arbiter must follow the finding as a valid reason for the
conclusions without citation of termination of respondents employment. The proof
specific evidence on which they are required for purposes that differ from one and the other
based; are likewise different.
(9) When the facts set forth in the petition
as well as in the petitioners' main Nonetheless, even without reliance on the
and reply briefs are not disputed by prosecutors finding, we find that there was valid cause for
the respondents; and respondents dismissal.
(10) When the findings of fact of the Court
of Appeals are premised on the In illegal dismissal cases, the employer bears the
supposed absence of evidence and burden of proving that the termination was for a valid or
contradicted by the evidence on authorized cause.[34]
record. (Emphasis supplied)[28]
Just cause is required for a valid dismissal. The
The contrariety of the findings of the Labor Labor Code[35] provides that an employer may terminate
Arbiter and the NLRC prevents reliance on the principle of an employment based on fraud or willful breach of the
special administrative expertise and provides the reason trust reposed on the employee. Such breach is considered
willful if it is done intentionally, knowingly, and purposely, written agreement to the
without justifiable excuse, as distinguished from an act contrary notwithstanding and
done carelessly, thoughtlessly, heedlessly or inadvertently. regardless of the oral agreement
It must also be based on substantial evidence and not on of the parties, an employment
the employers whims or caprices or suspicions otherwise, shall be deemed to be regular
the employee would eternally remain at the mercy of the where the employee has been
employer. Loss of confidence must not be indiscriminately engaged to perform activities
used as a shield by the employer against a claim that the which are usually necessary or
dismissal of an employee was arbitrary. And, in order to desirable in the usual business or
constitute a just cause for dismissal, the act complained of trade of the employer, except
must be work-related and shows that the employee where the employment has been
concerned is unfit to continue working for the employer. In fixed for a specific project or
addition, loss of confidence as a just cause for termination undertaking the completion or
of employment is premised on the fact that the employee termination of which has been
concerned holds a position of responsibility, trust and determined at the time of the
confidence or that the employee concerned is entrusted engagement of the employee or
with confidence with respect to delicate matters, such as where the work or service to be
the handling or care and protection of the property and performed is seasonal in nature
assets of the employer. The betrayal of this trust is the and the employment is for the
essence of the offense for which an employee is duration of the season.
penalized.[36]
An employment shall be deemed
Breach of trust is present in this case. to be casual if it is not covered by
We agree with the ruling of the Labor Arbiter and
the preceding paragraph:
Court of Appeals that the quantity of tubs expected to be
Provided, That any employee
received was the same as that which was loaded. However, who has rendered at least one
what is material is the kind of fish loaded and then
year of service, whether such
unloaded. Sameness is likewise needed.
service is continuous or broken,
We cannot close our eyes to the positive and clear shall be considered a regular
narration of facts of the three witnesses to the commission employee with respect to the
of qualified theft. Jonathan Distajo, a crew member of the
activity in which he is employed
Analyn VIII, stated in his letter addressed to De
and his employment shall
Borja[37] dated 8 August 1998, that while the vessel was continue while such activity
traversing San Nicolas, Cavite, he saw a small boat
exists.
approach them.When the boat was next to their vessel,
Alcovendas went inside the stockroom while Sebullen Lynvil contends that it cannot be guilty of illegal
pushed an estimated four tubs of fish away from it. Ariola,
dismissal because the private respondents were employed
on the other hand, served as the lookout and negotiator of
under a fixed-term contract which expired at the end of the
the transaction. Finally, Baez and Calinao helped in putting voyage.
the tubs in the small boat. He further added that he
Lynvil insists on the applicability of the case
received P800.00 as his share for the
of Brent School,[41] to wit:
transaction. Romanito Clarido, who was also on board the
Accordingly, and since the entire
vessel, corroborated the narration of Distajo on all purpose behind the development of
accounts in his 25 August 1998 affidavit.[38] He added that
legislation culminating in the present
Alcovendas told him to keep silent about what happened
Article 280 of the Labor Code clearly
on that day. Sealing tight the credibility of the narration of appears to have been, as already
theft is the affidavit[39] executed by Elorde Baez dated 3
observed, to prevent circumvention of the
May 1999. Baez was one of the dismissed employees who
employee's right to be secure in his
actively participated in the taking of the tubs. He clarified tenure, the clause in said article
in the affidavit that the four tubs taken out of the
indiscriminately and completely ruling
stockroom in fact contained fish taken from the eight
out all written or oral agreements
tubs. He further stated that Ariola told everyone in the
conflicting with the concept of regular
vessel not to say anything and instead file a labor case employment as defined therein should be
against the management.Clearly, we cannot fault Lynvil
construed to refer to the substantive evil
and De Borja when it dismissed the employees.
that the Code itself has singled out:
The second to the fifth assignment of errors interconnect. agreements entered into precisely to
circumvent security of tenure. It should
The nature of employment is defined in the Labor
have no application to instances where a
Code, thus: fixed period of employment was agreed
Art. 280. Regular and casual upon knowingly and voluntarily by the
employment. The provisions of parties, without any force, duress or
improper pressure being brought to bear broken, shall be considered a regular
upon the employee and absent any other employee with respect to the activity in
circumstances vitiating his consent, or which he is employed and his
where it satisfactorily appears that the employment shall continue while such
employer and employee dealt with each activity exists.
other on more or less equal terms with no
moral dominance whatever being The same set of circumstances indicate clearly enough that
exercised by the former over the latter. it was the need for a continued source of income that
Unless thus limited in its purview, the law forced the employees acceptance of the por viaje provision.
would be made to apply to purposes
other than those explicitly stated by its Having found that respondents are regular
framers; it thus becomes pointless and employees who may be, however, dismissed for cause as
arbitrary, unjust in its effects and apt to we have so found in this case, there is a need to look into
lead to absurd and unintended the procedural requirement of due process in Section 2,
consequences. Rule XXIII, Book V of the Rules Implementing the Labor
Code. It is required that the employer furnish the
Contrarily, the private respondents contend that employee with two written notices: (1) a written notice
they became regular employees by reason of their served on the employee specifying the ground or grounds
continuous hiring and performance of tasks necessary and for termination, and giving to said employee reasonable
desirable in the usual trade and business of Lynvil. opportunity within which to explain his side; and (2) a
written notice of termination served on the employee
Jurisprudence,[42] laid two conditions for the indicating that upon due consideration of all the
validity of a fixed-contract agreement between the circumstances, grounds have been established to justify his
employer and employee: termination.

First, the fixed period of From the records, there was only one written
employment was knowingly and notice which required respondents to explain within five
voluntarily agreed upon by the (5) days why they should not be dismissed from the
parties without any force, duress, service. Alcovendas was the only one who signed the
or improper pressure being receipt of the notice. The others, as claimed by Lynvil,
brought to bear upon the refused to sign. The other employees argue that no notice
employee and absent any other was given to them. Despite the inconsistencies, what is
circumstances vitiating his clear is that no final written notice or notices of
consent; or termination were sent to the employees.

Second, it satisfactorily appears The twin requirements of notice and hearing


that the employer and the constitute the elements of [due] process in cases of
employee dealt with each other employee's dismissal. The requirement of notice is
on more or less equal terms with intended to inform the employee concerned of the
no moral dominance exercised by employer's intent to dismiss and the reason for the
the former or the latter.[43] proposed dismissal. Upon the other hand, the requirement
of hearing affords the employee an opportunity to answer
Textually, the provision that: NA ako ay sumasang-ayon na his employer's charges against him and accordingly, to
maglingkod at gumawa ng mga gawain sang-ayon sa defend himself therefrom before dismissal is
patakarang por viaje na magmumula sa pagalis sa Navotas effected.[44] Obviously, the second written notice, as
papunta sa pangisdaan at pagbabalik sa pondohan ng indispensable as the first, is intended to ensure the
lantsa sa Navotas, Metro Manila is for a fixed period of observance of due process.
employment. In the context, however, of the facts that: (1) Applying the rule to the facts at hand, we grant a monetary
the respondents were doing tasks necessarily to Lynvils award of P50,000.00 as nominal damages, this, pursuant to
fishing business with positions ranging from captain of the the fresh ruling of this Court in Culili v. Eastern
vessel to bodegero; (2) after the end of a trip, they will Communication Philippines, Inc.[45] Due to the failure of
again be hired for another trip with new contracts; and (3) Lynvil to follow the procedural requirement of two-notice
this arrangement continued for more than ten years, the rule, nominal damages are due to respondents despite
clear intention is to go around the security of tenure of the their dismissal for just cause.
respondents as regular employees. And respondents are so
by the express provisions of the second paragraph of Given the fact that their dismissal was for just
Article 280, thus: cause, we cannot grant backwages and separation pay to
respondents. However, following the findings of the Labor
xxx Provided, That any employee who has Arbiter who with the expertise presided over the
rendered at least one year of service, proceedings below, which findings were affirmed by the
whether such service is continuous or
Court of Appeals, we grant the 13th month pay and salary employees representing nominal damages for petitioners
differential of the dismissed employees. non-compliance with statutory due process. No cost.

Whether De Borja is jointly and severally liable with SO ORDERED.


Lynvil
G.R. Nos. 97652-53 October 19, 1999
As to the last issue, this Court has ruled that in
labor cases, the corporate directors and officers are JOSE H. RUTAQUIO and ERLINDA F.
solidarily liable with the corporation for the termination of VILLAREAL, petitioners,
employment of employees done with malice or in bad vs.
faith.[46] Indeed, moral damages are recoverable when the THE HON. NATIONAL LABOR RELATIONS COMMISSION
dismissal of an employee is attended by bad faith or fraud (Third Division), THE HON. LABOR ARBITER,
or constitutes an act oppressive to labor, or is done in a AMBROCIO B. SISON, RURAL BANK OF BALER, INC., and
manner contrary to good morals, good customs or public FLORDELIZA S. CARPIO, respondents.
policy.

It has also been discussed in MAM Realty PURISIMA, J.:


Development Corporation v. NLRC[47] that:
At bar is a Petition for Certiorari under Rule 65 of the
x x x A corporation being a juridical entity, Revised Rules of Court assailing the Resolution of the
may act only through its directors, officers National Labor Relations Commission in NLRC Case Nos.
and employees. Obligations incurred by RAB-IV-10-2874-89 and RAB-IV-10-2878-89, dated July
them, acting as such corporate agents, are 11, 1990, and the Resolution, dated February 15, 1991,
not theirs but the direct accountabilities denying Petitioners' Motion for Reconsideration.
of the corporation they represent. True,
solidary liabilities may at times be The facts that matter are as follows:
incurred but only when exceptional
circumstances warrant such as, generally, Petitioners Jose H. Rutaquio and Erlinda F. Villareal are
in the following cases: Savings Bookkeeper and Cashier, respectively, of the
respondent Rural Bank of Baler, Inc., the respondent
1. When directors and trustees or, in herein.
appropriate cases, the officers of a
corporation: On September 15, 1989, M.Y. Mateo & Company, Certified
xxx Public Accountants of respondent bank, recommended the
(b) act in bad faith or with gross reprimand of the employees, Jose Rutaquio and Erlinda
negligence in directing the corporate Villareal, who were found guilty of negligence in the
affairs; performance of their duties and responsibilities, to wit:
x x x [48]
The term "bad faith" contemplates a "state of mind
1. After a reconciliation of the cash
affirmatively operating with furtive design or with some
account, cash in the custody of the Cashier
motive of self-interest or will or for ulterior purpose."[49]
exceeded her accountability per books by
P7,730.65.
We agree with the ruling of both the NLRC and the Court of
Appeals when they pronounced that there was no evidence
on record that indicates commission of bad faith on the 2. At the time of the examination,
part of De Borja. He is the general manager of Lynvil, the recording in the books of account was
one tasked with the supervision by the employees and the behind by about a week as the last
operation of the business. However, there is no proof that posting was August 31, 1989. The daily
he imposed on the respondents the por viaje provision for proofsheets covering the period from
purpose of effecting their summary dismissal. September 1 to 8, 1989 were prepared
WHEREFORE, the petition is partially and up-dated during the examination to
GRANTED. The 10 September 2007 Decision of the Court determine the exact accountability of the
of Appeals in CA-G.R. SP No. 95094 reversing the Cashier.
Resolution dated 31 March 2004 of the National Labor
Relations Commission is hereby MODIFIED. The Court 3. It should be pointed out at this juncture
hereby rules that the employees were dismissed for just that a week's delay in the recording of
cause by Lynvil Fishing Enterprises, Inc. and Rosendo S. De transactions in the books of account and a
Borja, hence, the reversal of the award for backwages and shortage or overage in cash accountability
separation pay. However, we affirm the award for regardless of amount constituted
13th month pay, salary differential and grant an negligence on the part of the employees
additional P50,000.00 in favor of the concerned. 1
Acting thereupon, on September 29, 1989, Flordeliza thru (sic) Director Jesse Domingo in 1988,
Carpio, President and Manager of the Bank, issued Board hence the incumbent bookkeeper could
Resolution No. 89-35 recommending disciplinary action not be held liable for failure to prepare
against Erlinda Villareal and Jose Rutaquio. They were and submit said statement of Capital
required to submit their formal resignation effective Required and Capital Accounts, for there
immediately upon receipt of the letter. 2 is no available record in the Bank to show
that said report had been prepared and
On October 1, 1989, the employees sent a letter to the submitted before I (Jose H. Rutaquio)
Manager questioning their illegal dismissal, stating that assumed office as General Bookkeeper in
they would resign only after vindicating their names May 1987.
before the proper dispenser of justice, theorizing that the
imputation of negligence was malicious. 3 With respect to the Ten Thousand Pesos
(P10,000.00) check, which was lost, the
On October 3, 1989, the President replied thus: incident happened during that time when
there was panic withdrawal from the
In the case of Mr. Rutaquio: the Bank was depositors. And after discovering that the
fined by the Central Bank in an amount of check was in fact lost, all necessary
approximately P35,000.00 for late actions were made to safeguard the
financial reports; books of account of the interest of the Bank. But after sometime
bank remain unbalanced, and lately, even the amount was charged to my (Erlinda F.
after being aware that the new Villareal) account. The full amount,
management intends to dismiss him, however, was recovered after Mr. Alberto
entries in the books of account were late. Ong issued Solidbank Check No. CA
496704, dated February 14, 1989 in favor
of the Rural Bank of Baler, Inc.
In the case of Mrs. Villareal: she could not
account for a P10,000.00 check and the
fact that she paid them the sum when the As to the overage amounting to Seven
new management took over is no Thousand Seven Hundred Thirty Pesos
mitigation. In the cash count made last and 65/100 (P7,730.65) during the Cash
month, there was an average of over Audit made by Mr. Bartolome I. Conde in
P7,000.00. the presence of Ms. Flordeliza S. Carpio,
President/Manager of the Bank on
September 8, 1989, at about 2:30 P.M.
When a small bank with a paid-up capital without any written authority from the
of only P500,000.00 has only one Central Bank to audit Rural Bank of Baler,
bookkeeper and only one cashier with Inc., the cash audit was undertaken even
such unreliability, the viability thereof is if the bank transaction was still going on.
in imminent danger. Moreover, you have Hence, the overage of Seven Thousand
always been acting in an insolent manner Seven Hundred Thirty Pesos and 65/100
towards the new management which is (P7,730.65) has been recorded, which
anathema to the smooth operation of the may be explained as follows:
bank.
a) Under Savings Deposit Number 3760,
You are dismissed from the Bank as of the the amount of Eight Thousand Pesos
of last month. 4 (P8,000.00) for deposit was received,
however the said deposit was accounted
On October 5, 1989, the employees presented an Answer the following banking day dated
to the Notice of Dismissal and Request for Hearing, September 11, 1989 and therefore the
contending: cash on hand exceeded the recorded cash
on hand.
xxx xxx xxx
b) On the same day, Savings Deposit
As to the statement of Capital Required Number 2181, withdrew the amount of
and Capital Accounts-CBP Form-7-19-07 Two Hundred Seventy Pesos (P270.00).
from June to December 1987 mentioned The said withdrawal had been paid-up
by the Central Bank, in its letter of July 25, but accounted and recorded on
1987, it is worth mentioning that the September 15, 1989.
Rural Bank of Baler, Inc., had never
prepared and submitted the same until a Finally, Section 5 of Rule XIV of the
form was furnished by the Central Bank, Omnibus Rules Implementing the Labor
Code on termination of employment, municipality. This incident happened
requires the employer to give the worker after said Jose Rutaquio has explained in
ample opportunity to be heard and the said conference the present financial
defend himself with the assistance of his statement of the said Rural Bank.
counsel or representative. Likewise Gregorio Suaverdez uttered
defamatory words and expressions
In view of all the foregoing, we against Jose Rutaquio, to wit: "PUTANG-
respectfully request for a hearing and be INA MO. PARA KANG MAY-ARI NG
given the opportunity to prove that the BANGKO KUNG MAGSALITA". Gregorio
Bank has no just cause to dismiss us and Suaverdez asked Danilo Natividad to get
granting arguendo that the Bank believes his gun from his wife (Vilma Suaverdez),
there is any, the dismissal should be made and he also said "KUNG GUSTO MO
only after due process, is afforded us, as TAPUSIN KA NA NAMIN". More so,
provided under Section 1, Rule XIV of the Manuel Suaverdez and Gregorio
Omnibus Rules Implementing the Labor Suaverdez also uttered the following
Code on termination of employment. "PAG PINATAY KA NAMIN, ANG WITNESS
MO LAMANG AY SI EX-MAYOR PIMENTEL
xxx xxx xxx ...7

On October 13, 1989, Jose Rutaquio brought a Complaint, On December 21, 1989, Flordeliza S. Carpio, with the
docketed as NLRC Case No. RB-IV-10-2878-89 before the assistance of her counsel, filed a Revised Position Paper
Arbitration Branch, Region No. IV, for illegal Dismissal and stating:
Damages in the amount of One Hundred Thousand
(P100,000.00) Pesos. The respondents are engaged in banking
business. Confidence and trust are the
On November 7, 1989, Erlinda F. Villareal and Jose principal consideration in the selection
Rutaquio filed their Position Papers with Rutaquio's and hiring of employees. In the same
Position paper praying: manner, loss of confidence and breach of
trust should also be the principal
consideration in the removal or dismissal
Wherefore, premises considered it is of the employees.
most respectfully prayed unto this
Honorable Commission, that after
hearing, judgment be rendered in favor of Respondents have enumerated the
the complainant against respondent, irregularities, incompetence,
declaring illegal and unlawful the disobedience, negligence, misbehavior
dismissal of herein complainant by and misconduct of complainant. All these
respondent, granting and awarding to facts are inimical to the employer's
said complainant, the following: interest. In consonance with the ruling of
the Supreme Court in San Miguel
Corporation vs. NLRC, 142, (sic) SCRA 376,
a) His salary from October 1, 1989 until the case is finally an employer has the right to dismiss an
terminated; employee whose continuance in office is
b) His monthly allowance from October 1, 1989 until the inimical to the employer's interests.
case is finally terminated;
c) The money value of his earned leave;
d) His separation pay; The respondents have lost confidence in
e) Payment for damages in the amount of P100,000.00 complainant when he continuously
f) Attorney's fee in the amount of P30,000.00; and neglected his duties on account of which
g) Other reliefs which are just and equitable under the the respondent bank was penalized twice
premises. 6 in the total amount of P32,890.00. The
right of the employer to dismiss the
bookkeeper based on loss of confidence
So, also, on November 14, 1989, a Certification was issued due to incompetence, serious
by P/Sgt. Miguel R. Barribal, Jr., INP relating to the Police irregularities grave misconduct cannot be
Blotter, alleging that: precluded. Such is the ruling of the
Supreme Court in Metro Drug Corp. vs.
. . . he was threatened by Manuel NLRC, 143 SCRA 132.
Suaverdez and Gregorio Suaverdez on or
about 072030 January 89 during a . . . It was only after his refusal to take
conference held at Rural Bank of Baler advantage of the magnanimity of the bank
Incorporated at Recto Street this that he was finally considered resigned at
the end of business hour on September On December 13, 1990, the Third Division of the National
29, 1989. . . . 8 Labor Relations Commission modified the Decision of the
Labor Arbiter, to wit:
On February 8, 1990, Jose Rutaquio filed his Comment to
the Respondent's Revised Position Paper. Although the case of City Service Corp.
Workers Union vs. City Service Corp., 135
On July 1, 1990, Labor Arbiter Ambrocio B. Sison found SCRA 565, the Supreme Court held that an
that subject employees were illegally dismissed and employee unjustly dismissed shall be
ordered thus: entitled under the Labor Code to
reinstatement and backwages from the
In the light of the foregoing facts and time his compensation was withheld to
jurisprudence, it is crystal clear that the the time of his reinstatement. Such fact is
dismissals of the complainants are illegal, not obtainable in this case considering
hence they must be reinstated to their that the Labor Arbiter awarded
former positions, considering however, separation pay to the complainants in lieu
the strained relationship which of reinstatement. However, to obviate
culminated between the parties, it is protracted litigations that may arise in
believed more appropriate under the the computation of complainant's
premises not to reinstate complainants to backwages, We deemed it proper to fix
prevent further the already acrimonious the award of backwages to one (1) year
relationship between the contending without qualification and deduction.
parties. Payment therefore of a separation
pay (one-half month pay for every year of Likewise, We delete the award of moral
service) is in order in the interest of damages and attorney's fee's for lack of
justice with damages for their social factual and legal basis. In the case
humiliation, sleepless nights, mental of Gutierrez vs. Villegas, 8 SCRA 527, the
anguish occasioned by their unwarranted Supreme Court held that no award for
dismissals which has dawned upon them moral damages can be made where the
without the benefit of due record shows no proof of mental anguish.
process.1âwphi1.nêt The other issues and arguments raised by
the complainants in their appeal are
Premises considered, judgment is hereby dismissed for want of merit.
rendered declaring the dismissals of the
complainants as illegal and therefore Anent the appeal of the respondents,
respondents are hereby ordered: records show that the questioned
decision was received by the respondents,
1. To pay complainant Erlinda F. Villareal thru (sic) counsel on July 24, 1990 and the
backwages from the date when she was appeal was filed on October 30, 1990
illegally dismissed on September 30, 1989 which is way beyond the ten (10)
up to July 1, 1990 the date of the calendar days reglementary period for
rendition of this decision, in the amount the filing of appeals as required by the
of P25,012.80, the amount of P28,139.40 Revised NLRC Rules. Well rooted is the
as separation pay and the amount of principle that perfection of an appeal
P15,000.00 as moral damages; within the statutory or reglementary
period is not only mandatory but
jurisdictional and failure to do so renders
2. To pay complainant Jose H. Rutaquio the questioned decision final and
his backwages from the time he was executory that deprives the appellate or
illegally dismissed on September 30, 1989 body of jurisdiction to alter the final
to July 1, 1990 the amount of P23,968.80, judgment much less entertain the appeal
the amount of P9,321.20 as separation (Acda vs. Minister of Labor, 306-307, (sic)
pay and the amount of P15,000.00 as SCRA 119, Dec. 15, 1982). Likewise, the
moral damages; records indicate that no appeal fee was
paid by the respondents. It has been held
3. To pay complainant's counsel ten that the non-payment of appeal fee is an
percent (10%) of the total award as essential requirement in the perfection of
Attorney's fees. 9 an appeal. Appellant must conform to the
requisites of law (Art. 221) considering
On August 3, 1990, the Bank filed its Memorandum on that the right to appeal is not a natural
Appeal while the employees filed theirs on August 9, 1990. right but merely statutory right (Acda vs.
MOLE, 119 SCRA, 507). For these reasons, other benefits or their monetary equivalent
We dismiss respondents' appeal. computed from the time his compensation was
withheld from him to the time of his actual
WHEREFORE, premises considered, the reinstatement. 12 In the landmark case of Osmalik
appealed decision is hereby modified to Bustamante, et al. v. National Labor Relations
delete the award of moral damages and Commission, G.R. No. 111651, November 28, 1996,
attorney's fees. Accordingly, respondents 265 SCRA 61, the Court ruled:
are hereby ordered to pay complainants
Jose F. Rutaquio and Erlinda F. Villareal . . . conformably with the evident
their backwages fixed at one (1) year legislative intent as expressed in Rep. Act
without qualification and deduction. All No. 6715, above-quoted, backwages to be
other dispositions stand. 10 awarded to an illegally dismissed
employee, should not, as a general rule, be
On February 1, 1991, the employees interposed a Motion diminished or reduced by the earnings
for Reconsideration of the aforesaid Decision but the same derived by him elsewhere during the
was denied in the Resolution of February 15, 1991. period of his illegal dismissal. The
underlying reason for this ruling is that
Undaunted, the petitioners found their way to this Court the employee, while litigating the legality
through the present Petition for Certiorari; assigning as (illegality) of his dismissal, must still earn
errors, that: a living to support himself and his family,
while full backwages have to be paid by
the employer as part of the price or
I penalty he has to pay for illegally
dismissing his employee. The clear
PUBLIC RESPONDENTS ERRED IN FIXING legislative intent of the amendment in
THE BACKWAGES OF HEREIN Rep. Act No. 6715 is to give more benefits
PETITIONERS AT ONLY ONE YEAR to workers than was previously given
WITHOUT QUALIFICATION. them under the Mercury Drug Rule or the
deduction of earnings elsewhere rule.
II Thus, a closer adherence to the legislative
policy behind Rep. Act No. 6715 points to
PUBLIC RESPONDENTS ERRED IN full backwages as meaning exactly
AWARDING TO HEREIN PETITIONERS that, i.e., without deducting from
SEPARATION PAY EQUIVALENT TO ONLY backwages the earnings derived
ONE-HALF (1/2) MONTH FOR EVERY elsewhere by the concerned employee
YEAR OF SERVICE. during the period of his illegal dismissal.
In other words, the provision calling for
III full backwages to illegally dismissed
employees is clear, pain and free from
ambiguity and, therefore, must be applied
PUBLIC RESPONDENT COMMISSION
without attempted or strained
ERRED IN NOT AWARDING MORAL
interpretation. Index animi sermo est.
DAMAGES AND ATTORNEY'S FEES FOR
"LACK OF FACTUAL AND LEGAL
BASIS." 11 With respect to separation pay, the dismissal of petitioners
being illegal, the Court holds that the award below of one-
half month pay for every year of service cannot be upheld.
The pivot of inquiry here is the correctness of the
Respondent commission erred in adopting the Labor
award of backwages, separation pay, moral
Arbiter's award of one-half month pay for every year of
damages and attorney's fees.
service. Following the prevailing doctrine enunciated in
the case of Reformist Union of R.B. Liner, Inc. v. National
On the issue of backwages, the award of a fixed Labor Relations Commission, 266 SCRA 728, citing Seatand
amount of one (1) year backwages without Service, Inc. v. National Labor Relations Commission, 206
qualification and deduction is not proper under SCRA 701, 710, petitioners are entitled to a separation pay
the circumstances. The illegal dismissal of the equivalent to one month pay for every year of service, as
herein employees-complainants was effective an alternative to reinstatement.
September 30, 1989, or after Republic Act 6715
(Herrera-Veloso Law) took effect on March 15,
Illegally dismissed, as they are, petitioners who were
1989. Absent any exceptional circumstance, it is
awarded separation pay in lieu of reinstatement, are
now settled that an employee who is unjustly
granted full backwages from the time of their illegal
dismissed from work shall be entitled to full
backwages, inclusive of allowances, and to his
dismissal up to the date of this decision of the Court,
without qualification or deduction.

As regards the award of moral damages, employer


contends that mere allegation of entitlement to moral
damages would not suffice to justify the award, absent any
concrete proof. The Court is of the sense that moral
damages must have a factual basis. In the case under
consideration, petitioners were unable to substantiate
their claim for moral damages. In the absence of fraud or
bad faith on the part of the employer in dismissing
petitioners, an award of moral damages is not proper.

Moral damages are recoverable only


where the dismissal was attended by bad
faith or fraud, or constituted an act
oppressive to labor, or was done in a
manner contrary to morals, good customs
or public policy. (Lopez v. Javier, 252
SCRA 68)

With respect to attorney's fees, the Court believes, and so


rules, that an award of attorney's fees is warranted since it
has been established that legal services have been
rendered by the lawyer of the petitioners. Taking into
account the attendant facts and circumstances, ten (10%)
percent of the total award is a reasonable amount of
attorney's fees. In the case of Philippine National
Construction Corporation v. National Labor Relations
Commission, 277 SCRA 91, the Court held.

It is settled that in actions for recovery of


wages or where an employee was forced
to litigate and, thus, incur expenses to
protect his rights and interest, the award
of attorney's fees is legally and morally
justifiable.

WHEREFORE, the Decision of the National Labor Relations


Commission in NLRC Case Nos. RB-IV-102874-89 and
NLRC Case No. RB-IV-10-2878 is AFFIRMED with
MODIFICATION and petitioners are hereby adjudged
entitled to full backwages from the time of their illegal
dismissal to the finality of this Decision, without
qualification and deduction, one month separation pay for
every year of service and attorney's fees equivalent to ten
(10%) percent of the total award. No pronouncement as to
costs.1âwphi1.nêt

SO ORDERED.