Lab Rev

No. 8967.
May 31, 1956]

ANASTACIO VIANA, petitioner, vs. ALEJO AL-LAGADAN and FILOMENA PIGA,
respondents.
1.WORKMEN'S COMPENSATION; NON-APPLICABILITY OF ACT No. 3428 SHOULD BE

PLEADED IN THE EMPLOYER'S ANSWER.—The nonapplicability of Act No. 3428 to
employers whose gross income does not reach P20,000 is however a matter of defense, which
cannot be availed of unless pieaded in the employer's answer to the claim for compensation
filed by the employee or his heirs.
2.EMPLOYER AND EMPLOYEE; ELEMENTS IN DETERMINING EXISTENCE OF

RELATIONSHIP.—In dt-termining the existence of employer-employee relationship, the
following' elements are generally considered namely: (1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control
the employee's conduct—although the latter is the most important element (35 A. Jur. 445.)
PETITION for review by certiorari of a decision of the Workmen's Compensation

Commission.
The facts are stated in the opinion of the Court.
Ang & Abeleda for petitioner.
Ildefonso de Guzman for respondents.
CONCEPCION, J.:
No. L-9110, April 30, 1957]

JOSEFA VDA. DE CRUZ, ET AL., plaintiffs and appellants vs. THE MANILA
HOTEL COMPANY, defendant and appellee.
1. 1.EMPLOYER AND EMPLOYEE; SEPARATION GRATUITY SUBJECT TO

CERTAIN CONDITION; CASE AT BAR.—The defendant company promised
gratuities to its employees who were not yet entitled to retirement insurance under
Republic Act No. 660. Such
359
VOL. 101, APRIL 30, 1957 359

Vda. de Cruz, et al. vs. The Manila Hotel Co.
1. Service Insurance System. Held: As the plaintiffs were never insured with such
System, they cannot claim the gratuities provided.
1. 2.INDEPENDENT CONTRACTOR; PERSON ENGAGED TO PERFORM SERVICE

FOR ANOTHER. WHEN CONSIDERED INDEPENDENT CONTRACTOR.—One
who is engaged to furnish music, according to his own manner and method, free from
the control and direction of his employer in all matters connected with the
performance of the service, except as to the result of the work, and for a certain price
daily, is an independent contractor within the meaning of the law of master and
servant.
APPEAL from an order of the Court of First Instance of Manila. Jose, J.

Javier & Javier for appellants.
Government Corporate Counsel Ambrosio Padilla and
Panfilo B, Morales for appellee.
BENGZON, J.:
132 SUPREME COURT REPORTS

ANNOTATED
LVN Pictures, Inc. vs. Philippine Musicians Guild
No. L-12582. January 28, 1961.

LVN PICTURES, INC., petitioner-appellant, vs.PHILIPPINE MUSICIANS GUILD
(FFW) and COURT OF INDUSTRIAL RELATIONS, respondents-appellees.
No. L-12598. January 28, 1961.

SAMPAGUITA PICTURES, INC., petitioner-appellant, vs. PHIL
133
VOL. 1, JANUARY 28, 1961 133

IPPINE MUSICIANS GUILD (FFW) and COURT OF INDUSTRIAL RELATIONS,

respondents-appellees.
Industrial Peace Act; Court of Industrial Relations; Certification proceeding.—The

Industrial Court can entertain a petition for certification if, after due hearing, the parties are
found to have an employer-employee relationship.
Same; Allegation that union members constitute a proper bargaining unit.—The absence
of an express allegation that the members of a musicians' guild constitute a proper bargaining
unit is not fatal in a certification proceeding for the same is not a "litigation" in the sense in
which this term is commonly understood. It is a mere investigation which is nonadversary
and fact-finding in character and whose purpose is to ascertain the desires of the employees
as to the matter of their representation.
Same; Discretion of court in certification -proceeding.—The Industrial Court enjoys a
wide discretion in determining the procedure necessary to insure the fair and free choice of
bargaining representatives by employees.
Same; Proper bargaining unit.—A registered labor union, whose members are musicians,
performing work in certain film companies which is distinct from the work of other employees
of said companies, constitutes a proper bargaining unit.
Same; Court of Industrial Relations; Discretion in determining bargaining unit.—The

Industrial Court has discretion to decide upon an appropriate unit for collective bargaining
purposes. Its judgment in this respect is entitled to almost complete finality, unless its action
is arbitrary or capricious.
Same; Employer and employee.—Musicians, who supply the musical background for
movie productions, are employees of film companies under the facts stated in the decision.
They work under the supervision of the movie director who is an employee of the film
company.
Same; Criterion for employer-employee relationship-—An employer-employee

relationship exists where the person for whom the services are performed reserves a right to
control not only the end to be achieved but also the means to be used in reaching such end.
It may exist notwithstanding the intervention of an alleged independent contractor who may
hire and fire the workers.
PETITION for review by certiorari of an order of the Court of Industrial Relations.

Nicanor S. Sison for petitioner-appellant.
Jaime E. Ilagan for respondent-appellee Court of
134

ANNOTATED
Agrarian Relations.
Gerardo P. Cabo Chan for respondent-appellee Philippine Musicians Guild.
CONCEPCION, J.:
VOL. 197, MAY 27, 1991 471

Torillo vs. Leogardo, Jr.
G.R. No. 77205. May 27, 1991. *
VALENTINO TORILLO, petitioner, vs.VICENTE LEOGARDO, JR., in his official

capacity as Deputy Minister of Labor; the HONORABLE MINISTER OF LABOR
AND EMPLOYMENT; and ABERDEEN COURT, INC., respondents.
Labor Law; Dismissal; Backwages; The granting of backwages are granted for equity for
earnings which a worker has lost due to his illegal dismissal.—Article 280 (now Article 279)
of the Labor Code
_______________
* THIRD DIVISION.
472

ANNOTATED
provides that “an employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and to his full backwages
x x x.” Backwages in general are granted on grounds of equity for earnings which a worker
or employee has lost due to his illegal dismissal. Reinstatement, on the other hand, means
restoration to a state of condition from which one had been removed or separated.
Same; Same; Distinction between backwages and reinstatement.—Backwages and
reinstatement are two reliefs given to an illegally dismissed employee. They are separate and
distinct from each other. However, in the event that reinstatement is no longer possible,
separation pay is awarded to the employee. Thus, the award of separation pay is in lieu of
reinstatement and not of backwages. In other words, an illegally dismissed employee is
entitled to (1) either reinstatement, if viable, or separation pay if reinstatement is no longer
viable and (2) backwages.
Same; Same; Backwages not exceeding three years without deduction and separation pay
in the amount of one month for every year of service for illegally dismissed employee.—This
Court held that “petitioner should be paid backwages not exceeding three years without
deduction and separation pay in the amount of one month for every year of service.” In
another case, this Court stated “the public respondent’s order for the private respondents’
reinstatement to their former position is no longer possible under the circumstances. An
award equivalent to three years backwages plus separation pay to compensate for their
illegal separation is thus proper.”
Same; Same; Illegally dismissed employee is entitled to reinstatement to his previous
position without loss of seniority.—We held that “an illegally dismissed employee is entitled
to reinstatement to his previous position without loss of seniority rights with backwages for
a period of three (3) years without qualification or deduction. If reinstatement is no longer
feasible, the employer may be ordered to pay, in addition to backwages, separation pay as
provided by law.”
PETITION to review the order of the Deputy Minister of Labor and Employment.
F.P. Pobre & Associates for petitioner.
Delos Reyes, Bonifacio, Delos Reyes for Aberdeen Court, Inc.
473
VOL. 197, MAY 27, 1991 473

FERNAN, C.J.:
G.R. No. 153511. July 18, 2012.*

LEGEND HOTEL (MANILA), owned by TITANIUM CORPORATION, and/or,
NELSON NAPUD, in his capacity as the President of Petitioner Corporation,
petitioner, vs. HERNANI S. REALUYO, also known as JOEY ROA, respondent.
Certiorari; Court of Appeals; The power of the Court of Appeals to review factual issues
in the exercise of its original jurisdiction to
_______________
* FIRST DIVISION.
11
VOL. 677, JULY 18, 2012 11

Legend Hotel (Manila) vs. Realuyo
issue writs of certiorari is based on Section 9 of Batas Pambansa Blg. 129.―There is no

longer any doubt that a petition for certiorari brought to assail the decision of the NLRC may
raise factual issues, and the CA may then review the decision of the NLRC and pass upon
such factual issues in the process. The power of the CA to review factual issues in the exercise
of its original jurisdiction to issue writs of certiorari is based on Section 9 of Batas Pambansa
Blg. 129, which pertinently provides that the CA “shall have the power to try cases and
conduct hearings, receive evidence and perform any and all acts necessary to resolve factual
issues raised in cases falling within its original and appellate jurisdiction, including the
power to grant and conduct new trials or further proceedings.”
Labor Law; Wages; The factors that determine the issue include who has the power to
select the employee, who pays the employee’s wages, who has the power to dismiss the employee,
and who exercises control of the methods and results by which the work of the employee is
accomplished.―The issue of whether or not an employer-employee relationship existed
between petitioner and respondent is essentially a question of fact. The factors that
determine the issue include who has the power to select the employee, who pays the
employee’s wages, who has the power to dismiss the employee, and who exercises control of
the methods and results by which the work of the employee is accomplished. Although no
particular form of evidence is required to prove the existence of the relationship, and any
competent and relevant evidence to prove the relationship may be admitted, a finding that
the relationship exists must nonetheless rest on substantial evidence, which is that amount
of relevant evidence that a reasonable mind might accept as adequate to justify a conclusion.
Same; Employer-Employee Relationship; Any stipulation in writing can be ignored when
the employer utilizes the stipulation to deprive the employee of his security of
tenure.―Petitioner could not seek refuge behind the service contract entered into with
respondent. It is the law that defines and governs an employment relationship, whose terms
are not restricted to those fixed in the written contract, for other factors, like the nature of
the work the employee has been called upon to perform, are also considered. The law affords
protection to an employee, and does not countenance any attempt to subvert its spirit and
intent. Any stipulation in writing can be ignored when the employer utilizes the stipulation
to deprive the employee of
12

ANNOTATED
his security of tenure. The inequality that characterizes employer-employee relations

generally tips the scales in favor of the employer, such that the employee is often scarcely
provided real and better options.
Same; Wages; Talent Fees; Respondent’s remuneration, albeit denominated as talent fees,
was still considered as included in the term wage in the sense and context of the Labor Code,
regardless of how petitioner chose to designate the remuneration.―Respondent’s remuneration,
albeit denominated as talent fees, was still considered as included in the term wage in the
sense and context of the Labor Code, regardless of how petitioner chose to designate the
remuneration. Anent this, Article 97(f) of the Labor Code clearly states: xxx wage paid to any
employee shall mean the remuneration or earnings, however designated, capable of being
expressed in terms of money, whether fixed or ascertained on a time, task, piece, or
commission basis, or other method of calculating the same, which is payable by an
employer to an employee under a written or unwritten contract of employment for
work done or to be done, or for services rendered or to be rendered, and includes the
fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other
facilities customarily furnished by the employer to the employee.
Same; Hours of Work; Article 83 of the Labor Code only set a maximum of number of
hours as “normal hours of work” but did not prohibit work of less than eight hours.―That
respondent worked for less than eight hours/day was of no consequence and did not detract
from the CA’s finding on the existence of the employer-employee relationship. In providing
that the “normal hours of work of any employee shall not exceed eight (8) hours a day,” Article
83 of the Labor Code only set a maximum of number of hours as “normal hours of work” but
did not prohibit work of less than eight hours.
Same; Control Test; The power of the employer to control the work of the employee is
considered the most significant determinant of the existence of an employer-employee
relationship.―The power of the employer to control the work of the employee is considered
the most significant determinant of the existence of an employer-employee relationship. This
is the so-called control test, and is premised on whether the person for whom the services are
performed
13
VOL. 677, JULY 18, 2012 13
reserves the right to control both the end achieved and the manner and means used to
achieve that end.
Same; Termination of Employment; Retrenchment; Retrenchment is one of the authorized
causes for the dismissal of employees recognized by the Labor Code.―Retrenchment is one of
the authorized causes for the dismissal of employees recognized by the Labor Code. It is a
management prerogative resorted to by employers to avoid or to minimize business losses.
xxx xxx The Court has laid down the following standards that an employer should meet to
justify retrenchment and to foil abuse, namely: (a) The expected losses should be substantial
and not merely de minimis in extent; (b) The substantial losses apprehended must be
reasonably imminent; (c) The retrenchment must be reasonably necessary and likely to
effectively prevent the expected losses; and (d) The alleged losses, if already incurred, and
the expected imminent losses sought to be forestalled must be proved by sufficient and
convincing evidence.
PETITION for review on certiorari of a decision of the Court of Appeals.

R. Lambino & Partners Law Firm for petitioners.
Y.F. Bustamante & Associates Law Office for respondent.
BERSAMIN, J.:
G.R. No. 198782. October 19, 2016.*
ALLAN BAZAR, petitioner, vs. CARLOS A. RUIZOL, respondent.
Remedial Law; Civil Procedure; Appeals; Question of Fact; Employer-Employee

Relationship; The existence of an employer-employee relationship is ultimately a question of
fact.—We emphasize at the outset that the existence of an employer-employee relationship
is ultimately a question of fact. Only errors of law are generally reviewed by this Court.
Factual findings of administrative and quasi-judicial agencies specializing in their respective
fields, especially when affirmed by the Court of Appeals, must be accorded high respect, if
not finality. We here see an exception to the rule on the binding effect on us of the factual
conclusiveness of the quasi-judicial agency. The findings of the Labor Arbiter are in conflict
with that of the NLRC and Court of Appeals. We can thus look into the factual issues involved
in this case.
Labor Law; Employer-Employee Relationship; The Four (4)-fold Test Used in
Determining the Existence of Employer-Employee Relationship.—The four-fold test used in
determining the existence of employer-employee relationship are: (a) the selection and
engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the
employer’s power to control the employee with respect to the means and method by which
the work is to be accomplished.
Same; Same; It is the law that defines and governs an employment relationship, whose
terms are not restricted by those fixed in the written contract, for other factors, like the nature
of the work the employee has been called upon to perform, are also considered.—Assuming
that respondent signed the retainership agreement, it is not indicative of his employment
status. It is the law that defines and governs an employment relationship, whose terms are
not restricted by those fixed in the written contract, for other factors, like the nature of the
work the employee has been called upon to per-
_______________
* THIRD DIVISION.
497
VOL. 806, OCTOBER 19, 2016 497

Bazar vs. Ruizol
form, are also considered. The law affords protection to an employee, and does not
countenance any attempt to subvert its spirit and intent. Any stipulation in writing can be
ignored when the employer utilizes the stipulation to deprive the employee of his security of
tenure. The inequality that characterizes employer-employee relations generally tips the
scales in favor of the employer, such that the employee is often scarcely provided real and
better options.
Same; Same; Control Test; Under the control test, an employer-employee relationship
exists where the person for whom the services are performed reserves the right to control not
only the end achieved, but also the manner and means to be used in reaching that end.—The
control test is the most crucial and determinative indicator of the presence or absence of an
employer-employee relationship. Under the control test, an employer-employee relationship
exists where the person for whom the services are performed reserves the right to control not
only the end achieved, but also the manner and means to be used in reaching that end.
Petitioner asserts that NDI did not exercise the power of control over respondent because he
is free to use his own means and methods by which his work is to be accomplished. The
records show the contrary. It was shown that respondent had to abide by the standards sets
by NDI in conducting repair work on Yamaha motorbikes done in NDI’s service shop. As a
matter of fact, on allegations that respondent failed to live up to the demands of the work, he
was sent several memoranda by NDI. We agree with the Labor Arbiter that the presence of
control is evident.
Same; Termination of Employment; Illegal Dismissals; Backwages; Reinstatement; An
illegally dismissed employee is entitled to two (2) reliefs: backwages and reinstatement.—An
illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The two
reliefs provided are separate and distinct. In instances where reinstatement is no longer
feasible because of strained relations between the employee and the employer, separation
pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement,
if viable, or separation pay if reinstatement is no longer viable, and backwages.
Civil Law; Obligations; Solidary Obligations; There is solidary liability when the
obligation expressly so states, when the law so provides, or when the nature of the obligation
so requires.—We now
498

ANNOTATED
Bazar vs. Ruizol
go to the liability of petitioner for payment of the monetary award. There is solidary
liability when the obligation expressly so states, when the law so provides, or when the nature
of the obligation so requires. Settled is the rule that a director or officer shall only be
personally liable for the obligations of the corporation, if the following conditions concur: (1)
the complainant alleged in the complaint that the director or officer assented to patently
unlawful acts of the corporation, or that the officer was guilty of gross negligence or bad faith;
and (2) the complainant clearly and convincingly proved such unlawful acts, negligence or
bad faith.
PETITION for review on certiorari of the decision and resolution of the Court of
Appeals.
R.R. Go Law Office for petitioner.
Poculan and Associates Law Office for respondent.
PEREZ, J.:
G.R. No. 197899. March 6, 2017.*
JOAQUIN LU, petitioner, vs. TIRSO ENOPIA, ROBERTO ABANES, ALEJANDRE

BAGAS, SALVADOR BERNAL, SAMUEL CAHAYAG, ALEJANDRO CAMPUGAN,
RUPERTO CERNA, JR., REYNALDO CERNA, PETER CERVANTES, LEONARDO
CONDESTABLE, ROLANDO ESLOPOR, ROLLY FERNANDEZ, EDDIE FLORES,
ROLANDO FLORES, JUDITO FUDOLIN, LEO GRAPANI, FELIX HUBAHIB,
JERRY JUAGPAO, MARCIANO LANUTAN, JOVENTINO MATOBATO, ALFREDO
MONIVA, VICTORIANO ORTIZ, JR., RENALDO PIALAN, ALFREDO PRU-
_______________
** Designated fifth member of the Third Division per Special Order No. 2417 dated January 4, 2017.
* SECOND DIVISION.
211
VOL. 819, MARCH 6, 2017 211

Lu vs. Enopia
CIA, PONCIANO REANDO, HERMENIO REMEGIO, DEMETRIO RUAYA,

EDGARDO RUSIANA, NESTOR SALILI, VICENTE SASTRELLAS, ROMEO
SUMAYANG, and DESIDERIO TABAY, respondents.
Remedial Law; Civil Procedure; Factual Findings; The Court of Appeals (CA) is not to be
restrained from revising or correcting such factual findings whenever warranted by the
circumstances simply because the National Labor Relations Commission (NLRC) is not
infallible.—The LA’s factual findings was affirmed by the NLRC, however, the CA found that
the latter’s resolution did not critically examine the facts and rationally assess the evidence
on hand, and thus found that the NLRC gravely abused its discretion when it sustained the
LA’s decision dismissing respondents’ complaint for illegal dismissal on the ground of lack of
merit. The judicial function of the CA in the exercise of its certiorari jurisdiction over the
NLRC extends to the careful review of the NLRC’s evaluation of the evidence because the
factual findings of the NLRC are accorded great respect and finality only when they rest on
substantial evidence. Accordingly, the CA is not to be restrained from revising or correcting
such factual findings whenever warranted by the circumstances simply because the NLRC is
not infallible. Indeed, to deny to the CA this power is to diminish its corrective jurisdiction
through the writ of certiorari.
Same; Same; Equity Jurisdiction; Supreme Court; When there is a conflict among the
factual findings of the antecedent deciding bodies like the Labor Arbiter (LA), the National
Labor Relations Commission (NLRC) and the Court of Appeals (CA), it is proper, in the
exercise of the Supreme Court’s (SC’s) equity jurisdiction, to review and reevaluate the factual
issues and to look into the records of the case and reexamine the questioned findings.—We
reiterate the doctrine that the existence of an employer-employee relationship is ultimately
a question of fact. Generally, We do not review errors that raise factual questions. However,
when there is a conflict among the factual findings of the antecedent deciding bodies like the
LA, the NLRC and the CA, it is proper, in the exercise of Our equity jurisdiction, to review
and reevaluate the factual issues and to look into the records of the case and reexamine the
questioned findings. In dealing with factual issues in labor cases, substantial evidence or that
212

ANNOTATED
Lu vs. Enopia
amount of relevant evidence which a reasonable mind might accept as adequate to

justify a conclusion is sufficient.
Labor Law; Employer-Employee Relationship; Elements of.—In determining the
existence of an employer-employee relationship, the following elements are considered: (1)
the selection and engagement of the workers; (2) the power to control the worker’s conduct;
(3) the payment of wages by whatever means; and (4) the power of dismissal. We find all
these elements present in this case. It is settled that no particular form of evidence is required
to prove the existence of an employer-employee relationship. Any competent and relevant
evidence to prove the relationship may be admitted.
Same; Same; Control Test; It is not essential that the employer actually supervises the
performance of duties by the employee. It is enough that the former has a right to wield the
power.—It was established that petitioner exercised control over respondents. It should be
remembered that the control test merely calls for the existence of the right to control, and
not necessarily the exercise thereof. It is not essential that the employer actually supervises
the performance of duties by the employee. It is enough that the former has a right to wield
the power.
Same; Same; The payment of respondents’ wages based on the percentage share of the fish
catch would not be sufficient to negate the employer-employee relationship existing between
them.—The payment of respondents’ wages based on the percentage share of the fish catch
would not be sufficient to negate the employer-employee relationship existing between them.
As held in Ruga v. NLRC, 181 SCRA 266 (1990): x x x [I]t must be noted that petitioners
received compensation on a percentage commission based on the gross sale of the fish-
catch, i.e., 13% of the proceeds of the sale if the total proceeds exceeded the cost of the crude
oil consumed during the fishing trip, otherwise, only 10% of the proceeds of the sale. Such
compensation falls within the scope and meaning of the term “wage” as defined under Article
97(f) of the Labor Code, thus: (f) “Wage” paid to any employee shall mean the remuneration
or earnings, however designated, capable of being expressed in terms of money, whether fixed
or ascertained on a time, task, piece or commission basis, or other method of calculating the
same, which is payable by an employer to an employee under a written or unwritten contract
of em-
213
VOL. 819, MARCH 6, 2017 213

Lu vs. Enopia
ployment for work done or to be done, or for services rendered or to be rendered, and
included the fair and reasonable value, as determined by the Secretary of Labor, of board,
lodging, or other facilities customarily furnished by the employer to the employee.
Same; Regular Employees; Security of Tenure; As respondents were petitioner’s regular
employees, they are entitled to security of tenure under Section 3,Constitution.—As
respondents were petitioner’s regular employees, they are entitled to security of tenure under
Section 3, Article XIII of the 1987 Constitution. It is also provided under Article 279 of the
Labor Code, that the right to security of tenure guarantees the right of employees to continue
in their employment absent a just or authorized cause for termination. Considering that
respondents were petitioner’s regular employees, the latter’s act of asking them to sign the
joint fishing venture agreement which provides that the venture shall be for a period of one
year from the date of the agreement, subject to renewal upon mutual agreement of the parties,
and may be pre-terminated by any of the parties before the expiration of the one-year period,
is violative of the former’s security of tenure. And respondents’ termination based on their
refusal to sign the same, not being shown to be one of those just causes for termination under
Article 282, is, therefore, illegal.
Same; Termination of Employment; Illegal Dismissals; Reinstatement; Backwages; An
employee who is unjustly dismissed from work shall be entitled to reinstatement without loss
of seniority rights and other privileges and to his full backwages, inclusive of allowances, and
to his other benefits or their monetary equivalent computed from the time his compensation
was withheld from him up to the time of his actual reinstatement.—An employee who is
unjustly dismissed from work shall be entitled to reinstatement without loss of seniority
rights and other privileges and to his full backwages, inclusive of allowances, and to his other
benefits or their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement. Respondents who were unjustly
dismissed from work are entitled to reinstatement and backwages, among others. However,
We agree with the CA that since most (if not all) of the respondents are already employed in
different deep-sea fishing companies, and considering the strained relations between MGTR
and the respondents, reinstatement is no longer viable. Thus, the CA correctly ordered the
payment to each
214

ANNOTATED
Lu vs. Enopia
respondent his separation pay equivalent to one month for every year of service reckoned
from the time he was hired as fishermen-crew member of F/B MG-28 by MGTR until the
finality of this judgment.
Same; Same; Same; Damages; Exemplary Damages; Exemplary damages are granted by
way of example or correction for the public good if the employer acted in a wanton, fraudulent,
reckless, oppressive or malevolent manner.—The CA’s award of exemplary damages to each
respondent is likewise affirmed. Exemplary damages are granted by way of example or
correction for the public good if the employer acted in a wanton, fraudulent, reckless,
oppressive or malevolent manners.
Same; Same; Same; Same; Attorney’s Fees; It is settled that 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.—We also agree with the CA that respondents are
entitled to attorney’s fees in the amount of 10% of the total monetary award. It is settled that
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.
Appeals.
Law Firm of Miguel, Baliao & Associates for petitioner.
Emilio O. Quianzon, Jr. for respondents.
Apex Mining Company, Inc. vs. NLRC
G.R. No. 94951. April 22, 1991. *
APEX MINING COMPANY, INC., petitioner, vs.NATIONAL LABOR RELATIONS

COMMISSION and SINCLITICA CANDIDO, respondents.
Labor Laws; Domestic Helper, defined.—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 other similar
househelps.
Same; Same; Laundrywoman in staffhouses of a company, not included in the definition
of domestic helpers.—The definition cannot be interpreted to include househelp or
laundrywomen 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.
Same; Same; Same; Laundrywoman not actually serving the family of the employer but
working in the staffhouses or within the premises of the business of the employer is a regular
employee.—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
_______________
* FIRST DIVISION.
252

ANNOTATED
Apex Mining Company, Inc. vs. NLRC
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.
PETITION for certiorari to review the decision of the National Labor Relations
Commission.

Bernabe B. Alabastro for petitioner.
Angel Fernandez for private respondent.
GANCAYCO, J.:
G.R. Nos. 169295-96. November 20, 2006. *
REMINGTON INDUSTRIAL SALES CORPORATION, petitioner, vs. ERLINDA

CASTAÑEDA, respondent.
Labor Law; Procedural Rules and Technicalities; The application of technical rules of
procedure may be relaxed to serve the demands of substantial justice, particularly in labor
cases.—It is wellsettled that the application of technical rules of procedure may be relaxed to
serve the demands of substantial justice, particularly in labor cases. Labor cases must be
decided according to justice and equity and the substantial merits of the controversy. Rules
of procedure are but mere tools designed to facilitate the attainment of justice. Their strict
and rigid application, which would result in technicalities that tend to frustrate rather than
promote substantial justice, must always be avoided.
Same; Same; Pleadings and Practice; Verification; The requirement of verification is
formal, and not jurisdictional—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.—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, noncompliance with
which does not necessarily render it fatally defective. Verification is simply intended to secure
an assurance that the
_______________
* SECOND DIVISION.
392

ANNOTATED
Remington Industrial Sales Corporation vs.
Castañeda
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. 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.
Same; Same; Same; Appeals; 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 National Labor Relations Commission may
disregard the procedural lapse where there is an acceptable reason to excuse tardiness in the
taking of the appeal.—Under Article 223 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. 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”; (b) fundamental
consideration of substantial justice; (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; and (d) special circumstances of the case
combined with its legal merits or the amount and the issue involved.
Same; Same; Same; Same; 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.—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
393
VOL. 507, NOVEMBER 20, 2006 393

Castañeda
motion for reconsideration fell on December 16, 2000, which was a Saturday. In a
number of cases, 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.
Same; Same; Same; Certiorari; 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.—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 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. 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.
Same; Employer-Employee Relationship; That a person works within company premises,
and that she does not cater exclusively to the personal comfort of a company officer and his
family, is reflective of the existence of the company’s right of control over her functions, which
is the primary indicator of the existence of an employeremployee relationship.—In the case at
bar, the petitioner itself admits in its position paper that respondent worked at the company
premises and her duty was to cook and prepare its employees’ lunch
394

ANNOTATED
Castañeda
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.
Same; Same; The determination of the existence of an employeremployee relationship is
defined by law according to the facts of each case, regardless of the nature of the activities
involved.—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. 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.
Same; Abandonment; Words and Phrases; Abandonment is the deliberate and
unjustified refusal of an employee to resume his employment—it is a form of neglect of duty;
hence, a just cause for termination of employment by the employer.—Abandonment is the
deliberate and unjustified refusal of an employee to resume his employment. 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. 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. The intent to discontinue the employment must
be shown by clear proof that it was deliberate and unjustified. This, the petitioner failed to
395
VOL. 507, NOVEMBER 20, 2006 395

Castañeda
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.
Appeals.

P.C. Nolasco & Associates for petitioner.
Amelia C. Garchitorena for respondent.
PUNO, J.:
PERALTA, J:
San Miguel Brewery Sales Force Union (PTGWO)

vs. Ople
G.R. No. 53515. February 8, 1989. *
SAN MIGUEL BREWERY SALES FORCE UNION (PTGWO), petitioner, vs. HON.
BLAS F. OPLE, as Minister of Labor and SAN MIGUEL CORPORATION,
respondents.
Labor Law; Labor Relations; Unfair Labor Practice; The free will of management to
conduct its own business affairs to achieve its purpose cannot be denied.—Public respondent
was correct in holding that the CDS is a valid exercise of management prerogatives: “Except
as limited by special laws, an employer is free to regulate, according to his own discretion and
judgment, all aspects of employment, including hiring, work assignments, working methods,
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 work. x x x (NLU vs. Insular La Yebana Co., 2 SCRA
924; Republic Savings Bank vs. CIR, 21 SCRA 226, 235.)” (Perfecto V. Hernandez, Labor
Relations Law, 1985 Ed., p. 44.) Every business enterprise endeavors to increase its profits.
In the process, it may adopt or devise means designed towards that goal. In Abott
Laboratories vs. NLRC, 154 SCRA 713, We ruled: x x x Even as the law is solicitous of the
welfare of the employees, it must also protect the right of an employer to exercise what are
clearly management prerogatives. The free will of management to conduct its own business
affairs to achieve its purpose cannot be denied.” So long as a company’s management
prerogatives are exercised in good faith for the advancement of the employer’s interest and
not for the purpose of defeating or circumventing the rights of the employees under special
laws or under valid agreements, this Court will uphold them (LVN Pictures Workers vs. LVN,
35 SCRA 147; Phil. American Embroideries vs. Embroidery and Garment Workers, 26 SCRA
634; Phil. Refining Co. vs. Garcia, 18 SCRA 110).
PETITION for certiorari to review the order of the Minister of Labor.

Lorenzo F. Miravite for petitioner.
Isidro D. Amoroso for New San Miguel Corp. Sales Force Union.
_______________
* FIRST DIVISION.
26

ANNOTATED
San Miguel Brewery Sales Force Union (PTGWO)
vs. Ople
Siguion Reyna, Montecillo & Ongsiako for private respondent.
GRIÑO-AQUINO, J.:
SUPREME COURT REPORTS ANNOTATED

Sime Darby Pilipinas, Inc. vs. NLRC (2nd
Division)
G.R. No. 119205. April 15, 1998. *
SIME DARBY PILIPINAS, INC., petitioner, vs.NATIONAL LABOR RELATIONS

COMMISSION (2ND DIVISION) and SIME DARBY SALARIED EMPLOYEES
ASSOCIATION (ALU-TUCP), respondents.
Labor Law; Management Prerogatives; Work Schedules; The right to fix the work
schedules of the employees rests principally on their employer.—We agree, hence, we sustain
petitioner. The right to fix the work schedules of the employees rests principally on their
employer. In the instant case petitioner, as the employer, cites as reason for the adjustment
the efficient conduct of its business operations and its improved production. It rationalizes
that while the old work schedule included a 30-minute paid lunch break, the employees could
be called upon to do jobs during that period as they were “on call.” Even if denominated as
lunch break, this period could very well be considered as working time because the factory
employees were required to work if necessary and were paid accordingly for working. With
the new work schedule, the employees are now given a one-hour lunch break without any
interruption from their employer. For a full one-hour undisturbed lunch break, the employees
can freely and effectively use this hour not only for eating but also for their rest and comfort
which are conducive to more efficiency and better performance in their work. Since the
employees are no longer required to work during this one-hour lunch break, there is no more
need for them to be compensated for this period. We agree with the
_______________
* FIRST DIVISION.
87
VOL. 289, APRIL 15, 1998 87

Division)
Labor Arbiter that the new work schedule fully complies with the daily work period of
eight (8) hours without violating the Labor Code. Besides, the new schedule applies to all
employees in the factory similarly situated whether they are union members or not.
Same; Same; Same; Right to Self-Organization; Where the change effected by

management with regard to working time is made to apply to all factory employees engaged
in the same line of work whether or not they are members of the union, it cannot be said that
the new scheme adopted by management prejudices the right of the union to self-
organization.—The case before us does not pertain to any controversy involving
discrimination of employees but only the issue of whether the change of work schedule, which
management deems necessary to increase production, constitutes unfair labor practice. As
shown by the records, the change effected by management with regard to working time is
made to apply to all factory employees engaged in the same line of work whether or not they
are members of private respondent union. Hence, it cannot be said that the new scheme
adopted by management prejudices the right of private respondent to self-organization.
Same; Same; Even as the law is solicitous of the welfare of the employees, it must also
protect the right of an employer to exercise what are clearly management prerogatives;
Management retains the prerogative, whenever exigencies of the service so require, to change
the working hours of its employees.—Every business enterprise endeavors to increase its
profits. In the process, it may devise means to attain that goal. Even as the law is solicitous
of the welfare of the employees, it must also protect the right of an employer to exercise what
are clearly management prerogatives. Thus, management is free to regulate, according to its
own discretion and judgment, all aspects of employment, including hiring, work assignments,
working methods, time, place and manner of work, processes to be followed, supervision of
workers, working regulations, transfer of employees, work supervision, lay off of workers and
discipline, dismissal and recall of workers. Further, management retains the prerogative,
whenever exigencies of the service so require, to change the working hours of its employees.
So long as such prerogative is exercised in good faith for the advancement of the employer’s
interest and not for the purpose of defeating or circumventing the rights of the employees
under special laws or under valid agreements, this Court will uphold such exercise.
88

ANNOTATED
Division)
Same; Same; Social Justice; Although the Supreme Court has inclined more often than
not toward the worker and has upheld his cause in his conflicts with the employer, such
favoritism has not blinded the Court to the rule that justice is in every case for the deserving,
to be dispensed in the light of the established facts and the applicable law and doctrine.—
While the Constitution is committed to the policy of social justice and the protection of the
working class, it should not be supposed that every dispute will be automatically decided in
favor of labor. Management also has rights which, as such, are entitled to respect and
enforcement in the interest of simple fair play. Although this Court has inclined more often
than not toward the worker and has upheld his cause in his conflicts with the employer, such
favoritism has not blinded the Court to the rule that justice is in every case for the deserving,
to be dispensed in the light of the established facts and the applicable law and doctrine.
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.

Ronaldo E. Javier for petitioner.
Seno, Mendoza and Associates for ALU-TUCP.
BELLOSILLO, J.:
Interphil Laboratories Employees Union-FFW vs.

Interphil Laboratories, Inc.
G.R. No. 142824. December 19, 2001. *
INTERPHIL LABORATORIES EMPLOYEES UNION-FFW, ENRICO GONZALES

and MA. THERESA MONTEJO, petitioners, vs. INTERPHIL LABORATORIES,
INC., and HONORABLE LEONARDO A. QUISUMBING, SECRETARY OF LABOR
AND EMPLOYMENT, respondents.
Labor Law; Strikes; Jurisdiction; Assumption of Jurisdiction; The Labor Secretary’s

authority to assume jurisdiction over a labor dispute must include and extend to all questions
and controversies arising therefrom, including cases over which the labor arbiter has exclusive
jurisdiction.—The appellate court also correctly held that the question of the Secretary of
Labor and Employment’s jurisdiction over labor and labor-related disputes was already
settled in International Pharmaceutical, Inc. vs. Hon. Secretary of Labor and Associated
Labor Union (ALU) where the Court declared: In the present case, the Secretary was
explicitly granted by Article 263(g) of the Labor Code the authority to assume jurisdiction
over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable
to the national interest, and decide the same accordingly. Necessarily, this authority to
assume jurisdiction over the said
_______________
* FIRST DIVISION.
659
VOL. 372, DECEMBER 19, 2001 659
Interphil Laboratories Employees Union-FFW
vs.
labor dispute must include and extend to all questions and controversies arising
therefrom, including cases over which the labor arbiter has exclusive jurisdiction.
Same; Same; Same; It is axiomatic that the factual findings of the Labor Arbiter, when
sufficiently supported by the evidence on record, must be accorded due respect by the Supreme
Court.—Anent the alleged misappreciation of the evidence proffered by the parties, it is
axiomatic that the factual findings of the Labor Arbiter, when sufficiently supported by the
evidence on record, must be accorded due respect by the Supreme Court. Here, the report and
recommendation of Labor Arbiter Caday was not only adopted by then Secretary of Labor
Quisumbing but was likewise affirmed by the Court of Appeals. We see no reason to depart
from their findings. Evidence; Parol Evidence Rule; Words and Phrases.—The parol evidence
rule provides that “(w)hen the terms of an agreement have been reduced to writing, it is
considered as containing all the terms agreed upon and there can be, between the parties and
their successors-in-interest, no evidence of such terms other than the contents of the written
agreement.” (Section 9 [par. 1], Rule 130 of the Rules of Court).
Same; Same; In labor cases pending before the National Labor Relations Commission or
the Labor Arbiter, the rules of evidence prevailing in courts of law or equity are not
controlling—the Labor Arbiter is not precluded from accepting and evaluating evidence other
than, and even contrary to, what is stated in the CBA.—The reliance on the parol evidence
rule is misplaced. In labor cases pending before the Commission or the Labor Arbiter, the
rules of evidence prevailing in courts of law or equity are not controlling. Rules of procedure
and evidence are not applied in a very rigid and technical sense in labor cases. Hence, the
Labor Arbiter is not precluded from accepting and evaluating evidence other than, and even
contrary to, what is stated in the CBA.
Labor Law; Working Hours; Where the employees assented by practice to an arrangement
of a continuous 24-hour, two-shift work daily schedule in spite of the eight-hour schedule
provided for in their CBA, they cannot now be heard to claim that the overtime boycott is
justified because they were not obliged to work beyond eight hours.—It is evident from the
foregoing provision that the working hours may be changed, at the discretion of the
company, should such change be necessary for its operations, and that the employees shall
observe such rules as have been laid down by the company. In the case before us, Labor Arbiter
Caday found that respondent company had to adopt a continuous 24-hour work daily
schedule
660

ANNOTATED
vs.
by reason of the nature of its business and the demands of its clients. It was established
that the employees adhered to the said work schedule since 1988. The employees are deemed
to have waived the eight-hour schedule since they followed, without any question or
complaint, the two-shift schedule while their CBA was still in force and even prior thereto.
The two-shift schedule effectively changed the working hours stipulated in the CBA. As the
employees assented by practice to this arrangement, they cannot now be heard to claim that
the overtime boycott is justified because they were not obliged to work beyond eight hours.
Same; Strikes; No-Strike Clause; An “overtime boycott” or “work slowdown” by the
employees constitutes a violation of the CBA which prohibits the union or employee, during
the existence of the CBA, to stage a strike or engage in slowdown or interruption of work.—
More importantly, the “overtime boycott” or “work slowdown” by the employees constituted
a violation of their CBA, which prohibits the union or employee, during the existence of the
CBA, to stage a strike or engage in slowdown or interruption of work. In Ilaw at Buklod ng
Manggagawa vs. NLRC, this Court ruled: x x x (T)he concerted activity in question would
still be illicit because contrary to the workers’ explicit contractual commitment “that there
shall be no strikes, walkouts, stoppage or slowdown of work, boycotts, secondary boycotts,
refusal to handle any merchandise, picketing, sit-down strikes of any kind, sympathetic or
general strikes, or any other interference with any of the operations of the COMPANY during
the term of xxx (their collective bargaining) agreement.” What has just been said makes
unnecessary resolution of SMC’s argument that the workers’ concerted refusal to adhere to
the work schedule in force for the last several years, is a slowdown, an inherently illegal
activity essentially illegal even in the absence of a no-strike clause in a collective bargaining
contract, or statute or rule. The Court is in substantial agreement with the petitioner’s
concept of a slowdown as a “strike on the installment plan”; as a willful reduction in the rate
of work by concerted action of workers for the purpose of restricting the output of the
employer, in relation to a labor dispute; as an activity by which workers, without a complete
stoppage of work, retard production or their performance of duties and functions to compel
management to grant their demands. The Court also agrees that such a slowdown is
generally condemned as inherently illicit and unjustifiable, because while the employees
“continue to work and remain at their positions and accept the wages paid to them,” they at
the same time “select what part of their allotted tasks they care to perform of their own
volition or refuse openly or secretly, to the employer’s damage, to do other work”; in other
words, they “work on their own terms.” x x x.
661
VOL. 372, DECEMBER 19, 2001 661

vs.
Same; Same; Same; The Court cannot agree with the proposition that the employer, in
extending substantial separation package to some officers of the union during the pendency of
the case, in effect, condoned the illegal acts they committed—the Court views the gesture of the
company as an act of generosity for which it should not be punished.—Finally, the Court
cannot agree with the proposition that respondent company, in extending substantial
separation package to some officers of petitioner union during the pendency of this case, in
effect, condoned the illegal acts they committed. Respondent company correctly postured that
at the time these union officers obtained their separation benefits, they were still considered
employees of the company. Hence, the company was merely complying with its legal
obligations. Respondent company could have withheld these benefits pending the final
resolution of this case. Yet, considering perhaps the financial hardships experienced by its
employees and the economic situation prevailing, respondent company chose to let its
employees avail of their separation benefits. The Court views the gesture of respondent
company as an act of generosity for which it should not be punished.
PETITION for review on certiorari of a decision of the Court of Appeals.

Allan S. Montaño for petitioners.
Castillo, Laman, Tan, Pantaleon & San Jose Law Offices for private
respondent.
KAPUNAN, J.:
Arica vs. National Labor Relations Commission
G.R. No. 78210. February 28, 1989. *
TEOFILO ARICA, DANILO BERNABE, MELQUIADES DOHINO, ABONDIO

OMERTA, GIL TANGIHAN, SAMUEL LABAJO, NESTOR NORBE, RODOLFO
CONCEPCION, RICARDO RICHA, RODOLFO NENO, ALBERTO BALATRO,
BENJAMIN JUMAMOY, FERMIN DAAROL, JOVENAL ENRIQUEZ, OSCAR
BASAL, RAMON ACENA, JAIME BUGTAY, and 561 OTHERS, HEREIN
REPRESENTED BY KORONADO B. APUZEN, petitioners, vs.NATIONAL LABOR
RELATIONS COMMISSION, HONORABLE FRANKLIN DRILON, HONORABLE
CONRADO B. MAGLAYA, HONORABLE ROSARIO B. ENCARNACION, and
STANDARD (PHIL-IPPINES) FRUIT CORPORATION, respondents.
Labor Law; Labor Relations; “Waiting Time”; The 30-minute assembly time practiced by
the employees of the company (private respondent), cannot be considered “waiting time”, and
is therefore not compensable.—Noteworthy is the decision of the Minister of Labor, on May
12, 1978 in the aforecited case (Associated Labor Union vs. Standard (Phil.) Fruit
Corporation, NLRC Case No. 26-LS-XI-76) where significant findings of facts and conclusions
had already been made on the matter. The Minister of Labor held: “The thirty (30)-minute
assembly time long practiced and institutionalized by mutual consent of the parties under
Article IV, Section 3, of the Collective Bargaining Agreement cannot be considered as ‘waiting
time’ within the purview of Section 5, Rule I, Book III of the Rules and Regulations
Implementing the Labor Code. x x x Furthermore, the thirty (30)-minute assembly is a
deeply-rooted, routinary practice of the employees, and the proceedings attendant thereto are
not infected with complexities as to deprive the workers the time to attend to other personal
pursuits. They are not new employees as to require the company to deliver long briefings
regarding their respective work assignments. Their houses are situated right on the area
where the farms are located, such that after the roll call, which does not necessarily require
the personal presence, they can go back to their houses to attend to some chores. In short,
they are not subject to the absolute control of the company during this period, otherwise,
their failure to
________________
* SECOND DIVISION.
777
VOL. 170, FEBRUARY 28, 1989 777

Arica vs. National Labor Relations
Commission
report in the assembly time would justify the company to impose disciplinary measures.”
Remedial Law; Civil Procedure; Judgments; Res Judicata; The principle of res judicata
bars not only the relitigation in a subsequent action of the issues raised, passed upon and
adjudicated in the first suit, but also the ventilation in said subsequent suit of any other issue
which could have been raised in the first, but was not.—This Court has held: “In this
connection account should be taken of the cognate principle that res judicataoperates to bar
not only the relitigation in a subsequent action of the issues squarely raised, passed upon
and adjudicated in the first suit, but also the ventilation in said subsequent suit of any other
issue which could have been raised in the first but was not. The law provides that ‘the
judgment or order is, with respect to the matter directly adjudged or as to any other matter
that could have been raised in relation thereto, conclusive between the parties and their
successors in interest by title subsequent to the commencement of the action x x litigating
for the same thing and in the same capacity.’ So, even if new causes of action are asserted in
the second action (e.g. fraud, deceit, undue machinations in connection with their execution
of the convenio de transaccion), this would not preclude the operation of the doctrine of res
judicata. Those issues are also barred, even if not passed upon in the first. They could have
been, but were not, there raised.” (Vda. de Buncio v. Estate of the late Anita de Leon, 156
SCRA 352 [1987]).
Same; Evidence; Findings of Fact; Findings of fact of quasi-judicial bodies are accorded
not only respect but at times, finality as long as they are supported by substantial evidence.—
Moreover, as a rule, the findings of facts of quasi-judicial agencies which have acquired
expertise because their jurisdiction is confined to specific matters are accorded not only
respect but at times even finality if such findings are supported by substantial evidence
(Special Events & Central Shipping Office Workers Union v. San Miguel Corporation, 122
SCRA 557 [1983]; Dangan v. NLRC, 127 SCRA 796 [1984]; Phil. Labor Alliance Council v.
Bureau of Labor Relations, 75 SCRA 162 [1977]; Mamerto v. Inciong, 118 SCRA 265 [1982];
National Federation of Labor Union (NAFLU) v. Ople, 143 SCRA 124 [1986]; Edi-Staff
Builders International, Inc. v. Leogardo, Jr., 152 SCRA 453 [1987]; Asiaworld Publishing
House, Inc. v. Ople, 152 SCRA 219 [1987].
778

ANNOTATED
Arica vs. National Labor Relations
Commission
SARMIENTO, J., Dissenting:
Labor Law; Labor Relations; Labor Standards; “Waiting Time”; In view of the
restrictions imposed upon petitioners with respect to the practice of the 30-minute assembly
time, said assembly time, has become, in truth and in fact a waiting time as contemplated in
the Labor Code.—It is evident that the Ople decision was predicated on the absence of any
insinuation of obligatoriness in the course or after the assembly activities on the part of the
employees. (“. . . [T]hey are not subject to the absolute control of the company during this
period, otherwise, their failure to report in the assembly time would justify the company to
impose disciplinary measures;” supra, 6.) As indicated, however, by the petitioners, things
had since changed, and remarkably so, and the latter had since been placed under a number
of restrictions. My considered opinion is that the thirty-minute assembly time had become,
in truth and fact, a “waiting time” as contemplated by the Labor Code.
PETITION for certiorari to review the decision of the National Labor Relations
Commission.

Koronado B. Apuzen and Jose C. Espinasfor petitioners.
The Solicitor General for public respondent.
Dominguez & Paderna Law Offices Co. for private respondent.
PARAS, J.:
VOL. 205, JANUARY 9, 1992 69

Rada vs. NLRC
G.R. No. 96078. January 9,1992. *
HILARIO RADA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION

(Second Division) and PHILNOR CONSULTANTS AND PLANNERS, INC.,
respondents.
Labor Law; Appeals; Technical rules not binding and prior resort to amicable
settlement; An appeal by the employer may be perfected only upon the posting of a cash or
surety bond.—While it is true that the payment of the supersedeas bond is an essential
requirement in the perfection of an appeal, however, where the fee had been paid although
payment was delayed, the broader interests of justice and the desired objective of resolving
controversies on the merits demands that the appeal be given due course. Besides, it was
within the inherent power of the NLRC to have allowed late payment of the bond, considering
that the aforesaid decision of the labor arbiter was received by private respondent on October
3, 1989 and its appeal was duly filed on October 13, 1989. However, said decision did not
state the amount awarded as backwages and overtime pay, hence the amount of the
supersedeas bond could not be determined. It was only in the order of the NLRC of February
16,1990 that the amount of the supersedeas bond was specified and which bond, after an
extension granted by the NLRC, was timely filed by private respondent.
Same; Termination of Employment; 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, the employment is not to be deemed regular.—A non-project
employee is different in that the employee is hired for more than one project. A non-project
employee, vis-a-vis a project employee, is best exemplified in the case of Fegurin, et al. vs.
National Labor Relations Commission, et al. wherein four of the petitioners had been working
with the company for nine years, one for eight years, another for six years, the shortest term
being three years. In holding that petitioners are regular employees, this Court therein
explained: "Considering the nature of the work of petitioners, that of carpenter, laborer or
mason, their respective jobs would actually be continuous and on-going. When a project to
which they are individually assigned is completed, they would be assigned to the next project
or a phase thereof. In other words, they belonged to a 'work pool' from which the
_______________
* SECOND DIVISION.
70

ANNOTATED
Rada vs. NLRC
company would draw workers for assignment to other projects at its discretion. They are,
therefore, actually 'non-project employees.'" From the foregoing, it is clear that petitioner is
a project employee considering that he does not belong to a "work pool" from which the
company would draw workers for assignment to other projects at its discretion. It is likewise
apparent from the facts obtaining herein that petitioner was utilized only for one particular
project, the MNEE Stage 2 Project of respondent company. Hence, the termination of herein
petitioner is valid by reason of the completion of the project and the expiration of his
employment contract.
Same; Conditions of Employment; Hours of Work; Hours worked shall include all time
during which an employee is suffered or permitted to work.—Anent the claim for overtime
compensation, we hold that petitioner is entitled to the same. The fact that he picks up
employees of Philnor at certain specified points along EDSA in going to the project site and
drops them off at the same points on his way back from the field office going home to Marikina,
Metro Manila is not merely incidental to petitioner's job as a driver. On the contrary, said
transportation arrangement had been adopted, not so much for the convenience of the
employees, but primarily for the benefit of the employer, herein private respondent. This fact
is inevitably deducible from the Memorandum of respondent company: "The herein
Respondent resorted to the above transport arrangement because from its previous project
construction supervision experiences, Respondent found out that project delays and
inefficiencies resulted from employees' tardiness; and that the problem of tardiness, in turn,
was aggravated by transportation problems, which varied in degrees in proportion to the
distance between the project site and the employees' residence. In view of this lesson from
experience, and as a practical, if expensive, solution to employees' tardiness and its
concomitant problems, Respondent adopted the policy of allowing certain employees—not
necessarily project drivers—to bring home project vehicles, so that employees could be
afforded fast, convenient and free transportation to and from the project field office. x x x."
SPECIAL CIVIL ACTION for certiorari to review the decision of the National Labor
Relations Commission.

Caballero, Calub, Aumentado & Associates Law Offices for petitioner.
71
VOL. 205, JANUARY 9, 1992 71

Rada vs. NLRC
REGALADO, J.:
VOL. 135, FEBRUARY 28, 1985 167

Remerco Garments Manufacturing vs. Minister of
Labor and Employment
Nos. L-56176–77. February 28, 1985. *
REMERCO GARMENTS MANUFACTURING. petitioner, vs. HON. MINISTER OF

LABOR AND EMPLOYMENT and ZENAIDA BUSTAMANTE, LUZ RAYMUNDO
and RUTH CORPUZ, respondents.
Labor Law; Termination of employment; Illegal Dismissals; Sole prerogative of

management to dismiss or lay-off an employee, to be exercised without abuse of discretion.—
While it is true that it is the sole prerogative of the management to dismiss or lay-off an
employee, the exercise of such a prerogative, however, must be made without abuse of
discretion, for what is at stake is not only private respondents’ positions but also their means
of livelihood. Basically, the right of an employer to dismiss an employee differs from and
should not be confused with the manner in which such right is exercised. It must not be
oppressive and abusive since it affects one’s person and property.
Same; Same; Same; Failure of employee to report for work on the employee’s rest day, not
gross insubordination, as the failure was based on a valid ground, and not one of the just
causes for termination under the Labor Code.—In the case of Luz Raymundo, she was charged
with insubordination for allegedly refusing to work on a Sun-
_______________
* SECOND DIVISION.
168

ANNOTATED
Remerco Garments Manufacturing vs.
Minister of Labor and Employment
day. October 15, 1978, which was ter rest day. The records show that the day before, she
requested exemption from work on that Sunday, In fact, she was granted a clearance slip
(Exhibit “B") allowing her to be absent on that Sunday by her immediate supervisor
(Department Head). She had a valid ground, therefore, not to work on that Sunday, and her
failure to report that day can not be considered as gross insubordination. The disapproval of
her request by top management reasonably creates the impression of a hostile attitude
characterizing the efforts of petitioner (Management) of easing out with undue haste the
services of private respondents. Besides, petitioner has not shown that Luz Raymundo’s
failure to report for work on that Sunday, October 15, 1978, constitutes one of the just causes
for termination under Article 283 of the New ‘Labor Code.
Same; Same; Same; Same; Abandonment of work, not proved, Abandonment of work by
an employee, inconsistent with the immediate filing of a complaint for her illegal dismissal.—
On the other hand, in the case of Zenaida Bustamante, she allegedly abandoned her
employment by failing to report for work after the expiration of her suspension on October
23, 1978. Like Luz Raymundo, her one week suspension arose from her failure to report for
work on a Sunday, October 15, 1978 which, as explained in her opposition to the clearance
application, was not without reason because on that day, she was ill and in fact treated by
Dr. Lorenzo Yuson for fever and severe stomach ache as shown by the medical certificate
(Exhibit “C"). On the consequent charge of abandonment, it must be noted that Zenaida
Bustamante filed a complaint for illegal dismissal on November 15, 1978 to oppose the
clearance application to dismiss her. Of course, it is a recognized principle that abandonment
of work by an employee is inconsistent with the immediate filing of a complaint for illegal
dismissal. It would be illogical for Zenaida Bustamante to abandon her job and then
immediately file an action seeking her reinstatement. At that time, no employee would
recklessly abandon her job knowing fully well the acute unemployment problem then existing
and the difficulty of looking for a means of livelihood,
Same; Same; Same; Same; Constitutional Law; Security of tenure and just and humane
conditions of work; Illegality of dismissal more apparent in the light of the express
constitutional provision requiring the State to assure the workers security of tenure and just
and humane conditions of work; Penalty of dismissal from
169
VOL. 135, FEBRUARY 28, 169

1985
the service for failure to report for work too severe; Duty of every employer, whether for
profit or not, to provide each of his employees a rest period.—The illegality of the dismissal of
the herein private respondents, under the facts and circumstances disclosed, becomes even
more apparent in the light of the express provision of the Constitution, requiring the State
to assure the workers “security of tenure” and “just and humane conditions of work.” The
constitutional mandate of security of tenure and just and humane conditions of work, both
as aspects of the protection accorded to labor, militates against the severity of the sanction
imposed on private respondents. The penalty of dismissal from the service, even assuming
petitioner’s charges to be true, is too severe a penalty. It is a penalty out of proportion to the
of fense committed—failure to report for work on a Sunday (October 15, 1978)—when after
all, suspension would suffice, The dismissal came as an afterthought because private
respondents were already suspended for one week. The lack of sympathetic understanding of
the underlying reasons for their absence aggravated by the indecent haste attendant to the
efforts of petitioner to terminate the services of private respondents portray a total disregard
of the constitutional mandate of “security of tenure” and “just and humane conditions of work”
which the State is mandated to protect. The New Labor Code is clear on this point. It is the
duty of every employer, whether operating for profit or not, to provide each of his employees
a rest period of not less than twenty four (24) hours after every six (6) consecutive normal
work days, Even if there really existed an urgency to require work on a rest day, (which is
not in the instant case) outright dismissal from employment is so severe a consequence, more
so when justifiable grounds exist for f ailure to report for work.
Same; Same; Same; Same; Protection to labor; Failure to furnish a copy of appeal
memorandum to the adverse party, not a fatal defect; Objections grounded on procedural
technicalities devoid of merit; Dismissal of an employee’s appeal on purely technical ground
inconsistent with the constitutional mandate on protection to labor.—From the other
standpoint, We find objections raised grounded on procedural technicalities devoid of merit.
The mere failure to furnish copy of the appeal memorandum to adverse party is not a fatal
defect. We have consistently adhered to the principle clearly held in Alonso vs. Villamor that
“technicality when it deserts its proper office as an aid to justice and becomes its great
hindrance and chief enemy, deserves scant consideration from courts,” In a more
170

ANNOTATED
forceful language, Mr. Chief Justice Enrique M. Fernando, speaking for the Court,
in Meracap vs. International Ceramics Manufacturing Co., Inc. stated “for the strictly
juridical standpoint, it cannot be too strongly stressed, to follow Davis in his masterly work,
Discretionary Justice, that where a decision may be made to rest on informed judgment
rather than rigid rules, all the equities of the case must be accorded their due weight, Finally,
labor law determinations, to quote from Bultmann, should be not only secundum retionembut
also secundum caritatem.” More recently, we held that in appeals in labor cases, non-service
of the copy of the appeal or appeal memorandum to the adverse party is not a jurisdictional
defect, and does not justify dismissal of the appeal. Likewise, it was held that dismissal of an
employee’s appeal on a purely technical ground is inconsistent with the constitutional
mandate on protection to labor.
Same; Same; Same; Procedural due process, no denial of, where the parties agreed to
submit their case based on their respective position papers; Motion for reconsideration cured
the defect based on alleged lack of procedural due process.—As regards the due process
argument, petitioner contend that it was denied the opportunity to cross-examine private
respondents and rebut their documentary evidence allegedly submitted only on appeal. At
the inception of the case however, both parties, after failing to arrive at an amicable
settlement, agreed to submit their case for resolution on the basis of their respective position
papers. While private respondents insisted on its claim that they have submitted their
documentary evidence together with their position papers, petitioner, on the other hand,
claim otherwise. Surprisingly though, it is only after the rendition of an adverse decision that
petitioner now raises this matter of nonsubmission of documentary evidence. And petitioner
did not insist on this alleged non-submission of evidence apparently because the Acting
Director of the National Capital Region decided the case in its favor, Even on the assumption
that no documentary evidence was ever submitted by private respondents, still, on appeal,
the entire record of the case was reviewed by the respondent Minister of Labor and in fact,
decided the case on the merits. Besides, a motion for reconsideration filed by petitioner
invoking due process cured the defect based on the alleged lack 01 procedural due process,
On its argument that it was denied the opportunity to rebut private respondents’
documentary evidence allegedly submitted only on appeal, it is interesting to note that in the
application for clearance to
171
VOL. 135, FEBRUARY 28, 171

1985
dismiss employees, the employer is required to present evidence before the former can
present any contrary evidence. Petitioner’s technical objections pointedly create an
impression of the weakness of its stand on the merits of the case.
Same; Same; Same; Reinstatement with three-year back wages.—Petitioner therefore is

under obligation to REINSTATE Luz Raymundo and Zenaida Bustamante to their former or
substantially equivalent positions without loss of seniority rights and privileges with three-
year (3) backwages to be computed from October 23, 1978, the date of expiration of their
suspension.
PETITION to review the decision of the Minister of Labor and Employment.

Luna, Sison & Manas Law Office for petitioner.
Manuel M. Iway for respondents.
CUEVAS, J.:
VOL. 375, JANUARY 30, 2002 311
San Miguel Corporation vs. Court of Appeals
G.R. No. 146775. January 30, 2002. *
SAN MIGUEL CORPORATION, petitioner, vs.THE HONORABLE COURT OF

APPEALS-FORMER THIRTEENTH DIVISION, HON. UNDERSECRETARY JOSE
M. ESPAÑOL, JR., HON. CRESENCIANO B. TRAJANO, and HON. REGIONAL
DIRECTOR ALLAN M. MACARAYA, respondents.
Actions; Appeals; Pleadings and Practice; The appeal from a final disposition of the
Court of Appeals is a petition for review under Rule 45 and not a special civil action under
Rule 65 of the 1997 Rules of Civil Procedure.—At the outset, petitioner came to this
Court via a petition for certiorari under Rule 65 instead of an appeal under Rule 45 of the
1997 Rules of Civil Procedure. In National Irrigation Administration vs. Court of
Appeals, the Court declared: x x x (S)ince the Court of Appeals had jurisdiction over the
petition under Rule 65, any alleged errors committed by it in the exercise of its jurisdiction
would be errors of judgment which are reviewable by timely appeal and not by a special civil
action of certiorari. If the aggrieved party fails to do so within the reglementary period, and
the decision accordingly becomes final and executory, he cannot avail himself of the writ
of certiorari, his predicament being the effect of his deliberate inaction. The appeal from a
final disposition of the Court of Appeals is a petition for review under Rule 45 and not a
special civil action under Rule 65 of the Rules of Court, now Rule 45 and Rule 65, respectively,
of the 1997 Rules of Civil Procedure. Rule 45 is clear that decisions, final orders or resolutions
of the Court of Appeals in any case, i.e., regardless of the nature of the action or proceeding
involved, may be appealed to this Court by filing a petition for review, which would be but a
continuation of the appellate process over the original case. Under Rule 45 the reglementary
period to appeal is fifteen (15) days from notice of judgment or denial of motion for
reconsideration.
_______________
* FIRST DIVISION.
312

ANNOTATED
Labor Law; Holiday Pay; Code of Muslim Personal Laws (Presidential Decree No. 1083);
Muslim holidays are provided under Articles 169 and 170, Title I, Book V, of Presidential
Decree 1083.—Muslim holidays are provided under Articles 169 and 170, Title I, Book V, of
Presidential Decree No. 1083, otherwise known as the Code of Muslim Personal Laws, which
states: Art. 169. Official Muslim holidays.—The following are hereby recognized as legal
Muslim holidays: (a) ‘Amun Jadid(New Year), which falls on the first day of the first lunar
month of Muharram; (b) Maulid-un-Nabi (Birthday of the Prophet Muhammad), which falls
on the twelfth day of the third lunar month of Rabi-ul-Awwal; (c) Lailatul Isra Wal
Mi’raj (Nocturnal Journey and Ascension of the Prophet Muhammad), which falls on the
twenty-seventh day of the seventh lunar month of Rajab; (d) ‘Id-ul-Fitr (Hari Raya
Puasa), which falls on the first day of the tenth lunar month of Shawwal,commemorating the
end of the fasting season; and (e) ‘Id-ul-Adha (Hari Raya Haji), which falls on the tenth day
of the twelfth lunar month of Dhu I-Hijja.
Same; Same; Same; There should be no distinction between Muslims and non-Muslims
as regards payment of benefits for Muslim holidays.—Petitioner asserts that Article 3(3) of
Presidential Decree No. 1083 provides that “(t)he provisions of this Code shall be applicable
only to Muslims x x x.” However, there should be no distinction between Muslims and non-
Muslims as regards payment of benefits for Muslim holidays. The Court of Appeals did not
err in sustaining Undersecretary Español who stated: Assuming arguendo that the
respondent’s position is correct, then by the same token, Muslims throughout the Philippines
are also not entitled to holiday pays on Christian holidays declared by law as regular holidays.
We must remind the respondent-appellant that wages and other emoluments granted by law
to the working man are determined on the basis of the criteria laid down by laws and certainly
not on the basis of the worker’s faith or religion. At any rate, Article 3(3) of Presidential
Decree No. 1083 also declares that “x x x nothing herein shall be construed to operate to the
prejudice of a non-Muslim.”
PETITION for review on certiorari of a decision and resolution of the Court of

Appeals.

Estenzo, Jamora and Solon for petitioner.
The Solicitor General for respondents.
313
VOL. 375, JANUARY 30, 2002 313

KAPUNAN, J.:
VOL. 156, DECEMBER 1, 1987 27

Jose Rizal College vs. National Labor Relations
Commission
No. L-65482. December 1, 1987. *
JOSE RIZAL COLLEGE, petitioner, vs.NATIONAL LABOR RELATIONS

COMMISSION AND NATIONAL ALLIANCE OF TEACHERS/OFFICE WORKERS,
respondents.
Labor; Employer-Employee Relations; Holiday Pay; Hourly paid faculty members are
entitled to their pay for unworked regular holidays; Reason.—Under the foregoing provisions,
apparently, the petitioner, although a non-profit institution is under obligation to give pay
even on unworked regular holidays to hourly paid faculty members subject to the terms and
conditions provided for therein. We believe that the aforementioned implementing rule is not
justified by the provisions of the law which after all is silent with respect to faculty members
paid by the hour who because of their teaching contracts are obliged to work and consent to
be paid only for work actually done (except when an emergency or a fortuitous event or a
national need calls for the declaration of special holidays). Regular holidays specified as such
by law are known to both school and faculty members as "no class days;" certainly the latter
do not expect payment for said unworked days, and this was clearly in their minds when they
entered into the teaching contracts.
Same; Same; Same; Hourly paid faculty members are however entitled to their regular
hourly rate on days declared as special holidays or when classes are called off or shortened;
Reason; Declared purpose of holiday pay.—lt is readily apparent that the declared purpose of
the holiday pay which is the prevention of diminution of the monthly income of the employees
on account of work interruptions is defeated when a regular class day is cancelled on account
of a special public holiday and class hours are held on another working day to make up for
time lost in the school calendar. Otherwise stated, the faculty member, although forced to
take a rest, does not earn what he should earn on that day. Be it noted that when a special
public holi-
_______________
* FIRST DIVISION.
28

ANNOTATED
Jose Rizal College vs. National Labor
Relations Commission
day is declared, the faculty member paid by the hour is deprived of expected income, and
it does not matter that the school calendar is extended in view of the days or hours lost, for
their income that could be earned from other sources is lost during the extended days.
Similarly, when classes are called off or shortened on account of typhoons, floods, rallies, and
the like, these faculty members must likewise be paid, whether or not extensions are ordered.
Same; Same; Same; Due Process; "Cardinal primary" requirements of due process in
administrative proceedings.—The Court has already set forth what is now known as the
"cardinal primary" requirements of due process in administrative proceedings, to wit: "(1) the
right to a hearing which includes the right to present one's case and submit evidence in
support thereof; (2) the tribunal must consider the evidence presented; (3) the decision must
have something to support itself; (4) the evidence must be substantial, and substantial
evidence means such evidence as a reasonable mind might accept as adequate to support a
conclusion; (5) the decision must be based on the evidence presented at the hearing, or at
least contained in the record and disclosed to the parties affected; (6) the tribunal or body of
any of its judges must act on its or his own independent consideration of the law and facts of
the controversy, and not simply accept the views of a subordinate; (7) the board or body should
in all controversial questions, render its decisions in such manner that the parties to the
proceeding can know the various issues involved, and the reason for the decision rendered."
(Doruelo vs. Commission on Elections, 133 SCRA 382 [1984]).
Same; Same; Same; Same; Claim of lack of due process, not true, where petitioner was
amply heard and represented in the proceedings, and even filed its position paper and
motions.—The records show petitioner JRC was amply heard and represented in the instant
proceedings. It submitted its position paper before the Labor Arbiter and the NLRC and even
filed a motion for reconsideration of the decision of the latter, as well as an "Urgent Motion
for Hearing En Banc" (Rollo, p. 175). Thus, petitioner's claim of lack of due process is
unfounded.
PETITION for certiorari with preliminary injunction to review the decision of the
National Labor Relations Commission.

29
VOL. 156, DECEMBER 1, 1987 29

Jose Rizal College vs. National Labor Relations
Commission
PARAS, J.:
Union of Filipro Employees vs. Vivar, Jr.
G.R. No. 79255. January 20, 1992. *
UNION OF FILIPRO EMPLOYEES (UFE), petitioner, vs. BENIGNO VIVAR, JR.,

NATIONAL LABOR RELATIONS COMMISSION and NESTLÉ PHILIPPINES, INC.
(formerly FILIPRO, INC.), respondents.
Labor Law; Field personnel; Holiday pay; Respondent's sales personnel are not covered
by the holiday pay. The law requires that the actual hours of work in the field be reasonably
ascertained.—The Court
______________
* EN BANC.
201
VOL. 205, JANUARY 20, 1992 201

does not agree. The law requires that the actual hours of work in the field be reasonably
ascertained. The company has no way of determining whether or not these sales personnel,
even if they report to the office before 8:00 a.m. prior to field work and come back at 4:30 p.m.,
really spend the hours in between in actual field work. We concur with the following
disquisition by the respondent arbitrator: "The requirement for the salesmen and other
similarly situated employees to report for work at the office at 8:00 a.m. and return at 4:00
or 4:30 p.m. is not within the realm of work in the field as defined in the Code but an exercise
of purely management prerogative of providing administrative control over such personnel.
This does not in any manner provide a reasonable level of determination on the actual field
work of the employees which can be reasonably ascertained. The theoretical analysis that
salesmen and other similarly-situated workers regularly report for work at 8:00 a.m. and
return to their home station at 4:00 or 4:30 p.m., creating the assumption that their field
work is supervised, is surface projection. Actual field work begins after 8:00 a.m. when the
sales personnel follow their field itinerary, and ends immediately before 4:00 or 4:30 p.m.
when they report back to their office. The period between 8:00 a.m. and 4:00 or 4:30 p.m.
comprises their hours of work in the field, the extent or scope and result of which are subject
to their individual capacity and industry and which 'cannot be determined with reasonable
certainty.' This is the reason why effective supervision over field work of salesmen and
medical representatives, truck drivers and merchandisers is practically a physical
impossibility. Consequently, they are excluded from the ten holidays with pay award.' (Rollo,
pp. 36-37)
Same; Same; Same; Actual hours of work; Respondent's sales personnel are evaluated by
the result of their work and not by the actual hours of field work which are hardly susceptible
to determination.—Thecriteria for granting incentive bonus are: (1) attaining or exceeding
sales volume based on sales target; (2) good collection performance; (3) proper compliance
with good market hygiene; (4) good merchandising work; (5) minimal market returns and (6)
proper truck maintenance. (Rollo, p. 190) The above criteria indicate that these sales
personnel are given incentive bonuses precisely because of the difficulty in measuring their
actual hours of field work. These employees are evaluated by the result of their work and not
by the actual hours of field work which are hardly susceptible to determination.
Same; Same; Overtime, night differential, sick and vacation leave pay; There is no merit
in respondent Nestlé's claim of overpayment of overtime and night differential pay and sick
and vacation leave bene-
202

ANNOTATED
fits, the computation of which are all based on the daily rate, since the daily rate is still
the same before and after the grant of holiday pay.—Following the criterion laid down in the
Chartered Bank case, the use of 251 days' divisor by respondent Filipro indicates that holiday
pay is not yet included in the employee's salary, otherwise the divisor should have been 261.
It must be stressed that the daily rate, assuming there are no intervening salary increases,
is a constant figure for the purpose of computing overtime and night differential pay and
commutation of sick and vacation leave credits. Necessarily, the daily rate should also be the
same basis for computing the 10 unpaid holidays. The respondent arbitrator's order to change
the divisor from 251 to 261 days would result in a lower daily rate which is violative of the
prohibition on non-diminution of benefits found in Article 100 of the Labor Code. To maintain
the same daily rate if the divisor is adjusted to 261 days, then the dividend, which represents
the employee's annual salary, should correspondingly be increased to incorporate the holiday
pay. To illustrate, if prior to the grant of holiday pay, the employee's annual salary is P25,100,
then dividing such figure by 251 days, his daily rate is P1 00.00. After the payment of 10
days' holiday pay, his annual salary already includes holiday pay and totals P26,100 (P25,100
+ 1,000). Dividing this by 261 days, the daily rate is still P1 00.00. There is thus no merit in
respondent Nestlé's claim of overpayment of overtime and night differential pay and sick and
vacation leave benefits, the computation of which are all based on the daily rate, since the
daily rate is still the same before and after the grant of holiday pay.
Same; Same; Same; Civil Law; Obligations and Contracts; Solutio indebiti; Nestlé's
invocation of solutio indebiti or payment by mistake due to its use of 251 days as divisor must
fail in light of the Labor Code mandate that "all doubts in the implementation and
interpretation of this Code, including its implementing rules and regulations shall be resolved
in favor of labor."—Respondent Nestlé's invocation of solutio indebiti, or payment by mistake,
due to its use of 251 days as divisor must fail in light of the Labor Code mandate that "all
doubts in the implementation and interpretation of this code, including its implementing
rules and regulations, shall be resolved in favor of labor." (Article 4). Moreover, prior to
September 1,1980, when the company was on a 6-day working schedule, the divisor used by
the company was 303, indicating that the 10 holidays were likewise not paid. When Filipro
shifted to a 5-day working schedule on September 1,1980, it had the chance to rectify its error,
if ever there was one, but did not do so. It is now too late to allege payment by mistake.
203
VOL. 205, JANUARY 20, 1992 203

PETITION to review the order of the National Labor Relations Commission.

Jose C. Espinas for petitioner.
Siguion Reyna, Montecillo & Ongsiako for private respondent.
GUTIERREZ, JR., J.:
VOL. 329, MARCH 31, 2000 357

Imbuido vs. National Labor Relations Commission
G.R. No. 114734. March 31, 2000. *

VIVIAN Y. IMBUIDO, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION, INTERNATIONAL INFORMATION SERVICES, INC. and
GABRIEL LIBRANDO, respondents.
Labor Law; Classification of Employment; The principal test for determining whether an
employee is a project employee or a regular employee is whether the project employee was
assigned to carry out a specific project or undertaking, the duration and scope of which were
specified at the time the employee was engaged for that project.—We agree with the findings
of the NLRC that petitioner is a project employee. The principal test for determining whether
an employee is a project employee or a regular employee is whether the project employee was
assigned to carry out a specific project or undertaking, the duration and scope of which were
specified at the time the employee was engaged for that project. A project employee is one
whose 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
_______________
* SECOND DIVISION.
358

ANNOTATED
Imbuido vs. National Labor Relations
Commission
the work or service to be performed is seasonal in nature and the employment is for the
duration of the season.
Same; Same; Requisites in order that a project employee or a member of a work pool may
acquire the status of a regular employee.—In the recent case of Maraguinot, Jr. vs. NLRC, we
held that “[a] project employee or a member of a work pool may acquire the status of a regular
employee when the following concur: 1) There is a continuous rehiring of project employees
even after [the] cessation of a project; and 2) The tasks performed by the alleged “project
employee” are vital, necessary and indispensable to the usual business or trade of the
employer.”
Same; Dismissals; Alleged causes of petitioner’s dismissal (low volume of work and
belatedly, completion of project) are not valid causes for dismissal under Articles 282 and 283
of the Labor Code.—The alleged causes of petitioner’s dismissal (low volume of work and
belatedly, completion of project) are not valid causes for dismissal under Articles 282 and 283
of the Labor Code. Thus, petitioner is entitled to reinstatement without loss of seniority rights
and other privileges, and to her full backwages, inclusive of allowances, and to her other
benefits or their monetary equivalent computed from the time her compensation was
withheld from her up to the time of her actual reinstatement.

Vivian Imbuido for and in her own behalf.
The Solicitor General for public respondent.
BUENA, J.:
VOL. 285, JANUARY 28, 1998 149

Fernandez vs. National Labor Relations Commission
G.R. No. 105892. January 28, 1998. *
LEIDEN FERNANDEZ, BRENDA GADIANO, GLORIA ADRIANO, EMELIA

NEGAPATAN, JESUS TOMONGHA, ELEONOR QUIÑANOLA, ASTERIA CAMPO,
FLORIDA VILLACERAN, FLORIDA TALLEDO, MARILYN LIM and JOSEPH
CANONIGO, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION,
FOURTH DIVISION; MARGUERITE LHUILLIER AND/OR AGENCIA CEBUANA-
1
H. LHUILLIER, respondents.
Labor Law; Appeals; The implementing rule explicitly excludes moral and exemplary
damages and attorney’s fees from the computation of the appeal bond.—There is no conflict
between the two provisions. Article 223 lays down the requirement that an appeal bond
should be filed. The implementing rule, on the other hand, explains how the appeal bond
shall be computed. The rule explicitly excludes moral and exemplary damages and attorney’s
fees from the computation of the appeal bond. This exclusion has been recognized by the
Court in a number of cases. Hence, in Erectors vs. NLRC, the Court nullified an NLRC order
requiring the posting of an appeal bond which, among others, “even included in the
computation the award of P400,000.00 for moral and exemplary damages.” Indeed, the said
implementing rule is a contemporaneous construction of Article 223 by the NLRC pursuant
to the mandate of the Labor Code; hence, it is accorded great respect by this Court.
Same; Same; The filing of a bond in appeals involving monetary awards should be given
liberal construction.—In line with the desired objective of our labor laws to resolve
controversies on their merits, the Court has held that the filing of a bond in appeals involving
monetary awards should be given liberal construction. The rule requiring the employer to
post a cash or surety bond to perfect his appeal assures the workers that they will receive the
money judgment awarded to them upon the dismissal of the employer’s appeal. It also
discourages employers from using an appeal to delay
_______________
* THIRD DIVISION.
1 Spelled “Marguerite” in the petition, it was “Margueritte” in the OSG’s Comment dated December 21, 1992.
150

ANNOTATED
Fernandez vs. National Labor Relations
Commission
or even evade their obligation to satisfy the just and lawful claims of their employees.
Same; Due Process; The filing of position papers and supporting documents fulfilled the
requirements of due process.—Private respondents were able to file their respective position
papers and the documents in support thereof, and all these were duly considered by the labor
arbiter. Indeed, the requirements of due process are satisfied where the parties are given the
opportunity to submit position papers. In any event, Respondent NLRC and the labor arbiter
are authorized under the Labor Code to decide a case on the basis of the position papers and
documents submitted. The holding of an adversarial trial depends on the discretion of the
labor arbiter, and the parties cannot demand it as a matter of right. In other words, the filing
of position papers and supporting documents fulfilled the requirements of due process.
Therefore, there was no denial of this right because private respondents were given the
opportunity to present their side.
Same; Dismissals; Abandonment; Requisites before abandonment may be pleaded as a
valid ground for dismissal.—To succeed in pleading abandonment as a valid ground for
dismissal, the employer must prove (1) the intention of an employee to abandon his or her
employment and (2) an overt act from which such intention may be inferred; i.e., the
employee showed no desire to resume his work. Mere absence is not sufficient. The employer
must prove a deliberate and unjustified refusal of the employee to resume his employment
without any intention of returning.
Same; Same; Damages; Determination of the amount of moral damages and attorney’s
fees is best left to the discretion of the labor arbiter.—Determination of the amount of moral
damages and attorney’s fees is best left to the discretion of the labor arbiter. Moral damages
are recoverable where the dismissal of the employee was attended by bad faith or fraud, or it
constituted an act oppressive to labor, or it was done in a manner contrary to morals, good
customs or public policy. In the case before us, records show that petitioners’ dismissals were
done oppressively and in bad faith, for they were just summarily dismissed without even the
benefit of notice and hearing. The well-settled rule is that the employer shall be sanctioned
for noncompliance with the requirements of, or for failure to observe, due process in
dismissing its employees.
151
VOL. 285, JANUARY 28, 1998 151

Fernandez vs. National Labor Relations Commission

Celestino A. Allanic for petitioners.
Diores Law Offices for private respondents.
PANGANIBAN, J.:
JPL Marketing Promotions vs. Court of Appeals
G.R. No. 151966. July 8, 2005. *
JPL MARKETING PROMOTIONS, petitioner, vs. COURT OF APPEALS,

NATIONAL LABOR RELATIONS COMMISSION, NOEL GONZALES, RAMON
ABESA III and FAUSTINO ANINIPOT, respondents.
Labor Law; Separation Pay; Separation pay is authorized only in cases of dismissals due
to any of these reasons—(a) installation of labor saving devices, (b) redundancy, (c)
retrenchment, (d) cessation of the employer’s business, and (e) when the employee is suffering
from a disease and his continued employment is prohibited by law or is prejudicial to his
health and to the health of his co-employees.—Under Arts. 283 and 284 of the Labor Code,
separation pay is authorized only in cases of dismissals due to any of these reasons: (a)
installation of labor saving devices; (b) redundancy; (c) retrenchment; (d) cessation of the
employer’s business; and (e) when the employee is suffering from a disease and his continued
employment is prohibited by law or is prejudicial to his health and to the health of his co-
employees. However, separation pay shall be allowed as a measure of social justice in those
cases where the employee is validly dismissed for causes other than serious misconduct or
those reflecting on his moral character, but only when he was illegally dismissed. In addition,
Sec. 4(b), Rule I, Book VI of the Implementing Rules to Implement the Labor Code provides
for the payment of separation pay to an employee entitled to reinstatement but the
establishment where he is to be reinstated has closed or has ceased operations or his present
position no longer exists at the time of reinstatement for reasons not attributable to the
employer.
Same; Same; The common denominator of the instances where payment of separation pay
is warranted is that the employee was dismissed by the employer.—The common denominator
of the instances where payment of separation pay is warranted is that the employee was
dismissed by the employer. In the instant case, there was no dismissal to speak of. Private
respondents were simply not dismissed at all, whether legally or illegally. What they received
from JPL was not a notice of termination of employment, but a
_______________
* SECOND DIVISION.
137
VOL. 463, JULY 8, 2005 137

JPL Marketing Promotions vs. Court of
Appeals
memo informing them of the termination of CMC’s contract with JPL. More importantly,
they were advised that they were to be reassigned. At that time, there was no severance of
employment to speak of.
Same; Same; “Floating Status”; When the “floating status” of an employee lasts for more
than six months, he may be considered to have been illegally dismissed from the service,
entitling him to the corresponding benefits for his separation.—Art. 286 of the Labor Code
allows the bona fide suspension of the operation of a business or undertaking for a period not
exceeding six (6) months, wherein an employee/employees are placed on the so-called
“floating status.” When that “floating status” of an employee lasts for more than six months,
he may be considered to have been illegally dismissed from the service. Thus, he is entitled
to the corresponding benefits for his separation, and this would apply to suspension either of
the entire business or of a specific component thereof.
Same; Same; The principle of awarding separation pay on the ground of compassionate
justice, or on grounds of equity and social consideration, applies only when the employee is
dismissed by the employer, but not where the employee sought and obtained employment
elsewhere.—As clearly borne out by the records of this case, private respondents sought
employment from other establishments even before the expiration of the six (6)-month period
provided by law. As they admitted in their comment, all three of them applied for and were
employed by another establishment after they received the notice from JPL. JPL did not
terminate their employment; they themselves severed their relations with JPL. Thus, they
are not entitled to separation pay. The Court is not inclined in this case to award separation
pay even on the ground of compassionate justice. The Court of Appeals relied on the cases
wherein the Court awarded separation pay to legally dismissed employees on the grounds of
equity and social consideration. Said cases involved employees who were actually dismissed
by their employers, whether for cause or not. Clearly, the principle applies only when the
employee is dismissed by the employer, which is not the case in this instance. In seeking and
obtaining employment elsewhere, private respondents effectively terminated their
employment with JPL.
Same; Thirteenth Month Pay; Service Incentive Leave Pay; The 13th month pay and
service incentive leave pay are benefits man-
138

ANNOTATED
Appeals
dated by law and should be given to employees as a matter of right.—JPL cannot escape
the payment of 13th month pay and service incentive leave pay to private respondents. Said
benefits are mandated by law and should be given to employees as a matter of right.
Presidential Decree No. 851, as amended, requires an employer to pay its rank and file
employees a 13th month pay not later than 24 December of every year. However, employers
not paying their employees a 13th month pay or its equivalent are not covered by said law.
The term “its equivalent” was defined by the law’s implementing guidelines as including
Christmas bonus, mid-year bonus, cash bonuses and other payment amounting to not less
than 1/12 of the basic salary but shall not include cash and stock dividends, cost-of-living-
allowances and all other allowances regularly enjoyed by the employee, as well as non-
monetary benefits.
Same; Same; Same; Service incentive leave is a yearly leave benefit of five (5) days with
pay, enjoyed by an employee who has rendered at least one year of service—it is clearly
demandable after one year of service.—On the other hand, service incentive leave, as provided
in Art. 95 of the Labor Code, is a yearly leave benefit of five (5) days with pay, enjoyed by an
employee who has rendered at least one year of service. Unless specifically excepted, all
establishments are required to grant service incentive leave to their employees. The term “at
least one year of service” shall mean service within twelve (12) months, whether continuous
or broken reckoned from the date the employee started working. The Court has held in
several instances that “service incentive leave is clearly demandable after one year of service.”
Same; Same; Same; The difference between the minimum wage and the actual salary
received by the employees cannot be deemed as their 13th month pay and service incentive
leave pay as such difference is not equivalent to or of the same import as the said benefits
contemplated by law.—Admittedly, private respondents were not given their 13th month pay
and service incentive leave pay while they were under the employ of JPL. Instead, JPL
provided salaries which were over and above the minimum wage. The Court rules that the
difference between the minimum wage and the actual salary received by private respondents
cannot be deemed as their 13th month pay and service incentive leave pay as such difference
is not equivalent to or of the same import as the said benefits contemplated
139
VOL. 463, JULY 8, 2005 139

Appeals
by law. Thus, as properly held by the Court of Appeals and by the NLRC, private
respondents are entitled to the 13th month pay and service incentive leave pay.
Same; Same; Same; While computation for the 13th month pay should properly begin
from the first day of employment, the service incentive leave pay should start a year after
commencement of service, for it is only then that the employee is entitled to said benefit.—The
Court disagrees with the Court of Appeals’ ruling that the 13th month pay and service
incentive leave pay should be computed from the start of employment up to the finality of the
NLRC resolution. While computation for the 13th month pay should properly begin from the
first day of employment, the service incentive leave pay should start a year after
commencement of service, for it is only then that the employee is entitled to said benefit. On
the other hand, the computation for both benefits should only be up to 15 August 1996, or the
last day that private respondents worked for JPL. To extend the period to the date of finality
of the NLRC resolution would negate the absence of illegal dismissal, or to be more precise,
the want of dismissal in this case. Besides, it would be unfair to require JPL to pay private
respondents the said benefits beyond 15 August 1996 when they did not render any service
to JPL beyond that date. These benefits are given by law on the basis of the service actually
rendered by the employee, and in the particular case of the service incentive leave, is granted
as a motivation for the employee to stay longer with the employer. There is no cause for
granting said incentive to one who has already terminated his relationship with the employer.
Same; It should be made clear that when the law tilts the scale of justice in favor of labor,
it is but recognition of the inherent economic inequality between labor and management; There
may be cases where the circumstances warrant favoring labor over the interests of
management but never should the scale be so tilted if the result is an injustice to the
employer.—The law in protecting the rights of the employees authorizes neither oppression
nor self-destruction of the employer. It should be made clear that when the law tilts the scale
of justice in favor of labor, it is but recognition of the inherent economic inequality between
labor and management. The intent is to balance the scale of justice; to put the two parties on
relatively equal positions. There may be cases where the circumstances warrant favoring
140

ANNOTATED
Appeals
labor over the interests of management but never should the scale be so tilted if the
result is an injustice to the employer. Justitia nemini neganda est (Justice is to be denied to
none).
Appeals.

Engelberto Farol for petitioner.
Eustaquio Beltran for private respondents.
TINGA, J.:
G.R. No. 164804. January 30, 2009.*

VIRGINIA A. SUGUE and THE HEIRS OF RENATO S. VALDERRAMA,
petitioners, vs.TRIUMPH INTERNATIONAL (PHILS.), INC., respondent.
G.R. No. 164784. January 30, 2009.*

TRIUMPH INTERNATIONAL (PHILS.), INC., petitioner, vs. VIRGINIA A. SUGUE
and THE HEIRS OF RENATO S. VALDERRAMA, respondents.
Labor Law; Discrimination; Words and Phrases; Discrimination is the failure to treat all
persons equally when no reasonable distinction can be found between those favored and those
not favored.—For her part, Sugue condemns Triumph for putting a condition on the approval
of her two days vacation leave for July 14 and 15, 2000, when she was required to first submit
a report on the 2001 Marketing Plan. To be very accurate, Mr. Escueta’s memorandum dated
July 13, 2000 advised Sugue that her application for leave will be approved if she will commit
to submit her reports in connection with the 2001 Marketing Plan by July 17, 2000, which
was two days after her leave. Again, we find nothing discriminatory in such a condition
considering that she was unable to show that she was the only employee whose leave
application has been subjected to a condition. Discrimination is the failure to treat all persons
equally when
_______________
* FIRST DIVISION.
324

ANNOTATED
Sugue vs. Triumph International (Phils.), Inc.
no reasonable distinction can be found between those favored and those not favored.
Sugue obviously failed to substantiate her claim of discrimination. To be sure, he who asserts
must prove. On the contrary, the record shows that as early as October 12, 1999, a
memorandum was issued by Triumph addressed to all department heads that leave
applications may be approved, disapproved or postponed depending on the (1) business status
due to CBA; (2) company’s urgent need for their presence; and (3) CBA negotiations status.
Evidently, this directive applies not just to Sugue but to all department heads. Although this
memorandum was supposedly in force only until December 1999, it establishes a precedent
for the company imposing conditions on the approval of leave applications of department
heads.
Same; Leave Privileges; In the grant of vacation and sick leave privileges to an employee,
the employer is given leeway to impose conditions on the entitlement to the same as the grant
of vacation and sick leave is not a standard of law, but a prerogative of management—it is a
mere concession or act of grace of the employer and not a matter of right on the part of the
employee.—It is worth stressing that in the grant of vacation and sick leave privileges to an
employee, the employer is given leeway to impose conditions on the entitlement to the same
as the grant of vacation and sick leave is not a standard of law, but a prerogative of
management. It is a mere concession or act of grace of the employer and not a matter of right
on the part of the employee. Thus, it is well within the power and authority of an employer
to deny an employee’s application for leave and the same cannot be perceived as
discriminatory or harassment.
Same; Management Prerogatives; The act of management in reorganizing the sales
department in order to achieve its objectives is a legitimate exercise of its management
prerogatives, barring any showing of bad faith which is absent in the instant case.—We find
that Triumph’s reorganization was intended to improve management operations especially
in the light of the poor sales performance of the company during that period. The act of
management in reorganizing the sales department in order to achieve its objectives is a
legitimate exercise of its management prerogatives, barring any showing of bad faith which
is absent in the instant case. Indeed, labor laws discourage interference in employers’
judgments concerning the conduct of their business. The law must protect not only the
welfare of employees, but also the right of employers.325
VOL. 577, JANUARY 30, 2009 325

Sugue vs. Triumph International (Phils.), Inc.
Same; Abandonment; Words and Phrases; Abandonment is the deliberate and unjustified
refusal of an employee to resume his employment, without any intention of returning—it is a
form of neglect of duty, hence, a just cause for termination of employment by the employer; For
abandonment to be a valid ground for dismissal, two elements must then be satisfied: (1) the
failure to report for work or absence without valid or justifiable reason, and (2) a clear
intention to sever the employer-employee relationship, the second element is the more
determinative factor and must be evinced by overt acts.—Having failed to substantiate their
claim of constructive dismissal, Sugue and Valderrama should be deemed to have abandoned
their work, thus, their dismissal is warranted. Abandonment is the deliberate and unjustified
refusal of an employee to resume his employment, without any intention of returning. It is a
form of neglect of duty, hence, a just cause for termination of employment by the employer.
For abandonment to be a valid ground for dismissal, two elements must then be satisfied: (1)
the failure to report for work or absence without valid or justifiable reason; and (2) a clear
intention to sever the employer-employee relationship. The second element is the more
determinative factor and must be evinced by overt acts.
PETITIONS for review on certiorari of the decision and resolution of the Court of
Appeals.
Balane, Tamase, Alampay Law Office for Virginia A. Sugue, et al.
Sycip, Hernandez & Gatmaitan for Triumph International (Phils.), Inc.
LEONARDO-DE CASTRO, J.:
G.R. No. 171231. February 17, 2010.*

PNCC SKYWAY TRAFFIC MANAGEMENT AND SECURITY DIVISION
WORKERS ORGANIZATION (PSTMSDWO), represented by its President, RENE
SORIANO, petitioner, vs.PNCC SKYWAY CORPORATION, respondent.
Actions; Pleadings and Practice; Verification; Certification against Forum Shopping;

Procedural Rules and Technicalities; The purpose of requiring verification is to secure an
assurance that the allegations in the petition have been made in good faith, or are true and
correct, not merely speculative; With respect to the certification of non-forum shopping, it has
been held that the certification requirement is rooted in the principle that a party-litigant shall
not be allowed to pursue simultaneous remedies in different fora, as this practice is
detrimental to an orderly judicial procedure.—The purpose of requiring verification is to
secure an assurance that the allegations in the petition have been made in good faith; or are
true and correct, not merely speculative. This requirement is simply a condition affecting the
form of pleadings, and non-compliance therewith does not necessarily render it fatally
defective. Truly, verification is only a formal, not a jurisdictional, requirement. With respect
to the certification of non-forum shopping, it has been held that the certification requirement
is rooted in the principle that a party-litigant shall not be allowed to pursue simultaneous
remedies in different fora, as this practice is detrimental to an orderly judicial procedure.
However, this Court has relaxed, under justifiable circumstances, the rule requiring the
submission of such certification considering that, although it is obligatory, it is not
jurisdictional. Not being jurisdictional, it can be relaxed under the rule of substantial
compliance.
Same; Same; Same; Same; Same; Assuming that the union president had no authority to
file the petition, the subsequent passing of a Board Resolution authorizing him to represent
the union is deemed a ratification of his prior execution of the verification and certificate of
non-forum shopping, thus curing any defects thereof.—In the case at bar, We rule that Rene
Soriano has sufficient author-
_______________
* THIRD DIVISION.
29
ity to sign the verification and certification against forum shopping for the following
reasons: First, the resolution dated June 30, 2006 was merely a reiteration of the authority
given to the Union President to file a case before this Court assailing the CBA violations
committed by the management, which was previously conferred during a meeting held on
October 5, 2005. Thus, it can be inferred that even prior to the filing of the petition before Us
on February 27, 2006, the president of the union was duly authorized to represent the union
and to file a case on its behalf. Second, being the president of the union, Rene Soriano is in a
position to verify the truthfulness and correctness of the allegations in the petition. Third,
assuming that Mr. Soriano has no authority to file the petition on February 27, 2006, the
passing on June 30, 2006 of a Board Resolution authorizing him to represent the union is
deemed a ratification of his prior execution, on February 27, 2006, of the verification and
certificate of non-forum shopping, thus curing any defects thereof. Ratification in agency is
the adoption or confirmation by one person of an act performed on his behalf by another
without authority.
Labor Law; Collective Bargaining Agreements; Interpretation of Contracts; The rule is
that where the language of a contract is plain and unambiguous, its meaning should be
determined without reference to extrinsic facts or aids.—The rule is that where the language
of a contract is plain and unambiguous, its meaning should be determined without reference
to extrinsic facts or aids. The intention of the parties must be gathered from that language,
and from that language alone. Stated differently, where the language of a written contract is
clear and unambiguous, the contract must be taken to mean that which, on its face, it
purports to mean, unless some good reason can be assigned to show that the words used
should be understood in a different sense.
Same; Same; Same; In fine, the Collective Bargaining Agreement (CBA) must be strictly
adhered to and respected if its ends have to be achieved, being the law between the parties.—
In the case at bar, the contested provision of the CBA is clear and unequivocal. Article VIII,
Section 1 (b) of the CBA categorically provides that the scheduling of vacation leave shall be
under the option of the employer. The preference requested by the employees is not
controlling because respondent retains its power and prerogative to consider or to ignore said
request. Thus, if the terms of a CBA are clear and leave no
30
doubt upon the intention of the contracting parties, the literal meaning of its stipulation
shall prevail. In fine, the CBA must be strictly adhered to and respected if its ends have to
be achieved, being the law between the parties. In Faculty Association of Mapua Institute of
Technology (FAMIT) v. Court of Appeals, 524 SCRA 709 (2007), this Court held that the CBA
during its lifetime binds all the parties. The provisions of the CBA must be respected since
its terms and conditions constitute the law between the parties. The parties cannot be
allowed to change the terms they agreed upon on the ground that the same are not favorable
to them.
Same; Same; Vacation Leaves; Management Prerogatives; In the grant of vacation leave
privileges to an employee, the employer is given the leeway to impose conditions on the
entitlement to and commutation of the same, as the grant of vacation leave is not a standard
of law, but a prerogative of management.—The multitude or scarcity of personnel manning
the tollways should not rest upon the option of the employees, as the public using the skyway
system should be assured of its safety, security and convenience. Although the preferred
vacation leave schedule of petitioner’s members should be given priority, they cannot demand,
as a matter of right, that their request be automatically granted by the respondent. If the
petitioners were given the exclusive right to schedule their vacation leave then said right
should have been incorporated in the CBA. In the absence of such right and in view of the
mandatory provision in the CBA giving respondent the right to schedule the vacation leave
of its employees, compliance therewith is mandated by law. In the grant of vacation leave
privileges to an employee, the employer is given the leeway to impose conditions on the
entitlement to and commutation of the same, as the grant of vacation leave is not a standard
of law, but a prerogative of management. It is a mere concession or act of grace of the
employer and not a matter of right on the part of the employee. Thus, it is well within the
power and authority of an employer to impose certain conditions, as it deems fit, on the grant
of vacation leaves, such as having the option to schedule the same.
Same; Same; Same; Same; Since the grant of vacation leave is a prerogative of the
employer, the latter can compel its employees to exhaust all their vacation leave credits.—
Along that line, since the grant of vacation leave is a prerogative of the employer, the latter
can compel its employees to exhaust all their vacation leave credits.
31
Of course, any vacation leave credits left unscheduled by the employer, or any scheduled
vacation leave that was not enjoyed by the employee upon the employer’s directive, due to
exigencies of the service, must be converted to cash, as provided in the CBA. However, it is
incorrect to award payment of the cash equivalent of vacation leaves that were already used
and enjoyed by the employees. By directing the conversion to cash of all utilized and paid
vacation leaves, the voluntary arbitrator has licensed unjust enrichment in favor of the
petitioner and caused undue financial burden on the respondent. Evidently, the Court cannot
tolerate this.
Same; Same; Same; The purpose of a vacation leave is to afford a laborer a chance to get
a much-needed rest to replenish his worn-out energy and acquire a new vitality to enable him
to efficiently perform his duties, and not merely to give him additional salary and bounty—to
give the employees the option not to consume it with the aim of converting it to cash at the end
of the year would defeat the very purpose of vacation leave.—It would seem that petitioner’s
goal in relentlessly arguing that its members preferred vacation leave schedule should be
given preference is not allowed to them to avail themselves of their respective vacation leave
credits at all but, instead, to convert these into cash. In Cuajo v. Chua Lo Tan, 6 SCRA 136
(1962) We said that the purpose of a vacation leave is to afford a laborer a chance to get a
much-needed rest to replenish his worn-out energy and acquire a new vitality to enable him
to efficiently perform his duties, and not merely to give him additional salary and bounty.
Accordingly, the vacation leave privilege was not intended to serve as additional salary, but
as a non-monetary benefit. To give the employees the option not to consume it with the aim
of converting it to cash at the end of the year would defeat the very purpose of vacation leave.
Same; Same; The supremacy of the law over contracts is explained by the fact that labor
contracts are not ordinary contracts—they are imbued with public interest and therefore are
subject to the police power of the state; If the provisions in the CBA run contrary to law, public
morals, or public policy, such provisions may very well be voided.—The relations between
capital and labor are not merely contractual. “They are so impressed with public interest that
labor contracts must yield to the common good x x x.” The supremacy of the law over contracts
is explained by the fact that labor contracts
32
are not ordinary contracts; they are imbued with public interest and therefore are
subject to the police power of the state. However, it should not be taken to mean that
provisions agreed upon in the CBA are absolutely beyond the ambit of judicial review and
nullification. If the provisions in the CBA run contrary to law, public morals, or public policy,
such provisions may very well be voided.
Same; Same; Security Guards; Since it is the primary responsibility of operators of
company security forces to maintain and upgrade the standards of efficiency, discipline,
performance and competence of their personnel, it follows that the expenses to be incurred
therein shall be for the personal account of the company.—Since it is the primary
responsibility of operators of company security forces to maintain and upgrade the standards
of efficiency, discipline, performance and competence of their personnel, it follows that the
expenses to be incurred therein shall be for the personal account of the company. Further,
the intent of the law to impose upon the employer the obligation to pay for the cost of its
employees’ training is manifested in the aforementioned law’s provision that Where the
quality of training is better served by centralization, the CFSD Directors may activate a
training staff from local talents to assist. The cost of training shall be pro-rated among the
participating agencies/private companies. It can be gleaned from the said provision that cost
of training shall be pro-rated among participating agencies and companies if the training is
best served by centralization. The law mandates pro-rating of expenses because it would be
impracticable and unfair to impose the burden of expenses suffered by all participants on
only one participating agency or company. Thus, it follows that if there is no centralization,
there can be no pro-rating, and the company that has its own security forces shall shoulder
the entire cost for such training. If the intent of the law were to impose upon individual
employees the cost of training, the provision on the pro-rating of expenses would not have
found print in the law.
Appeals.
Victoria Lim Law Offices for petitioner.
33
Ronald O. Guillermo and Michael M. Racelis for respondent.
PERALTA, J.:
Mayon Hotel & Restaurant vs. Adana
G.R. No. 157634. May 16, 2005. *
MAYON HOTEL & RESTAURANT, PACITA O. PO and/or JOSEFA PO LAM,

petitioners, vs.ROLANDO ADANA, CHONA BUMALAY, ROGER BURCE,
EDUARDO ALAMARES, AMADO ALAMARES, EDGARDO TORREFRANCA,
LOURDES CAMIGLA, TEODORO LAURENARIA, WENEFREDO LOVERES, LUIS
GUADES, AMADO MACANDOG, PATERNO LLARENA, GREGORIO NICERIO,
JOSE ATRACTIVO, MIGUEL TORREFRANCA, and SANTOS BROÑOLA,
respondents.
Labor Law; Appeals; Due Process; While it is within the NLRC’s competence, as an
appellate agency reviewing decisions of Labor Arbiters, to disagree with and set aside the
latter’s findings, it stands to reason that it should state an acceptable cause therefore,
otherwise it would be a whimsical, capricious, oppressive, illogical, unreasonable exercise of
quasi-judicial prerogative, subject to invalidation by the extraordinary writ of certiorari.—
There is no denying
_______________
* SECOND DIVISION.
610

ANNOTATED
that it is within the NLRC’s competence, as an appellate agency reviewing decisions of

Labor Arbiters, to disagree with and set aside the latter’s findings. But it stands to reason
that the NLRC should state an acceptable cause therefore, otherwise it would be a whimsical,
capricious, oppressive, illogical, unreasonable exercise of quasi-judicial prerogative, subject
to invalidation by the extraordinary writ of certiorari. And when the factual findings of the
Labor Arbiter and the NLRC are diametrically opposed and this disparity of findings is called
into question, there is, necessarily, a re-examination of the factual findings to ascertain which
opinion should be sustained.
Same; Same; Same; Administrative Law; Factual findings of administrative bodies like
the NLRC are affirmed only if they are supported by substantial evidence that is manifest in
the decision and on the records.—It is explicit in Castillo v. NLRC that factual findings of
administrative bodies like the NLRC are affirmed only if they are supported by substantial
evidence that is manifest in the decision and on the records. As stated in Castillo: [A]buse of
discretion does not necessarily follow from a reversal by the NLRC of a decision of a Labor
Arbiter. Mere variance in evidentiary assessment between the NLRC and the Labor Arbiter
does not automatically call for a full review of the facts by this Court. The NLRC’s decision, so
long as it is not bereft of substantial support from the records, deserves respect from this Court.
As a rule, the original and exclusive jurisdiction to review a decision or resolution of
respondent NLRC in a petition for certiorari under Rule 65 of the Rules of Court does not
include a correction of its evaluation of the evidence but is confined to issues of jurisdiction
or grave abuse of discretion. Thus, the NLRC’s factual findings, if supported by substantial
evidence, are entitled to great respect and even finality, unless petitioner is able to show that
it simply and arbitrarily disregarded the evidence before it or had misappreciated the evidence
to such an extent as to compel a contrary conclusion if such evidence had been properly
appreciated.
Same; Administrative Law; Evidence; Procedural Rules and Technicalities; Article 221
of the Labor Code is clear—technical rules are not binding, and the application of technical
rules of procedure may be relaxed in labor cases to serve the demand of substantial justice.—
Petitioners’ reliance on the rules of evidence, i.e., the certificate of registration being the best
proof of ownership, is misplaced. Notwithstanding the certificate of registration, doubts were
611
VOL. 458, MAY 16, 2005 611

cast as to the true nature of petitioner Josefa Po Lam’s involvement in the enterprise,
and the Labor Arbiter had the authority to resolve this issue. It was therefore within his
jurisdiction to require the additional documents to ascertain who was the real owner of
petitioner Mayon Hotel & Restaurant. Article 221 of the Labor Code is clear: technical rules
are not binding, and the application of technical rules of procedure may be relaxed in labor
cases to serve the demand of substantial justice. The rule of evidence prevailing in court of
law or equity shall not be controlling in labor cases and it is the spirit and intention of the
Labor Code that the Labor Arbiter shall use every and all reasonable means to ascertain the
facts in each case speedily and objectively and without regard to technicalities of law or
procedure, all in the interest of due process. Labor laws mandate the speedy administration
of justice, with least attention to technicalities but without sacrificing the fundamental
requisites of due process.
Same; Same; Same; Same; To apply the concept of judicial admissions to lowly
employees would be to exact compliance with technicalities of law that is contrary to the
demands of substantial justice.—Similarly, the fact that the respondents’ complaints
contained no allegation that petitioner Josefa Po Lam is the owner is of no moment. To apply
the concept of judicial admissions to respondents—who are but lowly employees—would be
to exact compliance with technicalities of law that is contrary to the demands of substantial
justice. Moreover, the issue of ownership was an issue that arose only during the course of
the proceedings with the Labor Arbiter, as an incident of determining respondents’ claims,
and was well within his jurisdiction.
Same; Same; Same; Due Process; The essence of due process in administrative
proceedings is simply an opportunity to explain one’s side or an opportunity to seek
reconsideration of the action or ruling complained of.—Petitioners were also not denied due
process, as they were given sufficient opportunity to be heard on the issue of ownership. The
essence of due process in administrative proceedings is simply an opportunity to explain one’s
side or an opportunity to seek reconsideration of the action or ruling complained of. And there
is nothing in the records which would suggest that petitioners had absolute lack of
opportunity to be heard. Obviously, the choice not to present evidence was made by
petitioners themselves.
612

ANNOTATED
Same; Same; Same; Presumptions; Failure to submit certain pieces of evidence could
only mean that if produced, they would have been adverse to such party’s case.—We sustain
the Labor Arbiter and the CA because even when the case was on appeal with the NLRC,
nothing was submitted to negate the Labor Arbiter’s finding that Pacita Po is not the real
owner of the subject hotel and restaurant. Indeed, no such evidence was submitted in the
proceedings with the CA nor with this Court. Considering that petitioners vehemently deny
ownership by petitioner Josefa Po Lam, it is most telling that they continue to withhold
evidence which would shed more light on this issue. We therefore agree with the CA that the
failure to submit could only mean that if produced, it would have been adverse to petitioners’
case.
Same; Dismissals; Article 286 of the Labor Code is clear—there is termination of
employment when an otherwise bona fide suspension of work exceeds six (6) months.—The
above factual finding of the Labor Arbiter was never refuted by petitioners in their appeal
with the NLRC. It confounds us, therefore, how the NLRC could have so cavalierly treated
this uncontroverted factual finding by ruling that respondents have not introduced any
evidence to show that they were illegally dismissed, and that the Labor Arbiter’s finding was
based on conjecture. It was a serious error that the NLRC did not inquire as to the legality
of the cessation of employment. Article 286 of the Labor Code is clear—there is termination
of employment when an otherwise bona fide suspension of work exceeds six (6) months. The
cessation of employment for more than six months was patent and the employer has the
burden of proving that the termination was for a just or authorized cause.
Same; Same; Serious business losses do not excuse the employer from complying with the
clearance or report required under Art. 283 of the Labor Code and its implementing rules
before terminating the employment of its workers; The requirement of law mandating the
giving of notices was intended not only to enable the employees to look for another employment
and therefore ease the impact of the loss of their jobs and the corresponding income, but more
importantly, to give the Department of Labor and Employment (DOLE) the opportunity to
ascertain the verity of the alleged authorized cause of termination.—We are not impressed by
petitioners’ claim that severe business losses justified their failure to reinstate respondents.
The evi-
613
VOL. 458, MAY 16, 2005 613
dence to prove this fact is inconclusive. But more important, serious business losses do
not excuse the employer from complying with the clearance or report required under Article
283 of the Labor Code and its implementing rules before terminating the employment of its
workers. In the absence of justifying circumstances, the failure of petitioners to observe the
procedural requirements set out under Article 284, taints their actuations with bad faith,
especially since they claimed that they have been experiencing losses in the three years
before 1997. To say the least, if it were true that the lay-off was temporary but then serious
business losses prevented the reinstatement of respondents, then petitioners should have
complied with the requirements of written notice. The requirement of law mandating the
giving of notices was intended not only to enable the employees to look for another
employment and therefore ease the impact of the loss of their jobs and the corresponding
income, but more importantly, to give the Department of Labor and Employment (DOLE) the
opportunity to ascertain the verity of the alleged authorized cause of termination.
Same; Same; While the Court recognizes the right of the employer to terminate the
services of an employee for a just or authorized cause, the dismissal of employees must be made
within the parameters of law and pursuant to the tenets of fair play.—While we recognize the
right of the employer to terminate the services of an employee for a just or authorized cause,
the dismissal of employees must be made within the parameters of law and pursuant to the
tenets of fair play. And in termination disputes, the burden of proof is always on the employer
to prove that the dismissal was for a just or authorized cause. Where there is no showing of
a clear, valid and legal cause for termination of employment, the law considers the case a
matter of illegal dismissal.
Same; Same; Evidence; Damages; If doubts exist between the evidence presented by the
employer and the employee, the scales of justice must be tilted in favor of the latter—the
employer must affirmatively show rationally adequate evidence that the dismissal was for a
justifiable cause; As a rule, moral damages are recoverable where the dismissal of the employee
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.—Under these circumstances, the
award of damages was proper. As a rule,
614

ANNOTATED
moral damages are recoverable where the dismissal of the employee 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. We believe that the dismissal of the respondents
was attended with bad faith and meant to evade the lawful obligations imposed upon an
employer. To rule otherwise would lead to the anomaly of respondents being terminated from
employment in 1997 as a matter of fact, but without legal redress. This runs counter to
notions of fair play, substantial justice and the constitutional mandate that labor rights
should be respected. If doubts exist between the evidence presented by the employer and the
employee, the scales of justice must be tilted in favor of the latter—the employer must
affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause.
It is a time-honored rule that in controversies between a laborer and his master, doubts
reasonably arising from the evidence, or in the interpretation of agreements and writing
should be resolved in the former’s favor. The policy is to extend the doctrine to a greater
number of employees who can avail of the benefits under the law, which is in consonance
with the avowed policy of the State to give maximum aid and protection of labor.
Same; Labor Standards; Pleadings and Practice; Petitioners’ arguments are not only
tiring, repetitive and unconvincing, but confusing and confused—entitlement to labor
standard benefits is a separate and distinct concept from payment of separation pay arising
from illegal dismissal, and are governed by different provisions of the Labor Code.—
Petitioners assail this ruling by repeating their long and convoluted argument that as there
was no illegal dismissal, then respondents are not entitled to their monetary claims or
separation pay and damages. Petitioners’ arguments are not only tiring, repetitive and
unconvincing, but confusing and confused—entitlement to labor standard benefits is a
separate and distinct concept from payment of separation pay arising from illegal dismissal,
and are governed by different provisions of the Labor Code.
Same; Same; Evidence; One who pleads payment has the burden of proving it, and even
where the employees must allege nonpayment, the general rule is that the burden rests on the
defendant to prove nonpayment, rather than on the plaintiff to prove nonpayment.—We agree
with the CA and the Labor Arbiter. Respondents have set out with particularity in their
complaint, position paper,
615
VOL. 458, MAY 16, 2005 615

affidavits and other documents the labor standard benefits they are entitled to, and
which they alleged that petitioners have failed to pay them. It was therefore petitioners’
burden to prove that they have paid these money claims. One who pleads payment has the
burden of proving it, and even where the employees must allege nonpayment, the general
rule is that the burden rests on the defendant to prove nonpayment, rather than on the
plaintiff to prove nonpayment. This petitioners failed to do.
Same; Same; Same; Presumptions; Failure of an employer to submit necessary
documents which are in its possession, in spite of orders to do so, gives rise to the presumption
that their presentation is prejudicial to its cause.—We also agree with the Labor Arbiter and
the CA that the documents petitioners submitted, i.e., affidavits executed by some of
respondents during an ocular inspection conducted by an inspector of the DOLE; notices of
inspection result and Facility Evaluation Orders issued by DOLE, are not sufficient to prove
payment. Despite repeated orders from the Labor Arbiter, petitioners failed to submit the
pertinent employee files, payrolls, records, remittances and other similar documents which
would show that respondents rendered work entitling them to payment for overtime work,
night shift differential, premium pay for work on holidays and rest day, and payment of these
as well as the COLA and the SILP—documents which are not in respondents’ possession but
in the custody and absolute control of petitioners. By choosing not to fully and completely
disclose information and present the necessary documents to prove payment of labor
standard benefits due to respondents, petitioners failed to discharge the burden of proof.
Indeed, petitioners’ failure to submit the necessary documents which as employers are in
their possession, in spite of orders to do so, gives rise to the presumption that their
presentation is prejudicial to its cause. As aptly quoted by the CA: [W]hen the evidence tends
to prove a material fact which imposes a liability on a party, and he has it in his power to
produce evidence which from its very nature must overthrow the case made against him if it
is not founded on fact, and he refuses to produce such evidence, the presumption arises that
the evidence, if produced, would operate to his prejudice, and support the case of his
adversary.
Same; Same; Cost of Facilities; Meals and Snacks; Before an employer may deduct the
value of facilities from the employee’s wages,
616

ANNOTATED
it must first satisfy the following—(a) proof that such facilities are customarily furnished
by the trade, (b) the provision of deductible facilities is voluntarily accepted in writing by the
employee, and, (c) the facilities are charged at fair and reasonable value—the law is clear that
mere availment is not sufficient to allow deductions from employees’ wages.—Even granting
that meals and snacks were provided and indeed constituted facilities, such facilities could
not be deducted without compliance with certain legal requirements. As stated in Mabeza v.
NLRC, the employer simply cannot deduct the value from the employee’s wages without
satisfying the following: (a) proof that such facilities are customarily furnished by the trade;
(b) the provision of deductible facilities is voluntarily accepted in writing by the employee;
and (c) the facilities are charged at fair and reasonable value. The records are clear that
petitioners failed to comply with these requirements. There was no proof of respondents’
written authorization. Indeed, the Labor Arbiter found that while the respondents admitted
that they were given meals and merienda, the quality of food served to them was not what
was provided for in the Facility Evaluation Orders and it was only when they filed the cases
that they came to know of this supposed Facility Evaluation Orders. Petitioner Josefa Po
Lam herself admitted that she did not inform the respondents of the facilities she had applied
for. Considering the failure to comply with the above-mentioned legal requirements, the
Labor Arbiter therefore erred when he ruled that the cost of the meals actually provided to
respondents should be deducted as part of their salaries, on the ground that respondents
have availed themselves of the food given by petitioners. The law is clear that mere availment
is not sufficient to allow deductions from employees’ wages.
Same; Same; Same; Same; Food or snacks or other convenience provided by the
employers are deemed as supplements if they are granted for the convenience of the employer—
the criterion in making a distinction between a supplement and a facility does not so much lie
in the kind (food, lodging) but the purpose.—We note the uncontroverted testimony of
respondents on record that they were required to eat in the hotel and restaurant so that they
will not go home and there is no interruption in the services of Mayon Hotel & Restaurant.
As ruled in Mabeza, food or snacks or other convenience provided by the employers are
deemed as supplements if they are granted for the convenience of the employer. The criterion
in making
617
VOL. 458, MAY 16, 2005 617
a distinction between a supplement and a facility does not so much lie in the kind (food,
lodging) but the purpose. Considering, therefore, that hotel workers are required to work
different shifts and are expected to be available at various odd hours, their ready availability
is a necessary matter in the operations of a small hotel, such as petitioners’ business. The
deduction of the cost of meals from respondents’ wages, therefore, should be removed.
Same; Same; Serious business losses is not a defense to payment of labor standard
benefits.—As for petitioners repeated invocation of serious business losses, suffice to say that
this is not a defense to payment of labor standard benefits. The employer cannot exempt
himself from liability to pay minimum wages because of poor financial condition of the
company. The payment of minimum wages is not dependent on the employer’s ability to pay.
Same; Damages; While it is true that other forms of damages under the Civil Code may
be awarded to illegally dismissed employees, any award of moral damages by the Labor
Arbiter cannot be based on the Labor Code but should be grounded on the Civil Code.—There
is no denying that the actuations of petitioners in this case have been reprehensible. They
have terminated the respondents’ employment in an underhanded manner, and have used
and abused the quasi-judicial and judicial processes to resist payment of their employees’
rightful claims, thereby protracting this case and causing the unnecessary clogging of dockets
of the Court. They have also forced respondents to unnecessary hardship and financial
expense. Indeed, the circumstances of this case would have called for exemplary damages, as
the dismissal was effected in a wanton, oppressive or malevolent manner, and public policy
requires that these acts must be suppressed and discouraged. Nevertheless, we cannot agree
with the Labor Arbiter in granting exemplary damages of P10,000.00 each to all respondents.
While it is true that other forms of damages under the Civil Code may be awarded to illegally
dismissed employees, any award of moral damages by the Labor Arbiter cannot be based on
the Labor Code but should be grounded on the Civil Code. And the law is clear that exemplary
damages can only be awarded if plaintiff shows proof that he is entitled to moral, temperate
or compensatory damages. As only respondents Loveres, Guades, Macandog, Llarena, Nicerio,
Atractivo and Broñola specifically claimed
618

ANNOTATED
damages from petitioners, then only they are entitled to exemplary damages.
Same; Same; Attorney’s Fees; In actions for recovery of wages or where an employee was
forced to litigate and incur expenses to protect his rights and interest, he is entitled to an award
of attorney’s fees.—We rule that attorney’s fees in the amount to P10,000.00 should be granted
to each respondent. It is settled that in actions for recovery of wages or where an employee
was forced to litigate and incur expenses to protect his rights and interest, he is entitled to
an award of attorney’s fees. This case undoubtedly falls within this rule.
Appeals.

Angelo R. Arizala for petitioners.
Public Attorney’s Office for respondents.
PUNO, J.:

ANNOTATED
Gaa vs. Court of Appeals
No. L-44169. December 3, 1985. *
ROSARIO A. GAA, petitioner, vs. THE HONORABLE COURT OF APPEALS,

EUROPHIL INDUSTRIES CORPORATION, and CESAR R. ROXAS, Deputy Sheriff
of Manila, respondents.
Labor Law; Words and Phrases; Damages; Execution; Attachment; Art 1708 of the Civil
Code which exempts "laborer's wage" from attachment or execution does not apply to a
responsibly placed employee, supervisory or managerial employee, but only to the rankand
file.—ln its broadest sense, the word "laborer" includes everyone who performs any kind of
mental or physical labor, but as commonly and customarily used and understood, it only
applies to one engaged in some form of manual or physical labor. That is the sense in which
the courts generally apply the term as applied in exemption acts, since persons of that class
usually look to the reward of a day's labor for immediate or present support and so are more
in need of the exemption than are other. (22 Am. Jur. 22 citing Briscoe vs. Montgomery, 93
Ga 602, 20 SE 40; Miller vs. Dugas, 77 Ga 4 Am St Rep 192; State ex rel. I.X.L. Grocery vs.
Land, 108 La 512, 32 So 433;
_______________
* FIRST DIVISION.
305
VOL. 140, DECEMBER 3, 1985 305

Wildner vs. Ferguson, 42 Minn 112, 43 NW 793; 6 LRA 338; Anno 102 Am St Rep 84.
Same; Same; Same; Same; Same; Same.—We do not think that the legislature intended
the exemption in Article 1708 of the New Civil Code to operate in favor of any but those who
are laboring men or women in the sense that their work is manual. Persons belonging to this
class usually look to the reward of a day's labor for immediate or present support, and such
person are more in need of the exemption than any others. Petitioner Rosario A. Gaa is
definitely not within that class.
Same; Same; Same; Same; Same; Same.—We find, therefore, and so hold that the Trial
Court did not err in denying in its order of November 7, 1975 the motion of petitioner to lift
the notice of garnishment against her salaries, commission and other remuneration from El
Grande Hotel since said salaries, commission and other remuneration due her from the El
Grande Hotel do not constitute wages due a laborer which, under Article 1708 of the Civil
Code, are not subject to execution or attachment.
Same; Same; "Wages" distinguished from "Salary."—Article 1708 used the word "wages"
and not "salary" in relation to "laborer" when it declared what are to be exempted from
attachment and execution. The term "wages" as distinguished from "salary", applies to the
compensation for manual labor, skilled or unskilled, paid at stated times, and measured by
the day, week, month, or season, while "salary" denotes a higher degree of employment, or a
superior grade of services, and implies a position of office: by contrast, the term "wages"
indicates considerable pay for a lower and less responsible character of employment, while
"salary" is suggestive of a larger and more important service (35 Am. Jur. 496).
Same; Same; Same.—The distinction between wages and salary was adverted to in
Bell vs. Indian Livestock Co. (Tex, Sup.), 11 S.W. 344, wherein it was said: " 'Wages' are the
compensation given to a hired person for service, and the same is true of 'salary'. The words
seem to be synonymous, convertible terms, though we believe that use and general
acceptation have given to the word 'salary' a significance somewhat different from the word
'wages' in this: that the former is understood to relate to position of office, to be the
compensation given for official or other service, as distinguished from 'wages', the
compensation for labor." Annotation 102 Am. St. Rep. 81, 95.
306

ANNOTATED
PETITION for certiorari to review the decision of the Court of Appeals.

Federico C. Alikpala and Federico Y. Alikpala, Jr. for petitioner.
Borbe and Palma for private respondent.
PATAJO, J.:
VOL. 468, AUGUST 25, 2005 111

Philex Gold Philippines, Inc. vs. Philex Bulawan
Supervisors Union
G.R. No. 149758. August 25, 2005. *

PHILEX GOLD PHILIPPINES, INC., GERARDO H. BRIMO, LEONARD P. JOSEF,
and JOSE B. ANIEVAS, petitioners, vs. PHILEX BULAWAN SUPERVISORS
UNION, represented by its President, JOSE D. PAMPLIEGA, respondents.
Labor Law; Wages; Constitutional Law; If an employer accords employees the same
position and rank, the presumption is that these employees perform equal work—hence, the
doctrine of “equal pay for equal work” in International School Alliance of Educators was
correctly applied by the Court of Appeals.—Petitioners admit that the “same class of workers
[are] doing the same kind of work.” This means that an ex-Padcal supervisor and a locally
hired supervisor of equal rank do the same kind of work. If an employer accords employees
the same position and rank, the presumption is that these employees perform equal work.
Hence, the doctrine of “equal pay for equal work” in International School Alliance of
Educators was correctly applied by the Court of Appeals.
Same; Same; Same; Petitioner failed to prove with satisfactory evidence that it has not
discriminated against the locally hired supervisor in view of the unequal salary.—Petitioners
failed to adduce evidence to show that an ex-Padcal supervisor and a locally hired supervisor
of the same rank are initially paid the same basic salary for doing the same kind of work.
They failed to differentiate this basic salary from any kind of salary increase or additional
benefit which may have been given to the ex-Padcal supervisors due to their seniority,
experience and other factors. The records only show that an ex-Padcal supervisor is paid a
higher salary than a locally hired supervisor of the same rank. Therefore, petitioner failed to
prove with satisfactory evidence that it has not discriminated against the locally hired
supervisor in view of the unequal salary.
Appeals.
_______________
* FIRST DIVISION.
112

ANNOTATED
Philex Gold Philippines, Inc. vs. Philex Bulawan
Supervisors Union

Roco, Kapunan, Migallos, Perez and Lunafor petitioners.
Arnel L. Lapore for private respondents.
AZCUNA, J.:
G.R. No. 152456. April 28, 2004. *
SEVILLA TRADING COMPANY, petitioner, vs. A.V.A. TOMAS E. SEMANA,

SEVILLA TRADING WORKERS UNION-SUPER, respondents.
Remedial Law; Certiorari; The special civil action of certiorari under Rule 65 is not, and
cannot be a substitute for an appeal, where the latter remedy is available.—It is elementary
that the special civil action of certiorari under Rule 65 is not, and cannot be a substitute for
an appeal, where the latter remedy is available, as it was in this case. Petitioner Sevilla
Trading failed to file an appeal within the fifteen-day reglementary period from its notice of
the adverse decision of A.V.A. Semana. It received a copy of the decision of A.V.A. Semana
on December 20, 2000, and should have filed its appeal under Rule 43 of the 1997 Rules of
Civil Procedure on or before January 4, 2001. Instead, petitioner filed on January 19, 2001 a
“Manifestation and Motion for Time to File Petition for Certiorari,” and on February 19, 2001,
it filed a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure. Clearly,
petitioner Sevilla Trading had a remedy of appeal but failed to use it.
Same; Same; Meaning of Grave Abuse of Discretion.—“Grave abuse of discretion” has
been interpreted to mean “such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction, or, in other
_______________
* SECOND DIVISION
240

ANNOTATED
Sevilla Trading Company vs. Semana
words where the power is exercised in an arbitrary or despotic manner by reason of

passion or personal hostility, and it must be so patent and gross as to amount to an evasion
of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in
contemplation of law.”
PETITION for review on certiorari of the decision of the Court of Appeals.

Generoso R.. Jacinto for petitioner.
PUNO, J.:
American Wire and Cable Daily Rated Employees

Union vs. American Wire and Cable Co., Inc.
G.R. No. 155059. April 29, 2005. *

AMERICAN WIRE AND CABLE DAILY RATED EMPLOYEES UNION,
petitioner, vs.AMERICAN WIRE AND CABLE CO., INC. and THE COURT OF
APPEALS, respondents.
Labor Law; Bonuses; Words and Phrases; A bonus is an amount granted and paid to an
employee for his industry and loyalty which contributed to the success of the employer’s
business and made possible the realization of profits—it is an act of generosity granted by an
enlightened employer to spur the employee to greater efforts for the
_______________
* SECOND DIVISION.
685
VOL. 457, APRIL 29, 2005 685

American Wire and Cable Daily Rated
Employees Union vs. American Wire and Cable
Co., Inc.
success of the business and realization of bigger profits.—In the case of Producers Bank
of the Philippines v. NLRC we have characterized what a bonus is, viz.: A bonus is an amount
granted and paid to an employee for his industry and loyalty which contributed to the success
of the employer’s business and made possible the realization of profits. It is an act of
generosity granted by an enlightened employer to spur the employee to greater efforts for the
success of the business and realization of bigger profits. The granting of a bonus is a
management prerogative, something given in addition to what is ordinarily received by or
strictly due the recipient. Thus, a bonus is not a demandable and enforceable obligation,
except when it is made part of the wage, salary or compensation of the employee.
Same; Same; The grant of benefits given above what is strictly due to the employees is a
management prerogative which benefits, whenever management sees necessary, may be
withdrawn, unless they have been made a part of the wage or salary or compensation of the
employees.—Based on the foregoing pronouncement, it is obvious that the
benefits/entitlements subjects of the instant case are all bonuses which were given by the
private respondent out of its generosity and munificence. The additional 35% premium pay
for work done during selected days of the Holy Week and Christmas season, the holding of
Christmas parties with raffle, and the cash incentives given together with the service awards
are all in excess of what the law requires each employer to give its employees. Since they are
above what is strictly due to the members of petitioner-union, the granting of the same was
a management prerogative, which, whenever management sees necessary, may be
withdrawn, unless they have been made a part of the wage or salary or compensation of the
employees.
Same; Same; For a bonus to be enforceable, it must have been promised by the employer
and expressly agreed upon by the parties, or it must have had a fixed amount and had been a
long and regular practice on the part of the employer.—For a bonus to be enforceable, it must
have been promised by the employer and expressly agreed upon by the parties, or it must
have had a fixed amount and had been a long and regular practice on the part of the employer.
The benefits/entitlements in question were never subjects of any express agreement between
the parties. They were never incorporated in the Collective Bargaining Agreement (CBA). As
observed by the Volun-
686

ANNOTATED
Co., Inc.
tary Arbitrator, the records reveal that these benefits/entitlements have not been
subjects of any express agreement between the union and the company, and have not yet
been incorporated in the CBA. In fact, the petitioner has not denied having made proposals
with the private respondent for the service award and the additional 35% premium pay to be
made part of the CBA.
Same; Same; Words and Phrases; To be considered a “regular practice,” the giving of the
bonus should have been done over a long period of time, and must be shown to have been
consistent and deliberate—the downtrend in the grant of these bonuses over the years
demonstrates that there is nothing consistent about it.—The Christmas parties and its
incidental benefits, and the giving of cash incentive together with the service award cannot
be said to have fixed amounts. What is clear from the records is that over the years, there
had been a downtrend in the amount given as service award. There was also a downtrend
with respect to the holding of the Christmas parties in the sense that its location changed
from paid venues to one which was free of charge, evidently to cut costs. Also, the grant of
these two aforementioned bonuses cannot be considered to have been the private
respondent’s long and regular practice. To be considered a “regular practice,” the giving of
the bonus should have been done over a long period of time, and must be shown to have been
consistent and deliberate. The downtrend in the grant of these two bonuses over the years
demonstrates that there is nothing consistent about it.
Same; Same; To hold that an employer should be forced to distribute bonuses which it
granted out of kindness is to penalize him for his past generosity.—The additional 35%
premium pay for work rendered during selected days of the Holy Week and Christmas season
cannot be held to have ripened into a company practice that the petitioners herein have a
right to demand. Aside from the general averment of the petitioner that this benefit had been
granted by the private respondent since time immemorial, there had been no evidence
adduced that it had been a regular practice. As propitiously observed by the Court of
Appeals: . . . [N]otwithstanding that the subject 35% premium pay was deliberately given
and the same was in excess of that provided by the law, the same however did not ripen into
a company practice on account of the fact that it was only granted for two (2) years and with
the express reservation from
687
VOL. 457, APRIL 29, 2005 687

Co., Inc.
respondent corporation’s owner that it cannot continue to grant the same in view of the
company’s current financial situation. To hold that an employer should be forced to distribute
bonuses which it granted out of kindness is to penalize him for his past generosity.

Honorato O. Victoria for petitioner.
Emiterio Manibong for respondent.
CHICO-NAZARIO, J.:
Nasipit Lumber Company, Inc. vs. National Wages

and Productivity Commission
G.R. No. 113097. April 27, 1998. *
NASIPIT LUMBER COMPANY, INC., and PHILIPPINE WALLBOARD

CORPORATION, petitioners, vs. NATIONAL WAGES AND PRODUCTIVITY
COMMISSION, WESTERN AGUSAN WORKERS UNION (WAWU-ULGWP LOCAL
101), TUNGAO LUMBER WORKERS UNION (TULWU-ULGWP LOCAL 102) and
UNITED WORKERS UNION (UWU-ULGWP LOCAL 103), respondents.
Constitutional Law; Administrative Law; The three great branches and the various
administrative agencies of the government can exercise only those powers conferred upon them
by the Constitution and the law.—The three great branches and the various administrative
agencies of the government can exercise only those powers conferred upon them by the
Constitution and the law. It is through the application of this basic constitutional principle
that the Court resolves the instant case.
Labor Law; Wage Orders; It is the National Wages and Productivity Commission
(NWPC), not the Regional Tripartite Wages and Productivity Boards (RTWPB), which has the
power to “prescribe the rules and guidelines” for the determination of minimum wage and
productivity measures.—The foregoing clearly grants the NWPC, not the RTWPB, the power
to “prescribe the rules and guidelines” for the determination of minimum wage and
productivity measures. While the RTWPB has the power to issue wage orders under Article
122(b) of the Labor Code, such orders are subject to the guidelines prescribed by the NWPC.
One of these guidelines is the “Rules on
________________
* FIRST DIVISION.
668

ANNOTATED
Nasipit Lumber Company, Inc. vs. National
Wages and Productivity Commission
Minimum Wage Fixing,” which was issued on June 4, 1990. Rule IV, Section 2 thereof,
allows the RTWPB to issue wage orders exempting enterprises from the coverage of the
prescribed minimum wages. However, the NWPC has the power not only to prescribe
guidelines to govern wage orders, but also to issue exemptions therefrom, as the said rule
provides that “[w]henever a wage order provides for exemption, applications thereto shall be
filed with the appropriate Board which shall process the same, subject to guidelines issued by
the Commission.” In short, the NWPC lays down the guidelines which the RTWPB
implements.
Same; Same; Where the NWPC never assented to a Guideline issued by the RTWPB, the
said guideline is inoperative and cannot be used by the latter in deciding or acting on an
employer’s application for exemption.—Significantly, the NWPC authorized the RTWPB to
issue exemptions from wage orders, but subject to its review and approval. Since the NWPC
never assented to Guideline No. 3 of the RTWPB, the said guideline is inoperative and cannot
be used by the latter in deciding or acting on petitioners’ application for exemption. Moreover,
Rule VIII, Section 1 of the NWPC’s Rules of Procedure on Minimum Wage Fixing issued on
June 4, 1990-which was prior to the effectivity of RTWPB Guideline No. 3-requires that an
application for exemption from wage orders should be processed by the RTWPB, subject
specifically to the guidelines issued by the NWPC.
Same; Same; Administrative Law; It is a hornbook doctrine that the issuance of an

administrative rule or regulation must be in harmony with the enabling law; A statutory grant
of “powers should not be extended by implication beyond what may be necessary for their just
and reasonable execution—official powers cannot be merely assumed by administrative
officers, nor can they be created by the courts in the exercise of their judicial functions.”—To
allow RTWPB Guideline No. 3 to take effect without the approval of the NWPC is to arrogate
unto RTWPB a power vested in the NWPC by Article 121 of the Labor Code, as amended by
RA 6727. The Court will not countenance this naked usurpation of authority. It is a hornbook
doctrine that the issuance of an administrative rule or regulation must be in harmony with
the enabling law. If a discrepancy occurs “between the basic law and an implementing rule
or regulation, it is the former that prevails.” This is so because the law cannot be broadened
by a mere administrative issuance. It is axiomatic that “[a]n administrative agency cannot
amend an act of Congress.” Article 122 (e) of the
669
VOL. 289, APRIL 27, 1998 669

Labor Code cannot be construed to enable the RTWPB to decide applications for
exemption on the basis of its own guidelines which were not reviewed and approved by the
NWPC, for the simple reason that a statutory grant of “powers should not be extended by
implication beyond what may be necessary for their just and reasonable execution. Official
powers cannot be merely assumed by administrative officers, nor can they be created by the
courts in the exercise of their judicial functions.”
Same; Same; Statutory Construction; Basic is the rule in statutory construction that all
doubts in the implementation and the interpretation of the provisions of the Labor Code, as
well as its implementing rules and regulations, must be resolved in favor of labor.—The Court
wishes to stress that the law does not automatically grant exemption to all establishments
belonging to an industry which is deemed “distressed.” Hence, RX-01, Section 3 (4), must not
be construed to automatically include all establishments belonging to a distressed industry.
The fact that the wording of a wage order may contain some ambiguity would not help
petitioners. Basic is the rule in statutory construction that all doubts in the implementation
and the interpretation of the provisions of the Labor Code, as well as its implementing rules
and regulations, must be resolved in favor of labor. By exempting all establishments
belonging to a distressed industry, Guideline No. 3 surreptitiously and irregularly takes
away the mandated increase in the minimum wage awarded to the affected workers. In so
acting, the RTWPB proceeded against the declared policy of the State, enshrined in the
enabling act, “to rationalize the fixing of minimum wages and to promote productivity-
improvement and gain-sharing measures to ensure a decent standard of living for the
workers and their families; to guarantee the rights of labor to its just share in the fruits of
production; x x x.” Thus, Guideline No. 3 is void not only because it lacks NWPC approval
and contains an arbitrarily inserted exemption, but also because it is inconsistent with the
avowed State policies protective of labor.
Same; Administrative Law; Certiorari; Absent any grave abuse of discretion, NWPC’s
actions will not be subject to judicial review.—To justify the exemption of a distressed
establishment from effects of wage orders, the NWPC requires the applicant, if a stock
corporation like petitioners, to prove that its accumulated losses impaired its paid-up capital
by at least 25 percent in the last full accounting
670

ANNOTATED
period preceding the application or the effectivity of the order. In the case at bar, it is
undisputed that during the relevant accounting period, NALCO, ALCO and PWC sustained
capital impairments of 1.89, 28.72, and 5.03 percent, respectively. Clearly, it was only ALCO
which met the exemption standard. Hence, the NWPC did not commit grave abuse of
discretion in approving the application only of ALCO and in denying those of petitioners.
Indeed, the NWPC acted within the ambit of its administrative prerogative when it set
guidelines for the exemption of a distressed establishment. Absent any grave abuse of
discretion, NWPC’s actions will not be subject to judicial review. Accordingly, we deem the
appealed Decisions to be consistent with law.

Froilan M. Bacungan & Associates for petitioners.
Lope A. Bunol for Western Agusan Workers Union-TUCP.
PANGANIBAN, J.:
Aklan Electric Cooperative, Incorporated vs.

NLRC
G.R. No. 121439. January 25, 2000. *
AKLAN ELECTRIC COOPERATIVE, INCORPORATED (AKELCO),

petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION (Fourth Division),
RODOLFO M. RETISO and 165 OTHERS, respondents. 1
Labor Law; Administrative Law; Evidence; Factual findings of administrative agencies

are not infallible and will be set aside when they fail the test of arbitrariness; Where the
findings of the National Labor Relations Commission contradict those of the labor arbiter, the
Supreme Court, in the exercise of its equity jurisdiction, may look into the records of the case
and reexamine the questioned findings.—At the outset, we reiterate the rule that in certiorari
proceedings under
_______________
*THIRD DIVISION.
1Myrna A. Ileto, Leopoldo Casibu, Jr., Vincent Fulgencio, Aradam R. De Manuel, Philip John B. Buenaflor,
Cecilia A. Laudaus, Alton O. Flores, Delly A. Yerro, Rowena A. Isidro, John I. Selorio, Nilo I. Tribo, Melenita G.
Quimpo, Andres V. Isturis, Rafael Reyes, Manuel M. Laurdaus, Jr., Nicasio Nepomuceno, Bonifacio Quimpo,
Villamarte P. Villanueva, Elizabeth M. David, Rudy A. Irada, Bebina B. Fulgencio, Rolando Gerardo, Alejandro
M. Arcenio, Emerita C. Mainit, Pedro Nalangan IV, Reynaldo P. Irac, Rodolfo M. Taran, Victorio Rowan, Gervacio
V. Rapiz, Jossie S. Lacorte, Joselito I. Lauron, Gabriel B. Casibu, Reynaldo F. Autencio, Hernany R. Pamatian,
Perfecto I. Cahilig, Antonio S. Baldo, Bonifacio A. Arboleda, Jesus L. Bandiola, Alma M. Lumio, Teody L. Iradon,
Alberto F. Icasas, Pancho A. Beltran, Napoleon B. Jorque, Oscar R. Isidro, Eduardo B. Alcober, Librado J.
Belarmino, Jr., Teodisia E. Cirriano, Florencia S. Laurdaus, Jolito C. Abello, Leovigildo I. Lumio, Jose P. Dalisay,
Emelio F. Cuatriz, Antonio R. Fulgencio, Tomas Dela Rosa, Marcelino R. Celis, Noel T. Macawili, Arnaldo C. Dela
Cruz, Saine T. Cuenco, Alfredo I. Ilete, Benedict M. Ureta, Editha I. Roldan, Reginato I. Reyes, Florencio S. Sevilla,
Rosine F. Dela Cruz, Antonio R. Luces, Jay Lloyd S. Beltran, Ludrigo S. Fuentes, Rogelio M. Flores, Leonardo J.
Delgado, Manolito E. Canlas, Allan G. Iguban, Salvador S. Maagma, Bernardo B. Aguirre, Jr., Ariel G. Ingeniero,
Nabel S. Casidsid, Leoncito T. Legaspi, Paulino B. Castillo, Jose Y. Navarro, Danilo M. Taran, Paul F. Paras,
Ramon M. Flores, Ricardo I. Ileto, Ellen A. De la Rosa, Telesforo N. Retuba, Arturo R. Roldan, Nestor
259
VOL. 323, JANUARY 25, 2000 259

NLRC
evidence upon which the labor arbiter and public respondent NLRC based their
resolutions. Our query is limited to the determination of whether or not public respondent
NLRC acted without or in excess of its jurisdiction or with grave abuse of discretion in
rendering the assailed resolutions. While administrative findings of fact are accorded great
respect, and even finality when supported by substantial evidence, nevertheless, when it can
be shown that administrative bodies grossly misappreciated evidence of such nature as to
compel a contrary conclusion, this court had not hesitated to reverse their factual findings.
Factual findings of administrative agencies are not infallible and will be set aside when they
fail the test of arbitrariness. Moreover, where the findings of NLRC contradict those of the
labor arbiter, this Court, in the exercise of its equity jurisdiction, may look into the records
of the case and reexamine the questioned findings.
_______________
U. Salido, Antonio T. Nicolas, Jr., Wilfredo S. Mique, Roger A. Pamatian, Raul S. Paraz, Luis I. De Jose,
Jimuel S. Mopia, Diego A. Inocenciso, Godofredo J. Pelayo, Merilyn C. Javier, Melvin T. Prado, Willie D. Pamatian,
Asisculo M. Maaya, Jo Arlu L. Sabar, Edito V. Mapiza, Crispin I. Fernandez, Jose O. Pelayo, Jr. Rexel S. Briones,
Rey A. Inson, Norberto S. Ponce, Alixes M. Regalado, Rey P. Auten-cio, Godofredo I. Nepomuceno, Filmore R.
Ibabao, Arnel A. Gonzales, Felix E. Aguirre, Dionito M. Dela Cruz, Nancy B. Pamatian, Teddy J. Belarmino, Roger
Q. Serrano, Luciano P. Oquindo, Roy S. Paraz, Rolando P. Nemez, Juan M. Tabas, Joselito M. Gerardo, Rafael M.
Silverio, Agustin J. Gonzales, Jose I. Geronimo, Jr., Remegio C. Fernandez, Ramon R. Fernandez, Renato B. De
Guzman, Rosebello T. Masigon, Cesar I. Ileto, Ronnie De la Cruz, Teddy T. Nicolas, Zaldy M. Semira, Emelio P.
Trinidad, Magdaleno O. Tagle, Ar-chimedes C. Beltran, Jessie S. Sta. Maria, Nilo S. Solidum, Michael P. Roba,
Jeaneflor L. Samar, Rosel M. Milloroso, Archimedes C. Retiro, Evelyn R. Nepomuceno, Eduardo I. Nepomuceno,
Benny S. Sallador, Constantino A. Romaquin, Rolando D. Marte, Bonifacio R. Nino, Prudencio B. Malimban,
Rodrigo C. Revesencio, Elizabeth T. Nalangan, Nilda F. Legaspi, Virgilio M. Moribus, Alberto I. Re-vester,
Concordio I. Yambing, Jr. Esther C. Taplac, Leoncito P. Dalisay, Oscar V Tasoy, Asahel M. Tranco, Melvin U.
Torres, Hilton B. Yasa, Flordelisa I. Coching, Julius I. Villanueva, Nemis N. Ber-naldo, Pedrito L. Leyson, Wilson
C. Sallador and Lyn B. Abanilla. 259
260

ANNOTATED
NLRC
Same; Same; Same; Words and Phrases; Substantial evidence is that amount of relevant
evidence which a reasonable mind might accept as adequate to justify a conclusion.—We do
not agree with the finding that private respondents had rendered services from June 16, 1992
to March 18, 1993 so as to entitle them to payment of wages. Public respondent based its
conclusion on the following: (a) the letter dated April 7, 1993 of Pedrito L. Leyson, Office
Manager of AKELCO addressed to AKELCO's General Manager, Atty. Leovigildo T. Mationg,
requesting for the payment of private respondents' unpaid wages from June 16, 1992 to
March 18, 1993; (b) the memorandum of said Atty. Mationg dated 14 April 1993, in answer
to the letter request of Pedrito Leyson where Atty. Mationg made an assurance that he will
recommend such request; (c) the private respondents' own computation of their unpaid wages.
We find that the foregoing does not constitute substantial evidence to support the conclusion
that private respondents are entitled to the payment of wages from June 16, 1992 to March
18, 1993. Substantial evidence is that amount of relevant evidence which a reasonable mind
might accept as adequate to justify a conclusion. These evidences relied upon by public
respondent did not establish the fact that private respondents actually rendered services in
the Kalibo office during the stated period.
Same; Transfer of Offices; It is not for employees to declare that the management’s act of
temporarily transferring its office is an illegal act.—Their excuse is that the transfer to Kalibo
was illegal but we agree with the Labor Arbiter that it was not for private respondents to
declare the management’s act of temporarily transferring the AKELCO office to Kalibo as an
illegal act. There is no allegation nor proof that the transfer was made in bad faith or with
malice.
Same; Money Claims; The long inaction of employees to file their claim for unpaid wages
cast doubts as to 'the veracity of their claim.—Private respondents were dismissed by
petitioner effective January 31, 1992 and were accepted back by petitioner, as an act of
compassion, subject to the condition of “no work, no pay” effective March 1993 which explains
why private respondents were allowed to draw their salaries again. Notably, the letter-
request of Mr. Leyson for the payment of backwages and other fringe benefits in behalf of
private respondents was made only in April 1993, after a Board Resolution accepting them
back to work out of compassion and hu-
261
VOL. 323, JANUARY 25, 2000 261

NLRC
manitarian reason. It took private respondents about ten months before they requested
for the payment of their backwages, and the long inaction of private respondents to file their
claim for unpaid wages cast doubts as to the veracity of their claim.
Same; Same; “No Work, No Pay” Principle; The age-old rule governing the relation
between labor and capital, or management and employee of a “fair day's wage for a fair day's
labor” remains as the basic factor in determining employees’ wages.—The age-old rule
governing the relation between labor and capital, or management and employee of a “fair
day’s wage for a fair day’s labor”—remains as the basic factor in determining employees’
wages. If there is no work performed by the employee there can be no wage or pay unless, of
course, the laborer was able, willing and ready to work but was illegally locked out,
suspended or dismissed, or otherwise illegally prevented from working, a situation which we
find is not present in the instant case. It would neither be fair nor just to allow private
respondents to recover something they have not earned and could not have earned because
they did not render services at the Kalibo office during the stated period.
Same; Same; Evidence; A labor tribunal errs in merely relying on the computations of
compensable services submitted by the em-ployees—there must be competent proof, such as
time cards or office records to show that they actually rendered compensable service during
the stated period to entitle them to wages.—We hold that public respondent erred in merely
relying on the computations of compensable services submitted by private respondents. There
must be competent proof such as time cards or office records to show that they actually
rendered compensable service during the stated period to entitle them to wages. It has been
established that the petitioner's business office was transferred to Kalibo and all its equip-
ments, records and facilities were transferred thereat and that it conducted its official
business in Kalibo during the period in question. It was incumbent upon private respondents
to prove that they indeed rendered services for petitioner, which they failed to do. It is a basic
rule in evidence that each party must prove his affirmative allegation. Since the burden of
evidence lies with the party who asserts the affirmative allegation, the plaintiff or
complainant has to prove his affirmative allegations in the complaint and the defendant or
the respondent has to prove the affirmative allegation in his affirmative defenses and
counterclaim.
262

ANNOTATED
NLRC
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari and Prohibition.

Villa & Partners for petitioner.
Lou F. Tirol and Teodulfo L.C. Castro for private respondents.
GONZAGA-REYES, J.:
Five J Taxi vs. National Labor Relation

Commission
G.R. No. 111474. August 22, 1994. *
FIVE J TAXI and/or JUAN S. ARMAMENTO, petitioners, vs. NATIONAL LABOR

RELATIONS COMMISSION, DOMINGO MALDIGAN and GILBERTO SABSALON,
respondents.
Labor Law; Judgments; Factual findings of quasi-judicial agencies like the NLRC are
generally accorded not only respect but, at times finality if such findings are supported by
substantial evidence.—This Court has repeatedly declared that the factual findings of quasi-
judicial agencies like the NLRC, which have acquired expertise because their jurisdiction is
confined to specific matters, are generally accorded not only respect but, at times, finality if
such findings are supported by substantial evidence. Where, however, such conclusions are
not supported by the evidence, they must be struck down for being whimsical and capricious
and, therefore, arrived at with grave abuse of discretion.
Same; Labor Code; Article 114; Deposits; The P15.00 daily deposits to defray shortage in
“boundary” is violative of Article 114 of Labor Code where there is no showing that the
Secretary of Labor has recognized the same as a “practice” in the taxi industry.—Respondent
NLRC held that the P15.00 daily deposits made by respondents to defray any shortage in
their “boundary” is covered by the general prohibition in Article 114 of the Labor Code against
requiring employees to make deposits, and that there is no showing that the Secretary of
Labor has recognized the
________________
* SECOND DIVISION.
557
VOL. 235, AUGUST 22, 1994 557

Commission
same as a “practice” in the taxi industry. Consequently, the deposits made were illegal
and the respondents must be refunded therefor. Article 114 of the Labor Code provides as
follows: “Article 114. Deposits for loss or damage.—No employer shall require his worker to
make deposits from which deductions shall be made for the reimbursement of loss of or
damage to tools, materials, or equipment supplied by the employer, except when the employer
is engaged in such trades, occupations or business where the practice of making deposits is a
recognized one, or is necessary or desirable as determined by the Secretary of Labor in
appropriate rules and regulations.”
Same; Same; Same; Same; Article 114 of the Labor Code provides the rule on deposits for
loss or damage to tools, materials or equipment supplied by the employer. It does not permit
deposits to defray any deficiency which the taxi driver may incur in the remittance of his
“boundary.”—It can be deduced therefrom that the said article provides the rule on deposits
for loss or damage to tools, materials or equipment supplied by the employer. Clearly, the
same does not apply to or permit deposits to defray any deficiency which the taxi driver may
incur in the remittance of his “boundary.” Also, when private respondents stopped working
for petitioners, the alleged purpose for which petitioners required such unauthorized deposits
no longer existed. In other case, any balance due to private respondents after proper
accounting must be returned to them with legal interest.
Same; Same; Same; Same; Car wash payments doled out by drivers are not
refundable.—Private respondents are not entitled to the refund of the P20.00 car wash
payments they made. It will be noted that there was nothing to prevent private respondents
from cleaning the taxi units themselves, if they wanted to save their P20.00. Also, as the
Solicitor General correctly noted, car washing after a tour of duty is a practice in the taxi
industry, and is, in fact, dictated by fair play.
Lawyers; Attorney’s Fees; Non-lawyers are not entitled to attorney’s fees.—On the last
issue of attorney’s fees or service fees for private respondents’ authorized representative,
Article 222 of the Labor Code, as amended by Section 3 of Presidential Decree No. 1691,
states that non-lawyers may appear before the NLRC or any labor arbiter only (1) if they
represent themselves, or (2) if they represent their organization or the members thereof.
While it may be true that Guillermo H. Pulia was the authorized representative of private
respondents, he was a non-lawyer who did not fall in either of the foregoing categories. Hence,
by clear mandate of the law, he is not entitled to attorney’s fees. Furthermore, the statutory
rule that an attorney shall be entitled to
558

ANNOTATED
Commission
have and recover from his client a reasonable compensation for his services necessarily
imports the existence of an attorney-client relationship as a condition for the recovery of
attorney’s fees, and such relationship cannot exist unless the client’s representative is a
lawyer.
The facts are stated in the resolution of the Court.

Edgardo G. Fernandez for petitioners.
RESOLUTION
VOL. 326, FEBRUARY 23, 2000 299

Jardin vs. National Labor Relations Commission
G.R. No. 119268. February 23, 2000. *
ANGEL JARDIN, DEMETRIO CALAGOS, URBANO MARCOS, ROSENDO

MARCOS, LUIS DE LOS ANGELES, JOEL ORDENIZA and AMADO CENTENO,
petitioners, vs.NATIONAL LABOR RELATIONS COMMISSION (NLRC) and
GOODMAN TAXI (PHILJAMA INTERNATIONAL, INC.), respondents.
Labor Law; The phrase “grave abuse of discretion amounting to lack or excess of
jurisdiction’’ means such capricious and whimsical exercise of judgment by the tribunal
exercising judicial or quasijudicial power as to amount to lack of power.—–The phrase “grave
abuse of discretion amounting to lack or excess of jurisdiction” has settled meaning in the
jurisprudence of procedure. It means such capricious and whimsical exercise of judgment by
the tribunal exercising judicial or quasi-judicial power as to amount to lack of power. In labor
cases, this Court has declared in several instances that disregarding rules it is bound to
observe constitutes grave abuse of discretion on the part of labor tribunal.
Same; Motion; Rule 7, Section 14 of the New Rules of Procedure allows only one motion
for reconsideration from the same party.—–In this case before us, private respondent
exhausted administrative remedy available to it by seeking reconsideration of public
respondent’s decision dated April 28, 1994, which public respondent denied. With this motion
for reconsideration, the labor tribunal had ample opportunity to rectify errors or mistakes it
may have committed before resort to courts of justice can be had. Thus, when private
respondent filed a second motion for reconsideration, public respondent should have
forthwith denied it in accordance with Rule 7, Section 14 of its New Rules of Procedure which
allows only one motion for reconsideration from the same party.
Same; Same; The second motion for reconsideration filed by private respondent is
indubitably a prohibited pleading.—–As correctly pointed out by petitioner, the second
motion for reconsideration filed by private respondent is indubitably a prohibited pleading
which should have not been entertained at all. Public respondent
___________________
* SECOND DIVISION.
300

ANNOTATED
Jardin vs. National Labor Relations
Commission
cannot just disregard its own rules on the pretext of “satisfying the ends of justice,”
especially when its disposition of a legal controversy ran afoul with a clear and long standing
jurisprudence in this jurisdiction as elucidated in the subsequent discussion. Clearly,
disregarding a settled legal doctrine enunciated by this Court is not a way of rectifying an
error or mistake. In our view, public respondent gravely abused its discretion in taking
cognizance and granting private respondent’s second motion for reconsideration as it wrecks
the orderly procedure in seeking reliefs in labor cases.
Same; Employer-Employee Relationship; The relationship between jeepney
owners/operators on one hand and jeepney drivers on the other under the boundary system is
that of employer-employee and not of lessor-lessee.—–In a number of cases decided by this
Court, we ruled that the relationship between jeepney owners/operators on one hand and
jeepney drivers on the other under the boundary system is that of employer-employee and
not of lessor-lessee. We explained that in the lease of chattels, the lessor loses complete
control over the chattel leased although the lessee cannot be reckless in the use thereof,
otherwise he would be responsible for the damages to the lessor. In the case of jeepney
owners/operators and jeepney drivers, the former exercise supervision and control over the
latter. The management of the business is in the owner’s hands. The owner as holder of the
certificate of public convenience must see to it that the driver follows the route prescribed by
the franchising authority and the rules promulgated as regards its operation. Now, the fact
that the drivers do not receive fixed wages but get only that in excess of the so-called
“boundary” they pay to the owner/operator is not sufficient to withdraw the relationship
between them from that of employer and employee. We have applied by analogy the
abovestated doctrine to the relationships between bus owner/ operator and bus conductor,
auto-calesa owner/operator and driver, and recently between taxi owners/operators and taxi
drivers. Hence, petitioners are undoubtedly employees of private respondent because as taxi
drivers they perform activities which are usually necessary or desirable in the usual business
or trade of their employer.
Same; Dismissal; Termination of employment must be effected in accordance with law;
Petitioners, being employees of private respondent, can be dismissed only for just and
authorize cause, and after affording them notice and hearing prior to termination.—–As
consistently held by this Court, termination of employment must be
301
VOL. 326, FEBRUARY 23, 2000 301

Jardin vs. National Labor Relations
Commission
effected in accordance with law. The just and authorized causes for termination of
employment are enumerated under Articles 282, 283 and 284 of the Labor Code. The
requirement of notice and hearing is set-out in Article 277 (b) of the said Code. Hence,
petitioners, being employees of private respondent, can be dismissed only for just and
authorized cause, and after affording them notice and hearing prior to termination. In the
instant case, private respondent had no valid cause to terminate the employment of
petitioners. Neither were there two (2) written notices sent by private respondent informing
each of the petitioners that they had been dismissed from work. These lack of valid cause and
failure on the part of private respondent to comply with the twin-notice requirement
underscored the illegality surrounding petitioners’ dismissal.

Ceferino Padua Law Office for petitioners.
Gonzalez, Dimaguila, Gonzales Law Firmfor PHILJAMA Int’l., Inc.
QUISUMBING, J.:
VOL. 473, OCTOBER 20, 2005 617

Lakpue Drug, Inc. vs. Belga
G.R. No. 166379. October 20, 2005. *
LAKPUE DRUG, INC., LA CROESUS PHARMA, INC., TROPICAL BIOLOGICAL

PHILS., INC. (all known as LAKPUE GROUP OF COMPANIES) and/or ENRIQUE
CASTILLO, JR., petitioners, vs. MA. LOURDES BELGA, respondent.
Labor Law; Labor Relations; Misconduct; Words and Phrases; The Supreme Court has
defined misconduct as a transgression of some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not
mere error in judgment.—We have defined misconduct as a transgression of some established
and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and
implies wrongful intent and not mere error in judgment. The misconduct to be serious must
be of such grave and aggravated character and not merely trivial and unimportant. Such
misconduct, however serious, must, nevertheless, be in connection with the employee’s work
to constitute just cause for his separation. Belga’s failure to formallyinform Tropical of her
pregnancy can not be considered as grave misconduct directly connected to her work as to
constitute just cause for her separation.
Same; Same; Dismissals; Disobedience; Words and Phrases; Disobedience, as a just
cause for termination, must be willful or intentional.—The charge of disobedience for Belga’s
failure to comply with the memoranda must likewise fail. Disobedience, as a just cause for
termination, must be willful or intentional. Willfulness is characterized by a wrongful and
perverse mental attitude rendering the employee’s act inconsistent with proper
subordination. In the instant case, the memoranda were given to Belga two days after she
had given birth. It was thus physically impossible for Belga to report for work and explain
her absence, as ordered.
Same; Same; Same; Loss of Trust and Confidence; The Supreme Court has recognized
the right of employers to dismiss employees by reason of loss of trust and confidence which
ground is premised
_______________
* FIRST DIVISION.
618

ANNOTATED
on the fact that said employees concerned hold positions of responsibility or trust and
confidence and the act complained of must be work-related.—Time and again, we have
recognized the right of employers to dismiss employees by reason of loss of trust and
confidence. However, we emphasize that such ground is premised on the fact that the
employee concerned holds a position of responsibility or trust and confidence. In order to
constitute a just cause for dismissal, the act complained of must be “work-related” such as
would show the employee concerned to be unfit to continue working for the employer. More
importantly, the loss of trust and confidence must be based on the willful breach of the trust
reposed in the employee by his employer. A breach of trust is willful if it is done intentionally,
knowingly and purposely, without justifiable excuse, as distinguished from an act done
carelessly, thoughtlessly, heedlessly or inadvertently.
Same; Same; Same; In Electro System Industries Corporation v. National Labor
Relations Commission, G.R. No. 165282, October 5, 2005, the Supreme Court held that, in
dismissing an employee, the employer has the burden of proving that the worker has been
served two notices: (1) one to apprise him of the particular acts or omissions for which his
dismissal is sought; and (2) the other to inform him of his employer’s decision to dismiss
him.—In Electro System Industries Corporation v. National Labor Relations Commission, we
held that, in dismissing an employee, the employer has the burden of proving that the worker
has been served two notices: (1) one to apprise him of the particular acts or omissions for
which his dismissal is sought, and (2) the other to inform him of his employer’s decision to
dismiss him. The first notice must state that the dismissal is sought for the act or omission
charged against the employee, otherwise the notice cannot be considered sufficient
compliance with the rules. It must also inform outright that an investigation will be
conducted on the charges particularized therein which, if proven, will result to his dismissal.
Further, we held that a notation in the notice that the employee refused to sign is not
sufficient proof that the employer attempted to serve the notice to the employee.
Same; Same; Same; Reinstatement; Backwages; An employee who was illegally
dismissed from work is entitled to reinstatement without loss of seniority rights, and other
privileges and to his full backwages, inclusive of allowances, and to his other benefits or their
619
VOL. 473, OCTOBER 20, 2005 619

monetary equivalent computed from the time his compensation was withheld from him
up to the time of his actual reinstatement.—An employee who was illegally dismissed from
work is entitled to reinstatement without loss of seniority rights, and other privileges and to
his full backwages, inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up to the time
of his actual reinstatement. Thus, Belga is entitled to be reinstated to her former or
equivalent position and to the payment of full backwages from the time she was illegally
dismissed until her actual reinstatement.
Appeals.

Quasha, Ancheta, Peña & Nolasco for petitioners.
Joel G. Martinez for respondent.
YNARES-SANTIAGO, J.:
Philippine Telegraph and Telephone Company vs.

NLRC
G.R. No. 118978. May 23, 1997. *
PHILIPPINE TELEGRAPH AND TELEPHONE

COMPANY, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and
**
GRACE DE GUZMAN, respondents.
Labor Law; Dismissals; 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.—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 peti-tioner’s as sertion 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.
Same; Same; While loss of confidence is a just cause for termination of employment, it
should not be simulated.—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 s he
was m oved 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.
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.
_______________
* SECOND DIVISION.
** The phrase “herein represented by DELIA M. OFI CIAL,” added hereto in the title of this case as stated
in the petition, has been deleted for being unnecessary and violative of the rules on pleadings, and is commented
upon in the text of this opinion.
597
VOL. 272, MAY 23, 1997 597

Philippine Telegraph and Telephone
Company vs. NLRC
Same; Same; 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.—Private respondent, it mus t 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 busines s or trade of the employer.
Same; Same; 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
declared void in Zialcita, et al. v. Philippine Air Lines.—It would be worthwhile to reflect
upon and adopt here the rationalization in Zialcita, et al. vs. Philippine Air Lines, 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 s eparated 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.
Same; Same; 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.—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
estab-
598

ANNOTATED
Philippine Telegraph and Telephone
Company vs. NLRC
lish 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.
Same; Same; The relations between capital and labor are not merely contractual,
impressed as they are with so much public interest that the same should yield to the comm on
good.—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 that 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.

D.P. Mercado & Associates for petitioner.
A.C. Estrada & Partners for private respondent.
REGALADO, J.:
G.R. No. 187226. January 28, 2015.*
CHERYLL SANTOS LEUS, petitioner, vs. ST. SCHOLASTICA’S COLLEGE

WESTGROVE and/or SR. EDNA QUIAMBAO, OSB, respondents.
Remedial Law; Civil Procedure; Appeals; Points of law, theories, issues, and arguments
not brought to the attention of the trial court ought not to be considered by a reviewing court,
as these cannot be raised for the first time on appeal.—“It is well-established that issues raised
for the first time on appeal and not raised in the proceedings in the lower court are barred by
estoppel. Points of law, theories, issues, and arguments not brought to the attention of the
trial court ought not to be considered by a reviewing court, as these cannot be raised for the
first time on appeal. To consider the alleged facts and arguments belatedly raised would
amount to trampling on the basic principles of fair play, justice, and due process.”
Department of Education; Schools; Section 57specifically empowers the Department of
Education (DepEd) to promulgate rules and regulations necessary for the administration,
supervision and regulation of the educational system in accordance with the declared policy
of Batas Pambansa (BP) Bilang 232.—The 1992 MRPS, the regulation in force at the time of
the instant controversy, was issued by the Secretary of Education pursuant to BP 232.
Section 70 of BP 232 vests the Secretary of Education with the authority to issue
_______________
* THIRD DIVISION.
379
VOL. 748, JANUARY 28, 2015 379

Leus vs. St. Scholastica's College Westgrove
rules and regulations to implement the provisions of BP 232. Concomitantly, Section 57

specifically empowers the Department of Education to promulgate rules and regulations
necessary for the administration, supervision and regulation of the educational system in
accordance with the declared policy of BP 232. The qualifications of teaching and nonteaching
personnel of private schools, as well as the causes for the termination of their employment,
are an integral aspect of the educational system of private schools. Indubitably, ensuring that
the teaching and nonteaching personnel of private schools are not only qualified, but
competent and efficient as well goes hand in hand with the declared objective of BP 232 —
establishing and maintaining relevant quality education. It is thus within the authority of
the Secretary of Education to issue a rule, which provides for the dismissal of teaching and
nonteaching personnel of private schools based on their incompetence, inefficiency, or some
other disqualification.
Remedial Law; Civil Procedure; Appeals; In a petition for review under Rule 45 of the
Rules of Court, such as the instant petition, where the Court of Appeals’ (CA’s) disposition in
a labor case is sought to be calibrated, the Court’s review is quite limited.—In a petition for
review under Rule 45 of the Rules of Court, such as the instant petition, where the CA’s
disposition in a labor case is sought to be calibrated, the Court’s review is quite limited. In
ruling for legal correctness, the Court has to view the CA decision in the same context that
the petition for certiorari it ruled upon was presented to it; the Court has to examine the CA
decision from the prism of whether it correctly determined the presence or absence of grave
abuse of discretion in the NLRC decision before it, not on the basis of whether the NLRC
decision on the merits of the case was correct.
Labor Law; Termination of Employment; Disgraceful and Immoral Conduct; The fact of
the petitioner’s pregnancy out of wedlock, without more, is not enough to characterize the
petitioner’s conduct as disgraceful or immoral.—The labor tribunals concluded that the
petitioner’s pregnancy out of wedlock, per se, is “disgraceful and immoral” considering that
she is employed in a Catholic educational institution. In arriving at such conclusion, the labor
tribunals merely assessed the fact of the petitioner’s pregnancy vis-à-visthe totality of the
circumstances surrounding the same. However, the Court finds no substantial evidence to
support the aforementioned conclusion arrived at by the labor tribunals. The fact of the
petitioner’s preg-
380

ANNOTATED
nancy out of wedlock, without more, is not enough to characterize the petitioner’s
conduct as disgraceful or immoral. There must be substantial evidence to establish that
premarital sexual relations and, consequently, pregnancy out of wedlock, are indeed
considered disgraceful or immoral.
Same; Same; Same; The determination of whether a conduct is disgraceful or immoral
involves a two (2)-step process: first, a consideration of the totality of the circumstances
surrounding the conduct; and second, an assessment of the said circumstances vis-à-vis the
prevailing norms of conduct, i.e., what the society generally considers moral and respectable.—
The determination of whether a conduct is disgraceful or immoral involves a two-step
process: first, a consideration of the totality of the circumstances surrounding the conduct;
and second, an assessment of the said circumstances vis-à-vis the prevailing norms of
conduct, i.e., what the society generally considers moral and respectable. That the petitioner
was employed by a Catholic educational institution per se does not absolutely determine
whether her pregnancy out of wedlock is disgraceful or immoral. There is still a necessity to
determine whether the petitioner’s pregnancy out of wedlock is considered disgraceful or
immoral in accordance with the prevailing norms of conduct.
Same; Same; Same; That the distinction between public and secular morality and
religious morality is important because the jurisdiction of the Court extends only to public and
secular morality.—In Estrada v. Escritor, 408 SCRA 1 (2003), an administrative case against
a court interpreter charged with disgraceful and immoral conduct, the Court stressed that in
determining whether a particular conduct can be considered as disgraceful and immoral, the
distinction between public and secular morality on the one hand, and religious morality, on
the other, should be kept in mind. That the distinction between public and secular morality
and religious morality is important because the jurisdiction of the Court extends only to
public and secular morality. The Court further explained that: The morality referred to
in the law is public and necessarily secular, not religious x x x. “Religious teachings
as expressed in public debate may influence the civil public order but public moral disputes
may be resolved only on grounds articulable in secular terms.” Otherwise, if government
relies upon religious beliefs in formulating public policies and morals, the
resulting policies and
381
VOL. 748, JANUARY 28, 2015 381

morals would require conformity to what some might regard as religious

programs or agenda. The nonbelievers would therefore be compelled to conform to a
standard of conduct buttressed by a religious belief, i.e., to a “compelled religion,” anathema
to religious freedom. Likewise, if government based its actions upon religious beliefs, it would
tacitly approve or endorse that belief and thereby also tacitly disapprove contrary religious
or nonreligious views that would not support the policy. As a result, government will not
provide full religious freedom for all its citizens, or even make it appear that those whose
beliefs are disapproved are second-class citizens. Expansive religious freedom therefore
requires that government be neutral in matters of religion; governmental reliance upon
religious justification is inconsistent with this policy of neutrality. In other words,
government action, including its proscription of immorality as expressed in
criminal law like concubinage, must have a secular purpose. That is, the
government proscribes this conduct because it is “detrimental (or dangerous) to
those conditions upon which depend the existence and progress of human society”
and not because the conduct is proscribed by the beliefs of one religion or the other.
Although admittedly, moral judgments based on religion might have a compelling influence
on those engaged in public deliberations over what actions would be considered a moral
disapprobation punishable by law. After all, they might also be adherents of a religion and
thus have religious opinions and moral codes with a compelling influence on them; the human
mind endeavors to regulate the temporal and spiritual institutions of society in a uniform
manner, harmonizing earth with heaven. Succinctly put, a law could be religious or
Kantian or Aquinian or utilitarian in its deepest roots, but it must have an
articulable and discernible secular purpose and justification to pass scrutiny of
the religion clauses.
Same; Same; Same; The proscription against “disgraceful or immoral conduct” under
Section 94(e) of the 1992 Manual of Regulations for Private Schools (MRPS), which is made
as a cause for dismissal, must necessarily refer to public and secular morality.—It bears
stressing that the right of an employee to security of tenure is protected by the Constitution.
Perfunctorily, a regular employee may not be dismissed unless for cause provided under the
Labor Code and other relevant laws, in this case, the 1992 MRPS. As stated above, when the
law refers to morality, it necessarily pertains to
382

ANNOTATED
public and secular morality and not religious morality. Thus, the proscription against
“disgraceful or immoral conduct” under Section 94(e) of the 1992 MRPS, which is made as a
cause for dismissal, must necessarily refer to public and secular morality. Accordingly, in
order for a conduct to be considered as disgraceful or immoral, it must be “‘detrimental (or
dangerous) to those conditions upon which depend the existence and progress of human
society’ and not because the conduct is proscribed by the beliefs of one religion or the other.”
Same; Same; Same; Premarital sexual relations between two consenting adults who have
no impediment to marry each other, and consequently, conceiving a child out of wedlock,
gauged from a purely public and secular view of morality, does not amount to a disgraceful or
immoral conduct under Section 94(e) of the 1992 Manual of Regulations for Private Schools
(MRPS).—Admittedly, the petitioner is employed in an educational institution where the
teachings and doctrines of the Catholic Church, including that on premarital sexual relations,
is strictly upheld and taught to the students. That her indiscretion, which resulted in her
pregnancy out of wedlock, is anathema to the doctrines of the Catholic Church. However,
viewed against the prevailing norms of conduct, the petitioner’s conduct cannot be considered
as disgraceful or immoral; such conduct is not denounced by public and secular morality. It
may be an unusual arrangement, but it certainly is not disgraceful or immoral within the
contemplation of the law. To stress, premarital sexual relations between two consenting
adults who have no impediment to marry each other, and, consequently, conceiving a child
out of wedlock, gauged from a purely public and secular view of morality, does not amount to
a disgraceful or immoral conduct under Section 94(e) of the 1992 MRPS.
Same; Same; Burden of Proof; Settled is the rule that in termination cases, the burden of
proving that the dismissal of the employees was for a valid and authorized cause rests on the
employer.—Settled is the rule that in termination cases, the burden of proving that the
dismissal of the employees was for a valid and authorized cause rests on the employer. It is
incumbent upon the employer to show by substantial evidence that the termination of the
employment of the employees was validly made and failure to discharge that duty would
mean that the dismissal is not justified and therefore illegal. “Substantial evidence is more
than a mere scintilla of evidence. It means such relevant evidence as a reasonable mind
383
VOL. 748, JANUARY 28, 2015 383

might accept as adequate to support a conclusion, even if other minds equally

reasonable might conceivably opine otherwise.”
Same; Same; Security of Tenure; Words and Phrases; Security of tenure is a right which
may not be denied on mere speculation of any unclear and nebulous basis.—Indubitably, bare
allegations do not amount to substantial evidence. Considering that the respondents failed
to adduce substantial evidence to prove their asserted cause for the petitioner’s dismissal,
the labor tribunals should not have upheld their allegations hook, line and sinker. The labor
tribunals’ respective findings, which were arrived at sans any substantial evidence, amounts
to a grave abuse of discretion, which the CA should have rectified. “Security of tenure is a
right which may not be denied on mere speculation of any unclear and nebulous basis.”
Same; Management Prerogative; The exercise of management prerogative is not absolute
as it must be exercised in good faith and with due regard to the rights of labor.—The Court
has held that “management is free to regulate, according to its own discretion and judgment,
all aspects of employment, including hiring, work assignments, working methods, time, place
and manner of work, processes to be followed, supervision of workers, working regulations,
transfer of employees, work supervision, layoff of workers and discipline, dismissal and recall
of workers. The exercise of management prerogative, however, is not absolute as it must be
exercised in good faith and with due regard to the rights of labor.” Management cannot
exercise its prerogative in a cruel, repressive, or despotic manner.
Same; Illegal Dismissals; Reinstatement; Separation Pay; Strained Relations; In cases of
illegal dismissal, the accepted doctrine is that separation pay is available in lieu of
reinstatement when the latter recourse is no longer practical or in the best interest of the
parties.—Having established that the petitioner was illegally dismissed, the Court now
determines the reliefs that she is entitled to and their extent. Under the law and prevailing
jurisprudence, “an illegally dismissed employee is entitled to reinstatement as a matter of
right.” Aside from the instances provided under Articles 283 and 284 of the Labor Code,
separation pay is, however, granted when reinstatement is no longer feasible because of
strained relations between the employer and the employee. In cases of illegal dismissal, the
accepted doctrine is that separation pay is available in lieu of
384

ANNOTATED
reinstatement when the latter recourse is no longer practical or in the best interest of
the parties.
Same; Same; Backwages; Employees who are illegally dismissed are entitled to full
backwages, inclusive of allowances and other benefits or their monetary equivalent, computed
from the time their actual compensation was withheld from them up to the time of their actual
reinstatement but if reinstatement is no longer possible, the backwages shall be computed from
the time of their illegal termination up to the finality of the decision.—“Employees who are
illegally dismissed are entitled to full backwages, inclusive of allowances and other benefits
or their monetary equivalent, computed from the time their actual compensation was
withheld from them up to the time of their actual reinstatement but if reinstatement is no
longer possible, the backwages shall be computed from the time of their illegal termination
up to the finality of the decision.” Accordingly, the petitioner is entitled to an award of full
backwages from the time she was illegally dismissed up to the finality of this decision.
Same; Same; Moral Damages; Exemplary Damages; The petitioner is not entitled to
moral and exemplary damages; The records of this case are bereft of any clear and convincing
evidence showing that the respondents acted in bad faith or in a wanton or fraudulent manner
in dismissing the petitioner.—The petitioner is not entitled to moral and exemplary damages.
“A dismissed employee is entitled to moral damages when the dismissal is attended by bad
faith or fraud or constitutes an act oppressive to labor, or is done in a manner contrary to
good morals, good customs or public policy. Exemplary damages may be awarded if the
dismissal is effected in a wanton, oppressive or malevolent manner.” “Bad faith, under the
law, does not simply connote bad judgment or negligence. It imports a dishonest purpose or
some moral obliquity and conscious doing of a wrong, or a breach of a known duty through
some motive or interest or ill will that partakes of the nature of fraud.” “It must be noted that
the burden of proving bad faith rests on the one alleging it” since basic is the principle that
good faith is presumed and he who alleges bad faith has the duty to prove the same.
“Allegations of bad faith and fraud must be proved by clear and convincing evidence.” The
records of this case are bereft of any clear and convincing evidence showing that the
respondents acted in bad faith or in a wanton or fraudulent manner in dismissing the
petitioner. That the petitioner was ille-
385
VOL. 748, JANUARY 28, 2015 385

gally dismissed is insufficient to prove bad faith. A dismissal may be contrary to law but
by itself alone, it does not establish bad faith to entitle the dismissed employee to moral
damages. The award of moral and exemplary damages cannot be justified solely upon the
premise that the employer dismissed his employee without cause.
Same; Same; Attorney’s Fees; The petitioner is entitled to attorney’s fees in the amount of
ten percent (10%) of the total monetary award pursuant to Article 111 of the Labor Code.—
The petitioner is entitled to attorney’s fees in the amount of ten percent (10%) of the total
monetary award pursuant to Article 111 of the Labor Code. “It is settled that 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.”
Appeals.
Banzuela, Velandrez & Associates for petitioner.
Padilla Law Office for respondents.
REYES, J.:
G.R. No. 198587. January 14, 2015.*
SAUDI ARABIAN AIRLINES (SAUDIA) and BRENDA J. BETIA,

petitioners, vs. MA. JOPETTE M. REBESENCIO, MONTASSAH B. SACAR-
ADIONG, ROUEN RUTH A. CRISTOBAL and LORAINE S. SCHNEIDERCRUZ,
respondents.
Conflict of Laws; Corporations; Foreign Corporations Doing Business in the Philippines;

Foreign Investments Act; A plain application of Section 3(d) of the Foreign Investments Act
leads to no other conclusion than that Saudia is a foreign corporation doing business in the
Philippines. As such, Saudia may be sued in the Philippines and is subject to the jurisdiction
of Philippine tribunals.—By its own admission, Saudia, while a foreign corporation, has a
Philippine office. Section 3(d) of Republic Act No. 7042, otherwise known as the Foreign
Investments Act of 1991, provides the following: The phrase “doing business” shall
include . . . opening offices, whether called “liaison” offices or branches; . . . and any
other act or acts that imply a continuity of commercial dealings or arrangements and
contemplate to that extent the performance of acts or works, or the exercise of some of the
functions normally incident to, and in progressive prosecution of commercial gain or of the
purpose and object of the business organization. (Emphasis supplied) A plain application of
Section 3(d) of the Foreign Investments Act leads to no other conclusion than that Saudia is
a foreign corporation doing business in the Philippines. As such, Saudia may be sued in the
Philippines and is subject to the jurisdiction of Philippine tribunals.
Same; Contracts; Transnational transactions entail differing laws on the requirements
for the validity of the formalities and substantive provisions of contracts and their
interpretation.—Transnational transactions entail differing laws on the requirements for the
validity of the formalities and substantive provisions of contracts and their interpretation.
These transactions inevitably lend themselves to the possibility of various fora for litigation
and dispute resolution. As observed by an eminent expert on transnational law:
_______________
* SECOND DIVISION.
141
VOL. 746, JANUARY 14, 2015 141

Saudi Arabian Airlines (Saudia) vs. Rebesencio
The more jurisdictions having an interest in, or merely even a point of contact with, a
transaction or relationship, the greater the number of potential fora for the resolution of
disputes arising out of or related to that transaction or relationship. In a world of increased
mobility, where business and personal transactions transcend national boundaries, the
jurisdiction of a number of different fora may easily be invoked in a single or a set of related
disputes.
Remedial Law; Civil Procedure; Forum Shopping; In the Philippines, the 1997 Rules on
Civil Procedure provide for willful and deliberate forum shopping as a ground not only for
summary dismissal with prejudice but also for citing parties and counsels in direct contempt,
as well as for the imposition of administrative sanctions.— In the Philippines, the 1997 Rules
on Civil Procedure provide for willful and deliberate forum shopping as a ground not only for
summary dismissal with prejudice but also for citing parties and counsels in direct contempt,
as well as for the imposition of administrative sanctions. Likewise, the same rules expressly
provide that a party may seek the dismissal of a Complaint or another pleading asserting a
claim on the ground “[t]hat there is another action pending between the same parties for the
same cause,” i.e, litis pendentia, or “[t]hat the cause of action is barred by a prior
judgment,” i.e., res judicata.
Conflict of Laws; Forum Non Conveniens; The doctrine of forum non conveniens
addresses the same rationale that the rule against forum shopping does, albeit on a
multijurisdictional scale.—Forum non conveniens literally translates to “the forum is
inconvenient.” It is a concept in private international law and was devised to combat the “less
than honorable” reasons and excuses that litigants use to secure procedural advantages,
annoy and harass defendants, avoid overcrowded dockets, and select a “friendlier” venue.
Thus, the doctrine of forum non conveniens addresses the same rationale that the rule
against forum shopping does, albeit on a multijurisdictional scale. Forum non conveniens,
like res judicata, is a concept originating in common law. However, unlike the rule on res
judicata, as well as those on litis pendentia and forum shopping, forum non conveniens finds
no textual anchor, whether in statute or in procedural rules, in our civil law system.
Nevertheless, jurisprudence has applied forum non conveniens as basis for a court to decline
its exercise of jurisdiction.
142

ANNOTATED
Same; Same; Under the doctrine of forum non conveniens, “a court, in conflicts of law
cases, may refuse impositions on its jurisdiction where it is not the most ‘convenient’ or
available forum and the parties are not precluded from seeking remedies elsewhere.”—
Accordingly, under the doctrine of forum non conveniens, “a court, in conflicts of law
cases, mayrefuse impositions on its jurisdiction where it is “not the most ‘convenient’ or
available forum and the parties are not precluded from seeking remedies elsewhere.”
In Puyat v. Zabarte, 352 SCRA 738 (2001), this court recognized the following situations as
among those that may warrant a court’s desistance from exercising jurisdiction: 1) The belief
that the matter can be better tried and decided elsewhere, either because the main aspects
of the case transpired in a foreign jurisdiction or the material witnesses have their residence
there; 2) The belief that the nonresident plaintiff sought the forum[,] a practice known
as forum shopping[,] merely to secure procedural advantages or to convey or harass the
defendant; 3) The unwillingness to extend local judicial facilities to nonresidents or aliens
when the docket may already be overcrowded; 4) The inadequacy of the local judicial
machinery for effectuating the right sought to be maintained; and 5) The difficulty of
ascertaining foreign law.
Same; Contracts; Principle of Autonomy of Contracts; Article 1306 of the Civil Code
expressly provides that “[t]the contracting parties may establish such stipulations, clauses,
terms and conditions as they may deem convenient.”—Our law on contracts recognizes the
validity of contractual choice of law provisions. Where such provisions exist, Philippine
tribunals, acting as the forum court, generally defer to the parties’ articulated choice. This is
consistent with the fundamental principle of autonomy of contracts. Article 1306 of the Civil
Code expressly provides that “[t]he contracting parties may establish such stipulations,
clauses, terms and conditions as they may deem convenient.” Nevertheless, while a
Philippine tribunal (acting as the forum court) is called upon to respect the parties’ choice of
governing law, such respect must not be so permissive as to lose sight of considerations of
law, morals, good customs, public order, or public policy that underlie the contract central to
the controversy.
143
VOL. 746, JANUARY 14, 2015 143

International Law; Convention on the Elimination of all Forms of Discrimination

Against Women; The Convention on the Elimination of all Forms of Discrimination Against
Women (CEDAW), signed and ratified by the Philippines on July 15, 1980, and on August 5,
1981, respectively, is part of the law of the land.—Article II, Section 14 of the 1987
Constitution provides that “[t]he State . . . shall ensure the fundamental equality before the
law of women and men.” Contrasted with Article II, Section 1 of the 1987 Constitution’s
statement that “[n]o person shall . . . be denied the equal protection of the laws,” Article II,
Section 14 exhorts the State to “ensure.” This does not only mean that the Philippines shall
not countenance nor lend legal recognition and approbation to measures that discriminate
on the basis of one’s being male or female. It imposes an obligation to actively engage in
securing the fundamental equality of men and women. The Convention on the Elimination
of all Forms of Discrimination against Women (CEDAW), signed and ratified by the
Philippines on July 15, 1980, and on August 5, 1981, respectively, is part of the law of the
land. In view of the widespread signing and ratification of, as well as adherence (in practice)
to it by states, it may even be said that many provisions of the CEDAW may have become
customary international law.
Constitutional Law; Equal Protection of the Laws; Apart from the constitutional policy
on the fundamental equality before the law of men and women, it is settled that contracts
relating to labor and employment are impressed with public interest.—Apart from the
constitutional policy on the fundamental equality before the law of men and women, it is
settled that contracts relating to labor and employment are impressed with public interest.
Article 1700 of the Civil Code provides that “[t]he 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.”
Conflict of Laws; As the present dispute relates to (what the respondents allege to be) the
illegal termination of respondents’ employment, this case is immutably a matter of public
interest and public policy. Consistent with clear pronouncements in law and jurisprudence,
Philippine laws properly find application in and govern this case.—As the present dispute
relates to (what the respondents allege to be) the illegal termination of respondents’
employment, this case is immutably a matter of public interest and
144

ANNOTATED
public policy. Consistent with clear pronouncements in law and jurisprudence,

Philippine laws properly find application in and govern this case. Moreover, as this premise
for Saudia’s insistence on the application forum non conveniens has been shattered, it follows
that Philippine tribunals may properly assume jurisdiction over the present controversy.
Same; Even if we were to assume, for the sake of discussion, that it is the laws of Saudi
Arabia which should apply, it does not follow that Philippine tribunals should refrain from
exercising jurisdiction.—As the question of applicable law has been settled, the supposed
difficulty of ascertaining foreign law (which requires the application of forum non conveniens)
provides no insurmountable inconvenience or special circumstance that will justify depriving
Philippine tribunals of jurisdiction. Even if we were to assume, for the sake of discussion,
that it is the laws of Saudi Arabia which should apply, it does not follow that Philippine
tribunals should refrain from exercising jurisdiction. To recall our pronouncements in Puyat,
as well as in Bank of America NT&SA v. Court of Appeals, 400 SCRA 156 (2003), it is not so
much the mere applicability of foreign law which calls into operation forum non conveniens.
Rather, what justifies a court’s desistance from exercising jurisdiction is “[t]he difficulty of
ascertaining foreign law” or the inability of a “Philippine Court . . . to make an intelligent
decision as to the law[.]” Consistent with lex loci intentionis, to the extent that it is proper
and practicable (i.e., “to make an intelligent decision”), Philippine tribunals may apply the
foreign law selected by the parties. In fact, (albeit without meaning to make a pronouncement
on the accuracy and reliability of respondents’ citation) in this case, respondents themselves
have made averments as to the laws of Saudi Arabia.
Same; The immense public policy considerations attendant to this case behoove
Philippine tribunals to not shy away from their duty to rule on the case.—All told, the
considerations for assumption of jurisdiction by Philippine tribunals as outlined in Bank of
America NT&SA have been satisfied. First, all the parties are based in the Philippines and
all the material incidents transpired in this jurisdiction. Thus, the parties may conveniently
seek relief from Philippine tribunals. Second, Philippine tribunals are in a position to make
an intelligent decision as to the law and the facts. Third, Philippine tribunals are in a position
to enforce their decisions. There is no
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VOL. 746, JANUARY 14, 2015 145

compelling basis for ceding jurisdiction to a foreign tribunal. Quite the contrary, the
immense public policy considerations attendant to this case behoove Philippine tribunals to
not shy away from their duty to rule on the case.
Labor Law; Maternity Leave; The very nature of a maternity leave means that a pregnant
employee will not report for work only temporarily and that she will resume the performance
of her duties as soon as the leave allowance expires.—Applying the cited standards on
resignation and constructive dismissal, it is clear that respondents were constructively
dismissed. Hence, their termination was illegal. The termination of respondents’ employment
happened when they were pregnant and expecting to incur costs on account of child delivery
and infant rearing. As noted by the Court of Appeals, pregnancy is a time when they need
employment to sustain their families. Indeed, it goes against normal and reasonable human
behavior to abandon one’s livelihood in a time of great financial need. It is clear that
respondents intended to remain employed with Saudia. All they did was avail of their
maternity leaves. Evidently, the very nature of a maternity leave means that a pregnant
employee will not report for work only temporarily and that she will resume the performance
of her duties as soon as the leave allowance expires. It is also clear that respondents exerted
all efforts to remain employed with Saudia. Each of them repeatedly filed appeal letters (as
much as five [5] letters in the case of Rebesencio) asking Saudia to reconsider the ultimatum
that they resign or be terminated along with the forfeiture of their benefits. Some of them
even went to Saudia’s office to personally seek reconsideration.
Same; Termination of Employment; In termination of cases, the burden of proving just or
valid cause for dismissing an employee rests on the employer.—“In termination of cases, the
burden of proving just or valid cause for dismissing an employee rests on the employer.” In
this case, Saudia makes much of how respondents supposedly completed their exit interviews,
executed quitclaims, received their separation pay, and took more than a year to file their
Complaint. If at all, however, these circumstances prove only the fact of their occurrence,
nothing more. The voluntariness of respondents’ departure from Saudia is non sequitur.
146

ANNOTATED
Same; Same; Quitclaims; As to respondents’ quitclaims, in Phil. Employ Services and

Resources, Inc. v. Paramio, 427 SCRA 732 (2004), the Supreme Court (SC) noted that “[i]f (a)
there is clear proof that the waiver was wangled from an unsuspecting or gullible person; or
(b) the terms of the settlement are unconscionable, and on their face invalid, such quitclaims
must be struck down as invalid or illegal.”—As to respondents’ quitclaims, in Phil. Employ
Services and Resources, Inc. v. Paramio, 427 SCRA 732 (2004), this court noted that “[i]f (a)
there is clear proof that the waiver was wangled from an unsuspecting or gullible person; or
(b) the terms of the settlement are unconscionable, and on their face invalid, such quitclaims
must be struck down as invalid or illegal.” Respondents executed their quitclaims after
having been unfairly given an ultimatum to resign or be terminated (and forfeit their
benefits).
Same; Same; Illegal Dismissals; Backwages; Separation Pay; Having been illegally and
unjustly dismissed, respondents are entitled to full backwages and benefits from the time of
their termination until the finality of this Decision. They are likewise entitled to separation
pay in the amount of one (1) month’s salary for every year of service until the finality of this
Decision, with a fraction of a year of at least six (6) months being counted as one (1) whole
year.—Having been illegally and unjustly dismissed, respondents are entitled to full
backwages and benefits from the time of their termination until the finality of this Decision.
They are likewise entitled to separation pay in the amount of one (1) month’s salary for every
year of service until the finality of this Decision, with a fraction of a year of at least six (6)
months being counted as one (1) whole year.
Same; Same; Same; Moral Damages; Moral damages are awarded in termination cases
where the employee’s dismissal was attended by bad faith, malice or fraud, or where it
constitutes an act oppressive to labor, or where it was done in a manner contrary to morals,
good customs or public policy.—“[M]oral damages are awarded in termination cases where
the employee’s dismissal was attended by bad faith, malice or fraud, or where it constitutes
an act oppressive to labor, or where it was done in a manner contrary to morals, good customs
or public policy.” In this case, Saudia terminated respondents’ employment in a manner that
is patently discriminatory and running afoul of the public interest that underlies
147
VOL. 746, JANUARY 14, 2015 147
employer-employee relationships. As such, respondents are entitled to moral damages.

Same; Same; Same; Exemplary Damages; In a long line of cases, the Supreme Court (SC)
awarded exemplary damages to illegally dismissed employees whose “dismissal[s were]
effected in a wanton, oppressive or malevolent manner.”—In a long line of cases, this court
awarded exemplary damages to illegally dismissed employees whose “dismissal[s were]
effected in a wanton, oppressive or malevolent manner.” This court has awarded exemplary
damages to employees who were terminated on such frivolous, arbitrary, and unjust grounds
as membership in or involvement with labor unions, injuries sustained in the course of
employment, development of a medical condition due to the employer’s own violation of the
employment contract, and lodging of a Complaint against the employer. Exemplary damages
were also awarded to employees who were deemed illegally dismissed by an employer in an
attempt to evade compliance with statutorily established employee benefits. Likewise,
employees dismissed for supposedly just causes, but in violation of due process requirements,
were awarded exemplary damages.
Same; Same; Same; Liability of Corporate Officers; As a rule, corporate directors and
officers are not liable for the illegal termination of a corporation’s employees.—A corporation
has a personality separate and distinct from those of the persons composing it. Thus, as a
rule, corporate directors and officers are not liable for the illegal termination of a
corporation’s employees. It is only when they acted in bad faith or with malice that they
become solidarily liable with the corporation.
Appeals.
Kapunan, Tamano, Javier & Associates for petitioners.
Altamira, Cas & Collado Law Offices for respondents.
148

ANNOTATED
LEONEN, J.:
R. No. 187417. February 24, 2016.*
CHRISTINE JOY CAPIN-CADIZ, petitioner, vs. BRENT HOSPITAL AND

COLLEGES, INC., respondent.
Remedial Law; Civil Procedure; Appeals; Petition for Review on Certiorari; Rule 46,
Section 3 of the Rules of Court states the contents of a petition filed with the Court of Appeals
(CA) under Rule 65, viz., “the petition shall x x x indicate the material dates showing when
notice of the judgment or final order or resolution subject thereof was received, when a motion
for new trial or reconsideration, if any, was filed and when notice of the denial thereof was
received.”—Rule 46, Section 3 of the Rules of Court states the contents of a petition filed with
the CA under Rule 65, viz., “the petition shall x x x indicate the material dates showing when
notice of the judgment or final order or resolution subject thereof was received, when a motion
for new trial or reconsideration, if any, was filed and when notice of the denial thereof was
received.” The rationale for this is to enable the CA to determine whether the petition was
filed within the period fixed in the rules. Cadiz’s failure to state the date of receipt of the copy
of the NLRC decision, however, is not fatal to her case since the more important material
date which must be duly alleged in a petition is
_______________
* THIRD DIVISION.
19
VOL. 785, FEBRUARY 24, 2016 19

Capin-Cadiz vs. Brent Hospital and Colleges, Inc.
the date of receipt of the resolution of denial of the motion for reconsideration, which she
has duly complied with.
Pleadings and Practice; Registry Receipts; What the rule requires is that the registry
receipt must be appended to the paper being served. Clearly, mere indication of the registry
receipt numbers will not suffice.—The CA also dismissed the petition for failure to attach the
registry receipt in the affidavit of service. Cadiz points out, on the other hand, that the
registry receipt number was indicated in the petition and this constitutes substantial
compliance with the requirement. What the rule requires, however, is that the registry
receipt must be appended to the paper being served. Clearly, mere indication of the registry
receipt numbers will not suffice. In fact, the absence of the registry receipts amounts to lack
of proof of service. Nevertheless, despite this defect, the Court finds that the ends of
substantial justice would be better served by relaxing the application of technical rules of
procedure. With regard to counsel’s failure to indicate the place where the IBP and PTR
receipts were issued, there was substantial compliance with the requirement since it was
indicated in the verification and certification of non-forum shopping, as correctly argued by
Cadiz’s lawyer.
Labor Law; Termination of Employment; Disgraceful and Immoral Conduct; Whether a
conduct is considered disgraceful or immoral should be made in accordance with the
prevailing norms of conduct, which, as stated in Leus v. St. Scholastica’s College Westgrove,
748 SCRA 378 (2015), refer to those conducts which are proscribed because they
are detrimental to conditions upon which depend the existence and progress of human
society.—Jurisprudence has already set the standard of morality with which an act should be
gauged — it is public and secular, not religious. Whether a conduct is considered disgraceful
or immoral should be made in accordance with the prevailing norms of conduct, which, as
stated in Leus v. St. Scholastica’s College Westgrove, 748 SCRA 378 (2015), refer to those
conducts which are proscribed because they are detrimental to conditions upon which
depend the existence and progress of human society. The fact that a particular act
does not conform to the traditional moral views of a certain sectarian institution is not
sufficient reason to qualify such act as immoral unless it, likewise, does not conform to public
and secular standards. More importantly, there must be substantial evidence to establish
that premarital
20

ANNOTATED
sexual relations and pregnancy out of wedlock is considered disgraceful or immoral.

Same; Same; Same; As declared in Leus v. St. Scholastica’s College Westgrove, 748 SCRA
378 (2015), “there is no law which penalizes an unmarried mother by reason of her sexual
conduct or proscribes the consensual sexual activity between two unmarried persons; that
neither does such situation contravene[s] any fundamental state policy enshrined in the
Constitution.”—The totality of the circumstances of this case does not justify the conclusion
that Cadiz committed acts of immorality. Similar to Leus, Cadiz and her boyfriend were both
single and had no legal impediment to marry at the time she committed the alleged immoral
conduct. In fact, they eventually married on April 15, 2008. Aside from these, the labor
tribunals’ respective conclusion that Cadiz’s “indiscretion” “scandalized the Brent community”
is speculative, at most, and there is no proof adduced by Brent to support such sweeping
conclusion. Even Brent admitted that it came to know of Cadiz’s “situation” only when her
pregnancy became manifest. Brent also conceded that “[a]t the time [Cadiz] and Carl R. Cadiz
were just carrying on their boyfriend-girlfriend relationship, there was no knowledge or
evidence by [Brent] that they were engaged also in premarital sex.” This only goes to show
that Cadiz did not flaunt her premarital relations with her boyfriend and it was not carried
on under scandalous or disgraceful circumstances. As declared in Leus, “there is no law which
penalizes an unmarried mother by reason of her sexual conduct or proscribes the consensual
sexual activity between two unmarried persons; that neither does such situation
contravene[s] any fundamental state policy enshrined in the Constitution.” The fact that
Brent is a sectarian institution does not automatically subject Cadiz to its religious standard
of morality absent an express statement in its manual of personnel policy and regulations,
prescribing such religious standard as gauge as these regulations create the obligation on
both the employee and the employer to abide by the same.
Same; Management Prerogative; The doctrine of management prerogative gives an
employer the right to “regulate, according to his own discretion and judgment, all aspects of
employment, including hiring, work assignments, working methods, the time, place and
manner of work, work supervision, transfer of employees, layoff of workers, and discipline,
dismissal, and recall of employees.”—The doctrine of management prerogative gives an
employer the right to
21
VOL. 785, FEBRUARY 24, 2016 21

“regulate, according to his own discretion and judgment, all aspects of employment,
including hiring, work assignments, working methods, the time, place and manner of work,
work supervision, transfer of employees, layoff of workers, and discipline, dismissal, and
recall of employees.” In this case, Brent imposed on Cadiz the condition that she subsequently
contract marriage with her then boyfriend for her to be reinstated. According to Brent, this
is “in consonance with the policy against encouraging illicit or common-law relations that
would subvert the sacrament of marriage.” Statutory law is replete with legislation
protecting labor and promoting equal opportunity in employment. No less than the 1987
Constitution mandates that 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.”
Same; Magna Carta for Women; Republic Act (RA) No. 9710 or the Magna Carta for
Women protects women against discrimination in all matters relating to marriage and family
relations, including the right to choose freely a spouse and to enter into marriage only with
their free and full consent.—With particular regard to women, Republic Act No. 9710 or
the Magna Carta for Women protects women against discrimination in all matters relating
to marriage and family relations, including the right to choose freely a spouse and to
enter into marriage only with their free and full consent. Weighed against these
safeguards, it becomes apparent that Brent’s condition is coercive, oppressive and
discriminatory. There is no rhyme or reason for it. It forces Cadiz to marry for economic
reasons and deprives her of the freedom to choose her status, which is a privilege that inheres
in her as an intangible and inalienable right. While a marriage or no-marriage qualification
may be justified as a “bona fideoccupational qualification,” Brent must prove two factors
necessitating its imposition, viz.: (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. Brent has not shown the presence of neither
of these factors. Perforce, the Court cannot uphold the validity of said condition.
22

ANNOTATED
Same; Termination of Employment; Illegal Dismissals; Backwages; Separation Pay;
Generally, the computation of backwages is reckoned from the date of illegal dismissal until
actual reinstatement. In case separation pay is ordered in lieu of reinstatement or
reinstatement is waived by the employee, backwages is computed from the time of dismissal
until the finality of the decision ordering separation pay.—The Court also finds that Cadiz is
only entitled to limited backwages. Generally, the computation of backwages is reckoned from
the date of illegal dismissal until actual reinstatement. In case separation pay is ordered in
lieu of reinstatement or reinstatement is waived by the employee, backwages is computed
from the time of dismissal until the finality of the decision ordering separation pay.
Jurisprudence further clarified that the period for computing the backwages during the
period of appeal should end on the date that a higher court reversed the labor arbitration
ruling of illegal dismissal. If applied in Cadiz’s case, then the computation of backwages
should be from November 17, 2006, which was the time of her illegal dismissal, until the date
of promulgation of this decision. Nevertheless, the Court has also recognized that the
constitutional policy of providing full protection to labor is not intended to oppress or destroy
management. The Court notes that at the time of Cadiz’s indefinite suspension from
employment, Leus was yet to be decided by the Court.
JARDELEZA, J., Concurring Opinion:
Labor Law; View that the values expressed in the Constitution cannot be completely
ignored in the just adjudication of labor cases.—I agree with my esteemed colleague Justice
Bienvenido L. Reyes’ application of the doctrine in Leus v. St. Scholastica’s College Westgrove,
748 SCRA 378 (2015). I take this opportunity to contribute to the analysis for cases similar
to this and Leus where women’s fundamental rights are pitted against an employer’s
management prerogatives. While the ponencia views the issue from the perspective of public
and secular morality, there is also a constitutional dimension to this case that should be
considered. This is a woman’s right to personal autonomy as a fundamental right. The
Constitution protects personal autonomy as part of the Due Process Clause in the Bill of
Rights. Indeed, the Bill of Rights cannot be invoked against private employers. However, the
values expressed in the Constitu-
23
VOL. 785, FEBRUARY 24, 2016 23

tion cannot be completely ignored in the just adjudication of labor cases.

Same; Pregnancy Outside of Wedlock; View that in Christine Joy’s case, her decision to
continue her pregnancy outside of wedlock is a constitutionally protected right. It is therefore
not only moral, it is also a constitutional value that this Court is duty-bound to uphold.—
Leus and the ponencia explain that in determining whether a particular conduct may be
considered as immoral in the public and secular sense, courts must follow a two-step
process. First, courts must consider the totality of the circumstances surrounding the conduct
and second, courts must assess these circumstances vis-à-vis the prevailing norms of conduct
or what society generally considers as moral. I propose that in ascertaining whether the
public holds a particular conduct as moral, the Constitution is a necessary and inevitable
guide. The Constitution is an expression of the ideals of the society that enacted and ratified
it. Its bill of rights, in particular, is an embodiment of the most important values of the people
enacting a Constitution. Values that find expression in a society’s Constitution are not only
accepted as moral, they are also fundamental. Thus, I propose that in ascertaining whether
an act is moral or immoral, a due consideration of constitutional values must be made. In
Christine Joy’s case, her decision to continue her pregnancy outside of wedlock is a
constitutionally protected right. It is therefore not only moral, it is also a constitutional value
that this Court is duty-bound to uphold.
Constitutional Law; Right to Liberty; View that jurisprudence directs us to the conclusion
that the constitutional right to liberty does not merely refer to freedom from physical restraint.
It also includes the right to be free to choose to be, in the words of Justice Fernando, a “unique
individual.”—Jurisprudence directs us to the conclusion that the constitutional right to
liberty does not merely refer to freedom from physical restraint. It also includes the right to
be free to choose to be, in the words of Justice Fernando, a “unique individual.” This
necessarily includes the freedom to choose how a person defines her personhood and how she
decides to live her life. Liberty, as a constitutional right, involves not just freedom from
unjustified imprisonment. It also pertains to the freedom to make choices that are intimately
related to a person’s own definition of her humanity. The constitutional protection extended
to this right man-
24

ANNOTATED
dates that beyond a certain point, personal choices must not be interfered with or unduly
burdened as such interference with or burdening of the right to choose is a breach of the right
to be free.
Same; Same; Termination of Employment; Constructive Dismissal; View that in
constructively dismissing Christine Joy and promising her reinstatement provided she
marries her boyfriend, Brent has breached not a mere statutory prohibition but a
constitutional right.—The Labor Code contains provisions pertaining to stipulations against
marriage. Specifically, Article 134 states that it is unlawful for employers to require as a
condition for employment or continuation of employment that a woman employee shall not
get married. This provision also prohibits the dismissal of a woman employee by reason of
her marriage. This Court, in the case of Philippine Telegraph and Telephone Company v.
NLRC, 272 SCRA 596 (1997), has applied this provision and found illegal the dismissal of a
woman employee because of a condition in her contract that she remains single during her
employment. Christine Joy’s case involves the reverse, albeit the effect is as burdensome and
as odious. In constructively dismissing Christine Joy and promising her reinstatement
provided she marries her boyfriend, Brent has breached not a mere statutory prohibition but
a constitutional right. While as I have already explained, there is jurisprudence to the effect
that the Bill of Rights cannot be invoked against a private employer, Brent’s act of invoking
the MRPS and the Labor Code brings this case within the ambit of the Constitution. In
arguing that immorality is a just cause for dismissal under the MRPS and the Labor Code,
Brent is effectively saying that these government issuances violate the constitutional right
to personal liberty and privacy. This interpretation cannot be countenanced. The
Constitution is deemed written into these government issuances and as such, they must be
construed to recognize the protection vested by the Bill of Rights.
PETITION for review on certiorari of the resolutions of the Court of Appeals.

Enriquez, Capin & Gaugano Law Offices for petitioner.
25
VOL. 785, FEBRUARY 24, 2016 25

Go, Covarrubias, Acosta, Cubero & Associates Law Offices for respondent.
REYES, J.:
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
and FAR EAST BANK AND TRUST COMPANY, respondents.
Labor Law; Labor Code; 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.—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.
Same; Same; Since the Magna Carta accords them the rights of qualified able-bodied
persons, they are thus covered by Article 280 of the Labor Code.—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.
Same; Same; The test of whether an employee is regular was laid down in De Leon vs.
National Labor Relations Commission.—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
188
188 SUPREME COURT REPORTS ANNOTATED

Bernardo vs. National Labor Relations Commission
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.”
Same; Same; When the bank renewed the contract after the lapse of the six-month
probationary period, the employees thereby became 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.
Same; Same; 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.—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.
Same; Same; 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.—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
189
VOL. 310, JULY 12, 1999 189

because of the nature of work and the length of service, not because of the mode or even
the reason for hiring them.
Same; Same; 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 x x x but on the nature
of the activities performed by the employee, and to some extent, the length of performance and
its continued existence.—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, 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 x x x but on the nature of the activities performed by the employee, and to some extent,
the length of performance and its continued existence.”
Same; Same; 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.—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. Otherwise, no employee can become regular by the simple expedient of
incorporating this condition in the contract of employment.
Same; Same; 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 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
190
190 SUPREME COURT REPORTS ANNOTATED

treated and granted the same rights like any other regular employees.

Sentro ng Alternatibong Lingap Panlegal (SALIGAN) for petitioners.
Picazo, Buyco, Tan, Fider & Santos for private respondent.
PANGANIBAN, J.:
G.R. No. 152894. August 17, 2007. *
CENTURY CANNING CORPORATION, petitioner, vs. COURT OF APPEALS and

GLORIA C. PALAD, respondents.
Labor Law; Apprenticeship; One of the objectives of Title II (Training and Employment
of Special Workers) of the Labor Code is to establish apprenticeship standards for the
protection of apprentices; an apprenticeship program should first be approved by the
Department of Labor and Employment (DOLE) before an apprentice may be hired, otherwise
the person hired will be considered a regular employee; An apprenticeship program should
first be approved by the Department of Labor and Employment (DOLE) before an apprentice
may be hired, otherwise the person hired will be considered a regular employee.—The Labor
Code defines an apprentice as a worker who is covered by a written apprenticeship agreement
with an employer. One of the objectives of Title II (Training and Employment of Special
Workers) of the Labor Code is to establish apprenticeship standards for the protection of
apprentices. In line with this objective, Articles 60 and 61 of the Labor Code provide: ART.
60. Employment of apprentices.—Only employers in the highly technical industries
may employ apprentices and only in apprenticeable occupations approved by the
Minister of Labor and Employment.
_______________
* SECOND DIVISION.
502

ANNOTATED
Century Canning Corporation vs. Court of
Appeals
(Emphasis supplied) ART. 61. Contents of apprenticeship agree-ments.—Apprenticeship

agreements, including the wage 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 percent of the applicable
minimum wage, may be entered into only in accordance with apprenticeship
programs duly approved by the Minister of Labor and Employment. The Ministry
shall develop standard model programs of apprenticeship. (Emphasis supplied) In Nitto
Enterprises v. National Labor Relations Commission, 248 SCRA 654 (1995), the Court cited
Article 61 of the Labor Code and held that an apprenticeship program should first be
approved by the DOLE before an apprentice may be hired, otherwise the person hired will be
considered a regular employee.
Same; Same; Technical Education and Skills Development Authority (TESDA); Republic
Act No. 7796 (RA 7796), which created the Technical Education and Skills Development
Authority (TESDA), has transferred the authority over apprenticeship programs from the
Bureau of Local Employment of the Department of Labor and Employment (DOLE) to the
Technical Education and Skills Development Authority (TESDA).—Republic Act No. 7796
(RA 7796), which created the TESDA, has transferred the authority over apprenticeship
programs from the Bureau of Local Employment of the DOLE to the TESDA. RA 7796
emphasizes TESDA’s approval of the apprenticeship program as a pre-requisite for the hiring
of apprentices. Such intent is clear under Section 4 of RA 7796: SEC. 4. Definition of Terms.—
As used in this Act: x x x j) “Apprenticeship” training within employment with compulsory
related theoretical instructions involving a contract between an apprentice and an
employer on an approved apprenticeable occupation;k)“Apprentice” is a person
undergoing training for an approved apprenticeable occupation during an established
period assured by an apprenticeship agreement; l) “Apprentice Agreement” is a contract
wherein a prospective employer binds himself to train the apprentice who in turn accepts the
terms of training for a recognized apprentice-able occupation emphasizing the
rights, duties and responsibilities of each party; m) “Apprenticeable Occupation” is
an
503
VOL. 530, AUGUST 17, 2007 503

Appeals
occupation officially endorsed by a tripartite body and approved for apprenticeship

by the Authority [TESDA]; (Emphasis supplied)
Same; Same; Same; An apprenticeship agreement which lacks prior approval from the
Technical Education and Skills Development Authority (TESDA) is void; Prior approval from
the Technical Education and Skills Development Authority (TESDA) is necessary to ensure
that only employers in the highly technical industries may employ apprentices and only in
apprenticeable occupations.—In this case, the apprenticeship agreement was entered into
between the parties before petitioner filed its apprenticeship program with the TESDA for
approval. Petitioner and Palad executed the apprenticeship agreement on 17 July 1997
wherein it was stated that the training would start on 17 July 1997 and would end
approximately in December 1997. On 25 July 1997, petitioner submitted for approval its
apprenticeship program, which the TESDA subsequently approved on 26 September 1997.
Clearly, the apprenticeship agreement was enforced even before the TESDA approved
petitioner’s apprenticeship program. Thus, the apprenticeship agreement is void because it
lacked prior approval from the TESDA. The TESDA’s approval of the employer’s
apprenticeship program is required before the employer is allowed to hire apprentices. Prior
approval from the TESDA is necessary to ensure that only employers in the highly technical
industries may employ apprentices and only in apprentice-able occupations. Thus, under RA
7796, employers can only hire apprentices for apprenticeable occupations which must be
officially endorsed by a tripartite body and approved for apprenticeship by the TESDA. This
is to ensure the protection of apprentices and to obviate possible abuses by prospective
employers who may want to take advantage of the lower wage rates for apprentices and
circumvent the right of the employees to be secure in their employment.
Same; Same; Same; Where a worker is not considered an apprentice because the
apprenticeship agreement was enforced before the TESDA’s approval of the apprenticeship
program, the worker is deemed a regular employee.—Since Palad is not considered an
apprentice because the apprenticeship agreement was enforced before the TESDA’s approval
of petitioner’s apprenticeship program, Palad is deemed a regular employee performing the
job of a “fish cleaner.” Clearly, the job of a “fish cleaner” is necessary in petitioner’s business
as a tuna and sardines factory. Under Article 280 of the Labor
504

ANNOTATED
Appeals
Code, an employment is deemed 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.
Same; Same; Dismissals; Absenteeism and Inefficiency; Habitual absenteeism and poor
efficiency of performance are among the valid causes for which the employer may terminate
the apprenticeship agreement after the probationary period.—In this case, the Labor Arbiter
held that petitioner terminated Palad for habitual absenteeism and poor efficiency of
performance. Under Section 25, Rule VI, Book II of the Implementing Rules of the Labor
Code, habitual absenteeism and poor efficiency of performance are among the valid causes
for which the employer may terminate the apprenticeship agreement after the probationary
period.
Same; Same; Same; When the alleged valid cause for the termination of employment is
not clearly proven, as in this case, the law considers the matter a case of illegal dismissal.—
Under Article 227 of the Labor Code, the employer has the burden of proving that the
termination was for a valid or authorized cause. Petitioner failed to substantiate its claim
that Palad was terminated for valid reasons. In fact, the NLRC found that petitioner failed
to prove the authenticity of the performance evaluation which petitioner claims to have
conducted on Palad, where Palad received a performance rating of only 27.75%. Petitioner
merely relies on the performance evaluation to prove Palad’s inefficiency. It was likewise not
shown that petitioner ever apprised Palad of the performance standards set by the company.
When the alleged valid cause for the termination of employment is not clearly proven, as in
this case, the law considers the matter a case of illegal dismissal.
Appeals.

Bolisay and Partners Law Offices and Engelberto A. Farol for petitioner.
Joel G. Martinez for private respondent.
505
VOL. 530, AUGUST 17, 2007 505

Appeals
CARPIO, J.:

ANNOTATED
Nitto Enterprises vs. National Labor Relations
Commission
G.R. No. 114337. September 29, 1995. *
NITTO ENTERPRISES, petitioner, vs.NATIONAL LABOR RELATIONS

COMMISSION, and ROBERTO CAPILI, respondents.
Labor Law; Apprenticeship Agreements; Prior approval by the Department of Labor and
Employment of the proposed apprenticeship program is a condition sine qua non before an
apprenticeship agreement can be validly entered into.—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 “care 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 ap-
_______________
* FIRST DIVISION.
655
VOL. 248, SEPTEMBER 29, 1995 655

Commission
proval 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.
Same; Same; Where the apprenticeship agreement has no force and effect, the worker
hired as apprentice should be considered as a regular employee.—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”) deserves credence. He should rightly be considered as a regular employee of
petitioner as defined by Article 280 of the Labor Code.
Same; Dismissals; Due Process; The twin requirements of due process, substantive and
procedural, must be complied with before valid dismissal exists, otherwise the dismissal
becomes void.—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.

Sinforoso R. Pagunsan for petitioner.
Ma. Elena Enly B. Nazareta representative of private respondent.
656

ANNOTATED
Commission
KAPUNAN, J.:
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.
Labor Law; Illegal Dismissals; 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.—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. 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.
Same; Regular Employees; With the expiration of the first agreement and the retention of
the employees, Atlanta recognized the completion of their training and their acquisition of a
regular employee status.—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
_______________
* THIRD DIVISION.
681
VOL. 640, JANUARY 26, 2011 681

Atlanta Industries, Inc. vs. Sebolino
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, is a violation of the Labor Code’s
implementing rules and is an act manifestly unfair to the employees, to say the least.
Appeals.
Dela Rosa & Nograles for petitioners.
Sentro ng Alternatibong Lingap Panligal [Saligan] for respondents.
BRION, J.:

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No. 8967.

May 31, 1956]

1.WORKMEN'S COMPENSATION; NON-APPLICABILITY OF ACT No. 3428 SHOULD BE

2.EMPLOYER AND EMPLOYEE; ELEMENTS IN DETERMINING EXISTENCE OF

PETITION for review by certiorari of a decision of the Workmen's Compensation

No. L-9110, April 30, 1957]

1. 1.EMPLOYER AND EMPLOYEE; SEPARATION GRATUITY SUBJECT TO

VOL. 101, APRIL 30, 1957 359

1. 2.INDEPENDENT CONTRACTOR; PERSON ENGAGED TO PERFORM SERVICE

APPEAL from an order of the Court of First Instance of Manila. Jose, J.

132 SUPREME COURT REPORTS

No. L-12582. January 28, 1961.

No. L-12598. January 28, 1961.

VOL. 1, JANUARY 28, 1961 133

IPPINE MUSICIANS GUILD (FFW) and COURT OF INDUSTRIAL RELATIONS,

Industrial Peace Act; Court of Industrial Relations; Certification proceeding.—The

Same; Court of Industrial Relations; Discretion in determining bargaining unit.—The

Same; Criterion for employer-employee relationship-—An employer-employee

PETITION for review by certiorari of an order of the Court of Industrial Relations.

The facts are stated in the opinion of the Court.

134 SUPREME COURT REPORTS

VOL. 197, MAY 27, 1991 471

VALENTINO TORILLO, petitioner, vs.VICENTE LEOGARDO, JR., in his official

472 SUPREME COURT REPORTS

VOL. 197, MAY 27, 1991 473

G.R. No. 153511. July 18, 2012.*

VOL. 677, JULY 18, 2012 11

issue writs of certiorari is based on Section 9 of Batas Pambansa Blg. 129.―There is no

12 SUPREME COURT REPORTS

his security of tenure. The inequality that characterizes employer-employee relations

PETITION for review on certiorari of a decision of the Court of Appeals.

G.R. No. 198782. October 19, 2016.*

ALLAN BAZAR, petitioner, vs. CARLOS A. RUIZOL, respondent.

Remedial Law; Civil Procedure; Appeals; Question of Fact; Employer-Employee

VOL. 806, OCTOBER 19, 2016 497

498 SUPREME COURT REPORTS

G.R. No. 197899. March 6, 2017.*

JOAQUIN LU, petitioner, vs. TIRSO ENOPIA, ROBERTO ABANES, ALEJANDRE

VOL. 819, MARCH 6, 2017 211

CIA, PONCIANO REANDO, HERMENIO REMEGIO, DEMETRIO RUAYA,

212 SUPREME COURT REPORTS

amount of relevant evidence which a reasonable mind might accept as adequate to

VOL. 819, MARCH 6, 2017 213

214 SUPREME COURT REPORTS

Apex Mining Company, Inc. vs. NLRC

G.R. No. 94951. April 22, 1991. *

APEX MINING COMPANY, INC., petitioner, vs.NATIONAL LABOR RELATIONS

252 SUPREME COURT REPORTS

The facts are stated in the opinion of the Court.

G.R. Nos. 169295-96. November 20, 2006. *

REMINGTON INDUSTRIAL SALES CORPORATION, petitioner, vs. ERLINDA

392 SUPREME COURT REPORTS

VOL. 507, NOVEMBER 20, 2006 393

394 SUPREME COURT REPORTS

VOL. 507, NOVEMBER 20, 2006 395

The facts are stated in the opinion of the Court.

San Miguel Brewery Sales Force Union (PTGWO)

G.R. No. 53515. February 8, 1989. *

PETITION for certiorari to review the order of the Minister of Labor.

The facts are stated in the opinion of the Court.

26 SUPREME COURT REPORTS

Siguion Reyna, Montecillo & Ongsiako for private respondent.

SUPREME COURT REPORTS ANNOTATED