G.R. No.

163210             August 13, 2008

LEPANTO CONSOLIDATED MINING COMPANY, petitioner,

vs.
MORENO DUMAPIS, ELMO TUNDAGUI and FRANCIS LIAGAO, respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the November 7, 2003
Decision1 and April 15, 2004 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 75860.

The antecedents of the case are as follows:

Lepanto Consolidated Mining Corporation (petitioner), a domestic juridical entity engaged in mining, employed Moreno
Dumapis and Elmo Tundagui as lead miners; and Francis Liagao, as load, haul and dump (LHD) machine operator
(respondents).3 All three were assigned at the 850 level, underground, Victoria Area in Lepanto, Mankayan, Benguet. This
is a known "highgrade" area where most of the ores mined are considered of high grade content.4

In the afternoon of September 15, 2000, at 2:00 p.m., Dwayne Chambers (Chambers), one of its foreign consultants who
was then acting as Assistant Resident Manager of the Mine, went underground at the 850 level to conduct a routinary
inspection of the workers and the working conditions therein. When he went to the various stopes of the said level, he was
surprised to see that nobody was there. However, when he went to the 8k stope, he noticed a group of workers sitting,
sorting, and washing ores believed to be "highgrade." Realizing that "highgrading"5 was being committed, Chambers
shouted. Upon hearing his angry voice, the workers scampered in different directions of the stope.6 Chambers then
reported the incident to the security investigation office.7

After investigating, Security Investigators Paul Pespes, Jr. and Felimon Ringor (Security Investigators) executed a Joint
Affidavit, which reads as follows:

xxxx

At about 3:40 PM of September 15, 2000, while we were at the Lepanto Security Investigation office, we received
a report that the LMD Asst. Resident Manager, Mr. Dwayne Chambers saw and surprised several unidentified
miners at 8K Stope, 850 level committing Highgrading activities therein;

Consequently, all miners assigned to work therein including their supervisor and SG Ceasarion Damoslog, an
element of the Mine Security Patrol posted therein as stationary guard were called to this office for interrogation
regarding this effect;

In the course of the investigation, we eventually learned that the highgrading event really transpired somewhere at
the roadway of 8K Stope, 850 level at about 2:00 o’clock PM of September 15, 2000. That the involved
participants were all miners assigned to work at 7K Stope, 8K Stope, 240 E, Cross Cut South level drive, all
located at 850 mine level. Likewise, the detailed stationary guard assigned thereat and some mine supervisors
were also directly involved in this activity;

Security Guard Ceasarion Damoslog honestly confessed his direct participation then claimed that he was
allegedly convinced by Mr. Joel Gumatin, one of the miners assigned at Panel No.1-est-North, 8K Stope, 850
level to cooperate with them to commit Highgrading. He revealed his companions to be all the miners assigned at
8K stope, namely, Joel Gumatin, Brent Suyam, Maximo Madao, Elmo Tundagui and Daniel Fegsar. He also
included those who were assigned to work at 240 E, XCS, namely: Thomas Garcia (immediate supervisor), John
Kitoyan, Moreno Dumapis, and Marolito Cativo. He enumerated also messrs. Benedict Arocod, Samson Damian,
and Dionisio Bandoc, 7K Stope, 850 level assigned miners and shiftboss, respectively;

Mr. Pablo Daguio, the shiftboss of 240 E, XCS, 850 level also positively confirmed the Highgrading activity. He
added that actually he came upon the group and even dispersed them when he went therein prior to the arrival of
Mr. Chambers;

Furthermore, we also learned from the confession of Mr. Maximo Madao that its was messrs. Joel Gumatin and
Brent Suyam who took their issued rock drilling machine then drilled holes and blasted the same at the 8K Stope
roadway with the assistance of Thomas Garcia, John Kitoyan, Benedict Arocod, Samsom Damian, Daniel Fegsar
and Francisco Liagao. That SG Ceasarion Damoslog was present on the area standing and watching the group
during the incident;

That we are executing this joint affidavit to establish the foregoing facts and to support any complaint that may be
filed against respondents;

IN WITNESS WHEREOF, we have hereunto set our hands and affix our signature this 28th day of September
2000, at Lepanto, Mankayan, Benguet.8

(Emphasis supplied)

On October 24, 2000, petitioner issued a resolution finding respondents and their co-accused guilty of the offense of
highgrading and dismissing them from their employment.9
On November 14, 2000, respondents together with the nine other miners, filed a Complaint for illegal dismissal with the
Labor Arbiter (LA), docketed as NLRC Case No. 11-0607-00 against petitioner.10 On August 21, 2001, the LA dismissed
the complaint for lack of merit.

On September 22, 2001, the miners appealed the decision of the LA to the National Labor Relations Commission (NLRC).
On August 30, 2002, the NLRC rendered a Decision, declaring the dismissal of herein respondents as illegal, but affirming
the dismissal of the nine other complainant miners. The dispositive portion of the NLRC Decision insofar as respondents
are concerned, reads:

WHEREFORE, premises considered, the DECISION dated August 21, 2001 is hereby MODIFIED declaring the
dismissal of complainants [herein respondents] Moreno Dumapis, Elmo Tundagui and Francis Liagao illegal and
ordering respondent to pay them backwages in the total amount of four hundred eighty thousand one hundred
eighty two pesos and 63/100 (P480, 182.63) and separation pay in the total amount of four hundred seventeen
thousand two hundred thirty pesos and 32/100 (P417,230.32) as computed in the body of the decision.

xxxx

SO ORDERED.11

Petitioner filed a motion for reconsideration which was denied for lack of merit by the NLRC in its Resolution dated on
November 22, 2002.12

Petitioner then filed a petition for certiorari under Rule 65 of the Rules of Court with the CA assailing the aforementioned
decision and resolution of the NLRC. The CA affirmed the decision of the NLRC13 and denied petitioner’s Motion for
Reconsideration.

Hence, herein petition on the following grounds:

THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND REVERSIBLE ERROR IN AFFIRMING
THE NATIONAL LABOR RELATIONS COMMISSION’S DECISION DATED AUGUST 30, 2002 WHICH
DECLARED AS ILLEGAL THE DISMISSAL FROM SERVICE OF HEREIN RESPONDENTS. 14

A. The Court of Appeal’s strict application of the hearsay rule under Section 36, Rule 130 of the Rules of
Court to the present case is uncalled for.

B. In cases of dismissal for breach of trust and confidence, proof beyond doubt is not required, it being
sufficient that the employer has reasonable ground to believe that the employees are responsible for the
misconduct which renders them unworthy of the trust and confidence demanded by their position. 15

The petition is devoid of merit.

In finding the dismissal of respondents illegal, the CA upheld the NLRC in considering the Joint Affidavit of the Security
Investigators (Joint Affidavit) as hearsay and therefore inadmissible, to wit:

We subscribed to the conclusion of the NLRC that the Joint Affidavit of Security Investigators Paul D. Pespes, Jr.
and Felimon Ringor is hearsay and thus, inadmissible. Their narration of factual events was not based on their
personal knowledge but on disclosures made by Chambers and Daguio. Section 36, Rule 130 of the Rules of
Court defined the nature of hearsay:

Witness can testify only to those facts which he knows of his personal knowledge, that is, which are derived from
his own perception, except as otherwise provided in these rules.16

Arguing for the admissibility of the Joint Affidavit, petitioner cites Article 221 of the Labor Code, as amended, which
provides:

Article 221. Technical rules not binding and prior resort to amicable settlement. In any proceeding before the
Commission or any Labor Arbiters, the rules of evidence prevailing in courts of law or equity shall not be
controlling and it is the spirit and intention of the Code that the Commission and its members and the Labor
Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and objectively
and without regard to the technicalities of law or procedure, all in the interest of due process. x x x (Emphasis
supplied)

We agree with the petitioner.

Administrative bodies like the NLRC are not bound by the technical niceties of law and procedure and the rules obtaining
in courts of law. Indeed, the Revised Rules of Court and prevailing jurisprudence may be given only stringent
application, i.e.,  by analogy or in a suppletory character and effect.17

In a number of cases,18 this Court has construed Article 221 of the Labor Code as permitting the NLRC or the LA to decide
a case on the basis of position papers and other documents submitted without necessarily resorting to technical rules of
evidence as observed in the regular courts of justice. Rules of evidence are not strictly observed in proceedings before
administrative bodies like the NLRC.19

In Bantolino v. Coca-Coca Bottlers Phils., Inc.20 the Court ruled that although the affiants had not been presented to affirm
the contents of their affidavits and be cross-examined, their affidavits may be given evidentiary value; the argument that
such affidavits were hearsay was not persuasive. Likewise, in Rase v. National Labor Relations Commission,21 this Court
ruled that it was not necessary for the affiants to appear and testify and be cross-examined by counsel for the adverse
party. To require otherwise would be to negate the rationale and purpose of the summary nature of the proceedings
mandated by the Rules and to make mandatory the application of the technical rules of evidence.

Thus, the CA and the NLRC erred in ruling that the Joint Affidavit is inadmissible for being hearsay. The Joint Affidavit of
the Security Investigators is admissible for what it is, an investigation report.

However, the admissibility of evidence should not be confused with its probative value. Admissibility refers to the question
of whether certain pieces of evidence are to be considered at all, while probative value refers to the question of whether
the admitted evidence proves an issue.22 Thus, a particular item of evidence may be admissible, but its evidentiary weight
depends on judicial evaluation within the guidelines provided by the rules of evidence.23 The distinction is clearly laid out
in Skippers United Pacific, Inc. v. National Labor Relations Commission.24 In finding that the Report of the Chief Engineer
did not constitute substantial evidence to warrant the dismissal of Rosaroso, this Court ruled:

According to petitioner, the foregoing Report established that respondent was dismissed for just cause. The CA,
the NLRC and the Labor Arbiter, however, refused to give credence to the Report. They are one in ruling that the
Report cannot be given any probative value as it is uncorroborated by other evidence and that it is merely
hearsay, having come from a source, the Chief Engineer, who did not have any personal knowledge of the events
reported therein.

xxxx

The CA upheld these findings, succinctly stating as follows:

Verily, the report of Chief Engineer Retardo is utterly bereft of probative value. It is not verified by an oath and,
therefore, lacks any guarantee of trusthworthiness. It is furthermore, and this is crucial, not sourced from the
personal knowledge of Chief Engineer Retardo. It is rather based on the perception of "ATTENDING SUPT.
ENGINEERS CONSTANTLY OBSERVING ALL PERSONNELS ABILITY AND ATTITUDE WITH REGARDS TO
OUR TECHNICAL CAPABILITY AND BEHAVIOURS WITH EMPHASY [sic] ON DISCIPLINE" who " NOTICED
3/E ROSAROSO AS BEING SLACK AND NOT CARING OF HIS JOB AND DUTIES x x x." Accordingly, the
report is plain hearsay. It is not backed up by the affidavit of any of the "Supt." Engineers who purportedly had
first-hand knowledge of private respondents supposed "lack of discipline," "irresponsibility" and "lack of diligence"
which caused him to lose his job. x x x

The Courts finds no reason to reverse the foregoing findings.25 (Emphasis supplied)

While it is true that administrative or quasi-judicial bodies like the NLRC are not bound by the technical rules of procedure
in the adjudication of cases, this procedural rule should not be construed as a license to disregard certain fundamental
evidentiary rules. The evidence presented must at least have a modicum of admissibility for it to have probative
value.26 Not only must there be some evidence to support a finding or conclusion, but the evidence must be substantial.
Substantial evidence is more than a mere scintilla.27 It means such relevant evidence as a reasonable mind might accept
as adequate to support a conclusion.28 Thus, even though technical rules of evidence are not strictly complied with before
the LA and the NLRC, their decision must be based on evidence that must, at the very least, be substantial.29

Pursuant to the aforementioned doctrines, we now look into the probative weight of the Joint Affidavit.

An examination of the Joint Affidavit reveals that the facts alleged therein by the Security Investigators are not of their own
personal knowledge. They simply referred to the facts allegedly relayed to them by Chambers, Damoslog, Daguio, and
Madao. Thus, there is a need to individually scrutinize the statements and testimonies of the four sources of the Joint
Affidavit in order to determine the latter’s probative weight.

The Joint Affidavit states that, "Mr. Dwayne Chambers saw and surprised several unidentified miners x x x."30 Chambers
simply narrated to the Security Investigators what he saw but did not indicate herein respondents.

Also stated in the Joint Affidavit is the alleged confession of Damoslog wherein he named respondents Tundagui and
Dumapis as his companions in the act of highgrading .31

Records show that Damoslog submitted two sworn statements. In his first statement,32 Damoslog claimed that he was
unaware of the act of highrading, and denied any involvement therein. However, in his second statement,33 Damoslog
claimed to have personally witnessed the act of highgrading and named the miners involved to wit:

07. Ques - Could you narrate briefly how it transpired then?

Ans - On the first hour of this specific dated and shift at about 0800hrs, while we were at the 8K stope, 850
level, Mr. Joel Gumatin approached me that he could not procure some needed amount of money and if possible
we will commit highgrading for that effect to settle his problem. That because I pity him, I just answered that if they
could manage to do it then they could do it.

08. Ques - Who was the companion of Mr. Gumatin when he approached you?

Ans - He was alone.

09. Ques - Did Gumatin specifically informed [sic] you his problem?

Ans - I did not asked him honestly but he only insisted that he needed an amount of money badly as I earlier said.

10. Ques - So just after telling his purpose did he started [sic] the highgrading activity?
 Ans - No, the highgrading scheme started at past 1300 Hrs.

11. Ques - How did it started [sic]?

Ans - They started after they all finished their respective drilling assignment. That while I was near the panel 2-
West located at the inner portion of 8K Stope, I observed the LHD unit coming from the roadway near the 8K
Eating station which was previously parked thereat proceeded to the roadway of panel 1-West then started
cleaning and scraping said roadway. That after cleaning he parked it at the inner portion of the roadway. Then
afterwhich one among the miner who was not assigned therein and I failed to identify his name shove two shovels
on the roadway recently cleaned by the LHD then handed it to us with another man whom I don’t know his name
but could recognize and identify him if I will meet him again then we washed the same in the inner area of panel
2-West which is adjacent. That after washing and sorting the same, we placed it atop of an spread cartoon [sic]
sheet. That while we were busy washing and sorting, Mr. Gumatin also was fixing and spreading the airhose for
rockdrilling machine. That few moments thereafter, I heard the running engine of the drilling machine but I can not
identify the operator as my line of view was obstructed by the curbed angle of the panel where we are washing
the ores. That afterwhich I heard somebody that they are now going to blast the drilled holes but we remained in
our place continuing washing the stones. That after the blast Mr. Garcia and one other companion whom I failed
to identify due to foggy condition caused by the explosive blasting then handed us the additional newly unearth
ores for washing. That while were still busy washing, Gumatin approached us then told us that he will collect what
was already washed and sorted and start to process the same. That Gumatin took the items then started to pound
the ores atop of an LHD unit parked near the entrance of panel 2-East which was not used during the shift. That
after that, I stood up then subsequently proceeded to panel 2-West then observed messrs. Maximo Madao,
Benedict Arocod, Brent Suyam, Daniel Fegsar, Thomas Garcia, Mariolito Cativo, John Kitoyna and
Samson Damian who acted as the look out at the junction of 240 E, XCS and 8K Stope. The enumerated miners
except Damian were in squatting position in scattered adjacent places busy sorting ores. Moments later Shift
boss Dionisio Bandoc arrived then went to the place of Gumatin then told us that he will get a portion of the
already proceeded ores for the operator to handcarry so that he will not need to come to 8K Stope, 850 level then
after taking some of the loot he proceeded out simultaneously uttering that he will check the look out at the outer
area of the mainline posted away from the 7K Stope.34 (Emphasis supplied)

Evidently, Damoslog does not name respondents Dumapis and Tundagui as among the miners involved in the act of
highgrading; neither does he mention respondent Liagao.

The Joint Affidavit also states that Daguio positively confirmed the act of highgrading. However, in his sworn
statement,35 Daguio claims that he did not recognize nor did he identify any of the miners, to wit:

11. Ques - In your own honest observation, what could be the estimate [sic] number of this group of miners doing
highgrading activities?

Ans - I don’t know but obviously they were several as manifested by their number of cap lamplights. I also
speculated that some of them were hidden at the curved inner access of the roadway enroute to the inner area.

12. Ques - Did you recognize nor [sic] identify any of them?

Ans - Honestly, no.36 (Emphasis supplied)

Lastly, the Joint Affidavit also points to the confession of Madao wherein he particularly named respondent Liagao as one
of the miners involved in the act of highgrading.

Madao submitted two sworn statements. In his first sworn statement37 dated September 16, 2000, Madao claimed his
innocence. He did not incriminate any of the respondents. However, in his second sworn statement38 dated September 20,
2000, Madao claimed to have knowledge of the act of highgrading and specifically named respondent Liagao as one of
the miners involved, to wit:

09. Ques - Do I understand that Mr. Suyam has companions and had drilled first the flooring of that roadway
before blasting it?

Ans - Yes, that is true I saw Suyam and Gumatin transferred [sic] their assigned drilling machine at the said
roadway and drilled the area with the company of Garcia, Kitoyan, Arocod, Damian, Fegsar and
Liagao.39 (Emphasis supplied)

Nonetheless, the second sworn statement of Madao is not sufficient to find Liagao guilty of highgrading. In a Joint
Affidavit40 which he executed with respondent Tundagui, Madao made the following declarations:

When I, MAXIMO MADAO reported for work on September 16, 2000, I am being required to appear at the
security investigation office. After quitting time I went to the security office and was surprised to learn that my
name is among those listed persons who were seen by Mr. Chambers committing acts of highgrading on
September 15, 2000. However, when I quit work on September 20, 2000 I was again called through telephone to
appear at the security office. Investigator Felimon Ringor told me that I will give another statement and convinced
to tell me all the names of the persons assigned thereat with the promise that I will report for work. With my limited
education having not finished grade 1, I was made to give my statement on questions and answers which are self-
incriminating and knowingly mentioned names of persons who are innocent. Worst, when I got my copy and the
contents were fully explained to me by our legal counsel I was surprised that it was duly notarized when in fact
and in truth after I gave my statement I did not appear before Atty. Nina Fe Lazaga-Raffols for swearing. With this
circumstances, I hereby RETRACT my statement dated September 20, 2000 for being self incriminatory
unassisted by my counsel or union representative and hereby ADAPTS [sic] and RETAINS my sworn statement
dated September 16, 2000.41 (Emphasis supplied)
In labor cases, in which technical rules of procedure are not to be strictly applied if the result would be detrimental to the
workingman, an affidavit of desistance gains added importance in the absence of any evidence on record explicitly
showing that the dismissed employee committed the act which caused the dismissal.42 Accordingly, the Court cannot turn
a blind eye and disregard Madao’s recantation, as it serves to cast doubt as to the guilt of respondent Liagao.

Based on the foregoing, the Court is convinced that the Joint Affidavit, being sourced from Chambers, Damoslog, Daguio
and Madao, has no probative value to support evidence to warrant the dismissal of the respondents. Chambers and
Daguio did not identify the miners involved in the act of highgrading. In addition, Damoslog’s first and second sworn
statements did not implicate respondents, and Madao recanted his statement implicating respondent Liagao. As earlier
discussed, the sworn statements and joint affidavits of the sources do not corroborate but actually cast doubt as to the
veracity of the statements in the Joint Affidavit.

The second ground is not plausible.

While the Court agrees that the job of the respondents, as miners, although generally described as menial, is
nevertheless of such nature as to require a substantial amount of trust and confidence on the part of petitioner,43 the rule
that proof beyond reasonable doubt is not required to terminate an employee on the charge of loss of confidence, and that
it is sufficient that there be some basis for such loss of confidence, is not absolute.44

The right of an employer to dismiss an employee on the ground that it has lost its trust and confidence in him must not be
exercised arbitrarily and without just cause.45 In order that loss of trust and confidence may be considered as a valid
ground for an employee’s dismissal, it must be substantial and not arbitrary, and must be founded on clearly established
facts sufficient to warrant the employee’s separation from work.46

In the present case, the Court reiterates that the evidence is not substantial to hold respondents guilty of highgrading so
as to warrant the dismissal of respondents.

Moreover, it is a well-settled doctrine that 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. 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 themselves of the benefits under the law, which is in consonance with the avowed policy of the State to give
maximum aid and protection to labor.47

Lastly, respondents’ prayer in their Comment48 and Memorandum,49 that the CA Decision be modified by ordering their
reinstatement to their former positions without loss of seniority rights and with payment of full backwages from their
alleged dismissal up to date of reinstatement, deserves scant consideration. Respondents are estopped from claiming
their right to reinstatement. Records show that respondents along with their co-accused, filed an appeal with the CA
docketed as CA-G.R. SP No. 75457 questioning the decision of the NLRC. The said appeal was denied by the CA. The
case was then elevated to this Court through a petition for review, entitled Thomas Garcia v. Court of Appeals, docketed
as G.R. No. 162554. However, the same was denied with finality for having been filed out of time.50 In effect, it serves to
estop the respondents from praying for their reinstatement in the present case. Under the doctrine of conclusiveness of
judgment, which is also known as "reclusion of issues" or "collateral estoppel," issues actually and directly resolved in a
former suit cannot again be raised in any future case between the same parties involving a different cause of
action.51 Applied to the present case, the "former suit" refers to CA-G.R. SP No. 75457 wherein the CA ordered separation
pay instead of reinstatement and G.R. No. 162554 wherein this Court denied the petition for review filed by respondents
together with other dismissed workers. The "future case" is the present case in which the petitioner is Lepanto
Consolidated Mining Company assailing the validity of the CA Decision declaring the dismissal of respondents to be
illegal. Reinstatement was not an issue raised by herein petitioner. Respondents cannot now be allowed to raise the same
in the petition filed by petitioner, for that would circumvent the finality of judgment as to separation pay insofar as
respondents are concerned.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated November 7, 2003 and its Resolution
dated April 15, 2004 in CA-G.R. SP No. 75860 are AFFIRMED.

Double costs against petitioner.

SO ORDERED.
G.R. No. 126703 December 29, 1998

GANDARA MILL SUPPLY and MILAGROS SY, petitioner,

vs.
THE NATIONAL LABOR RELATIONS COMMISSION AND SILVESTRE GERMANO, respondents.

PURISIMA, J.:

At bar is a special civil action for Certiorari under Rule 65 of the Revised Rules of Court, assailing the
Resolution   of the National Labor Relations Commission   (NLRC) promulgated on May 22, 1996, and NLRC
1 2

Resolution   dated July 23, 1996, denying petitioner's motion for reconsideration in NLRC NCR 00-02-1653-
3

94.

From the records on hand, it appears that.

Milagros Sy, owner of Gandara Mill Supply, at No. 708 Gandara St. Binondo, Manila, was the respondent in
NLRC Case No. 02-01653-94 instituted by Silvestre Germano (now the private respondent).

On February 6, 1995, the private respondent, without notifying his employer, Milagros Sy, did not report for
work until February 11, 1995. Like any expectant father, he chose to be near his wife who was then about to
deliver. The wife gave birth on February 12, 1995. Upon private respondent's request, Milagros Sy extended
some financial assistance to the Germano couple.

The petition avers inter alia that Gandara Mill Supply is a small business enterprise with only two (2)
employees, including the herein private respondent, to do manual work. With inadequate manpower, the
absence of just one worker can spell untold difficulties in its operations. Matters became even worse when
private respondent, without informing his employer, was absent for a long time, so much so that the former
incurred the ire of the latter. Two (2) weeks after, private respondent returned to duty, and to his surprise,
he was met by his employer to personally tell him that someone had been hired to take his place. He was
advised, however, that he was to be re-admitted in June 1996.

On February 27, 1995, a case of illegal dismissal was commenced by the private respondent with the
Department of Labor and Employment.

To buy peace, petitioner offered P5,000.00 but to no avail. The offer was flatly rejected by private
respondent. When conciliation efforts proved futile, the Labor Arbiter directed the parties to submit their
position papers on or before April 28, 1995, which deadline was extended to May 5, 1995. In his Order of
May 9, 1995, Labor Arbiter Facundo L. Leda gave petitioner a "last opportunity to file/submit their (sic)
Position Paper within seven (7) days from receipt hereof otherwise their (sic) right to be heard are (sic)
deemed waived and this case will be decided on the basis of the documents on file."  4

Despite receipt of the aforesaid Order, however, petitioner still failed to comply therewith, prompting the
Labor Arbiter to hand down a decision on January 29, 1996, disposing, thus:

WHEREFORE, decision is hereby rendered ordering respondent/s Gandara Mill Supply and/or
Milagros Sy to complainant Silvestre Germano the sum of SIXTY FIVE THOUSAND SIX
HUNDRED EIGHTY FIVE PESOS AND 90/00 (P65,685.90) representing separation pay,
backwages, SLIP and attorney's fee as discussed and computed abore.

On March 4, 1996, petitioner appealed said decision to the NLRC. To the appeal, an Opposition was
interposed on March 15, 1996.

On May 22, 1996, the NLRC dismissed petitioner's appeal for failure to post a cash or surety bond.

The appeal was predicated on the submission that petitioner's business is small, on which invoked ground
petitioner sought exemption from posting a bond. Should its prayer for exemption of a bond be denied,
petitioner asked for at least twenty (20) days to put up such bond.

The petition attacks the July 23, 1996 Resolution of public respondent, affirming the decision of the Labor
Arbiter dated January 29, 1996. On August 14, 1996, a Motion for Execution was presented by private
respondent. NLRC entered its judgment on August 26, 1996.

On September 6, 1996, private respondent sent in an Ex-parte Motion for Execution, which was granted. The
corresponding Writ of Execution issued on September 13, 1996.

The issues posited for resolution:

FIRST, did the public respondent act with grave abuse of discretion in dismissing petitioner's appeal and in
not giving petitioner a chance to prove that the private respondent was not illegally dismissed but was
merely suspended for abandoning his job?: and
SECOND, did the public respondent act with grave abuse of discretion in awarding to the private
respondent the amount of SIXTY-FIVE THOUSAND SIX HUNDRED EIGHTY-FIVE AND 90/00 (P65,685.90),
which amount petitioner assails as excessive?

To be sure, the petitioner was afforded a chance to show that the private respondent was not illegally
dismissed. Unfortunately, petitioner failed to discharge its burden of proof.

In a long line of cases, the Court has consistently ruled that, findings of fact by quasi-judicial agencies like
the NLRC are conclusive upon the court in the absence of proof of grave error in the appreciation of facts.
Petitioner's bare allegation that it was denied the right to be heard is negated by the Labor Arbiter's
extension of much leniency to petitioner by allowing the latter to submit a position paper on April 28, 1995,
then on May 5, 1995, and finally, seven (7) days from receipt of the Order dated May 9, 1995. Generally,
reglementary periods are strictly observed to the end that orderly administration of justice be safeguarded.
In the case under consideration, the public respondent had been quite liberal in observing and enforcing
the rules. Consequently, petitioner's protestation of denial of opportunity to be heard is barren of any
factual basis. The principle of laches finds a wide room for application here. Laches, in a general sense, is
failure or neglect for an unreasonable length of time to do that which by exercising due diligence could or
should have been done earlier; it is negligence or omission to assert a right within a reasonable time
warranting a presumption that the party entitled to assert it has either abandoned or declined to raise it. The
doctrine of laches or "stale demands" is based upon grounds of public policy which require for the peace of
society, discouragement of stale claims. And unlike the statute of limitations, it is not a mere question of
time but is principally a question of inequity or unfairness or permitting a right or claim to be enforced or
asserted. (Tijam v. Sibonghanoy, 23 SCRA 29). So also, in the Order, dated May 9, 1995, respondent
Commission declared in clear and unequivocal terms that "failure to file a position paper is deemed a
waiver of the right to be heard and that decisions will be based on the position paper submitted." Evidently,
for making good his said Order, the Labor Arbiter cannot be faulted for acting arbitrarily.

Neither can grave error be ascribed to respondent NLRC for handing down its decision without petitioner's
Position Paper. By its inaction, petitioner was properly considered to have waived or forfeited the right to
refute private respondent's stance. Indeed, petitioner cannot now be permitted to belatedly complain of a
denial of due process.

That petitioner was not represented by a lawyer in all the aforesaid proceedings was solely attributable to
its own negligence or inattention to the case. While the court has held that representation by a lawyer is a
fundamental right of litigants, petitioner has nobody to blame but itself for its failure to secure the services
of counsel resulting to the dismissal of its case. In the case under scrutiny, petitioner was represented by a
non-lawyer, Ramon Flores, who was present from the beginning of the case but failed to efficiently follow-
up the case until the promulgation of judgment. While the right to due process is available to all the parties,
it does not countenance self-serving excuses devised to undermine orderly administration of justice.

After a careful study, and a thorough examination of the pleadings and supporting documents, it appears
decisively clear that private respondent Silvestre Germane was illegally dismissed. While a prolonged
absence without leave may constitute as a just cause of dismissal, its illegality stems from the non-
observance of due process. Applying the WenPhil Doctrine by analogy, where dismissal was not preceded
by the twin requirement of notice and hearing, the legality of the dismissal in question, is under heavy
clouds and therefore illegal. While it cannot be deduced unerringly from the records on hand that private
respondent was really dismissed, there is no clear indication that the latter was to be reinstated. In fact,
since the inception of the case, what petitioner merely endeavored was to compromise for a measly sum of
P5,000.00, and no mention of taking respondent back to his job was ever offered as part of the deal to end
the controversy. What can be surmised from petitioners's offer to re-admit the private respondent, was
nothing but a polite gesture couched in words intended to make the impact of his so-called suspension less
severe. Invoking the plight of a working man, where "no work, no pay" is the rule of thumb, the court cannot
sanction an over extended suspension. The Labor Code explicitly provides, that:

No preventive suspension shall last longer than thirty (30) days. The employer shall
thereafter reinstate the worker to his former or substantially equivalent position or the
employer may extend the period of suspension provided that during the period of extension,
he pays the wages and other benefits due to the worker. In such case, the worker shall not be
bound to reimburse the amount paid to him during the extension if the employer decides
after completion of the hearing to dismiss the worker.  5

In this case, the supposed suspension was expected to last for more than the period allowed by law, thus
making the suspension constitutive of an illegal dismissal. Therefore, the Labor Arbiter's contention is
upheld by the Court.

Granting arguendo that private respondent's absence engendered undue difficulty to the smooth operations
of petitioner's business, considering the predicament of respondent Silvestre Germane, his dismissal is
unwarranted. In holding the constitutional mandate of protection to labor, the rigid rules of procedure may
sometimes be dispensed with to give room for compassion. The doctrine of "compassionate justice" is
applicable under the premises, private respondent being the breadwinner of his family. "The Social Justice
policy mandates a compassionate attitude toward the working class in its relation to management. In calling
for the protection to labor, the Constitution does not condone wrongdoing by the employee, it nevertheless
urges a moderation of the sanctions that may be applied to him in the light of the many disadvantages that
weigh heavily on him like an albatross on his neck.  6
The timeliness of petitioner's appeal is an issue which this court endeavors to pass upon. While the rule
governing the instant Petition does not fix a period within which to file an appeal, "the yardstick to measure
the seasonableness of a Petition for Certiorari is the reasonableness of the duration of time that expired
from the commission of the act complained of, to the institution of the proceedings to annul the same.   The
7

court had the occasion to hold that where no law can be applied, resort to the fundamental law can be had.
The Constitution provides that:

All persons shall have the right to a speedy disposition of their cases before all
judicial, guasi-judicial and administrative bodies. 
8

Taking into account the interval of time that elapsed from the receipt of the assailed Resolution by
petitioner, to the time the court received the present petition, an interregnum of almost three (3) months, the
irresistible conclusion is that the Petition was not filed on time.

All things studiedly considered, we are of the view that public respondent NLRC did not act with grave
abuse of discretion in awarding to private respondent the amount of P65,685.90 which is not at all excessive
under the facts and circumstances of the case. Time and again, the court held that factual findings by the
Labor Arbiter are to treated as final absent any showing that he erred in his evaluation. The familiarity with
the parties, circumstances and opportunity to observe their demeanor is something the court did not have
the privilege to witness.

Untenable is petitioner's contention that the said amount awarded, representing backwages, separation pay
and attorney's fee is excessive and tantamount to a deprivation of petitioner's property without due process
of law. Once a finding of illegal dismissal is established, an award of separation pay and backwages is in
order and binding upon the court, unless the contrary is proved. The court shares the Labor Arbiter's
observation and ratiocination that the amount of the questioned award is not excessive in light of prevailing
economic conditions.

WHEREFORE, the Petition for Certiorari under consideration is hereby DISMISSED on the grounds, that: (1)
It was filed out of time; (2) It is devoid of merit; and (3) it was interposed for purposes of delay.

Accordingly, the NLRC Resolution of July 23, 1996 is AFFIRMED in toto; the writ of execution issued on
September 13, 1996 upheld; and petitioner's prayer for a restraining order DENIED.

No pronouncement as to costs.

SO ORDERED.
G.R. No. 117378 March 26, 1997

GIL CAPILI and RICARDO CAPILI, petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION, National Capital Region (First Division), BENIGNO SANTOS,
DELFIN YUSON, LUISITO SANTOS, URSINO BASISTER, RICARDO REYES, JOSELITO SANTOS, JORGE
BINUYA and NICOLAS MULINGBAYAN, respondents.

BELLOSILLO, J.:

Respondents Benigno Santos, Delfin Yuson, Luisito Santos, Ursino Basister, Ricardo Reyes, Joselito Santos, Jorge
Binuya and Nicolas Mulingbayan are licensed drivers of public utility jeepneys plying the Libertad-Sta. Cruz route in
Manila. The jeepneys were formerly owned by petitioner Gil Capili. For the use of the jeepney for twelve hours a
driver would pay rent or so-called "boundary" of P280.00 and earn a net profit of P200.00 per day.

On 7 May 1991, at a time when petitioner Ricardo Capili jointly with his wife had assumed ownership and operation
of the jeepneys driven by private respondents, the latter and the other drivers similarly situated were required by the
jeepney operators to sign individually contracts of lease of the jeepneys to formalize their lessor-lessee relationship.
However, having gathered the impression that the signing of the contracts of lease was a condition precedent
before they could continue driving for petitioners, all the drivers stopped plying their assigned routes beginning 7
May 1991.

A week later or on 14 May 1991 the drivers, numbering twenty-two (22), filed a complaint for illegal dismissal before
the Labor Arbiter praying not for reinstatement but for separation pay. 1

In the interim, fourteen (14) of the complainants desisted and resumed plying their routes. The remaining eight (8)
complainants with their reckoning dates of employment follow: (a) Benigno Santos, 1972; (b) Jorge Binuya, 1965;
(c) Luisito Santos, 1982; (d) Delfin Yuson, 1983; (e) Ursino Basister, 1980; (f) Ricardo Reyes, 1985; (g) Joselito
Santos, 1989; and, (h) Nicolas Mulingbayan, 1978.

Petitioners opposed the claim of private respondents before the Labor Arbiter alleging that the latter voluntarily
abandoned their respective jobs without any valid cause and thereafter refused and still continue to refuse to return
to work despite repeated demands and/or notices given to them to return to work.

In resolving the dispute, the Labor Arbiter ruled —

On the issue of dismissal versus abandonment, we are inclined to believe that the latter scenario
happened. It is not sound business practice to dismiss many employees at the same time since it
would cripple the operations.

What was more likely was that the drivers, all 22 of them . . . boycotted respondents on May 7, 1991
by not reporting for work on that day.

xxx xxx xxx

From the viewpoint of complainants, their signing of the lease contract was a condition sine qua
non to the continuous driving of their respective drivers (jeepneys?). But from the point of view of
respondent Capili and as shown in the aforequoted paragraph 5 of his affidavit, and as further shown
in the notices (Exhibits "3-B" and "3-B-1") which merely asked complainants to return to work without
mentioning any condition like the signing of the contract, the signing of the lease contract by the
drivers was merely intended as a confirmation of the original concept of a no employer-employee
relationship, and to streamline the operation by indicating the amount of the boundary per driver,
depending on the number of hours they drive and their obligation to check on the motor/engine, oil,
tires, brakes and other routinary requirements in order to insure the vehicles' roadworthiness. It was
never meant to be that if a driver refuses to sign the contract, he would not be allowed to continue
driving.

To our mind, both parties misappreciated the situation. Respondents' erroneous insistence of a no
employer-employee relationship even in the face of a well-established contrary doctrine as
postulated in the Dinglasan case  (98 Phil. 649) and complainants' erroneous apprehension of the
2

loss of such employer-employee relationship if they sign the lease contract propelled the
complainants to file the instant complaint.

In short, this is merely a simple case of misunderstanding.

To remedy the situation, we feel that the most prudent approach would be to let the parties return to
the relationship that existed between them prior to May 7, 1991. 3

The Labor Arbiter thus concluded —

WHEREFORE, decision is hereby rendered declaring the breakage (sic), of relationship between
respondent Ricardo Capili and complainants Benigno T. Santos, Delfin Yuson, Luisito Santos,
 Ursino Basister, Ricardo Reyes, Joselito Santos, Jorge Binuya and Nicholas Mulingbayan, as a
product of misunderstanding and misappreciation of the situation by both parties and, therefore,
respondents are hereby directed to reinstate them to their former position without loss of seniority
rights and other benefits, but without back wages (p. 7, Annex "F", emphasis supplied). 4

Private respondents appealed to the National Labor Relations Commission. They reiterated their prayer for
separation pay equivalent to one (1) month salary for every year of service and, in addition, three (3) years back
wages.

Respondent NLRC upheld the finding of the Labor Arbiter that the case arose due to simple misunderstanding
between the complaining drivers on one hand and their employers on the other. However, it took exception to the
relief granted to private respondents and modified the appealed decision accordingly by holding that —

Since there was misunderstanding between the parties and this misunderstanding resulted in
animosity and strained relationship between them, we deem it proper and most prudent approach to
maintain industrial peace for respondents to pay the complainants their separation pay of one half
(1/2) month for every year of service, based on their daily earnings of P200.00. 5

The petitioners moved to have the above disquisition of respondent NLRC reconsidered but the latter denied the
motion. They now come to us arguing that since there was a clear finding of abandonment by the Labor Arbiter
consisting in the failure of private respondents to report for work without justifiable reason, the award of separation
pay could not be warranted.

The NLRC brushed aside the arguments of petitioners. It emphasized that if it were the finding of the Labor Arbiter
that private respondents were guilty of abandonment he would not have ordered reinstatement but dismissal of the
case. Thus on 9 August 1994 NLRC denied reconsideration.

Petitioners impute grave abuse of discretion on the part of respondent NLRC in awarding separation pay to private
respondents.

We agree with petitioners. The legal basis for the award of separation pay is clearly provided by Art. 279 of the
Labor Code which states that the remedy for illegal dismissal is reinstatement without loss of seniority rights plus
back wages computed from the time compensation was withheld up to reinstatement. However there may be
instances where reinstatement is not a viable remedy as where the relations between employer and employee have
been so severely strained that it is no longer advisable to order reinstatement or where the employee decides not to
be reinstated. In such events, the employer will instead be ordered to pay separation pay. 6

A reading of Art. 279 in relation to Art. 282 of the Labor Code reveals that an employee who is dismissed for cause
after appropriate proceedings in compliance with the due process requirements is not entitled to an award of
separation pay. Under Arts. 283 and 284 of the same 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
7

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.

The common denominator of those 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 at all. Respondent NLRC
affirmed the factual findings of the Labor Arbiter that there was only a misunderstanding between petitioners and
private respondents which caused the latter to stop reporting for work. If the Labor Arbiter ordered reinstatement it
should not be construed as relief proceeding from illegal dismissal; instead, it should be considered as a declaration
or affirmation that private respondents may return to work because they were not dismissed in the first place, and
they should be happy that their employers are accepting them back. This could be the reason why complainants
asked only for separation pay — not for reinstatement — in their complaint before the Labor Arbiter.

The award of separation pay cannot be justified solely because of the existence of "strained relations" between the
employer and the employee. It must be given to the employee only as an alternative to reinstatement emanating
from illegal dismissal. When there is no illegal dismissal, even if the relations are strained, separation pay has no
legal basis. Besides, the doctrine on "strained relations" cannot be applied indiscriminately since every labor dispute
almost invariably results in "strained relations;" otherwise, reinstatement can never be possible simply because
some hostility is engendered between the parties as a result of their disagreement. That is human nature. 8

The constitutional policy of providing full protection to labor is not intended to oppress or destroy management. The
commitment of this Court to the cause of labor does not prevent us from sustaining the employer when it is in the
right, as in this case.
9

When respondents filed their complaint, and taking account of the allegations therein, they foreclosed reinstatement
as a relief, since they prayed only for an award of separation pay. This is confirmed in their appeal to the NLRC
where they prayed for a modification of the decision of the Labor Arbiter, from reinstatement without back wages to
payment of three (3) years back wages and separation pay equivalent to one (1) month salary for every year of
service.   It is therefore clear that respondents never desired to be reinstated. This being so, the Court cannot order
10

them to return to work.   If private respondents voluntarily chose not to return to work anymore they must be
11

considered as having resigned from their employment. This is without prejudice however to the willingness of both
parties to continue with their former contract of employment or enter into a new one whenever they so desire.
WHEREFORE, the petition is GRANTED and the employer-employee relationship between petitioners on one hand
and each private respondent on the other is deemed voluntarily terminated. Consequently, the decision of
respondent National Labor Relations Commission dated 28 February 1994 is REVERSED and SET ASIDE.

SO ORDERED.
G.R. No. 106370 September 8, 1994

PHILIPPINE GEOTHERMAL, INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and EDILBERTO M. ALVAREZ, respondents.

Romulo, Mabanta, Buenaventura, Sayoc & De Los Angeles for petitioner.

Fidel Angelito I. Arias for private respondent.

PADILLA, J.:

Petitioner Philippine Geothermal, Incorporated filed the present petition for certiorari seeking the reversal of the
decision of public respondent National Labor Relation Commision In NLRC CA No. L-000295-91/RB-IV-1-3583-91
entitled "Edilberto M. Alvarez v. Philippine Geothermal, Inc. et al."

The relevant facts of this case are as follows:

Private respondent Edilberto M. Alvarez was first employed by petitioner on 2 July 1979. On 31 May 1989, private
respondent, who was then occupying the position of Steam Test Operator II, injured his right wrist when a steam-
pressured "chicksan swivel joint assembly" exploded while he was checking a geothermal well operated by
petitioner. As a result, private respondent's right arm was placed in a plaster cast and he was confined at the San
Pablo Doctor's Hospital from 31 May 1989 to 3 June 1989.

Dr. Oscar M. Brion, the attending physician, diagnosed private respondent's injuries to be:

1) Complete fracture/dislocation distal radius (r);

2) Complete fracture styloid process and dislocation of the ulna;

3) Right pelvic contusion, which required a recuperation period of approximately forty-five (45) days.

Petitioner thus gave private respondent a fifty (50) days "work-connected accident" (WCA) leave with pay until 29
July 1989. Petitioner also referred private respondent's case to Dr. Liberato A.C. Leagogo, Jr. of the Philippine
Orthopedic Institute, at petitioner's expense.

On 26 July 1989, Dr. Leagogo certified that private respondent was fit to return to work with the qualification
however, that he could only perform light work. Thus, on 31 July 1989, when respondent Alvarez returned to work,
he was assigned to "caliberation of barton recorders", in accordance with the doctor's recommendations.

On 13 November 1989, Alvarez was again examined by Dr. Leagogo who issued a medical certificate which reads:  1

This is with regards [sic] the work recommendation for Mr. Bert Alvarez.

At this point in time, 5 months post-injury, he can be given moderate working activities, pulling,
pushing, carrying and turning a 20 lbs.-25 lbs. weight/force.

On the 6th month, he can go back to his previous job.

Despite this certification, respondent Alvarez continued to absent himself from work and by the end of 1989 he had
used ten (10) days of vacation leave, eighteen (18) days of sick leave, fifteen (15) days of WCA leave and four (4)
days of emergency leave for the period starting 31 July 1989.

On 28 December 1989, Dr. Leagogo, after examining Alvarez, certified that the latter's injury had healed completely
and that he could thus return to his pre-injury work.

On the same day, Alvarez consulted another doctor, Dr. Angela D.V. Garcia, a private physician, who likewise
confirmed that there were "no contraindications for him (Alvarez) not to attend to his work."

On 29 December 1989, based on Dr. Leagogo's findings, petitioner wrote Alvarez stating:

This is to inform you that based on the examination performed on December 28, 1989 by your
attending physician, Dr. Liberato Antonio C. Leagogo, Jr., your right wrist fracture is completely
healed as stated in the attached medical certificate. Therefore, you are advised to go back to your
regular duty as an Operator II at the Well Testing Section effective immediately.

xxx xxx xxx

Any absences you may incur in the future will be subject to our existing policy on leaves and
absences. . . . 
2
Since Alvarez failed to report for work from 2 to 10 January 1990, petitioner again wrote him stating:

. . . it is indicated that your therapy has no contraindication for you not to attend to your work.
However, from that date up to now, January 11, you have not reported for work. . . .

Therefore, as of January 11, 1990, you are considered to be "Absent Without Official Leave (AWOL)
and Without Pay". This letter serves as a warning letter per our rules and regulations, Unauthorized
absences, rule 3, par. i, page 31.

You are advised to immediately report for work or further disciplinary action will be taken.  3

After reading the letter. Alvarez wrote a hand-written note on petitioner's copy of the letter, stating "Please wait for
my doctor's medical certificate from Dr. Relampagos."

On 19 January 1990, Dr. Victoria Pineda, an orthopedic doctor of the National Orthopedic Hospital whom Alvarez
also consulted issued the following medical certificate:

Patient has reached a plateau in his rehabilitation with limitations of wrist motion (r) as regular. Fit for
work. 4

On 20 January 1990, Alvarez consulted Dr. Francisco, another orthopedic doctor at the Polymedic General Hospital,
who recommended a set of laboratory tests to be conducted on Alvarez' right wrist.

On 1 February 1990, Dr. Relampagos of the National Orthopedic Hospital certified Alvarez to be "Fit for light job."  5

On 6 February 1990, Dr. Francisco, who read and interpreted the results of the tests undertaken on Alvarez at the
St. Luke's Medical Center, certified that there is no "hindrance for him (Mr. Alvarez) to do his office work."  6

Notwithstanding the above medical findings, respondent Edilberto M. Alvarez continued to incur numerous
absences. He did not report for work in the months of January and February 1990.

On 7 February 1990, petitioner addressed its third letter to Alvarez stating:

The attached medical certificates from Dr. Garcia, Dr. Pineda,

Dr. Relampagos, Dr. Francisco, and Dr. Leagogo all indicate that you are fit to work. Based on these
medical certificates, your absences from January 11 to February 6 1990 (23 working days) will be
charged to your sick leave credits. Be advised that your sick leave credits will be exhausted on
February 8, 1990 therefore, you will not be paid for subsequent absences.

In addition, if you fail to report to work and are unable to present a medical certificate explaining your
absences, you will face disciplinary action. I am enclosing the statement of company policy on
absences for your information and would strongly suggest that you report to work immediately.  7

Under petitioner's company rules, employees who incur unauthorized absences of six (6) days or more are subject
to dismissal. Thus, when Alvarez failed to report for work from 8 to 28 February 1990, a total of eighteen (18)
working days with three (3) days off, petitioner wrote Alvarez a fourth time stating in part:

This refers to your continued refusal to report back to work following your recovery from a work-
related accident involving your right wrist last May 31, 1989. That you have recovered is based on
the certification of four (4) physicians, including the company-retained orthopedic doctor and three
(3) other orthopedic specialists whom you personally chose and consulted.

xxx xxx xxx

In order not to lose your income, the company has allowed you to charge all these unwarranted
absences against your accumulated sick leave credits. Our records show that as of February 7,
1990, you have used up all your remaining sick leaves. We would like to emphasize that from
February 8 to 28, all your absences are considered unauthorized and without pay. Please be
reminded that, according to company rules, employees who go on unauthorized absences of six (6)
or more days are subject to dismissal.

The company, therefore, believes that it has given all the time, help, and considerations in your
case. We go by the doctor's certifications that you are already fit to work.

In view of the above, we are giving you a final warning. Should you fail to report to work on Monday,
March 5, 1990 your employment with the company will be terminated.  8

This fourth warning letter of petitioner was unheeded. Alvarez failed to report for work; neither did he inform
petitioner of the reason for his continued absences.

As a consequence, petitioner terminated Alvarez, employment on

9 March 1990.
On 19 June 1990, Alvarez filed a complaint for illegal dismissal against petitioner with the Regional Arbitration
Branch, Region IV.

On 19 December 1990, the labor arbiter dismissed the complaint, without prejudice, for failure of the complainant to
submit his position paper despite repeated orders from the labor arbiter.

On 16 January 1991, private respondent refiled his complaint for illegal dismissal.

On 6 September 1991 the labor arbiter rendered a decision holding private respondent's termination from
employment as valid and justified.

On appeal to the public respondent National Labor Relations Commission (NLRC), the decision was reserved and
set aside. Petitioner was ordered to reinstate Edilberto M. Alvarez to his former position without loss of seniority
rights but without backwages.

A Motion for Reconsideration was denied on 15 May 1992. Petitioner then filed the present petition for certiorari,
based on two (2) grounds namely:

RESPONDENT COMMISSION ABUSED ITS DISCRETION AND ACTED BEYOND ITS

JURISDICTION BY ENTERTAINING AN APPEAL THAT WAS FILED OUT OF TIME

EVEN ON THE MERITS OF THE CASE, RESPONDENT COMMISSION ABUSED ITS

DISCRETION BY FAILING TO APPRECIATE OVERWHELMING EVIDENCE UNIFORMLY
SHOWING THAT THE TERMINATION OF MR. ALVAREZ WAS VALID AND JUSTIFIED.  9

On the issue of whether or not the appeal from the decision of the labor arbiter to the NLRC was filed within the ten
(10) day reglementary period, it is undisputed that private respondent received a copy of the labor arbiter's decision
on 5 September 1991. Alvarez thus had up to 15 September 1991 to perfect his appeal. Since this last mentioned
date was a Sunday, private respondent had to file his appeal on the next business day, 16 September 1991.

Petitioner contends that the appeal was filed only on 20 September 1991. Respondent NLRC however found that
private respondent filed his appeal by registered mail on 16 September 1991, the same day that petitioner's counsel
was furnished copies of said appeal.  10

We will not disturb this factual finding of the NLRC.

The contention that even assuming arguendo that the appeal was filed on time, the appeal fee was paid four (4)
days late (and, therefore, the appeal to the NLRC should be dismissed) likewise fails to entirely empress us. In C.W.
Tan Manufacturing v. NLRC,   we held that "the broader interest of justice and the desired objective of deciding the
11

case on the merits demand that the appeal be given due course."

On the issue of whether or not Edilberto M. Alvarez was validly dismissed, we rule in the affirmative and
consequently the decision of respondent NLRC is set aside.

Article 282(b) of the Labor Code provides that an employer may validly dismiss an employee for gross and habitual
neglect by the employee of his duties. In the present case, it is clear that private respondent was guilty of seriously
neglecting his duties.

The records establish that as early as 26 July 1989, Dr. Leagogo already had certified that Alvarez could perform
light work. On 13 November 1989,
Dr. Leagogo certified that Alvarez could perform moderate work and it was further certified that by December 1989,
Alvarez could return to his pre-injury duties. Notwithstanding these certifications, Alvarez continued to incur
unexplained absences until his dismissal on 9 March 1990.

A review of Alvarez' record of attendance shows that from August to December 1989, he reported for work only
seventy-seven (77) times while he incurred forty-seven (47) absences.

An employee who earnestly desires to resume his regular duties after recovering from an injury undoubtedly will not
go through the trouble of getting opinions from five (5) different of getting opinions from five (5) different physicians
before going back to work after he has been certified to be fit to return to his regular duties.

Petitioner has not been shown to be without sympathy or concern for Alvarez. He was given fifty (50) days work-
connected accident (WCA) leave with pay to allow him to recuperate from his injury without loss of earnings. He was
allowed to use his leave credits and was actually given an additional fifteen (15) days WCA leave to allow him to
consult his doctors and fully recover from his injuries. Moreover, petitioner gave Alvarez several warnings to report
for work, otherwise, he would face disciplinary sanctions. In spite of these warnings, Alvarez was absent without
official leave (AWOL) for eighteen (18) days. Under company policy, of which Alvarez was made aware, employees
who incur without valid reason six (6) or more absences are subject to dismissal.

Petitioner, in its fourth and last warning letter to Alvarez, was willing to allow him to resume his work in spite of the
eighteen (18) days he went on AWOL. It was made clear, however, that should private respondent still fail to report
for work on 5 March 1990, his employment would be terminated.
Private respondent failed to report for work on 5 March 1990. Petitioner validly dismissed him not only for violation of
company policy but also for violation of Section 282(c) of the Labor Code aforecited.

While it is true that compassion and human consideration should guide the disposition of casses involving
termination of employment since it affects one's source or means of livelihood, it should not be overlooked that the
benefits accorded to labor do not include compelling an employer to retain the services of an employee who has
been shown to be a gross liability 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
12

justice in favor of labor, it is but a 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 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).

In Cando v. National Labor Relations Commission   the Court awarded separation pay to an employee who was
13

terminated for unuathorized absences. We believe that separation pay of one-half (1/2) month salary for every year
of service is adequate in this case.

WHEREFORE, the decision of respondent National Labor Relations Commision is hereby SET ASIDE and the
decision of the Labor Arbiter is reinstated with the MODIFICATION that petitioner Philippine Geothermal, Inc. is
ordered to pay private respondent Edilberto M. Alvarez separation pay equivalent to one-half (1/2) month salary for
every year of service starting from 2 July 1979 until his dismissal on 9 March 1990.

SO ORDERED.
 [G.R. No. 47800. December 2, 1940.]

MAXIMO CALALANG, Petitioner, v. A. D. WILLIAMS, ET AL., Respondents.

Maximo Calalang in his own behalf.

Solicitor General Ozaeta and Assistant Solicitor General Amparo for respondents Williams,
Fragante and Bayan

City Fiscal Mabanag for the other respondents.

SYLLABUS

1. CONSTITUTIONAL LAW; CONSTITUTIONALITY OF COMMONWEALTH ACT No. 648; DELEGATION

OF LEGISLATIVE POWER; AUTHORITY OF DIRECTOR OF PUBLIC WORKS AND SECRETARY OF PUBLIC
WORKS AND COMMUNICATIONS TO PROMULGATE RULES AND REGULATIONS. — The provisions of
section 1 of Commonwealth Act No. 648 do not confer legislative power upon the Director of Public
Works and the Secretary of Public Works and Communications. The authority therein conferred upon
them and under which they promulgated the rules and regulations now complained of is not to
determine what public policy demands but merely to carry out the legislative policy laid down by the
National Assembly in said Act, to wit, "to promote safe transit upon, and avoid obstructions on, roads
and streets designated as national roads by acts of the National Assembly or by executive orders of
the President of the Philippines" and to close them temporarily to any or all classes of traffic
"whenever the condition of the road or the traffic thereon makes such action necessary or advisable
in the public convenience and interest." The delegated power, if at all, therefore, is not the
determination of what the law shall be, but merely the ascertainment of the facts and circumstances
upon which the application of said law is to be predicated. To promulgate rules and regulations on
the use of national roads and to determine when and how long a national road should be closed to
traffic, in view of the condition of the road or the traffic thereon and the requirements of public
convenience and interest, is an administrative function which cannot be directly discharged by the
National Assembly. It must depend on the discretion of some other government official to whom is
confided the duty of determining whether the proper occasion exists for executing the law. But it
cannot be said that the exercise of such discretion is the making of the law.

2. ID.; ID.; POLICE POWER; PERSONAL LIBERTY; GOVERNMENTAL AUTHORITY. — Commonwealth

Act No. 548 was passed by the National Assembly in the exercise of the paramount police power of
the state. Said Act, by virtue of which the rules and regulations complained of were promulgated,
aims to promote safe transit upon and avoid obstructions on national roads, in the interest and
convenience of the public. In enacting said law, therefore, the National Assembly was prompted by
considerations of public convenience and welfare. It was inspired by a desire to relieve congestion of
traffic, which is, to say the least, a menace to public safety. Public welfare, then, lies at the bottom of
the enactment of said law, and the state in order to promote the general welfare may interfere with
personal liberty, with property, and with business and occupations. Persons and property may be
subjected to all kinds of restraints and burdens, in order to secure the general comfort, health, and
prosperity of the state (U.S. v. Gomer Jesus, 31 Phil., 218). To this fundamental aim of our
Government the rights of the individual are subordinated. Liberty is a blessing without which life is a
misery, but liberty should not be made to prevail over authority because then society will fall into
anarchy. Neither should authority be made to prevail over liberty because then the individual will fall
into slavery. The citizen should achieve the required balance of liberty and authority in his mind
through education and, personal discipline, so that there may be established the resultant
equilibrium, which means peace and order and happiness for all. The moment greater authority is
conferred upon the government, logically so much is withdrawn from the residuum of liberty which
resides in the people. The paradox lies in the fact that the apparent curtailment of liberty is precisely
the very means of insuring its preservation.

3. ID.; ID.; SOCIAL JUSTICE. — Social justice is "neither communism, nor despotism, nor atomism,
nor anarchy," but the humanization of laws and the equalization of social and economic forces by the
State so that justice in its rational and objectively secular conception may at least be approximated.
Social justice means the promotion of the welfare of all the people, the adoption by the Government
of measures calculated to insure economic stability of all the competent elements of society, through
the maintenance of a proper economic and social equilibrium in the interrelations of the members of
the community, constitutionally, through the adoption of measures legally justifiable, or extra-
constitutionally, through the exercise of powers underlying the existence of all governments on the
time-honored principle of salus populi est suprema lex. Social justice, therefore, must be founded on
the recognition of the necessity of interdependence among divers and diverse units of a society and
of the protection that should be equally and evenly extended to all groups as a combined force in our
social and economic life, consistent with the fundamental and paramount objective of the state of
promoting the health, comfort, and quiet of all persons, and of bringing about "the greatest good to
the greatest number."

DECISION
 LAUREL, J.:

Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila, brought before this
court this petition for a writ of prohibition against the respondents, A. D. Williams, as Chairman of
the National Traffic Commission; Vicente Fragante, as Director of Public Works; Sergio Bayan, as
Acting Secretary of Public Works and Communications; Eulogio Rodriguez, as Mayor of the City of
Manila; and Juan Dominguez, as Acting Chief of Police of Manila.

It is alleged in the petition that the National Traffic Commission, in its resolution of July 17, 1940,
resolved to recommend to the Director of Public Works and to the Secretary of Public Works and
Communications that animal-drawn vehicles be prohibited from passing along Rosario Street
extending from Plaza Calderon de la Barca to Dasmariñas Street, from 7:30 a.m. to 12:30 p.m. and
from 1:30 p.m. to 5:30 p.m.; and along Rizal Avenue extending from the railroad crossing at
Antipolo Street to Echague Street, from 7 a.m. to 11 p.m., from a period of one year from the date
of the opening of the Colgante Bridge to traffic; that the Chairman of the National Traffic
Commission, on July 18, 1940 recommended to the Director of Public Works the adoption of the
measure proposed in the resolution aforementioned, in pursuance of the provisions of
Commonwealth Act No. 548 which authorizes said Director of Public Works, with the approval of the
Secretary of Public Works and Communications, to promulgate rules and regulations to regulate and
control the use of and traffic on national roads; that on August 2, 1940, the Director of Public Works,
in his first indorsement to the Secretary of Public Works and Communications, recommended to the
latter the approval of the recommendation made by the Chairman of the National Traffic Commission
as aforesaid, with the modification that the closing of Rizal Avenue to traffic to animal-drawn vehicles
be limited to the portion thereof extending from the railroad crossing at Antipolo Street to Azcarraga
Street; that on August 10, 1940, the Secretary of Public Works and Communications, in his second
indorsement addressed to the Director of Public Works, approved the recommendation of the latter
that Rosario Street and Rizal Avenue be closed to traffic of animal-drawn vehicles, between the
points and during the hours as above indicated, for a period of one year from the date of the opening
of the Colgante Bridge to traffic; that the Mayor of Manila and the Acting Chief of Police of Manila
have enforced and caused to be enforced the rules and regulations thus adopted; that as a
consequence of such enforcement, all animal-drawn vehicles are not allowed to pass and pick up
passengers in the places above-mentioned to the detriment not only of their owners but of the riding
public as well.

It is contended by the petitioner that Commonwealth Act No. 548 by which the Director of Public
Works, with the approval of the Secretary of Public Works and Communications, is authorized to
promulgate rules and regulations for the regulation and control of the use of and traffic on national
roads and streets is unconstitutional because it constitutes an undue delegation of legislative power.
This contention is untenable. As was observed by this court in Rubi v. Provincial Board of Mindoro (39
Phil, 660, 700), "The rule has nowhere been better stated than in the early Ohio case decided by
Judge Ranney, and since followed in a multitude of cases, namely: ’The true distinction therefore is
between the delegation of power to make the law, which necessarily involves a discretion as to what
it shall be, and conferring an authority or discretion as to its execution, to be exercised under and in
pursuance of the law. The first cannot be done; to the latter no valid objection can be made.’
(Cincinnati, W. & Z. R. Co. v. Comm’rs. Clinton County, 1 Ohio St., 88.) Discretion, as held by Chief
Justice Marshall in Wayman v. Southard (10 Wheat., 1) may be committed by the Legislature to an
executive department or official. The Legislature may make decisions of executive departments or
subordinate officials thereof, to whom it has committed the execution of certain acts, final on
questions of fact. (U.S. v. Kinkead, 248 Fed., 141.) The growing tendency in the decisions is to give
prominence to the ’necessity’ of the case."cralaw virtua1aw library

Section 1 of Commonwealth Act No. 548 reads as follows: jgc:chanrobles.com.ph

"SECTION 1. To promote safe transit upon, and avoid obstructions on, roads and streets designated
as national roads by acts of the National Assembly or by executive orders of the President of the
Philippines, the Director of Public Works, with the approval of the Secretary of Public Works and
Communications, shall promulgate the necessary rules and regulations to regulate and control the
use of and traffic on such roads and streets. Such rules and regulations, with the approval of the
President, may contain provisions controlling or regulating the construction of buildings or other
structures within a reasonable distance from along the national roads. Such roads may be
temporarily closed to any or all classes of traffic by the Director of Public Works and his duly
authorized representatives whenever the condition of the road or the traffic thereon makes such
action necessary or advisable in the public convenience and interest, or for a specified period, with
the approval of the Secretary of Public Works and Communications." cralaw virtua1aw library

The above provisions of law do not confer legislative power upon the Director of Public Works and the
Secretary of Public Works and Communications. The authority therein conferred upon them and
under which they promulgated the rules and regulations now complained of is not to determine what
public policy demands but merely to carry out the legislative policy laid down by the National
Assembly in said Act, to wit, "to promote safe transit upon and avoid obstructions on, roads and
streets designated as national roads by acts of the National Assembly or by executive orders of the
President of the Philippines" and to close them temporarily to any or all classes of traffic "whenever
the condition of the road or the traffic makes such action necessary or advisable in the public
convenience and interest." The delegated power, if at all, therefore, is not the determination of what
the law shall be, but merely the ascertainment of the facts and circumstances upon which the
application of said law is to be predicated. To promulgate rules and regulations on the use of national
roads and to determine when and how long a national road should be closed to traffic, in view of the
condition of the road or the traffic thereon and the requirements of public convenience and interest,
is an administrative function which cannot be directly discharged by the National Assembly. It must
depend on the discretion of some other government official to whom is confided the duty of
determining whether the proper occasion exists for executing the law. But it cannot be said that the
exercise of such discretion is the making of the law. As was said in Locke’s Appeal (72 Pa. 491): "To
assert that a law is less than a law, because it is made to depend on a future event or act, is to rob
the Legislature of the power to act wisely for the public welfare whenever a law is passed relating to
a state of affairs not yet developed, or to things future and impossible to fully know." The proper
distinction the court said was this: "The Legislature cannot delegate its power to make the law; but it
can make a law to delegate a power to determine some fact or state of things upon which the law
makes, or intends to make, its own action depend. To deny this would be to stop the wheels of
government. There are many things upon which wise and useful legislation must depend which
cannot be known to the law-making power, and, must, therefore, be a subject of inquiry and
determination outside of the halls of legislation." (Field v. Clark, 143 U. S. 649, 694; 36 L. Ed. 294.)

In the case of People v. Rosenthal and Osmeña, G.R. Nos. 46076 and 46077, promulgated June 12,
1939, and in Pangasinan Transportation v. The Public Service Commission, G.R. No. 47065,
promulgated June 26, 1940, this Court had occasion to observe that the principle of separation of
powers has been made to adapt itself to the complexities of modern governments, giving rise to the
adoption, within certain limits, of the principle of "subordinate legislation," not only in the United
States and England but in practically all modern governments. Accordingly, with the growing
complexity of modern life, the multiplication of the subjects of governmental regulations, and the
increased difficulty of administering the laws, the rigidity of the theory of separation of governmental
powers has, to a large extent, been relaxed by permitting the delegation of greater powers by the
legislative and vesting a larger amount of discretion in administrative and executive officials, not only
in the execution of the laws, but also in the promulgation of certain rules and regulations calculated
to promote public interest.

The petitioner further contends that the rules and regulations promulgated by the respondents
pursuant to the provisions of Commonwealth Act No. 548 constitute an unlawful interference with
legitimate business or trade and abridge the right to personal liberty and freedom of locomotion.
Commonwealth Act No. 548 was passed by the National Assembly in the exercise of the paramount
police power of the state.

Said Act, by virtue of which the rules and regulations complained of were promulgated, aims to
promote safe transit upon and avoid obstructions on national roads, in the interest and convenience
of the public. In enacting said law, therefore, the National Assembly was prompted by considerations
of public convenience and welfare. It was inspired by a desire to relieve congestion of traffic. which
is, to say the least, a menace to public safety. Public welfare, then, lies at the bottom of the
enactment of said law, and the state in order to promote the general welfare may interfere with
personal liberty, with property, and with business and occupations. Persons and property may be
subjected to all kinds of restraints and burdens, in order to secure the general comfort, health, and
prosperity of the state (U.S. v. Gomez Jesus, 31 Phil., 218). To this fundamental aim of our
Government the rights of the individual are subordinated. Liberty is a blessing without which life is a
misery, but liberty should not be made to prevail over authority because then society will fall into
anarchy. Neither should authority be made to prevail over liberty because then the individual will fall
into slavery. The citizen should achieve the required balance of liberty and authority in his mind
through education and personal discipline, so that there may be established the resultant equilibrium,
which means peace and order and happiness for all. The moment greater authority is conferred upon
the government, logically so much is withdrawn from the residuum of liberty which resides in the
people. The paradox lies in the fact that the apparent curtailment of liberty is precisely the very
means of insuring its preservation.

The scope of police power keeps expanding as civilization advances. As was said in the case of
Dobbins v. Los Angeles (195 U.S. 223, 238; 49 L. ed. 169), "the right to exercise the police power is
a continuing one, and a business lawful today may in the future, because of the changed situation,
the growth of population or other causes, become a menace to the public health and welfare, and be
required to yield to the public good." And in People v. Pomar (46 Phil., 440), it was observed that
"advancing civilization is bringing within the police power of the state today things which were not
thought of as being within such power yesterday. The development of civilization, the rapidly
increasing population, the growth of public opinion, with an increasing desire on the part of the
masses and of the government to look after and care for the interests of the individuals of the state,
have brought within the police power many questions for regulation which formerly were not so
considered."cralaw virtua1aw library

The petitioner finally avers that the rules and regulations complained of infringe upon the
constitutional precept regarding the promotion of social justice to insure the well-being and economic
security of all the people. The promotion of social justice, however, is to be achieved not through a
mistaken sympathy towards any given group. Social justice is "neither communism, nor despotism,
nor atomism, nor anarchy," but the humanization of laws and the equalization of social and economic
forces by the State so that justice in its rational and objectively secular conception may at least be
approximated. Social justice means the promotion of the welfare of all the people, the adoption by
the Government of measures calculated to insure economic stability of all the competent elements of
society, through the maintenance of a proper economic and social equilibrium in the interrelations of
the members of the community, constitutionally, through the adoption of measures legally justifiable,
or extra-constitutionally, through the exercise of powers underlying the existence of all governments
on the time-honored principle of salus populi est suprema lex.

Social justice, therefore, must be founded on the recognition of the necessity of interdependence
among divers and diverse units of a society and of the protection that should be equally and evenly
extended to all groups as a combined force in our social and economic life, consistent with the
fundamental and paramount objective of the state of promoting the health, comfort, and quiet of all
persons, and of bringing about "the greatest good to the greatest number." cralaw virtua1aw library

In view of the foregoing, the writ of prohibition prayed for is hereby denied, with costs against the
petitioner. So ordered.
G.R. No. L-18353             July 31, 1963

SAN MIGUEL BREWERY, INC., petitioner,

vs.
DEMOCRATIC LABOR ORGANIZATION, ET AL., respondents.

Paredes, Poblador, Cruz and Nazareno for petitioner.

Delfin N. Mercader for respondents.

BAUTISTA ANGELO, J.:

On January 27, 1955, the Democratic Labor Association filed complaint against the San Miguel Brewery, Inc.
embodying 12 demands for the betterment of the conditions of employment of its members. The company filed its
answer to the complaint specifically denying its material averments and answering the demands point by point. The
company asked for the dismissal of the complaint.

At the hearing held sometime in September, 1955, the union manifested its desire to confine its claim to its demands
for overtime, night-shift differential pay, and attorney's fees, although it was allowed to present evidence on service
rendered during Sundays and holidays, or on its claim for additional separation pay and sick and vacation leave
compensation. 1äwphï1.ñët

After the case had been submitted for decision, Presiding Judge Jose S. Bautista, who was commissioned to
receive the evidence, rendered decision expressing his disposition with regard to the points embodied in the
complaint on which evidence was presented. Specifically, the disposition insofar as those points covered by this
petition for review are concerned, is as follows:

1. With regard to overtime compensation, Judge Bautista held that the provisions of the Eight-Hour Labor
Law apply to the employees concerned for those working in the field or engaged in the sale of the
company's products outside its premises and consequently they should be paid the extra compensation
accorded them by said law in addition to the monthly salary and commission earned by them, regardless of
the meal allowance given to employees who work up to late at night.

2. As to employees who work at night, Judge Bautista decreed that they be paid their corresponding salary
differentials for work done at night prior to January 1, 1949 with the present qualification: 25% on the basis
of their salary to those who work from 6:00 to 12:00 p.m., and 75% to those who work from 12:01 to 6:00 in
the morning.

3. With regard to work done during Sundays and holidays, Judge Bautista also decreed that the employees
concerned be paid an additional compensation of 25% as provided for in Commonwealth Act No. 444 even if
they had been paid a compensation on monthly salary basis.

The demands for the application of the Minimum Wage Law to workers paid on "pakiao" basis, payment of
accumulated vacation and sick leave and attorney's fees, as well as the award of additional separation pay, were
either dismissed, denied, or set aside.

Its motion for reconsideration having been denied by the industrial court en banc, which affirmed the decision of the
court a quo with few exceptions, the San Miguel Brewery, Inc. interposed the present petition for review.

Anent the finding of the court a quo, as affirmed by the Court of Industrial Relations, to the effect that outside or field
sales personnel are entitled to the benefits of the Eight-Hour Labor Law, the pertinent facts are as follows:

After the morning roll call, the employees leave the plant of the company to go on their respective sales routes either
at 7:00 a.m. for soft drinks trucks, or 8:00 a.m. for beer trucks. They do not have a daily time record. The company
never require them to start their work as outside sales personnel earlier than the above schedule.

The sales routes are so planned that they can be completed within 8 hours at most, or that the employees could
make their sales on their routes within such number of hours variable in the sense that sometimes they can be
completed in less than 8 hours, sometimes 6 to 7 hours, or more. The moment these outside or field employees
leave the plant and while in their sales routes they are on their own, and often times when the sales are completed,
or when making short trip deliveries only, they go back to the plant, load again, and make another round of sales.
These employees receive monthly salaries and sales commissions in variable amounts. The amount of
compensation they receive is uncertain depending upon their individual efforts or industry. Besides the monthly
salary, they are paid sales commission that range from P30, P40, sometimes P60, P70, to sometimes P90, P100
and P109 a month, at the rate of P0.01 to P0.01-½ per case.

It is contended that since the employees concerned are paid a commission on the sales they make outside of the
required 8 hours besides the fixed salary that is paid to them, the Court of Industrial Relations erred in ordering that
they be paid an overtime compensation as required by the Eight-Hour Labor Law for the reason that the commission
they are paid already takes the place of such overtime compensation. Indeed, it is claimed, overtime compensation
is an additional pay for work or services rendered in excess of 8 hours a day by an employee, and if the employee is
already given extra compensation for labor performed in excess of 8 hours a day, he is not covered by the law. His
situation, the company contends, can be likened to an employee who is paid on piece-work, "pakiao", or
commission basis, which is expressly excluded from the operation of the Eight-Hour Labor Law.1
We are in accord with this view, for in our opinion the Eight-Hour Labor Law only has application where an
employee or laborer is paid on a monthly or daily basis, or is paid a monthly or daily compensation, in which case, if
he is made to work beyond the requisite period of 8 hours, he should be paid the additional compensation
prescribed by law. This law has no application when the employee or laborer is paid on a piece-work, "pakiao", or
commission basis, regardless of the time employed. The philosophy behind this exemption is that his earnings in the
form of commission based on the gross receipts of the day. His participation depends upon his industry so that the
more hours he employs in the work the greater are his gross returns and the higher his commission. This philosophy
is better explained in Jewel Tea Co. v. Williams, C.C.A. Okla., 118 F. 2d 202, as follows:

The reasons for excluding an outside salesman are fairly apparent. Such salesman, to a greater extent,
works individually. There are no restrictions respecting the time he shall work and he can earn as much or
as little, within the range of his ability, as his ambition dictates. In lieu of overtime he ordinarily receives
commissions as extra compensation. He works away from his employer's place of business, is not subject to
the personal supervision of his employer, and his employer has no way of knowing the number of hours he
works per day.

True it is that the employees concerned are paid a fixed salary for their month of service, such as Benjamin Sevilla,
a salesman, P215; Mariano Ruedas, a truck driver, P155; Alberto Alpaza and Alejandro Empleo, truck helpers,
P125 each, and sometimes they work in excess of the required 8-hour period of work, but for their extra work they
are paid a commission which is in lieu of the extra compensation to which they are entitled. The record shows that
these employees during the period of their employment were paid sales commission ranging from P30, P40,
sometimes P60, P70, to sometimes P90, P100 and P109 a month depending on the volume of their sales and their
rate of commission per case. And so, insofar is the extra work they perform, they can be considered as employees
paid on piece work, "pakiao", or commission basis. The Department of Labor, called upon to implement, the Eight-
Hour Labor Law, is of this opinion when on December 9, 1957 it made the ruling on a query submitted to it, thru the
Director of the Bureau of Labor Standards, to the effect that field sales personnel receiving regular monthly salaries,
plus commission, are not subject to the Eight-Hour Labor Law. Thus, on this point, said official stated:

. . . Moreover, when a fieldman receives a regular monthly salary plus commission on percentage basis of
his sales, it is also the established policy of the Office to consider his commission as payment for the extra
time he renders in excess of eight hours, thereby classifying him as if he were on piecework basis, and
therefore, technically speaking, he is not subject to the Eight-Hour Labor Law.

We are, therefore, of the opinion that the industrial court erred in holding that the Eight-Hour Labor Law applies to
the employees composing the outside service force and in ordering that they be paid the corresponding additional
compensation.

With regard to the claim for night salary differentials, the industrial court found that claimants Magno Johnson and
Jose Sanchez worked with the respondent company during the period specified by them in their testimony and that
watchmen Zoilo Illiga, Inocentes Prescillas and Daniel Cayuca rendered night duties once every three weeks
continuously during the period of the employment and that they were never given any additional compensation
aside from their monthly regular salaries. The court found that the company started paying night differentials only in
January, 1949 but never before that time. And so it ordered that the employees concerned be paid 25% additional
compensation for those who worked from 6:00 to 12:00 p.m. and 75% additional compensation for those who
worked from 12:01 to 6: 00 in the morning. It is now contended that this ruling is erroneous because an award for
night shift differentials cannot be given retroactive effect but can only be entertained from the date of demand which
was on January 27, 1953, citing in support thereof our ruling in Earnshaws Docks & Honolulu Iron Works v. The
Court of Industrial Relations, et al., L-8896, January 25, 1957.

This ruling, however, has no application here for it appears that before the filing of the petition concerning this claim
a similar one had already been filed long ago which had been the subject of negotiations between the union and the
company which culminated in a strike in 1952. Unfortunately, however, the strike fizzled out and the strikers were
ordered to return to work with the understanding that the claim for night salary differentials should be settled in
court. It is perhaps for this reason that the court a quo granted this claim in spite of the objection of the company to
the contrary.

The remaining point to be determined refers to the claim for pay for Sundays and holidays for service performed by
some claimants who were watchmen or security guards. It is contended that these employees are not entitled to
extra pay for work done during these days because they are paid on a monthly basis and are given one day off
which may take the place of the work they may perform either on Sunday or any holiday.

We disagree with this claim because it runs counter to law. Section 4 of Commonwealth Act No. 444 expressly
provides that no person, firm or corporation may compel an employee or laborer to work during Sundays and legal
holidays unless he is paid an additional sum of 25% of his regular compensation. This proviso is mandatory,
regardless of the nature of compensation. The only exception is with regard to public utilities who perform some
public service.

WHEREFORE, the decision of the industrial court is hereby modified as follows: the award with regard to extra work
performed by those employed in the outside or field sales force is set aside. The rest of the decision insofar as work
performed on Sundays and holidays covering watchmen and security guards, as well as the award for night salary
differentials, is affirmed. No costs.
G.R. No. 75039 January 28, 1988

FRANKLIN BAKER COMPANY OF THE PHILIPPINES, petitioner,

vs.
HONORABLE CRESENCIO B. TRAJANO, DIRECTOR OF BUREAU OF LABOR RELATIONS, FRANKLIN
BAKER BROTHERHOOD ASSOCIATION (TECHNICAL AND OFFICE EMPLOYEES)-ASSOCIATION OF TRADE
UNIONS (ATU), respondents.

PARAS, J.:

This is a petition for certiorari seeking the annulment of. (a) the Order of Mediator-Arbiter Conchita J. Martinez of the Ministry of Labor and Employment, Davao
City, dated September 17, 1984 in LRD Case No. R-22 MED-ROXI-UR-28-84 entitled "In Re: Petition for Certification Election Among the Office and Technical
Employees of Franklin Baker Company of the Philippines, Davao Plant at Coronan, Sta. Cruz, Davao del Sur, Franklin Baker Company of the Philippines, Davao
Plant, Employer, Franklin Baker Brotherhood Association (Technical and Office Employees)-Association of Trade Unions (ATU)," insofar as it includes the
managerial employees (inspectors, foremen and supervisors) in the certification election; (b) the Order of April 7, 1986 of Director Cresencio B. Trajano, also of the
MOLE, dismissing the appeal of aforesaid Order of September 17, 1985 for lack of merit; and (c) the Order of June 6, 1986 of said Director denying
reconsideration of his Order of April 7, 1986 and affirming the same in toto (Rollo, p. 90).

In brief, the undisputed facts of this case are as follows:

On April 23, 1984, private respondent Franklin Baker Brotherhood Association-(ATU) filed a petition for certification
election among the office and technical employees of petitioner company with the Ministry of Labor and
Employment, Regional Office No. XI, Davao City, docketed as LRD No. R-22, MED-ROXI-UR-2884. Among other
things, it alleges that Franklin Baker Company of the Phils. Davao Plant, had in its employ approximately ninety (90)
regular technical and office employees, which group is separate and distinct from the regular rank and file
employees and is excluded from the coverage of existing Collective Bargaining Agreement.

Petitioner company did not object to the holding of such an election but manifested that out of the ninety (90)
employees sought to be represented by the respondent union, seventy four (74) are managerial employees while
two (2) others are confidential employees, hence, must be excluded from the certification election and from the
bargaining unit that may result from such election (Rollo, p. 3).

Hearings were held and thereafter, the parties agreed to file their respective memoranda. Likewise, petitioner filed a
reply to private respondent's Memorandum (Rollo, p. 4).

Subsequently, on September 17, 1984, Med-Arbiter Conchita J. Martinez issued an order, the dispositive part of
which reads:

Accordingly, the petition is hereby granted and a certification election among the office and technical
employees of Franklin Baker Company of the Philippines, Davao Plant is ordered within twenty (20)
days from receipt hereof. The choices shall be the following:

1. Franklin Baker Brotherhood Association-(ATU)

2. No Union

The representation officer assigned shall call the parties for a pre-election conference at least five
(5) days before the date of the election to thresh out the mechanics of the election, the finalization of
the list of voters, the posting of notices and other relevant matters.

The company's latest payroll shall be the basis for determining the office and technical workers
qualified to vote.

SO ORDERED. (Rollo, pp. 47-48).

From the aforequoted order petitioner Company appealed to the Bureau of Labor Relations, docketed as BLR Case
No. A-22884, praying that the appealed order be set aside and another be issued declaring the seventy four (74)
inspectors, foremen and supervisors as managerial employees.

During the pendency of the appeal, sixty one (61) of the employees involved, filed a Motion to Withdraw the petition
for certification election praying therein for their exclusion from the Bargaining Unit and for a categorical declaration
that they are managerial employees, as they are performing managerial functions (Rollo, p. 4).

On April 7, 1986, public respondent Bureau of Labor Relations Cresencio B. Trajano issued a Resolution affirming
the order dated September 17, 1984, the dispositive part of which reads:

WHEREFORE, the appealed Order dated September 17, 1985 is hereby affirmed and the appeal
dismissed for lack of merit. Let the certification election among the office and technical employees of
Franklin Baker Company of the Philippines proceed without delay.

The latest payrolls of the company shall be used as basis of determining the list of eligible voters.
(Rollo, p. 77),
Petitioner company sought the reconsideration of the aforequoted resolution but its motion was denied by Director
Cresencio B. Trajano in his order dated June 6, 1986, the dispositive part of which reads:

WHEREFORE, the appeal of respondent company is, dismissed for lack of merit and the Bureau's
Resolution dated April 1986 affirmed in toto.

Let, therefore, the pertinent papers of this case be immediately forwarded to the Office of origin for
the conduct of the certification election. (Rollo, p. 90).

Hence, this petition.

In the resolution of July 30, 1986, the Second Division of this Court without giving due course to the petition required
the respondents to file their comment (Rollo, p. 91). On August 28, 1986, public respondent filed its comment (Rollo,
pp. 99 to 102). Likewise private respondent filed its comment on September 5, 1986 (Rollo, pp. 104 to 107).

In the resolution of September 8, 1986, petitioner was required to file its reply to public respondent's comment
(Rollo, p. 119) which reply was filed on September 18, 1986 (Rollo, pp. 122-127).

On October 20, 1986, this Court resolved to give due course to the petition and required the parties to file their
respective Memoranda (Rollo, p. 133). In compliance with said resolution, petitioner and private respondent filed
their Memoranda on December 8, 1986 and December 29, 1986, respectively (Rollo, pp. 183-187). On the other
hand, public respondent filed with this Court a manifestation (Rollo, p. 153) to the effect that it is adopting as its
memorandum its comment dated August 18, 1986 (Rollo, p. 99) which manifestation was noted by this Court in its
resolution dated November 26, 1986
(Rollo, p. 155).

The lone assignment of error raised by petitioner states:

Public respondent acted with grave abuse of discretion amounting to lack of jurisdiction when he
ruled that the 76 employees subject of this petition are not managerial employees (inspectors,
foremen, supervisors and the like) and therefore, may participate in the certification election among
the office and technical employees. Such ruling is contrary to jurisprudence and to the factual
evidence presented by petitioner which was not rebutted by private respondent union and is
therefore patently baseless.

From this assigned error two questions are raised by petitioner, namely: (1) whether or not subject employees are
managerial employees under the purview of the Labor Code and its Implementing Rules; and (2) whether the
Director of the Bureau of Labor Relations acted with abuse of discretion in affirming the order of Mediator-Arbiter
Conchita J. Martinez.

There is no question that there are in the DAVAO Plant of petitioner company approximately 90 regular technical
and office employees which form a unit, separate and distinct from the regular rank and file employees and are
excluded from the coverage of existing Collective Bargaining Agreement; that said group of employees organized
themselves as Franklin Baker Brotherhood Association (technical and office employees) and affiliated with the local
chapter of the Association of trade Unions (ATU), a legitimate labor organization with Registration Permit No. 8745
(Fed) LC and with office located at the 3rd Floor of Antwell Bldg., Sta. Ana, Davao City; that petitioner company did
not object to the holding of such certification, but only sought the exclusion of inspectors, foremen and supervisors,
members of Franklin Baker Brotherhood Association (technical and office employees) numbering 76 from the
certification election on the ground that they are managerial employees.

A managerial employee is defined as one "who is vested with powers or prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or
to effectively recommend such managerial actions." (Reynolds Phil. Corp. v. Eslava, 137 SCRA [1985], citing
Section 212 (K), Labor Code.

Also pertinent thereto is Section 1 (M) of the Implementing Rules and Regulations, which is practically a restatement
of the above provision of law.

To sustain its posture, that the inspectors, foreman and supervisors numbering 76 are managerial employees,
petitioner painstakingly demonstrates that subject employees indeed participate in the formulation and execution of
company policies and regulations as to the conduct of work in the plant, exercised the power to hire, suspend or
dismiss subordinate employees and effectively recommend such action, by citing concrete cases, among which are:
(1) Mr. Ponciano Viola, a wet process inspector, who while in the performance of his duty, found Mr. Enrique
Asuncion, a trimmer "forging", falsifying and simulating a company time card (timesheet) resulting in payroll padding,
immediately recommended the dismissal of said erring employee, resulting in the latter's discharge. (Employer's
Memo, Rollo, p.18); (2) Mr. Manuel Alipio, an opening inspector, recommended for suspension Nut Operator
Ephraim Dumayos who was caught in the act of surreptitiously transferring to a co-worker's bin some whole nuts
which act constitutes a violation of company policy; (3) Mr. Sofronio Abangan, a line inspector, censured and
thereafter recommended the suspension of Mr. Romeo Fullante, for being remiss in the proper and accurate
counting of nuts; (4) Binleader Dionisio Agtang was required to explain his inefficiency of Mr. Saturnino Bangkas,
Bin Loading Inspector; (5) for disobeying the orders of Bin Loading Inspector Mauricio Lumanog's order, Macario
Mante, Eduardo Adaptor, Rodolfo Irene and George Rellanos were all recommended for suspension which
culminated in an investigation conducted by Lumanog's higher bosses (Ibid., p. 20).
It has also been shown that subject employees have the power to hire, as evidenced by the hiring of Rolando Asis,
Roy Layson, Arcadio Gaudicos and Felix Arciaga, upon the recommendation of Opening Inspector Serafin Suelo,
Processing Inspector Leonardo Velez and Laureano C. Lim, Opening Inspector (Ibid., p. 21).

It will be noted, however, that in the performance of their duties and functions and in the exercise of their
recommendatory powers, subject employees may only recommend, as the ultimate power to hire, fire or suspend as
the case may be, rests upon the plant personnel manager.

The test of "supervisory" or "managerial status" depends on whether a person possesses authority to act in the
interest of his employer in the matter specified in Article 212 (k) of the Labor Code and Section 1 (m) of its
Implementing Rules and whether such authority is not merely routinary or clerical in nature, but requires the use of
independent judgment. Thus, where such recommendatory powers as in the case at bar, are subject to evaluation,
review and final action by the department heads and other higher executives of the company, the same, although
present, are not effective and not an exercise of independent judgment as required by law (National Warehousing
Corp. v. CIR, 7 SCRA 602-603 [1963]).

Furthermore, in line with the ruling of this Court, subject employees are not managerial employees because as
borne by the records, they do not participate in policy making but are given ready policies to execute and standard
practices to observe, thus having little freedom of action (National Waterworks and Sewerage Authority v. NWSA
Consolidated, L-18938, 11 SCRA 766 [1964]).

Petitioner's contention that the Director of the Bureau of Labor Relations acted with abuse of discretion amounting to
lack of jurisdiction in holding that the 76 employees are not managerial employees and must be included in the
certification election has no basis in fact and in law. Neither is its contention that the use of the word's "and/or"
categorically shows that performance of the functions enumerated in the law qualifies an employee as a managerial
employee.

It is well settled that the findings of fact of the Ministry of Labor and National Labor Relations Commission are
entitled to great respect, unless the findings of fact and the conclusions made therefrom, are not supported by
substantial evidence, or when there is grave abuse of discretion committed by said public official (Kapisanan ng
Manggagawa sa Camara Shoes, 2nd Heirs of Santos Camara, et al., 111 SCRA 477 [1982]; International hardwood
and Veneer Co. of the Philippines v. Leonardo, 117 SCRA 967 [1982]; Pan-Phil-Life, Inc. v. NLRC, 114 SCRA 866
[1982]; Pepsi-Cola Labor Union-BF LUTUPAS Local Chapter N-896 v. NLRC, 114 SCRA 930 [1982]; Egyptair v.
NLRC, 148 SCRA 125 [1987]; RJL Martinez Fishing Corp. v. NLRC, G.R. Nos. 63550-51, 127 SCRA 455 [1984];
and Reyes v. Phil. Duplicators, G.R. No. 54996, 109 SCRA 489 [1981]).

By "grave abuse of discretion" is meant, such capricious and whimsical exercise of judgment as is equivalent to lack
of jurisdiction. The abuse of discretion must be grave as where the power is exercised in an arbitrary or despotic
manner by reason of passion or personal hostility and 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 by or to act at all in contemplation of law (G.R. No.
59880, George Arguelles [Hda. Emma Arguelles v. Romeo Yang, etc.], September 11, 1987).

Moreover, this Court has ruled that findings of administrative agencies which have acquired expertise, like the Labor
Ministry, are accorded respect and finality (Special Events and Central Shipping Office Workers Union v. San Miguel
Corp., 122 SCRA 557 [1983] and that the remedy of certiorari does not lie in the absence of any showing of abuse
or misuse of power properly vested in the Ministry of Labor and Employment (Buiser v. Leogardo, Jr., 131 SCRA
151 [1984]).

After a careful review of the records, no plausible reason could be found to disturb the findings of fact and the
conclusions of law of the Ministry of Labor.

Even if We regard the employees concerned as "managerial employees," they can still join the union of the rank and
file employees. They cannot however form their own exclusive union as "managerial employees" (Bulletin Publishing
Corporation v. Sanchez, 144 SCRA 628).

PREMISES CONSIDERED, the petition is DISMISSED, and the assailed resolution and orders are AFFIRMED.

SO ORDERED.
G.R. No. L-75038 August 23, 1993

ELIAS VILLUGA, RENATO ABISTADO, JILL MENDOZA, ANDRES ABAD, BENJAMIN BRIZUELA, NORLITO
LADIA, MARCELO AGUILAN, DAVID ORO, NELIA BRIZUELA, FLORA ESCOBIDO, JUSTILITA CABANIG, and
DOMINGO SAGUIT, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION) and BROAD STREET TAILORING and/or
RODOLFO ZAPANTA, respondents.

Balguma, Macasaet & Associates for petitioners.

Teresita Gandionco Oledan for private respondents.

NOCON, J.:

A basic factor underlying the exercise of rights and the filing of claims for benefits under the Labor Code and other
presidential issuances or labor legislations is the status and nature of one's employment. Whether an employer-
employee relationship exist and whether such employment is managerial in character or that of a rank and file
employee are primordial considerations before extending labor benefits. Thus, petitioners in this case seek a
definitive ruling on the status and nature of their employment with Broad Street Tailoring and pray for the nullification
of the resolution dated May 12, 1986 of the National Labor Relations Commissions in NLRC Case No. RB-IV-
21558-78-T affirming the decision of Labor Arbiter Ernilo V. Peñalosa dated May 28, 1979, which held eleven of
them as independent contractors and the remaining one as employee but of managerial rank.

The facts of the case shows that petitioner Elias Villuga was employed as cutter in the tailoring shop owned by
private respondent Rodolfo Zapanta and known as Broad Street Tailoring located at Shaw Boulevard,
Mandaluyong, Metro Manila. As cutter, he was paid a fixed monthly salary of P840.00 and a monthly transportation
allowance of P40.00. In addition to his work as cutter, Villuga was assigned the chore of distributing work to the
shop's tailors or sewers when both the shop's manager and assistant manager would be absent. He saw to it that
their work conformed with the pattern he had prepared and if not, he had them redone, repaired or resewn.

The other petitioners were either ironers, repairmen and sewers. They were paid a fixed amount for every item
ironed, repaired or sewn, regardless of the time consumed in accomplishing the task. Petitioners did not fill up any
time record since they did not observe regular or fixed hours of work. They were allowed to perform their work at
home especially when the volume of work, which depended on the number of job orders, could no longer be coped
up with.

From February 17 to 22, 1978, petitioner Villuga failed to report for work allegedly due to illness. For not properly
notifying his employer, he was considered to have abandoned his work.

In a complaint dated March 27, 1978, filed with the Regional Office of the Department of Labor, Villuga claimed that
he was refused admittance when he reported for work after his absence, allegedly due to his active participation in
the union organized by private respondent's tailors. He further claimed that he was not paid overtime pay, holiday
pay, premium pay for work done on rest days and holidays, service incentive leave pay and 13th month pay.

Petitioners Renato Abistado, Jill Mendoza, Benjamin Brizuela and David Oro also claimed that they were dismissed
from their employment because they joined the Philippine Social Security Labor Union (PSSLU). Petitioners Andres
Abad, Norlito Ladia, Marcelo Aguilan, Nelia Brizuela, Flora Escobido, Justilita Cabaneg and Domingo Saguit
claimed that they stopped working because private respondents gave them few pieces of work to do after learning
of their membership with PSSLU. All the petitioners laid claims under the different labor standard laws which private
respondent allegedly violated.

On May 28, 1979, Labor Arbiter Ernilo V. Peñalosa rendered a decision ordering the dismissal of the complaint for
unfair labor practices, illegal dismissal and other money claims except petitioner Villuga's claim for 13th month pay
for the years 1976, 1977 and 1980. The dispositive portion of the decision states as follows:

WHEREFORE, premises considered, the respondent Broad Street Tailoring and/or Rodolfo Zapanta
are hereby ordered to pay complainant Elias Villuga the sum of ONE THOUSAND TWO HUNDRED
FORTY-EIGHT PESOS AND SIXTY-SIX CENTAVOS (P1,248.66) representing his 13th month pay
for the years 1976, 1977 and 1978. His other claims in this case are hereby denied for lack of merit.

The complaint insofar as the other eleven (11) complainants are concerned should be, as it is
hereby dismissed for want of jurisdiction.1

On appeal, the National Labor Relations Commission affirmed the questioned decision in a resolution dated May 12,
1986, the dispositive portion of which states as follows:

WHEREFORE, premises considered, the decision appealed from is, as it is hereby AFFIRMED, and
the appeal dismissed.  2

Presiding Commissioner Guillermo C. Medina merely concurred in the result while Commissioner Gabriel M.
Gatchalian rendered a dissenting opinion which states as follows:
 I am for upholding employer-employee relationship as argued by the complainants before the Labor
Arbiter and on appeal. The further fact that the proposed decision recognizes complainant's status
as piece-rate worker all the more crystallizes employer-employee relationship the benefits prayed for
must be granted.  3

Hence, petitioners filed this instant certiorari case on the following grounds:

1. That the respondent National Labor Relations Commission abused its discretion when it ruled that
petitioner/complainant, Elias Villuga falls within the category of a managerial employee;

2. . . . when it ruled that the herein petitioners were not dismissed by reason of their union activities;

3. . . . when it ruled that petitioners Andres Abad, Benjamin Brizuela, Norlito Ladia, Marcelo Aguilan,
David Oro, Nelia Brizuela, Flora Escobido, Justilita Cabaneg and Domingo Saguit were not
employees of private respondents but were contractors.

4. . . . when it ruled that petitioner Elias Villuga is not entitled to overtime pay and services for
Sundays and Legal Holidays; and

5. . . . when it failed to grant petitioners their respective claims under the provisions of P.D. Nos. 925,
1123 and 851. 4

Under Rule 1, Section 2(c), Book III of the Implementing Rules of Labor Code, to be a member of a managerial staff,
the following elements must concur or co-exist, to wit: (1) that his primary duty consists of the performance of work
directly related to management policies; (2) that he customarily and regularly exercises discretion and independent
judgment in the performance of his functions; (3) that he regularly and directly assists in the management of the
establishment; and (4) that he does not devote his twenty per cent of his time to work other than those described
above.

Applying the above criteria to petitioner Elias Villuga's case, it is undisputed that his primary work or duty is to cut or
prepare patterns for items to be sewn, not to lay down or implement any of the management policies, as there is a
manager and an assistant manager who perform said functions. It is true that in the absence of the manager the
assistant manager, he distributes and assigns work to employees but such duty, though involving discretion, is
occasional and not regular or customary. He had also the authority to order the repair or resewing of defective item
but such authority is part and parcel of his function as cutter to see to it that the items cut are sewn correctly lest the
defective nature of the workmanship be attributed to his "poor cutting." Elias Villuga does not participate in policy-
making. Rather, the functions of his position involve execution of approved and established policies. In Franklin
Baker Company of the Philippines v. Trajano,   it was held that employees who do not participate in policy-making
5

but are given ready policies to execute and standard practices to observe are not managerial employees. The test
of "supervisory or managerial status" depends on whether a person possesses authority that is not merely routinary
or clerical in nature but one that requires use of independent judgment. In other words, the functions of the position
are not managerial in nature if they only execute approved and established policies leaving little or no discretion at
all whether to implement said policies or not.  6

Consequently, the exclusion of Villuga from the benefits claimed under Article 87 (overtime pay and premium pay for
holiday and rest day work), Article 94, (holiday pay), and Article 95 (service incentive leave pay) of the Labor Code,
on the ground that he is a managerial employee is unwarranted. He is definitely a rank and file employee hired to
perform the work of the cutter and not hired to perform supervisory or managerial functions. The fact that he is
uniformly paid by the month does not exclude him from the benefits of holiday pay as held in the case of Insular
Bank of America Employees Union v. Inciong.  He should therefore be paid in addition to the 13th month pay, his
7

overtime pay, holiday pay, premium pay for holiday and rest day, and service incentive leave pay.

As to the dismissal of the charge for unfair labor practices of private respondent consisting of termination of
employment of petitioners and acts of discrimination against members of the labor union, the respondent
Commission correctly held the absence of evidence that Mr. Zapanta was aware of petitioners' alleged union
membership on February 22, 1978 as the notice of union existence in the establishment with proposal for
recognition and collective bargaining negotiation was received by management only an March 3, 1978. Indeed, self-
serving allegations without concrete proof that the private respondent knew of their membership in the union and
accordingly reacted against their membership do not suffice.

Nor is private respondent's claim that petitioner Villuga abandoned his work acceptable. For abandonment to
constitute a valid cause for dismissal, there must be a deliberate and unjustified refusal of the employee to resume
his employment. Mere absence is not sufficient, it must be accompanied by overt acts unerringly pointing to the fact
that the employee simply does not want to work anymore.  At any rate, dismissal of an employee due to his
8

prolonged absence without leave by reason of illness duly established by the presentation of a medical certificate is
not justified.  In the case at bar, however, considering that petitioner Villuga absented himself for four (4) days
9

without leave and without submitting a medical certificate to support his claim of illness, the imposition of a sanction
is justified, but surely, not dismissal, in the light of the fact that this is petitioner's first offense. In lieu of
reinstatement, petitioner Villuga should be paid separation pay where reinstatement can no longer be effected in
view of the long passage of time or because of the realities of the situation.   But petitioner should not be granted
10

backwages in addition to reinstatement as the same is not just and equitable under the circumstances considering
that he was not entirely free from blame.  11
As to the other eleven petitioners, there is no clear showing that they were dismissed because the circumstances
surrounding their dismissal were not even alleged. However, we disagree with the finding of respondent
Commission that the eleven petitioners are independent contractors.

For an employer-employee relationship to exist, the following elements are generally considered: "(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."  12

Noting that the herein petitioners were oftentimes allowed to perform their work at home and were paid wages on a
piece-rate basis, the respondent Commission apparently found the second and fourth elements lacking and ruled
that "there is no employer-employee relationship, for it is clear that respondents are interested only in the result and
not in the means and manner and how the result is obtained."

Respondent Commission is in error. The mere fact that petitioners were paid on a piece-rate basis is no argument
that herein petitioners were not employees. The term "wage" has been broadly defined in Article 97 of the Labor
Code as remuneration or earnings, capable of being expressed in terms of money whether fixed or ascertained on a
time, task, piece or commission
basis. . . ." The facts of this case indicate that payment by the piece is just a method of compensation and does not
define the essence of the
relation.   The petitioners were allowed to perform their work at home does not likewise imply absence of control
13

and supervision. The control test calls merely for the existence of a right to control the manner of doing the work, not
the actual exercise of the right. 
14

In determining whether the relationship is that of employer and employee or one of an independent contractor,
"each case must be determined on its own facts and all the features of the relationship are to be
considered."   Considering that petitioners who are either sewers, repairmen or ironer, have been in the employ of
15

private respondent as early as 1972 or at the latest in 1976, faithfully rendering services which are desirable or
necessary for the business of private respondent, and observing management's approved standards set for their
respective lines of work as well as the customers' specifications, petitioners should be considered employees, not
independent contractors.

Independent contractors are those who exercise independent employment, contracting to do a piece of work
according to their own methods and without being subjected to control of their employer except as to the result of
their work. By the nature of the different phases of work in a tailoring shop where the customers' specifications must
be followed to the letter, it is inconceivable that the workers therein would not be subjected to control.

In Rosario Brothers, Inc. v. Ople,   this Court ruled that tailors and similar workers hired in the tailoring department,
16

although paid weekly wages on piece work basis, are employees not independent contractors. Accordingly, as
regular employees, paid on a piece-rate basis, petitioners are not entitled to overtime pay, holiday pay, premium pay
for holiday/rest day and service incentive leave pay. Their claim for separation pay should also be defined for lack of
evidence that they were in fact dismissed by private respondent. They should be paid, however, their 13th month
pay under P.D. 851, since they are employees not independent contractors.

WHEREFORE, in view of the foregoing reasons, the assailed decision of respondent National Labor Relations
Commission is hereby MODIFIED by awarding —

(a) in favor of petitioner Villuga, overtime pay, holiday pay, premium pay for holiday and rest day, service incentive
leave pay and separation pay, in addition to his 13th month pay; and

(b) in favor of the rest of the petitioners, their respective 13th month pay.

The case is hereby REMANDED to the National Labor Relations Commission for the computation of the claims
herein-above mentioned.

SO ORDERED.
G.R. Nos. 64821-23 January 29, 1993

UNIVERSITY OF PANGASINAN FACULTY UNION, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and UNIVERSITY OF PANGASINAN, respondents.

Tanopo & Serafica for petitioner.

Hermogenes S. Decano for private respondents.

ROMERO, J.:

In the instant petition for mandamus and certiorari, petitioner union seeks to enjoin the respondent National Labor
Relations Commission (NLRC) to resolve, or direct the Labor Arbiter to hear and decide, the merits of three of
petitioner's unresolved complaints, and to annul and set aside the resolution of the NLRC affirming the decision of
the Executive Labor Arbiter dismissing the petitioner's complaints for violation of certain labor standards laws but
requiring respondent university to integrate the cost of living allowance into the basic pay of the covered employees
and reminding it to pay its employees at intervals not exceeding sixteen (16) days.

The uncontroverted facts show that on various dates, petitioner filed the following complaints against the University
of Pangasinan (University for brevity) before the Arbitration Branch of the NLRC in Dagupan City:

1. October 14, 1980: for nonpayment of benefits under P.D. No. 1713 and emergency cost of living
allowance (ecola) to part-time teachers, and for prompt and accurate computation of benefits under
P.D. No. 451 and the payment of ecolas;

2. November 7, 1980: for nonpayment of all ecolas to instructors from October 18-31, 1980;

3. November 20, 1980: for nonpayment of ecolas under P.D. Nos. 525, 1123, 1614, 1634, 1678 and
1713 for November 1-15, 1980, and extra loads during typhoons "Nitang" and "Osang" on July 21
and 25, 1980, respectively;

4. April 13, 1981: for violation of P.D. No. 1751 and nonpayment of extra loads on February 12-13,
1980 (Anniversary celebration);

5. April 27, 1981: for nonpayment of all ecolas for April 1-15, 1981 to faculty members who were also
members of the union;

6. May 21, 1981: for violation of Wage Order No. 1 and delayed payment of salaries; and

7. June 17, 1981: for nonpayment of salary differentials for summer under P.D. No. 451. 1

The Regional Director in San Fernando, La Union certified six (6) of these complaints to Labor Arbiter Pedro
Fernandez of the Dagupan City District Office of the then Ministry of Labor and Employment for compulsory
arbitration.   According to the petitioner, it was made to understand by Fernandez that the seventh complaint should
2

also be discussed in its position paper. Accordingly, petitioner filed a position paper discussing the merits of all the
seven complaints. On the other hand, the University limited its discussion to only four: the complaints filed on April
13, 1981, April 27, 1981, May 21, 1981 and June 17, 1981. Petitioner was of the view that Executive Labor Arbiter
Sotero L. Tumang adopted the stand of the University on the four complaints and accordingly dismissed them in his
decision of January 25, 1982. 3

Observing that in its position paper, the petitioner included matters which were "beyond the scope of the issues
alleged in the complaints," said Labor Arbiter discussed the four complaints individually. On the April 13, 1981
complaint, he ruled that because at the time P.D. No. 1123 took effect on May 1, 1977, the University had not
increased its tuition fees, there was of "nothing to integrate."  However, from June 16, 1979 when the University
4

increased its tuition fees, it was obligated to cause the integration of the across-the-board increase of P60.00 in
emergency allowance into the basic pay as mandated by P.D. Nos. 1123 and 1751.

On the alleged nonpayment of extra loads handled by the employees on February 12 and 13, 1981 when classes
were suspended, Tumang stated that Consuelo Abad, the petitioner's president, had no cause to complain because
her salary was fully paid and that, since there were "no complainants for the alleged nonpayment of extra loads for
two days," the issue had become academic.

With respect to the April 27, 1981 complaint, Tumang said that since the salary paid to Consuelo Abad and other
faculty members for the April 1-15, 1981 period had been earned "as part of their salary for the ten-month period,"
she was no longer entitled to an emergency cost of living allowance. He added that "payment of emergency cost of
living allowance is based on actual work performed except when they (employees) are on leave with pay." Hence,
because classes ended in March 1981, the teachers who did not report for work could not be considered on leave
with pay and, therefore, they were not entitled to an emergency cost of living allowance.

As regards the May 21, 1981 complaint alleging violation of Wage Order No. 1, Tumang found that the University
had actually implemented the additional living allowance of P2.00 a day required therein. On the alleged delay in the
payment of salaries of the employees, he rationalized that delays could not be avoided but he reminded the
University to pay its employees on time.

The June 17, 1981 complaint was also resolved in favor of the University. Stating that P.D. No. 451 which mandates
salary increases is dependent on enrollment and allowable deductions, Tumang ruled that, again, Consuelo Abad
had no cause to complain as she had been paid out of the allowable 12.74% for distribution which was a
"substantial compliance with P.D. No. 451."   The dispositive portion of the decision states:
5

IN THE LIGHT OF THE FOREGOING CONSIDERATION, the above-entitled cases are dismissed
for lack of merit. Respondent however, is required to integrate the allowance of P60.00 under P.D.
1123 into the basic pay of the covered employees if the same has not as yet been complied with.
Respondent is also reminded to pay the employees at intervals not exceeding sixteen (16) days
pursuant to Article 102 of the Labor Code.

SO ORDERED.

The petitioner appealed the said decision to the NLRC. In its resolution of June 20, 1993, the NLRC affirmed the
decision of Executive Labor Article Tumang. Hence, the instant petition for mandamus and certiorari with the
following prayer:

WHEREFORE, the foregoing premises considered, it is respectfully prayed that this petition be given
due course and that judgment issue:

1. Declaring petitioner as possessed with capacity to represent its members in the complaints it filed
thru its president, Miss Consuelo Abad, against private respondent, and the complaints are
pertaining to the members who are entitled under the law to the claims sought herein, not to Miss
Abad alone;

2. Annulling and setting aside the appealed resolution insofar as the issues of nonpayment of Ecola
for April 1-15, 1981 and nonpayment of salary differentials for summer of 1981 under P.D. No. 451
are concerned;

3. Ordering private respondent to pay covered members of petitioner their Ecola for April 1-15, 1981
and their salary differentials for summer of 1981 pursuant to the mandate of P.D. 451;

4. Enjoining public respondent to resolve on the merits the issues of nonpayment of extra loads of
February 12-13, 1980 and violation of Wage Order No. 1 which were properly brought on appeal to
said office;

5. Enjoining public respondent to resolve on the merits the issues or grievances alleged in the
complaints filed on October 14, November 7 and November 20, all in 1980, which were not resolved
by the labor arbiter but nonetheless appealed to public respondents, or

6. Enjoining public respondent to order or direct the labor arbiter to resolve on the merits the said
issues or grievances alleged in the complaints mentioned in the next preceding paragraph;

7. Attorney's fee in such amount as this Honorable Tribunal may deem just and reasonable in the
premises;

8. Ordering private respondent to pay costs of suit, including this appeal.

Petitioner further prays for safeguards and/or measures to insure the correct computation of the
amount of claims herein sought due to each covered member of petitioner, and for such other reliefs
just and equitable in the premises. 6

We shall first deal with the propriety of the special civil action of mandamus. In this regard, petitioner contends that
the NLRC should have, in the exercise of its appellate jurisdiction, resolved the issues raised in the three (3)
complaints filed on October 14, November 7 and November 20, 1980 or, in the alternative, ordered the Labor Arbiter
to hear and decide the aforementioned three (3) complaints, it having the power of supervision over Labor Arbiters.

Sec. 3, Rule 65 of the Rules of Court provides:

Sec. 3. Petition for Mandamus. — When any tribunal, corporation, board, or person unlawfully
neglects the performance of an act which the law specifically enjoins as a duty resulting from an
office, trust, or station, or unlawfully excludes another from the use and enjoyment of a right or office
to which such other is entitled, and there is no other plain, speedy and adequate remedy in the
ordinary course of law, the person aggrieved thereby may file a verified petition in the proper court
alleging the facts with certainty and praying that judgment be rendered commanding the defendant,
immediately or at some other specified time, to do the act required to be done to protect the rights of
the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of
the defendant.

As succinctly provided in this section, anyone who wishes to avail of the remedy of mandamus must state in a
verified petition "the facts with certainty." On account of this requirement, mandamus is never issued in doubtful
cases and showing of a clear and certain right on the part of the petitioner is required.   Indeed, while the labor
7

arbiter is duty bound to resolve all complaints referred to him for arbitration and, therefore, he may be compelled
by mandamus to decide them (although not in any particular way or in favor of anyone),  we find that the peculiar
8

circumstances in this case do not merit the issuance of the writ of mandamus.

Petitioner admits that only six of the complaints were certified to Labor Arbiter Fernandez for compulsory arbitration.
It failed, however, to allege why this was the case or whether it had exerted any effort to include the remaining
complaint in the certification. What it stresses is the alleged assurance of Labor Arbiter Fernandez that the seventh
complaint may be discussed in its position paper. It turned out, however, that, according to the unrebutted allegation
of the Solicitor General, Labor Arbiter Fernandez inhibited himself from handling the cases referred to him as he
was teaching at the University. Hence, Labor Arbiter Fernandez forwarded the complaints to the Assistant Director
for Arbitration in Regional Office No. 1 in San Fernando, La Union for appropriate action. He should have
forwarded all of the complaints to the said Assistant Director, but it appears that Fernandez turned over only four of
them. In turn, the Assistant Director referred only complaints Nos. 5, 6 and 7, which had been docketed as RBI-C-
24-81, LS-42-81 and LS-43-81, to Executive Labor Arbiter Sotero L. Tumang for compulsory arbitration. However,
while only these three docket numbers appear on the caption of the decision, the same actually resolved four
complaints, as earlier mentioned.  9

From these facts, one may infer that there must have been a mishandling of the complaints and/or the records of the
cases. However, the petitioner failed to substantiate by evidence such negligence on the part of the public
respondents as to warrant the issuance of a writ of mandamus.   Its officials even neglected the simple act of
10

verifying from the MOLE office in Dagupan City whether the records of all the cases filed had been forwarded to the
proper official who should resolve them.   Infact, nowhere in its pleadings   is there an allegation to that effect.
11 12

On the contrary, the petitioner took Fernandez' words seriously and allowed the proceedings to reach its inevitable
conclusion. When it received a copy of the decision, the petitioner should have taken note of Executive Labor
Arbiter Tumang's observation therein that it had discussed matters "beyond the scope of the issues alleged in the
complaints." In its memorandum of appeal, it should have prayed for the inclusion of the three complaints inasmuch
as in labor cases, an appeal may be treated as a motion for reconsideration or
vice-versa.   The fact that three complaints had been omitted did not escape the attention of the NLRC which stated
13

in its resolution that "since those cases were not consolidated it is now too late to consolidate them" with the four
decided cases.   We agree with the NLRC that the said complaints should proceed separately as long as their
14

resolution would not conflict with the resolved

cases.  It should be added that under Art. 217(b) of the Labor Code, the NLRC has "exclusive appellate jurisdiction
15

over all cases decided by the Labor Arbiters." Needless to say, the NLRC could not have acted on matters outside
of the cases appealed to it.

Petitioner's contention that the cases filed by Consuelo Abad as its president should affect, not only herself, but all
the other union members similarly situated as she was, is well taken. The uncontroverted allegation of the petitioner
is that it is the holder of Registration Certificate No. 9865-C, having been registered with the then Ministry of Labor
and Employment on February 16, 1978. As such, petitioner possessed the legal personality to sue and be sued
under its registered name.  Corollarily, its president, Consuelo Abad, correctly filed the complaints even if some of
16

them involved rights and interest purely or exclusively appertaining to individual employees, it appearing that she
signed the complaints "for and in behalf of the University of Pangasinan Faculty Union." 17

The University's contention that petitioner had no legal personality to institute and prosecute money claims must,
therefore, fail. To quote then Associate Justice Teehankee in Heirs of Teodelo M. Cruz v. CIR,  "[w]hat should be
18

borne in mind is that the interest of the individual worker can be better protected on the whole by a strong union
aware of its moral and legal obligations to represent the rank and file faithfully and secure for them the best wages
and working terms and conditions. . . . Although this was stated within the context of collective bargaining, it applies
equally well to cases, such as the present wherein the union, through its president, presented its individual
members' grievances through proper proceedings. While the complaints might not
have disclosed the identities of the individual employees claiming monetary benefits,  such technical defect should
19

not be taken against the claimants, especially because the University appears to have failed to demand a bill of
particulars during the proceedings before the Labor Arbiter.

On the merits of the petition, the NLRC did not abuse its discretion in resolving the appeal from the decision of
Executive Labor Arbiter Tumang except for the disallowance of the emergency cost of living allowance to members
of the petitioner. The Rules Implementing P.D. No. 1713 which took effect on August 18, 1980 provide:

Sec. 6. Allowances of full-time and part-time employees. — Employees shall be paid in full the
monthly allowance on the basis of the scales provided in Section 3 hereof, regardless of the number
of their regular working days if they incur no absences during the month. If they incur absences
without pay, the amounts corresponding to the absences may be deducted from the monthly
allowance provided that in determining the equivalent daily allowance of such deduction, the
applicable monthly allowance shall be divided by thirty (30) days.

xxx xxx xxx

(Emphasis supplied).

This Section, which is a virtual reproduction of Section 12 of the old Rules Implementing P.D. No. 1123, has been
interpreted by this Court as requiring that the full amount of the cost of living allowance mandated by law should be
given monthly to each employee if the latter has worked continuously for each month, regardless of the number of
the regular working days.  But more apropos is the ruling of this Court in University of Pangasinan Faculty Union v.
20
University of Pangasinan and NLRC,  a case involving the same parties as in the instant petition and dealing with a
21

complaint filed by the petitioner on December 18, 1981 seeking, among others, the payment of emergency cost of
living allowances for November 7 to December 5, 1981, a semestral break. The Court held therein:

. . . The "No work, no pay" principle does not apply in the instant case. The petitioner's members
received their regular salaries during this period. It is clear from the . . . law that it contemplates a "no
work" situation where the employees voluntarily absent themselves. Petitioners, in the case at bar,
certainly do not, ad voluntatem absent themselves during semestral breaks. Rather, they are
constrained to take mandatory leave from work. For this, they cannot be faulted nor can they be
begrudged that which is due them under the law. To a certain extent, the private respondent can
specify dates when no classes would be held. Surely, it was not the intention of the framers of the
law to allow employers to withhold employee benefits by the simple expedient of unilaterally
imposing "no work" days and consequently avoiding compliance with the mandate of the law for
those days.

As interpreted and emphasized in the same case, the law granting emergency cost of living allowances was
designed to augment the income of the employees to enable them to cope with the rising cost of living and inflation.
Clearly, it was enacted in pursuance of the State's duty to protect labor and to alleviate the plight of the workers. To
uphold private respondent's interpretation of the law would be running counter to the intent of the law and the
Constitution.

WHEREFORE, the petition for mandamus is hereby DISMISSED. The decision of the NLRC is AFFIRMED subject
to the MODIFICATION that private respondent University of Pangasinan shall pay its regular and fulltime teachers
and employees emergency cost of living allowance for the period April 1-15, 1981. Costs against private
respondent.

SO ORDERED.
GR No. L-1309 July 26, 1948

THE SHELL COMPANY OF PHILIPPINE ISLANDS, LIMITED, appellant,

v.
NATIONAL LABOR UNION, appealed.

Messrs. Ross, Selph, Carrascoso and Janda on behalf of the appellant.

Messrs. Paguia and Villanueva on behalf of the respondent.

BRIONES, J .:

Acting on a petition from the labor entity called "National Labor Union," the Court of Industrial Relations has issued a
decision in which, among other things, the oil firm "The Shell Company of Philippine Islands, Limited" is obliged to
pay to its workers who work at night (from sunset until it rises the next day) an additional compensation of 50% on
their regular wages if they worked during the day. It seems that the comania needs the night service of a certain
number of workers, since the planes coming from abroad tend to land and take off at night, making it necessary to
carry out tasks at night for the supply of gasoline and lubricants, and for other necessities.The oil company has
objected against said decision hence the present appeal ofcertiorari for us to revoke.

The appellant company alleges and argues that not only is there no legal provision that empowers the Court of
Industrial Relations to order the payment of additional compensation to workers who work at night, but, on the
contrary, Commonwealth law No. 444 exempts the employer from such an obligation since the law provides for the
cases in which the payment of "overtime" (additional compensation) is compulsory, and such cases do not include
night work.

For its part, the challenged labor union maintains that the power in dispute is part of the broad and effective powers
that Commonwealth Law No. 103 - the charter of the Industrial Relations Tribunal - grants to said court; and that the
Commonwealth Law No. 444 that is invoked does not have any application to the present case, since it is
necessarily limited in scope, referring specifically and exclusively to the maximum daily workday allowed in industrial
establishments - the 8 hours.

Our conclusion is that the workers' union under appeal is right on their part. For a clear and thorough elucidation of
the points discussed, we consider it advisable, even at the risk of lengthening this presentation, to transcribe the
pertinent legal provisions that are articles 1, 4 and 13 of Commonwealth Law No. 103. Here you are:

SECTION 1. The Judge: his appointment, qualifications, compensation, tenure. - There is hereby created a
Court of Industrial Relations, which shall have jurisdiction over the entire Philippines, to consider,
investigate, decide, and settle any question, matter, controversy or dispute arising between, and / or
affecting, employers and employees or laborers , and landlords and tenants or farm-laborers, and regulate
the relation between them, subject to, and in accordance with, the provisions of this Act. The Court shall
keep a record of all its proceedings and shall be presided over by a Judge to be appointed by the President
of the Philippines with the consent of the Commission on Appointments of the National Assembly. The
Judge of the Court shall hold office during good behavior until he reaches the age of seventy years, or
becomes incapacitated to discharge the duties of his office.His qualifications shall be the same as those
provided in the Constitution for members of the Supreme Court and he shall receive an annual
compensation of ten thousand pesos and shall be entitled to traveling expenses and per diems when
performing official duties outside of the City of Manila. The Department of Justice shall have executive
supervision over the Court.

SEC. 4. Strikes and lockouts. - The Court shall take cognizance for purpose of prevention, arbitration,
decision and settlement, of any industrial or agricultural dispute causing or likely to cause a strike or lockout,
arising form differences as regards wages, shares or compensation, hours of labor or conditions of tenancy
or employment, between employers and employees or laborers and between landlords and tenants or farm-
laborers, provided that the number of employees, laborers or tenants or farm-laborers involved exceeds
thirty, and such industrial or agricultural dispute is submitted to the Court by the Secretary of Labor, or by
any or both of the parties to the controversy and certified by the Secretary of Labor as existing and proper to
be dealt with by the Court for the sake of public interest. In all such cases,the Secretary of Labor or the party
or parties submitting the disputes, shall clearly and specifically state in writing the questions to be decided.
Upon the submission of such a controversy or question by the Secretary of Labor, his intervention therein as
authorized by law, shall cease.

The Court shall, before hearing the dispute and in the course of such hearing, endeavor to reconcile the
parties and induce them to settle the dispute by amicable agreement. If any agreement as to the whole or
any part of the dispute is arrived at by the parties, a memorandum of its terms shall be made in writing,
signed and acknowledged by the parties thereto before the Judge of the Court or any official acting in his
behalf and authorized to administer oaths or acknowledgments, or, before a notary public. The
memorandum shall be filed in the office of the Clerk of the Court, and, unless otherwise ordered by the
Court, shall, as between the parties to the agreement, have the same effect as, and be deemed to be, a
decision or award .

SEC. 13. Character of the award . - In making an award, order or decision, under the provisions of section
four of this Act, the Court shall not be restricted to the specific relief claimed or demands made by the
parties to the industrial or agricultural dispute, but may include in the award , order or decision any matter or
determination which my be deemed necessary or expedient for the purpose of setting the dispute or of
preventing further industrial or agricultural disputes.
The following is evident from the transcribed provisions: (a) that when a dispute arises between the principal and the
employee or worker, vgr. Regarding wages, the Industrial Relations Court has jurisdiction over the entire territory of
the Philippines to consider, investigate and resolve said dispute, setting the wages it deems fair and reasonable; (b)
that for the purposes of prevention, arbitration, decision and settlement, the same Industrial Relations Tribunal also
has jurisdiction to hear any dispute - industrial or agricultural - resulting from any differences regarding wages,
participation or compensation, hours of work job,conditions of employment or partnership between employers and
employees or workers and between owners and landowners or agricultural workers prior to the fulfillment of certain
requirements and conditions, when it is seen that said dispute causes or may cause a strike; (c) that in the exercise
of its powers specified above, the Court of Industrial Relations is not limited, when deciding the dispute, to grant the
remedy or remedies requested by the parties to the dispute, but may include in the order or decision any matter or
determination for the purpose of settling the dispute or preventing further industrial or agricultural controversies.(c)
that in the exercise of its powers specified above, the Court of Industrial Relations is not limited, when deciding the
dispute, to grant the remedy or remedies requested by the parties to the dispute, but may include in the order or
decision any matter or determination for the purpose of settling the dispute or preventing further industrial or
agricultural controversies.(c) that in the exercise of its powers specified above, the Court of Industrial Relations is
not limited, when deciding the dispute, to grant the remedy or remedies requested by the parties to the dispute, but
may include in the order or decision any matter or determination for the purpose of settling the dispute or preventing
further industrial or agricultural controversies.

In the case at hand there is undoubtedly an industrial disposition. While the company, the Shell company, is not
willing to pay its night workers higher wages than the outbound workers, the "NationalLabor Union", to which the
Shell workers are affiliated, demands other types of wages for the service. night - 50% more. This is the dispute, the
industrial dispute. Now, what has the Court of Industrial Relations done, after submitting the conflict to its
jurisdiction? Well, precisely what is mandated by the aforementioned Commonwealth Law No. 103, organic charter
of its creation and operation, namely: consider, investigate and prosecute the dispute, later resolving it in the sense
in which it has been resolved, that is, remunerating the work at night with 50% more than day wages.And this is
perfectly legal both within the scope of Article 1 of the aforementioned Law No. 103, which empowers the Court of
Industrial Relations to decide any dispute over wages and compensation in the manner it deems reasonable and
convenient, as well as within the framework of Article 4 of the same law that authorizes said court to prosecute and
decide any lawsuit or industrial or agricultural controversy determines the outbreak of a strike or tends to cause it.
Still further: what was done by the Industrial Relations Court in the present case is also legal within the framework of
article 13 of the same law No. 103, article that, as seen, not only empowers said court to grant the remedy that They
collect the parts, but even go further, that is, to grant remedies not expressly requested,provided that they are
directed to resolve the dispute at once or to prevent the outbreak of further disputes or strikes.

It is evident that with these broad powers the State has proposed to equip the Tribunal of Industrial Relations to the
maximum possible of utility and efficiency, making it not a simple academic agency, but truly active, dynamic and
efficient - in a word, the official machinery. par excellence in the formidable and thorny task of resolving industrial
and agricultural conflicts of a certain kind, thus preventing and avoiding those stoppages and strikes that so afflict
and damage not only companies and workers, but, in general, all community. In its concurring opinion rendered in
the authoritative case of Ang Tibay against the Industrial Relations Tribunal 1 (RG No. 46496), Judge Laurel has
very correctly expressed the fundamental idea that underlines the creation of said court, with the following
pronouncement:

In Commonwealth Act No. 103, and by it, our government no longer performs the role of mere mediator or
intervenor but that of supreme arbiter . (Italics are ours.).

The appellant argues, however, that although it is true that in the event of a dispute the Industrial Relations Court
has, by virtue of its organic law, the power to set wages, such power is not absolute, but is subject to certain
restrictions and cuttings, provided in the law commonly known by law on the eight-hour workday, Commonwealth
Law No. 444, the pertinent articles of which are fully transacted below:

SECTION 1. The legal working day for any person employed by another shall be of not more than eight
hours daily. When the work is not continuous, the time during which the laborer is not working and can leave
his working place and can rest completely shall not be counted.

SEC. 3. Work may be performed beyond eight hours a day in case of actual or impending emergencies
caused by serious accidents, fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity in
order to prevent loss to life and property or imminent danger to public safety; or in case urgent work to be
performed on the machines, equipment, or installations in order to avoid a serious loss which the employer
would otherwise suffer, or some other just cause of a similar nature; but in all such cases the laborers and
employees shall be entitled to receive compensation for the overtime work performed at the same rate as
their regular wages or salary, plus at least twenty-five per centum additional.

In case of national emergency the government is empowered to establish rules and regulations for the
operation of the plants and factories and to determine the wages to be paid the laborers.

SEC. 4. No person, firm, or corporation, business establishment or place or center of labor shall compel an
employee or laborer to work during Sundays and legal holidays, unless he is paid an additional sum of at
least twenty-five per centum of his regular remuneration: Provided however , That this prohibition shall not
apply to public utilities performing some public service such as supplying gas, electricity, power, water, or
providing means of transportation or communication.

As you wish - argue the appellant's lawyers - that these articles specify the cases in which the payment of extra or
additional compensation is authorized and they are only, namely: (a) in case of "overtime" or work in excess of the
regular hours for imperative reasons of urgency due to a disaster or accident, or to avoid losses or repair them; (b)
in case of work on Sundays and holidays; (c) in case of emergency, and there is nothing to do with night work;
Therefore, the order in question is illegal, as it is not authorized by law. "In the absence - the lawyers of the
appellant emphasize - legislation authorizing the payment of extra compensation for work done at night,the Court of
Industrial Relations has no power or authority to order the petitioner company to pay extra compensation for work
done by its laborers at night.Expressio unius est exclusio alterius . Where, as in the case at bar, statute expressly
specifies the cases where payment of extra compensation may be demanded, extra compensation may be allowed
in those cases only, and in no others. The provisions of the Commonwealth Act No. 444 cannot be enlarged by
implication or otherwise. Expressum facit cessare tacitum .

The argument is wrong. Law No. 444 is not applicable to the present case, being evident that it has a specific
purpose, namely: (a) to set the maximum working day at 8 hours; (b) indicate certain exceptional cases in which
work may be authorized outside of said shift; (c) provide a bonus, which should not be less than 25% of the regular
salary, for "overtime" or work in excess of 8 hours.

In the case of Manila Electric, applicant-appellant, v. The Public Utilities Employees' Association, 2appealed, L-1206
(45 Off. Gaz., 1760), this Court has declared that the power conferred by Article 1 of Commonwealth Law No. 103 to
the Industrial Relations Court to prosecute and decide industrial disputes and disputes between the Capital and
labor, which includes the setting of wages and compensation for employees and workers, has been restricted by
Article 4 of Commonwealth Law No. 444, which at the same time limits to 25% of the salary or regular compensation
of the worker The minimum of additional compensation that the court can grant for work on Sundays and official
holidays, exempts the public utility entities that provide any public service, such as those that supply gas, electricity,
deadly force, from the payment of said additional compensation. water, or provide means of transportation or
communication.Such restriction becomes an exception to the general power of the court to fix, in cases of dispute,
the wages and compensation that employers must pay to employees and workers; And since said article 4 refers
only to salary or compensation for work during Sundays and official holidays, it is obvious that it cannot refer to
salary or additional compensation for work outside of the eight-hour shift that is generally carried out from the
beginning. hours of the morning to late afternoon, as one thing is to work on Sundays and public holidays, and quite
another thing is to work at night or outside the eight-hour shift on weekdays. Applying the legal maximum "the
wages and compensation that employers must pay to employees and workers; And since said article 4 refers only to
salary or compensation for work during Sundays and official holidays, it is obvious that it cannot refer to salary or
additional compensation for work outside of the eight-hour shift that is generally carried out from the beginning.
hours of the morning to late afternoon, as one thing is to work on Sundays and public holidays, and quite another
thing is to work at night or outside the eight-hour shift on weekdays. Applying the legal maximum "the wages and
compensation that employers must pay to employees and workers; And since said article 4 refers only to salary or
compensation for work during Sundays and official holidays, it is obvious that it cannot refer to salary or additional
compensation for work outside of the eight-hour shift that is generally carried out from the beginning. hours of the
morning to late afternoon, as one thing is to work on Sundays and public holidays, and quite another thing is to work
at night or outside the eight-hour shift on weekdays. Applying the legal maximum "And since said article 4 refers
only to salary or compensation for work during Sundays and official holidays, it is obvious that it cannot refer to
salary or additional compensation for work outside of the eight-hour shift that is generally carried out from the
beginning. hours of the morning to late afternoon, as one thing is to work on Sundays and public holidays, and quite
another thing is to work at night or outside the eight-hour shift on weekdays. Applying the legal maximum "And since
said article 4 refers only to salary or compensation for work during Sundays and official holidays, it is obvious that it
cannot refer to salary or additional compensation for work outside of the eight-hour shift that is generally carried out
from the beginning. hours of the morning to late afternoon, as one thing is to work on Sundays and public holidays,
and quite another thing is to work at night or outside the eight-hour shift on weekdays. Applying the legal maximum
"and another very different thing is to work at night or outside the eight-hour shift on weekdays. Applying the legal
maximum "and another very different thing is to work at night or outside the eight-hour shift on weekdays. Applying
the legal maximum "expressio unius est exclusio alterius , "it can be argued, without fear of being wrong, that a law
that provides a specific exception to its general provisions, such as additional compensation for work on Sundays
and official holidays, excludes any other, such as compensation additional for night work on weekdays. "Another
case in which this maxim may almost invariably by followed is that of statute which makes certain specific
exceptions to its general provisions. Here we may safely assume that all other exceptions were intended to be
excluded. "(Wabash R. Co. v. United States, 178 Fed., 5, 101 CCA 133; Cella Commision Co. v. Bohlinger, 147
Fed., 419; 78 CCA 467; Kunkalman vs. Gibson, 171 Ind., 503; 84 NE 985; Hering vs. Clement, 133 App. Div., 293;
117 NY, Supp. 747.).

The night work that the Shell company demands of its workers is not really an "overtime", in the sense in which this
word is used in Le No. 444, but it is a full day of work, also of 8 hours: only that, instead of being done by day, it is
done at night. In other words, the night work in question here is not only an excess, prolongation or "overtime" of the
regular day work, but is another type of work, absolutely independent of the daytime shift. That is why there are two
shifts: the shift of workers who work during the day; and the shift of those who work at night. So it is not surprising
that the legislator has not included this type of work among the "overtime" cases indicated in the aforementioned
Law No. 444.

The question that, in our opinion, must be determined is whether among the general powers of the Court of
Industrial Relations that are admitted without a deputy, is to consider the night shift as a full working day ; that of
estimating it as more burdensomethat the day shift; and consequently, to provide and order that he be paid 50%
more than the regular daytime wages. Our answer is affirmative: all this is included among the general powers of the
Court of Industrial Relations. If this court has, in cases of dispute, the power to fix the wages it deems fair and
reasonable for day work, there is no reason why it should not have the same power with respect to night wages; the
one is as much work as the other. And with respect to the appreciation that night work is heavier and more
expensive than day work and, therefore, deserves higher remuneration, there is no reason to revoke or alter it
either. There is no possible argument against the universal fact that regular, normal and ordinary work is
daytime,and that night work is very exceptional and justified only for certain imperatively unavoidable reasons. For a
reason humanity has always worked during the day.

Reasons of hygiene, medicine, morals, culture, sociology, establish together that night work has many drawbacks,
and when there is no choice but to do it, it is only fair that it be remunerated better than usual to compensate for
certain point to the worker for such inconveniences. There is no doubt that night work not only affects the health of
the worker in the long run, but also deprives him of certain things that make life relatively pleasant, such as, for
example, complete and uninterrupted rest and certain moments of relaxation , leisure or spiritual and cultural
expansion that you could have when finishing work in the afternoon and during the first hours of the night. It is said
that the worker can rest during the day after having worked all night;But can rest during the day give the body that
tonic and complete repairing effect that only natural rest at night can provide? It is also said that some prefer to work
at night in our scorching weather, thus avoiding the heat of the day. We fear, however, that this is better discussed
than practiced. We believe that since time immemorial the universal rule is that man works at night more out of
irremediable necessity than out of pleasant convenience.We believe that since time immemorial the universal rule is
that man works at night more out of irremediable necessity than out of pleasant convenience.We believe that since
time immemorial the universal rule is that man works at night more out of irremediable necessity than out of
pleasant convenience.

To the vulgar, universal opinion, we must add the expert opinion, the specialist criterion. The opinion of the writers
and experts militates decisively in favor of the thesis that night work is harder and more expensive than day work,
considering it with marked reluctance and consequently compelling capitalist management to establish a higher
scale. wages as an incentive for workers to accept it . Several authorities could be cited, but in order not to extend
this presentation too much, we opted to transcribe only a few, namely:

. . . Then, it must be remembered that it is distinctly unphysiological to turn the night into day and deprive the
body of the beneficial effects of sunshine. The human organism revolts against this procedure. Added to
artificial lighting are reversed and unnatural times of eating, resting, and sleeping. Much of the inferiority of
nightwork can doubtless be traced to the failure of the workers to secure proper rest and sleep, by day.
Because of inability or the lack of opportunity to sleep, nightworkers often spend their days in performing
domestic duties, joining the family in the midday meal, 'tinkering about the place', watching the baseball
game, attending the theater or taking a ride in the car. It is not strange that nightworkers tend to be less
efficient than dayworkers and lose more time. . . (The Management of Labor Relations,by Watkins & Dodd,
page 524.).

Nightwork. - Nightwork has gained a measure of prominence in the modern industrial system in connection
with continuous industries, that is, industries in which the nature of the processes makes it necessary to
keep machinery and equipment in constant operation. Even in continuous industries the tendency is
definitely in the direction of FOUR shifts of 6 hours each, with provision for an automatic change of shift for
all workers at stated intervals. Some discussion has taken place with regard to the lengths of the period any
workers should be allowed to remain on the night shift. A weekly change of shifts is common, specially
where three or four shifts are in operation; in other cases the change is made fortnightly or monthly; in still
other instances, no alternation is provided for, the workers remaining on day - or nightwork
permanently,except where temporary changes are made for individual convenience.

There is a sharp difference of opinion concerning the relative merits of these systems. Advocates of the
weekly change of shifts contend that the strain of nightwork and the difficulty of getting adequate sleep
during the day make it unwise for workers to remain on the "graveyard" shift for more than a week at a time.
Opponents urge that repeated changes make it more difficult to settle down to either kind of shift and that
after the first week nightwork becomes less trying while the ability to sleep by day increases. Workers
themselves react in various ways to the different systems. This much, however, is certain: Few persons
react favorably to nightwork, whether the shift be continuous or alternating. Outside of continuous industries,
nightwork can scarcely be justified, and, even in these,it presents serious disadvantages which must be
recognized in planing for industrial efficiency, stabilization of the working force, the promotion of industrial
good-will, and the conservation of the health and vitality of the workers.

Nightwork cannot be regarded as desirable, either from the point of view of the employer or of the wage
earner. It is uneconomical unless overhead costs are unusually heavy. Frequently the scale of wages is
higher as an inducement to employees to accept employment on the night shift, and the rate of production is
generally lower. (Management of Labor Relations, by Watkins & Dodd, pp. 522-524; emphasis ours.)

. . . The lack of sunlight tends to produce anemia and tuberculosis and to predispose to other ills. Nightwork
brings increased liability to eyestrain and accident. Serious moral dangers are also likely to result from the
necessity of traveling the streets alone at night, and from the interference with normal home life. From an
economic point of view, moreover, the investigations showed that nightwork was unprofitable, being inferior
to day work both in quality and in quantity. Wherever it had been abolished, in the long run the efficiency
both of the management and of the workers was raised. Furthermore, it was found that nightwork laws are a
valuable aid in enforcing acts fixing the maximum period of employment. (Principles of Labor Legislation, by
Commons and Andrews, 4th Revised Edition, p. 142.)

Special regulation of nightwork for adult men is a comparatively recent development. Some European
countries have adopted laws placing special limitations on hours of nightwork for men, and others prohibit
such work except in continuous processes. (Principles of Labor legislation, 4th Revised Edition by Common
& Andrews, p. 147.)
 Nightwork has almost invariably been looked upon with disfavor by students of the problem because of the
excessive strain involved, especially for women and young persons, the large amount of lost time
consequent upon exhaustion of the workers, the additional strain and responsibility upon the executive staff ,
the tendency of excessively fatigued workers to "keep going" on artificial stimulants, the general curtailment
of time for rest, leisure, and cultural improvement, and the fact that night workers, although precluded to an
extent from the activities of day life, do attempt to enter into these activities, with resultant impairment of
physical well-being. It is not contended, of course, that nightwork could be abolished in the continuous-
process industries, but it is possible to put such industries upon a three- or four-shifts basis,and to prohibit
nightwork for women and children. (Labor's Progress and Problems, Vol. I, p. 464, by Professors Millis and
Montgomery.)

Nightwork. - Civilized peoples are beginning to recognize the fact that except in cases of necessity or in
periods of great emergency, nightwork is socially undesirable. Under our modern industrial system,
however, nightwork has greatly aided the production of commodities, and has offered a significant method of
cutting down the ever-increasing overhead costs of industry. This result has led employers to believe that
such work is necessary and profitable. Here again one meets a conflict of economic and social interests.
Under these circumstances it is necessary to discover whether nightwork has deleterious effects upon the
health of laborers and tends to reduce the ultimate supply of efficient labor. If it can proved that nightwork
affects adversely both the quality and quantity of productive labor,its discontinuance will undoubtedly be
sanctioned by employers. From a social point of view, even a relatively high degree of efficiency in night
operations must be forfeited if it is purchased with rapid exhaustion of the health and energy of the workers.
From an economic point of view, nightwork may be necessary if the employer is to meet the demand for his
product, or if he is to maintain his market in the face of increasing competition or mounting variable
production costs.or if he is to maintain his market in the face of increasing competition or mounting variable
production costs.or if he is to maintain his market in the face of increasing competition or mounting variable
production costs.

Industrial experience has shown that the possession of extra-ordinary physical strength and self-control
facilitates the reversal of the ordinary routine of day work and night rest, with the little or no unfavorable
effect on health and efficiency. Unusual vitality and self-control, however, are not common possessions. It
has been found that the most serious obstacle to a reversal of the routine is the lack of self-discipline. Many
night workers enter into the numerous activities of day life that preclude sleep, and continue to attempt to do
their work at night. Evidence gathered by the British Health of Munition Workers' Committee places
permanent night workers, whether judged on the basis of output or loss of time, in a very unfavorable
positions as compared with day workers.

Systems of nightwork differ. There is the continuous system, in which employees labor by night and do not
attend the establishment at all by day, and the discontinuous system, in which the workers change to the
day turn at regular intervals, usually every other week. There are, of course, minor variations in these
systems, depending upon the nature of the industry and the wishes of management. Such bodies as the
British Health Munition Workers' Committee have given us valuable conclusions concerning the effect of
nightwork. Continuous nightwork is definitely less productive than the discontinuous system. The output of
the continuous day shift does not make up for this loss in production.

There is, moreover, a marked difference between the rates of output of night and day shifts on the
discontinuous plan. In each case investigated the inferiority of night labor was definitely established. This
inferiority is evidently the result of the night worker's failure to secure proper amounts of sleep and rest
during the day. The system of continuous shifts, especially for women, is regarded by all investigators as
undesirable. Women on continuous nightwork are likely to perform domestic duties, and this added strain
undoubtedly accounts for the poorer results of their industrial activities.The tendency to devote to
amusement and other things the time that should be spent in rest and sleep is certainly as common among
men as among women workers and accounts largely for the loss of efficiency and time on the part of both
sexes in nightwork.

The case against nightwork, then, may be said to rest upon several grounds. In the first place, there are the
remotely injurious effects of permanent nightwork manifested in the later years of the worker's life. Of more
immediate importance to the average worker is the disarrangement of his social life, including the
recreational activities of his leisure hours and the ordinary associations of normal family relations. From an
economic point of view, nightwork is to be discouraged because of its adverse effect upon efficiency and
output. A moral argument against nightwork in the case of women is that the night shift forces the workers to
go to and from the factory in darkness. Recent experiences of industrial nations have added much to the
evidence against the continuation of nightwork,except in extraordinary circumstances and unavoidable
emergencies. The immediate prohibition of nightwork for all laborers is hardly practicable; its discontinuance
in the case of women employees is unquestionably desirable. 'The night was made for rest and sleep and
not for work' is a common saying among wage-earning people, and many of them dream of an industrial
order in which there will be no night shift. (Labor Problems, 3rd Edition, pp. 325-328, by Watkins & Dodd.).
(Labor Problems, 3rd Edition, pp. 325-328, by Watkins & Dodd.).(Labor Problems, 3rd Edition, pp. 325-328,
by Watkins & Dodd.).

On the merits of the foregoing, the petition for certiorari filed is denied and the judgment of the Industrial Claims
Court is confirmed, with costs borne by the appellant. So ordered.