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THIRD DIVISION

[G.R. No. 235315. July 13, 2020.]

HENRY T. PARAGELE, ROLAND ELLY C. JASO, JULIE B.


APARENTE, RODERICO S. ABAD, MILANDRO B. ZAFE JR.,
RICHARD P. BERNARDO, JOSEPH C. AGUS, ROMERALD S.
TARUC, ZERNAN BAUTISTA, ARNOLD MOTITA, JEFFREY
CANARIA, ROMMEL F. BULIC, HENRY N. CHING, NOMER C.
OROZCO, JAMESON M. FAJILAN, JAY ALBERT E. TORRES,
RODEL P. GALERO, CARL LAWRENCE JASA NARIO, ROMEO
SANCHEZ MANGALI III, FRANCISCO ROSALES JR.,
BONICARL PENAFLORIDA USARAGA, JOVEN P. LICON,
NORIEL BARCITA SY, GONZALO MANABAT BAWAR, DAVID
ADONIS S. VENTURA, SOLOMON PICO SARTE, JONY F.
LIBOON, JONATHAN PERALTA ANITO, JEROME TORRALBA,
AND JAYZON MARSAN, petitioners, vs. GMA NETWORK,
INC., respondent.

DECISION

LEONEN, J  : p

Only casual employees performing work that is neither necessary nor desirable
to the usual business and trade of the employer are required to render at least one (1)
year of service to attain regular status. Employees who perform functions which are
necessary and desirable to the usual business and trade of the employer attain regular
status from the time of engagement. HTcADC

This resolves a Petition for Review on Certiorari 1 under Rule 45 of the 1997


Rules of Civil Procedure filed by petitioners Henry T. Paragele, Roland Elly C. Jaso,
Julie B. Aparente, Roderico S. Abad, Milandro B. Zafe Jr., Richard P. Bernardo,
Joseph C. Agus, Romerald S. Taruc, Zernan Bautista, Arnold Motita, Jeffrey Canaria,
Rommel F. Bulic, Henry N. Ching, Nomer C. Orozco, Jameson M. Fajilan, Jay Albert
E. Torres, Rodel P. Galero, Carl Lawrence Jasa Nario, Romeo Sanchez Mangali III,
Francisco Rosales Jr., Bonicarl Penaflorida Usaraga, Joven P. Licon, Noriel Barcita
Sy, Gonzalo Manabat Bawar, David Adonis S. Ventura, Solomon Pico Sarte, Jony F.
Liboon, Jonathan Peralta Anito, Jerome Torralba, and Jayzon Marsan (collectively,
"petitioners"), praying that the Decision 2 and Resolution 3 of the Court of Appeals in
CA-G.R. SP No. 136396 be reversed and set aside.
The dispute subject of the present Petition arose from a consolidated Complaint
for regularization, which was subsequently converted into one for "illegal dismissal,
non-payment of salary/wages, and regularization" 4 filed by petitioners and other co-
complainants against respondent GMA Network, Inc. (GMA). 5
Petitioners claimed that they were regular employees of GMA, having been
employed and dismissed as follows:

SALARY PERTAPIN DATE DATE


NAME POSITION
G HIRED DISMISSED

(1) Henry Paragele Cameraman P1,500.00 Sept. 2011 May 2013

(2) Roland Elly Jaso Cameraman P1,500.00 2008 May 2013

Asst.
(3) Julie Aparente P750.00 2011 May 2013
Cameraman

Asst.
(4) Joseph Agus P1,500.00 2011 May 2013
Cameraman

(5) Roxin Lazaro Cameraman P1,500.00 2005 May 2013

Asst.
(6) Francisco Rosales Jr. P750.00 2011 May 2013
Cameraman

(7) Henry Ching Cameraman P1,500.00 2007 May 2013

(8) Carl Lawrence Nario Cameraman P1,500.00 Sept. 2011 May 2013

Asst.
(9) Romerald Taruc P750.00 2010 May 2013
Cameraman

(10) Adonis Ventura Cameraman P1,500.00 2011 May 2013

(11) Romeo S. Mangali Asst.


P750.00 2011 May 2013
III Cameraman

(12) Rodel Galero Cameraman P1,500.00 2010 May 2013

Asst.
(13) Bonicarl Usaraga P750.00 2011 May 2013
Cameraman

(14) Solomon P. Sarte Cameraman P1,500.00 2011 May 2013

Asst.
(15) Nomer C. Orozco P750.00 2010 May 2013
Cameraman

(16) Noriel Sy Asst. P1,500.00 2011 May 2013


Cameraman

Asst.
(17) Rommel Bulic P750.00 2011 May 2013
Cameraman

Asst.
(18) Richard Bernardo P750.00 2011 May 2013
Cameraman

Asst.
(19) Joven Licon P750.00 2011 May 2013
Cameraman

Asst.
(20) Johnny Liboon P750.00 2011 May 2013
Cameraman

Asst.
(21) Milandro Zafe Jr. P750.00 2011 May 2013
Cameraman

Asst.
(22) Roderico Abad P750.00 2011 May 2013
Cameraman

(23) Gonzalo Bawar Cameraman P1,500.00 2011 May 2013

Asst.
(24) Jayson Marzan P750.00 2011 May 2013
Cameraman

Asst.
(25) Jameson Fajilan P750.00 2011 May 2013
Cameraman

Asst.
(26) Arnold Motita P750.00 2011 May 2013
Cameraman

(27) Jerome T. Torralba Cameraman P1,500.00 2011 May 2013

(28) Zernan Bautista        

(29) Jeffrey Canaria Cameraman P1,500.00 2009 May 2013

(30) Jay Albert Torres Cameraman P1,500.00 2000 May 2013

(31) Jonathan P. Anito 6        

 
Countering petitioners, GMA denied the existence of an employer-employee
relationship. It insisted that petitioners were engaged as mere "pinch-hitters or
relievers" whose services were engaged only when there was a need for substitute or
additional workforce. 7
On December 16, 2014, Labor Arbiter Elias H. Salinas dismissed 8 the
consolidated Complaint due to petitioners' failure to prove the existence of an
employer-employee relationship. Conformably, as no employer-employee relationship
existed for him, Labor Arbiter Salinas ruled that no illegal dismissal could have
ensued. 9
On appeal, the National Labor Relations Commission, in its March 28, 2014
Decision, 10 modified Labor Arbiter Salinas' Decision. The National Labor Relations
Commission recognized petitioners as employees of GMA, but held that only one of
their co-complainants, Roxin Lazaro (Lazaro), was a regular employee. 11
The National Labor Relations Commission explained that GMA directly
engaged petitioners as camera operators to perform services that were necessary and
desirable to its business as a broadcasting company. 12 It added that GMA's mere
designation that they are "pinch-hitters or relievers" cannot exclude them from what
the law considers to be employees. 13
However, the National Labor Relations Commission added that the existence
of an employer-employee relationship between petitioners and GMA does not
automatically mean that petitioners were regular employees of GMA. 14 It reasoned
that, pursuant to Article 295 (formerly Article 280) of the Labor Code, 15 petitioners
should have first rendered "at least one year of service, whether such service is
continuous or broken" 16 before they can be considered regular employees of GMA.
In view of this, only Lazaro, who had served a total of 477 days from June 2005 to
April 2013, was considered to have attained regular status. 17
Petitioners asked the National Labor Relations Commission to partially
reconsider its March 28, 2014 Decision. However, their Motion was denied by the
National Labor Relations Commission in a Resolution dated May 21, 2014. 18
Aggrieved, petitioners filed before the Court of Appeals a Petition for
Certiorari under Rule 65 of the 1997 Rules of Civil Procedure. 19
On March 3, 2017, the Court of Appeals dismissed their Rule 65 Petition for
lack of merit and sustained the March 28, 2014 Decision and May 21, 2014
Resolution of the National Labor Relations Commission. 20
Citing the National Labor Relations Commission's March 28, 2014 Decision
with approval, the Court of Appeals maintained that an employer-employee
relationship existed between petitioners and GMA. 21 However, it explained that the
existence of an employer-employee relationship does not automatically confer regular
employment status on employees who were merely employed as "relievers for
aggregate periods of less than a year each." 22
On March 30, 2017, petitioners moved for the reconsideration of the March 3,
2017 Decision of the Court of Appeals, but their Motion was denied in a Resolution
dated October 26, 2017. 23
Petitioners then filed the present Petition for Review on Certiorari, 24 praying
that: (1) the March 3, 2017 Decision and October 26, 2017 Resolution of the Court of
Appeals be reversed and set aside; (2) they be declared regular employees of GMA
who were illegally dismissed from their service; and ultimately (3) that they be
reinstated with full backwages.
Petitioners maintain that they are employees of GMA having satisfied the four-
fold test of employer-employee relationship in this manner:
(1) GMA hired them as camera operators;
(2) GMA compensated them for their service;
(3) GMA exercised its power of dismissal, albeit unjustly, over them; and
(4) GMA had control over the means and methods of their work. 25
With respect to the element of control, petitioners allege that their work
schedules were provided by GMA and that they were required to stay in their work
sites before and after every taping. GMA likewise provided the equipment they used
for tapings such as cameras, lighting, and audio equipment. 26 Moreover, GMA
assigned supervisors to monitor their work and ensure their compliance with company
standards. Petitioners were likewise obliged to follow company rules and
regulations. 27
Petitioners assert that as camera operators assigned to several television
programs of GMA, they performed functions that were necessary and desirable to
GMA's business as both a television and broadcasting company. They further contend
that their repeated and continuous employment with GMA after each television
program they covered shows the necessity and desirability of their functions. Hence,
they have already attained the status of regular employees. 28
Ultimately, petitioners argue that, as regular employees, they are accorded the
right to security of tenure and, therefore, their dismissal was illegal for want of just or
authorized cause. 29
In its Comment, 30 upon being required to submit by this Court through its
April 2, 2018 Resolution, 31 GMA refutes the existence of an employer-employee
relationship. 32 It maintains that petitioners were mere "pinch-hitters or relievers" who
were engaged to augment its regular crew whenever there is a need for substitute or
additional workforce. 33
Further, GMA asserts that the "service fees" given to the workers were "not
compensation paid to an employee, but rather remuneration for the services rendered"
as pinch-hitters/freelancers. 34 Furthermore, GMA also belies the contention that it
exercised control over the workers. It claims that it only monitored the performance of
their work to ensure that the "end result" is compliant with company standards. 35  aScITE
GMA adds that, even assuming that an employer-employee relationship did
exist between them, petitioners could not have attained regular status considering their
failure to render "at least one year of service" as required by law. 36
Specifically, with respect to petitioner Adonis S. Ventura (Ventura), GMA
added that he was engaged as a fixed-term employee under a valid "Talent
Agreement." Accordingly, Ventura's employment was automatically terminated upon
the happening of the day certain stipulated in the contract. GMA further maintains
that it may not be obliged to re-engage Ventura. 37
Ultimately, GMA argues that petitioners could not have been illegally
dismissed since they were not regular employees with tenurial security. 38 GMA
maintains that as pinch-hitters/freelancers, petitioners' engagement ceased at the end
of every shoot. Consequently, there exists no obligation on the part of GMA to re-
engage them. 39
For this Court's resolution are the following issues:
First, whether or not an employer-employee relationship existed between the
petitioners and GMA;
Second — assuming the existence of an employer-employee relationship —
whether or not the petitioners are regular employees of GMA;
Third, assuming regular employment status, whether or not the petitioners were
illegally dismissed.
The petition is meritorious.
I
Labor cases are elevated to this Court through Rule 45 petitions, following
Rule 65 petitions decided by the Court of Appeals on rulings made by the National
Labor Relations Commission. From this, two (2) chief considerations become
apparent: (1) the general injunction that Rule 45 petitions are limited to questions of
law; and (2) that the more basic underlying issue is the National Labor Relations
Commission's potential grave abuse of its discretion. In labor disputes then, this Court
may only resolve the matter of whether the Court of Appeals erred in determining "the
presence or absence of grave abuse of discretion and deciding other jurisdictional
errors of the National Labor Relations Commission." 40
The general limitation on Rule 45 petitions being concerned with questions of
law was discussed in Abuda v. L. Natividad Poultry Farms: 41
When a decision of the Court of Appeals decided under Rule 65 is
brought to this Court through a petition for review under Rule 45, the general
rule is that this Court may only pass upon questions of law. Meralco
Industrial Engineering Services Corp. v. National Labor Relations
Commission emphasized as follows:
This Court is not a trier of facts. Well-settled is the rule
that the jurisdiction of this Court in a petition for review
on certiorari under Rule 45 of the Revised Rules of Court is
limited to reviewing only errors of law, not of fact, unless the
factual findings complained of are completely devoid of
support from the evidence on record, or the assailed judgment
is based on a gross misapprehension of facts. Besides, factual
findings of quasi-judicial agencies like the [National Labor
Relations Commission], when affirmed by the Court of
Appeals, are conclusive upon the parties and binding on this
Court. 42 (Citations omitted, emphasis in the original)
In addition, E. Ganzon, Inc. v. Ando, Jr., 43 citing Montoya v. Transmed, 44 is
instructive:
In labor cases, Our power of review is limited to the determination of
whether the [Court of Appeals] correctly resolved the presence or absence of
grave abuse of discretion on the part of the [National Labor Relations
Commission]. The Court explained this in Montoya v. Transmed Manila
Corporation:
. . . In a Rule 45 review, we consider the correctness of the
assailed [Court of Appeals] decision, in contrast with the
review for jurisdictional error that we undertake under Rule 65.
Furthermore, Rule 45 limits us to the review of questions of
law raised against the assailed [Court of Appeals] decision. In
ruling for legal correctness, we have to view the [Court of
Appeals] decision in the same context that the petition
for certiorari it ruled upon was presented to it; we have to
examine the [Court of Appeals] decision from the prism of
whether it correctly determined the presence or absence of
grave abuse of discretion in the [National Labor Relations
Commission] decision before it, not on the basis of whether the
[National Labor Relations Commission] decision on the merits
of the case was correct. In other words, we have to be keenly
aware that the [Court of Appeals] undertook a Rule 65 review,
not a review on appeal, of the [National Labor Relations
Commission] decision challenged before it. This is the
approach that should be basic in a Rule 45 review of a [Court
of Appeals] ruling in a labor case. In question form, the
question to ask is: Did the [Court of Appeals] correctly
determine whether the [National Labor Relations Commission]
committed grave abuse of discretion in ruling on the
case? 45 (Citation omitted, emphasis supplied)
It has been settled that the National Labor Relations Commission may be found
to have committed grave abuse of discretion when its decision does not provide the
following, as stated in E. Ganzon, Inc.: 
. . . not supported by substantial evidence or are in total disregard of evidence
material to or even decisive of the controversy; when it is necessary to prevent
a substantial wrong or to do substantial justice; when the findings of the
[National Labor Relations Commission] contradict those of the [Labor
Arbiter]; and when necessary to arrive at a just decision of the
case." 46 (Citation omitted)
These parameters shall guide this Court in resolving the substantial issues in
the present Petition.
II
GMA insists that petitioners were never hired as its employees, "whether
probationary, casual[,] or any type of employment." 47 According to it, petitioners
were merely pinch-hitters or freelancers engaged on a per-shoot basis whenever the
need for additional workforce arose. 48
GMA's arguments fail to impress.
The question of whether an employer-employee relationship existed between
petitioners and GMA has already been settled by the consistent rulings of the National
Labor Relations Commission and the Court of Appeals. To once and for all put this
matter to rest, this Court further clarifies their pronouncements.
A four-fold test has been applied in determining the existence of an employer-
employee relationship. In Begino v. ABS-CBN: 49
To determine the existence of [an employer-employee relationship], case law
has consistently applied the four-fold test, to wit: (a) the selection and
engagement of the employee; (b) the payment of wages; (c) the power of
dismissal; and (d) the employer's power to control the employee on the means
and methods by which the work is accomplished. Of these criteria, the so-
called "control test" is generally regarded as the most crucial and
determinative indicator of the presence or absence of an employer-employee
relationship. Under this test, an employer-employee relationship is said to
exist where the person for whom the services are performed reserves the right
to control not only the end result but also the manner and means utilized to
achieve the same. 50 (Citations omitted, emphasis supplied)
Thus, to be considered employees of GMA, petitioners must prove the
following: (1) that GMA engaged their services; (2) that GMA compensated them; (3)
that GMA had the power to dismiss them; and more importantly; (4) that GMA
exercised control over the means and methods of their work.
On the power of hiring, there is no question that petitioners were engaged by
and rendered services directly to GMA. Even GMA concedes that it engaged
petitioners to perform functions, which had been found by the National Labor
Relations Commission and the Court of Appeals to be necessary and desirable to
GMA's usual business as both a television and broadcasting company. 51
On the payment of wages, that petitioners were paid so-called "service fees"
and not "wages" 52 is merely a matter of nomenclature. Likewise, it is of no
consequence that petitioners were paid on a per-shoot basis, since this is only a mode
of computing compensation and does not, in any way, preclude GMA's control over
the distribution of their wages and the manner by which they carried out their work.
It is settled that the mode of computing compensation is not the decisive factor
in ascertaining the existence of an employer-employee relationship. What matters is
that the employee received compensation from the employer for the services that he or
she rendered. 53 Here, there is no question that GMA directly compensated petitioners
for their services.
On the power to dismiss, the Court of Appeals correctly sustained the National
Labor Relations Commission in noting that the power of dismissal "is implied and is
concomitant with the power to select and engage; in other words, it is also the power
to disengage." 54 GMA maintains that petitioners were merely "disengaged" from
service. This, again, is a futile effort at splitting hairs. Disengagement in the context
of an employer-employee relationship amounts to dismissal.
Finally, on the most important element of control, it becomes necessary to
determine whether GMA exercised control over the means and methods of petitioners'
work. Moreover, given GMA's specific representations on the nature of its
engagement with petitioners, a review of the difference between an independent
contractor and an employee is in order.
GMA rejects an explicit nomenclature recognizing it as having engaged
petitioners as "talents" or independent contractors. 55 Yet, its denial of an employer-
employee relationship, coupled with the claim that it merely exercised control over
the output required of petitioners, 56 is an implicit assertion that it engaged petitioners
as independent contractors. It also does not escape this Court's attention that the
remuneration given to the petitioners was denominated as "talent fee." 57 This is
consistent with petitioners' allegation that they were made to sign contracts indicating
that they were "talents" or independent contractors of GMA. 58
Chavez v. National Labor Relations Commission 59 defines an independent
contractor as:
". . . one who carries on a distinct and independent business and undertakes to
perform the job, work, or service on its own account and under its own
responsibility according to its own manner and method, free from the control
and direction of the principal in all matters connected with the performance
of the work except as to the results thereof." 60 (Citation omitted, emphasis
supplied)
An independent contractor "enjoys independence and freedom from the control
and supervision of his principal" as opposed to an employee who is "subject to the
employer's power to control the means and methods by which the employee's work is
to be performed and accomplished." 61
This Court exhaustively discussed the nature of an independent contractor
relation in Fuji Television Network, Inc. v. Espiritu: 62  HEITAD

Independent contractors are recognized under Article 106 of the Labor


Code:
Art. 106. Contractor or subcontractor. — Whenever an
employer enters into a contract with another person for the
performance of the farmer's work, the employees of the
contractor and of the latter's subcontractor, if any, shall be paid
in accordance with the provisions of this Code.
xxx xxx xxx
The Secretary of Labor and Employment may, by
appropriate regulations, restrict or prohibit the contracting-out
of labor to protect the rights of workers established under this
Code. In so prohibiting or restricting, he may make appropriate
distinctions between labor-only contracting and job contracting
as well as differentiations within these types of contracting and
determine who among the parties involved shall be considered
the employer for purposes of this Code, to prevent any
violation or circumvention of any provision of this Code.
There is "labor-only" contracting where the person
supplying workers to an employer does not have substantial
capital or investment in the form of tools, equipment,
machineries, work premises, among others, and the workers
recruited and placed by such person are performing activities
which are directly related to the principal business of such
employer. In such cases, the person or intermediary shall be
considered merely as an agent of the employer who shall be
responsible to the workers in the same manner and extent as if
the latter were directly employed by him.
In Department Order No. 18-A, Series of 2011, of the Department of
Labor and Employment, a contractor is defined as having:
Section 3. . . .
(c) . . . an arrangement whereby a principal agrees to
put out or farm out with a contractor the performance or
completion of a specific job, work or service within a definite
or predetermined period, regardless of whether such job, work
or service is to be performed or completed within or outside the
premises of the principal.
This department order also states that there is a trilateral relationship in
legitimate job contracting and subcontracting arrangements among the
principal, contractor, and employees of the contractor. There is no employer-
employee relationship between the contractor and principal who engages the
contractor's services, but there is an employer-employee relationship between
the contractor and workers hired to accomplish the work for the principal.
Jurisprudence has recognized another kind of independent contractor:
individuals with unique skills and talents that set them apart from ordinary
employees. There is no trilateral relationship in this case because the
independent contractor himself or herself performs the work for the principal.
In other words, the relationship is bilateral.
In Orozco v. Court of Appeals, Wilhelmina Orozco was a columnist
for the Philippine Daily Inquirer. This court ruled that she was an independent
contractor because of her "talent, skill, experience, and her unique viewpoint
as a feminist advocate." In addition, the Philippine Daily Inquirer did not have
the power of control over Orozco, and she worked at her own pleasure.
Semblante v. Court of Appeals involved a masiador and
a sentenciador. This court ruled that "petitioners performed their functions as
masiador and sentenciador free from the direction and control of respondents"
and that the masiador and sentenciador "relied mainly on their 'expertise that
is characteristic of the cockfight gambling.'" Hence, no employer-employee
relationship existed.
Bernarte v. Philippine Basketball Association involved a basketball
referee. This court ruled that "a referee is an independent contractor, whose
special skills and independent judgment are required specifically for such
position and cannot possibly be controlled by the hiring party."
In these cases, the workers were found to be independent
contractors because of their unique skills and talents and the lack of control
over the means and methods in the performance of their work.
In other words, there are different kinds of independent contractors:
those engaged in legitimate job contracting and those who have unique skills
and talents that set them apart from ordinary employees. 63 (Citations omitted,
emphasis supplied)
Evidently, the relationship between GMA and petitioners is bilateral since
petitioners themselves performed work for GMA. Therefore, in order to be considered
independent contractors and not employees of GMA, it must be shown that petitioners
were hired because of their "unique skills and talents" and that GMA did not exercise
control over the means and methods of their work. 
Fuji's resolution of whether there existed an independent contractual
relationship in that case entailed a comparison of the circumstances surrounding two
(2) prior cases decided by this Court. Fuji considered Sonza v. ABS-
CBN 64 and Dumpit Murillo v. Court of Appeals 65 in the following manner:
Sonza was engaged by ABS-CBN in view of his "unique skills, talent
and celebrity status not possessed by ordinary employees." His work was for
radio and television programs. On the other hand, Dumpit-Murillo was hired
by ABC as a newscaster and co-anchor.
Sonza's talent fee amounted to P317,000.00 per month, which this
court found to be a substantial amount that indicated he was an independent
contractor rather than a regular employee. Meanwhile, Dumpit-Murillo's
monthly salary was P28,000.00, a very low amount compared to what Sonza
received.
Sonza was unable to prove that ABS-CBN could terminate his services
apart from breach of contract. There was no indication that he could be
terminated based on just or authorized causes under the Labor Code. In
addition, ABS-CBN continued to pay his talent fee under their agreement,
even though his programs were no longer broadcasted. Dumpit-Murillo was
found to have been illegally dismissed by her employer when they did not
renew her contract on her fourth year with ABC.
In Sonza, this court ruled that ABS-CBN did not control how Sonza
delivered his lines, how he appeared on television, or how he sounded on
radio. All that Sonza needed was his talent. Further, "ABS-CBN could not
terminate or discipline SONZA even if the means and methods of
performance of his work . . . did not meet ABS-CBN's approval." In Dumpit-
Murillo, the duties and responsibilities enumerated in her contract was a clear
indication that ABC had control over her work. 66 (Citations omitted,
emphasis supplied)
Here, petitioners were hired by GMA as camera operators. There is no showing
at all that they were hired because of their "unique skills, talent and celebrity status
not possessed by ordinary employees."
They were paid a meager salary ranging from P750.00 to P1,500.00 per taping.
Though wages are not a "conclusive factor in determining whether one is an employee
or an independent contractor," it "may indicate whether one is an independent
contractor." 67 In this case, the sheer modesty of the remuneration rendered to
petitioners undermines the assertion that there was something particularly unique
about their status, talents, or skills.
More importantly, petitioners were subject to GMA's control and supervision.
Moreover:
(1) Their recordings and shoots were never left to their own discretion and
craft;
(2) They were required to follow the work schedules which GMA provided to
them;
(3) They were not allowed to leave the work site during tapings, which often
lasted for days;
(4) They were also required to follow company rules like any other employee.
GMA provided the equipment they used during tapings. GMA also assigned
supervisors to monitor their performance and guarantee their compliance with
company protocols and standards. 68
Having satisfied the element of control in determining the existence of an
employer-employee relationship, the next matter for resolution is whether petitioners
were regular employees of GMA.
III
Petitioners maintain that as camera operators, petitioners performed functions
that were necessary and desirable to GMA's usual business as a television and
broadcasting company. They emphasize that their continuous employment with
GMA, despite the end of shooting and recording for each television program to which
they were assigned, further demonstrates the necessity and desirability of the
functions they were performing. Accordingly, they were regular employees. 69
Petitioners' assertions are well-taken.
Classifying employment, that is, whether an employee is engaged as a regular,
project, seasonal, casual, or fixed-term employee, is "determined by law, regardless of
any contract expressing otherwise." 70
Article 295 of the Labor Code identifies four (4) categories of employees,
namely: (1) regular; (2) project; (3) seasonal; and (4) casual employees. Furthermore:
Article 295. Regular and casual employment. — The provisions of
written agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be regular where
the employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer, except
where the employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the
engagement of the employee or where the work or service to be performed is
seasonal in nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the
preceding paragraph: Provided, That [sic], any employee who has rendered at
least one year of service, whether such service is continuous or broken, shall
be considered a regular employee with respect to the activity in which he is
employed and his employment shall continue while such activity exists.
(Emphasis supplied)
Brent School, Inc. v. Zamora 71 recognized another category: fixed-term
employees. Fixed-term employment sanctions the possibility of a purely contractual
relationship between the employer and the fixed-term employee, provided that certain
requisites are met. Consequently, terms and conditions stipulated in the contract
govern their relationship, particularly with respect to the duration of employment. 72
Pursuant to Article 295, GMA Network, Inc. v. Pabriga states:
". . . employees performing activities which are usually necessary or desirable
in the employer's usual business or trade can either be regular, project or
seasonal employees, while, as a general rule, those performing activities not
usually necessary or desirable in the employer's usual business or trade
are casual employees." 73 (Emphasis supplied)
Nevertheless, though project and seasonal employees may perform functions
that are necessary and desirable to the usual business or trade of the employer, the law
distinguishes them from regular employees in that, project and seasonal employees
are generally needed and engaged to perform tasks which only last for a specified
duration. The relevance of this distinction finds support in how "only employers who
constantly need the specified tasks to be performed can be justifiably charged to
uphold the constitutionally protected security of tenure of the corresponding
workers." 74 ATICcS

Conformably, Article 294 of the Labor Code provides:


Article 294. [279] Security of Tenure. — In cases of regular
employment, the employer shall not terminate the services of an employee
except for a just cause or when authorized by this Title. An employee who is
unjustly dismissed from work shall be entitled to reinstatement without loss of
seniority rights and other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent computed
from the time his compensation was withheld from him up to the time of his
actual reinstatement. (Citation omitted)
Here, GMA argues that petitioners should have rendered "at least one (1) year
of service equivalent to 313 working days (6-day work per week) or 261 days (5-day
work per week)" before they are deemed to have attained regular status. 75 It harps on
the March 3, 2017 Decision of the Court of Appeals which noted that petitioners
cannot be deemed regular employees since they failed to comply with the one-year
period supposedly required by law. Quite notably, GMA does not refute the finding
that petitioners performed functions necessary and desirable to its usual business, it
merely insists on a supposedly requisite duration.
From the plain language of the second paragraph of Article 295 of the Labor
Code, 76 it is clear that the requirement of rendering "at least one (1) year of
service[,]" before an employee is deemed to have attained regular status, only applies
to casual employees. An employee is regarded a casual employee if he or she was
engaged to perform functions which are not necessary and desirable to the usual
business and trade of the employer. 77 Thus, when one is engaged to perform
functions which are necessary and desirable to the usual business and trade of the
employer, engagement for a year-long duration is not a controlling consideration.
GMA's claim that petitioners were required to render at least one (1) year of
service before they may be considered regular employees finds no basis in law.
Petitioners were never casual employees precisely because they performed functions
that were necessary and desirable to the usual business of GMA. They did not need to
render a year's worth of service to be considered regular employees.
Of course, that petitioners performed functions which were necessary and
desirable to GMA's usual trade business could nevertheless mean that they were
project employees whose engagements were fundamentally time-bound. This Court
finds that they were not.
As opposed to a regular employee, a project employee may or may not perform
functions that are usually necessary or desirable in the usual business or trade of the
employer. This has been extensively discussed in GMA Network, Inc. v. Pabriga: 78
[T]he activities of project employees may or may not be usually necessary or
desirable in the usual business or trade of the employer, as we have discussed
in ALU-TUCP v. National Labor Relations Commission, and recently
reiterated in Leyte Geothermal Power Progressive Employees Union-ALU-
TUCP v. Philippine National Oil Company-Energy Development
Corporation. In said cases, we clarified the term "project" in the test for
determining whether an employee is a regular or project employee:
It is evidently important to become clear about the
meaning and scope of the term "project'' in the present context.
The "project" for the carrying out of which "project
employees" are hired would ordinarily have some relationship
to the usual business of the employer. Exceptionally, the
"project" undertaking might not have an ordinary or normal
relationship to the usual business of the employer. In this latter
case, the determination of the scope and parameters of the
"project" becomes fairly easy. It is unusual (but still
conceivable) for a company to undertake a project which has
absolutely no relationship to the usual business of the
company; thus, for instance, it would be an unusual steel-
making company which would undertake the breeding and
production of fish or the cultivation of vegetables. From the
viewpoint, however, of the legal characterization problem here
presented to the Court, there should be no difficulty in
designating the employees who are retained or hired for the
purpose of undertaking fish culture or the production of
vegetables as "project employees," as distinguished from
ordinary or "regular employees," so long as the duration and
scope of the project were determined or specified at the time of
engagement of the "project employees." For, as is evident from
the provisions of Article [295] of the Labor Code, quoted
earlier, the principal test for determining whether
particular employees are properly characterized as
"project employees" as distinguished from "regular
employees," is whether or not the ''project employees" were
assigned to carry out a "specific project or undertaking," the
duration (and scope) of which were specified at the time the
employees were engaged for that project.
In the realm of business and industry, we note
that "project" could refer to one or the other of at least two
(2) distinguishable types of activities. Firstly, a project
could refer to a particular job or undertaking that is within
the regular or usual business of the employer company, but
which is distinct and separate, and identifiable as such, from
the other undertakings of the company. Such job or
undertaking begins and ends at determined or determinable
times. The typical example of this first type of project is a
particular construction job or project of a construction
company. A construction company ordinarily carries out two or
more [distinct] identifiable construction projects: e.g., a
twenty-five-[story] hotel in Makati; a residential condominium
building in Baguio City; and a domestic air terminal in Iloilo
City. Employees who are hired for the carrying out of one of
these separate projects, the scope and duration of which has
been determined and made known to the employees at the time
of employment, are properly treated as "project employees,"
and their services may be lawfully terminated at completion of
the project.
The term "project" could also refer to, secondly, a
particular job or undertaking that is not within the regular
business of the corporation. Such a job or undertaking must
also be identifiably separate and distinct from the ordinary or
regular business operations of the employer. The job or
undertaking also begins and ends at determined or
determinable times. . . 
Thus, in order to safeguard the rights of workers against the arbitrary
use of the word "project" to prevent employees from attaining the status of
regular employees, employers claiming that their workers are project
employees should not only prove that the duration and scope of the
employment was specified at the time they were engaged, but also that there
was indeed a project. As discussed above, the project could either be (1) a
particular job or undertaking that is within the regular or usual business of the
employer company, but which is distinct and separate, and identifiable as
such, from the other undertakings of the company; or (2) a particular job or
undertaking that is not within the regular business of the corporation. As it
was with regard to the distinction between a regular and casual employee, the
purpose of this requirement is to delineate whether or not the employer is in
constant need of the services of the specified employee. If the particular job or
undertaking is within the regular or usual business of the employer
company and it is not identifiably distinct or separate from the other
undertakings of the company, there is clearly a constant necessity for the
performance of the task in question, and therefore said job or undertaking
should not be considered a project. 79 (Citations omitted, emphasis and
underscoring in the original)
From this, project employment ultimately requires the existence of a project or
an undertaking which could either be: (1) a particular job within the regular or usual
business of the employer, but which is distinct and separate, and identifiable as such,
from the other undertakings of the company; or (2) a particular job not within the
regular business of the company. It is not enough that the employee is made aware of
the duration and scope of employment at the time of engagement. To rule otherwise
would be to allow employers to easily circumvent an employee's right to security of
tenure through the convenient artifice of communicating a duration or scope.
In this case, GMA repeatedly engaged petitioners as camera operators for its
television programs. As camera operators, petitioners performed activities which are:
(1) within the regular and usual business of GMA; and (2) not identifiably distinct or
separate from the other undertakings of GMA. It would be absurd to consider the
nature of their work of operating cameras as distinct or separate from the business of
GMA, a broadcasting company that produces, records, and airs television programs.
From this alone, the petitioners cannot be considered project employees for there is no
distinctive "project" to even speak of.
Neither should GMA's assertion that petitioners were merely engaged as pinch-
hitters or substitutes, whose employment are for a specific duration or period, prevent
them from being regular employees. Again, from GMA Network, Inc. v. Pabriga: 80
Every industry, even public offices, has to deal with securing substitutes for
employees who are absent or on leave. Such tasks, whether performed by the
usual employee or by a substitute, cannot be considered separate and distinct
from the other undertakings of the company. While it is management's
prerogative to device a method to deal with this issue, such prerogative is not
absolute and is limited to systems wherein employees are not ingeniously and
methodically deprived of their constitutionally protected right to security of
tenure. We are not convinced that a big corporation such as petitioner cannot
device a system wherein a sufficient number of technicians can be hired with
a regular status who can take over when their colleagues are absent or on
leave, especially when it appears from the records that petitioner hires so-
called pinch-hitters regularly every month. 81 (Emphasis supplied)
Fuji, 82 citing ABS-CBN Broadcasting Corporation v. Nazareno, 83 explained
the test for determining regular employment, as follows:
The test for determining regular employment is whether there is a
reasonable connection between the employee's activities and the usual
business of the employer. Article [295] provides that the nature of work must
be "necessary or desirable in the usual business or trade of the employer" as
the test for determining regular employment. As stated in ABS-CBN
Broadcasting Corporation v. Nazareno:
In determining whether an employment should be
considered regular or non-regular, the applicable test is
the reasonable connection between the particular activity
performed by the employee in relation to the usual business or
trade of the employer. The standard, supplied by the law
itself, is whether the work undertaken is necessary or desirable
in the usual business or trade of the employer, a fact that can
be assessed by looking into the nature of the services rendered
and its relation to the general scheme under which the business
or trade is pursued in the usual course. It is distinguished from
a specific undertaking that is divorced from the normal
activities required in carrying on the particular business or
trade. 84 (Emphasis supplied)
GMA is primarily engaged in the business of broadcasting, which encompasses
the production of television programs. Following the nature of its business, GMA is
naturally and logically expected to engage the service of camera operators such as
petitioners, in case it ceases business by failing to shoot and record any television
program. Again, that petitioners' work as camera operators was necessary and
desirable to the usual business of GMA has long been settled by the consistent rulings
of both the National Labor Relations Commission and the Court of Appeals. Even
GMA fails to refute these findings.
This Court finds no cogent reason to depart from these rulings. There is no
denying that a reasonable connection exists between petitioners' work as camera
operators and GMA's business as both a television and broadcasting company. The
repeated engagement of petitioners over the years only reinforces the indispensability
of their services to GMA's business. Mindful of these considerations, this Court is
certain that the petitioners were GMA's regular employees.
IV
Fuji, 85 citing Pabriga, 86 explained the standards on fixed-term employment
contracts established in Brent in this manner:
Cognizant of the possibility of abuse in the utilization of fixed-term
employment contracts, we emphasized in Brent that where from the
circumstances it is apparent that the periods have been imposed to preclude
acquisition of tenurial security by the employee, they should be struck down
as contrary to public policy or morals. We thus laid down indications or
criteria under which "term employment" cannot be said to be in circumvention
of the law on security of tenure, namely:
1) The fixed period of employment was knowingly and voluntarily
agreed upon by the parties without any force, duress, or
improper pressure being brought to bear upon the employee and
absent any other circumstances vitiating his consent; or
2) It satisfactorily appears that the employer and the employee dealt
with each other on more or less equal terms with no moral
dominance exercised by the former or the latter.
These indications, which must be read together, make the Brent
doctrine applicable only in a few special cases wherein the employer and
employee are on more or less in equal footing in entering into the contract.
The reason for this is evident: when a prospective employee, on account of
special skills or market forces, is in a position to make demands upon the
prospective employer, such prospective employee needs less protection than
the ordinary worker. Lesser limitations on the parties' freedom of contract are
thus required for the protection of the employee. 87 (Citation omitted,
emphasis supplied)  TIADCc

That the contract was "knowingly and voluntarily agreed upon" and that the
"employer and employee dealt with each other on more or less equal terms," when
taken together, renders a contract for fixed-term employment valid and enforceable.
Nevertheless, this Court has not cowered in invalidating fixed-term
employment contracts in instances where the employer fails to show that it dealt with
the employee in "more or less equal terms." As discussed in Pabriga: 88
[W]hen a prospective employee, on account of special skills or market forces,
is in a position to make demands upon the prospective employer, such
prospective employee needs less protection than the ordinary worker. Lesser
limitations on the parties' freedom of contract are thus required for the
protection of the employee. These indications were applied in Pure Foods
Corporation v. National Labor Relations Commission, where we discussed
the patent inequality between the employer and employees therein:
[I]t could not be supposed that private respondents and all other
so-called "casual" workers of [the employer] knowingly and
voluntarily agreed to the 5-month employment contract.
Cannery workers are never on equal terms with their
employers. Almost always, they agree to any terms of an
employment contract just to get employed considering that it is
difficult to find work given their ordinary qualifications. Their
freedom to contract is empty and hollow because theirs is the
freedom to starve if they refuse to work as casual or contractual
workers. Indeed, to the unemployed, security of tenure has no
value. It could not then be said that petitioner and private
respondents "dealt with each other on more or less equal terms
with no moral dominance whatever being exercised by the
former over the latter.["]
To recall, it is doctrinally entrenched that in illegal dismissal cases, the
employer has the burden of proving with clear, accurate, consistent, and
convincing evidence that the dismissal was valid. It is therefore the employer
which must satisfactorily show that it was not in a dominant position of
advantage in dealing with its prospective employee. Thus, in Philips
Semiconductors (Phils.), Inc. v. Fadriquela, this Court rejected the employer's
insistence on the application of the Brent doctrine when the sole employer's
insistence on the application of the Brent doctrine when the sole justification
of the fixed terms is to respond to temporary albeit frequent need of such
workers:
We reject the petitioner's submission that it resorted to
hiring employees for fixed terms to augment or supplement its
regular employment "for the duration of peak loads" during
short-term surges to respond to cyclical demands; hence, it may
hire and retire workers on fixed terms, ad infinitum, depending
upon the needs of its customers, domestic and international.
Under the petitioner's submission, any worker hired by it for
fixed terms of months or years can never attain regular
employment status. . . . 89 (Citations omitted)
Similarly, in this case, this Court cannot enable GMA in hiring and rehiring
workers solely depending on its fancy, getting rid of them when, in its mind, they are
bereft of prior utility, and with a view to circumvent their right to security of tenure. It
would be improper to classify Ventura as a fixed-term employee considering that
GMA did not even allege the manner as to how the terms of the contract with him
were agreed upon.
It is "the employer which must satisfactorily show that it was not in a dominant
position of advantage in dealing with its prospective employee." 90 Thus, the burden is
upon GMA as the employer to prove that it dealt with Ventura in more or less equal
terms in the execution of the talent agreements with him. Sweeping guarantees that
the contract was knowingly and voluntarily agreed upon by the parties and that the
employer and the employee stood on equal footing will not suffice.
That Ventura never contested the execution of his talent agreements cannot in
any way operate to preclude him from attaining regular employment status. This
Court is not blind to the unfortunate tendency for many employees to cede their right
to security of tenure rather than face total unemployment.
V
As regular employees, petitioners enjoy the right to security of tenure. Thus,
they may only be terminated for just or authorized cause, and after due notice and
hearing. The burden to prove that a dismissal was anchored on a just or authorized
cause rests on the employer. The employer's failure to discharge this burden leads to
no other conclusion than that a dismissal was illegal.
It was thus, incumbent upon GMA to ensure that petitioners' dismissals were
made in keeping with the requirements of substantive and procedural due process.
GMA, however, miserably failed to allege in its Comment, much less prove, that
petitioners' dismissals were impelled by any of the just or authorized causes
recognized in Articles 297, 91 298, 92 299 93 or 279 (a) 94 of the Labor Code.
As illegally dismissed employees, petitioners are entitled to reinstatement to
their positions with full backwages computed from the time of dismissal up to the
time of actual reinstatement. Where reinstatement is no longer feasible, petitioners
should be given separation pay in addition to full backwages.
Further, petitioners are entitled to the payment of attorney's fees as they were
forced to litigate. "It is settled that in actions for recovery of wages or where an
employee was forced to litigate and, thus, incur expenses to protect his rights and
interest, the award of attorney's fees is legally and morally justifiable." 95
Finally, petitioners are entitled to interest at the legal rate at the rate of 6% per
annum until the monetary awards due to them are fully paid, pursuant to Nacar v.
Gallery Frames. 96
WHEREFORE, this Court resolves to GRANT the Petition. The assailed
March 3, 2017 Decision and October 26, 2017 Resolution of the Court of Appeals
are REVERSED and SET ASIDE.
The following petitioners are DECLARED regular employees of respondent
GMA Network, Inc. and are ORDERED REINSTATED to their former positions
and to be PAIDbackwages, allowances, and other benefits from the time of their
illegal dismissal up to the time of their actual reinstatement:
1. Henry T. Paragele 
2. Roland Elly C. Jaso
3. Julie B. Aparente
4. Roderico S. Abad
5. Milandro B. Zafe Jr.
6. Richard P. Bernardo
7. Joseph C. Agus
8. Romerald S. Taruc
9. Zernan Bautista
10. Arnold Motita
11. Jeffrey Canaria
12. Rommel F. Bulic
13. Henry N. Ching
14. Nomer C. Orozco
15. Jameson M. Fajilan
16. Jay Albert E. Torres
17. Rodel P. Galero
18. Carl Lawrence Jasa Nario
19. Romeo Sanchez Mangali III
20. Francisco Rosales Jr.
21. Bonicarl Penaflorida Usaraga
22. Joven P. Licon
23. Noriel Barcita Sy
24. Gonzalo Manabat Bawar
25. David Adonis S. Ventura
26. Solomon Pico Sarte
27. Jony F. Liboon
28. Jonathan Peralta Anito
29. Jerome Torralba
30. Jayzon Marsan
Respondent GMA Network, Inc. is further ordered to pay each of the
petitioners' attorney's fees equivalent to ten percent (10%) of total monetary award
accruing to each of them.
The amounts due to each petitioner shall bear legal interest at the rate of six
percent (6%) per annum, to be computed from the finality of this Decision until full
payment.
The case is REMANDED to the Labor Arbiter for the computation of
backwages and other monetary awards due to petitioners.
SO ORDERED.  AIDSTE

|||  (Paragele v. GMA Network, Inc., G.R. No. 235315, [July 13, 2020])

FIRST DIVISION

[G.R. No. 225425. January 29, 2020.]

WILHELMSEN SMITH BELL MANNING, INC., WILHELMSEN


SHIP MANAGEMENT LTD., and FAUSTO R. PREYSLER,
JR., petitioners, vs. FRANKLIN J. VILLAFLOR, respondent.
DECISION

J.C. REYES, JR., J  : p

This is a Petition for Review on Certiorari 1 under Rule 45 of the Rules of


Court, assailing the Decision 2 dated March 7, 2016 and Resolution 3 dated May 19,
2016 of the Court of Appeals (CA) in CA-G.R. SP No. 142966.
The Factual Antecedents
Wilhelmsen Smith Bell Manning, Inc., on behalf of its principal Wilhelmsen
Ship Management Ltd. (petitioners) hired Franklin J. Villaflor (respondent) as Third
Engineer on board their vessel M/V NOCC Puebla on a seven-month contract dated
August 22, 2012. Respondent underwent the required pre-employment medical
examinations and was thereby pronounced fit to work on August 22, 2012. On
September 5, 2012, respondent boarded the vessel. 4
Sometime in March 2013, while conducting maintenance works on the vessel
and lifting heavy engine and generator spare parts with his crewmates, respondent felt
severe back pain which caused him to fall on his knees. He was given pain relievers
by his superiors for immediate relief but was advised by the Master to be repatriated
for further examination. 5
Respondent was, thus, medically repatriated on March 28, 2013. 6
Upon arrival in Manila, petitioners referred respondent to Marine Medical
Service for examination. He was diagnosed to have S/P Laminotomy, L4 Bilateral
Interspinous Process Decompression Coflex and has been advised to regularly consult
with the specialists for the monitoring of his condition. He also underwent out-patient
rehabilitation sessions at the Metropolitan Medical Center. 7
On July 9, 2013, Dr. William Chuasuan, Jr. (Dr. Chuasuan), an Orthopedic and
Adult Joint Replacement Surgeon, issued a letter addressed to the company-
designated physician, Dr. Robert D. Lim (Dr. Lim), stating that respondent's
prognosis is guarded and that the latter had already reached his maximum medical
improvement. Consequently, Dr. Chuasuan gave respondent a disability grading of 8
or 2/3 loss of lifting power of the trunk. Despite this, the company-designated
physician still advised respondent to continue with his medications and rehabilitation.
Respondent was also directed to see Dr. Lim sometime in May 2014. 8
On June 5, 2014, respondent independently consulted a physician of his choice,
Dr. Manuel C. Jacinto, Jr. (Dr. Jacinto). On July 21, 2014, Dr. Jacinto issued a
Medical Certificate, stating that respondent's disability is total and the cause of injury
is work-related/work-aggravated, thus, declaring respondent unfit to go back to work
as a seafarer. 9This prompted respondent to file a complaint for total and permanent
disability benefits against petitioners. 
For its part, petitioners alleged that respondent's condition was merely brought
about by the recurrence of his lumbar problem from his previous employment, for
which he had already claimed total and permanent disability benefits from his
previous employer. 10
In a Decision dated April 16, 2015, the labor arbiter dismissed the complaint
for disability benefits, finding that respondent's injury is not work-related as it was
merely a recurrence of the condition he suffered from his previous employment and as
such, the complained injury did not occur during his term of employment with
petitioners. It disposed, thus:
WHEREFORE, premises considered, the instant complaint is
dismissed for lack of merit. 11
On appeal, the National Labor Relations Commission (NLRC) affirmed the
dismissal of the complaint, finding that respondent failed to exhibit good faith when
he entered into the contract of employment with petitioners as he already knew that he
was not fit to work then, considering that he previously pursued a case for and was
actually granted total and permanent disability benefits against his former employer.
Hence, respondent's appeal was likewise dismissed:
WHEREFORE, premises considered, the appeal of the [respondent]
is hereby dismissed for lack of merit.
SO ORDERED. 12
Respondent's motion for reconsideration of said NLRC Resolution was
likewise denied in its Resolution dated September 24, 2015. 13
A different conclusion was reached on certiorari to the CA. The appellate
court ruled that petitioners cannot harp on the fact that respondent had previously
claimed disability benefits from his former employer. According to the CA, the fact
that respondent was able to find gainful employment even after such claim against his
former employer does not preclude him from instituting another disability claim
against his petitioners as long as his complained injury is work-related or work-
aggravated and that such injury has prevented him from doing the same work. 14
On the merits, the CA found that when petitioners engaged respondent's
services, they were aware of the latter's history of back injury as this was disclosed by
respondent in his PEME. Despite such history, respondent passed all the required tests
in the PEME and was declared fit to work. The CA also found that while respondent
had a pre-existing back problem, his condition was aggravated by the nature of his
work on board the vessel as Third Engineer like lifting heavy materials during
maintenance operations, among others. It was further found that while Dr. Chuasuan
gave respondent a Grade 8 disability rating, his findings also stated that the prognosis
on respondent's case is guarded, meaning "the outcome of the patient's illness is in
doubt." Respondent was thereafter still required to continue his medications and
rehabilitation for over a year since his repatriation. Hence, the CA concluded that
respondent is considered totally and permanently disabled. The CA disposed, thus: 
WHEREFORE, in view of the foregoing, the instant Petition is
hereby GRANTED. Consequently, the assailed Resolutions dated July 31,
2015 and September 24, 2015 rendered by public respondent NLRC-2nd
Division in NLRC LAC No. 06-000486-15/NLRC NCR-OFW-M-08-10443-
14 are hereby REVERSED and SET ASIDE and a new one entered ordering
[petitioners] to jointly and severally pay [respondent] the following: a)
permanent total disability benefits of US$60,000.00 at its peso equivalent at
the time of actual payment; and b) attorney's fees of ten percent (10%) of the
total monetary award at its peso equivalent at the time of actual payment.
SO ORDERED. 15
Petitioners then filed a motion for reconsideration which was denied by the CA
in its May 19, 2016 assailed Resolution:
WHEREFORE, in view of the foregoing, the instant Motion is
hereby DENIED.
SO ORDERED. 16
Hence, this Petition.
Issue
In the main, petitioners argue that the CA erred in granting total and permanent
disability benefits to respondent considering that he was assessed with a Grade 8
disability by the company-designated doctor. Petitioners reasoned that, according to
the rules, the company-designated doctor's assessment should prevail over the
seafarer's personal doctor. Further, petitioners argue that mere inability to work for
over 120 days does not entitle a seafarer to total and permanent disability
compensation. Also, petitioners point out that, in the first place, respondent's
condition was pre-existing and not suffered on board.
Ultimately, the issue before us is whether or not respondent is entitled to total
and permanent disability benefits.
The Court's Ruling
We find no reversible error on the assailed CA Decision and Resolution.
Accordingly, we affirm the assailed rulings, but modify the same by imposing legal
interest upon the monetary awards given by the CA. 
For disability to be compensable under Section 20 (A) of the 2010 POEA-SEC,
the two elements must concur: (1) the injury or illness must be work-related; and (2)
the work-related injury or illness must have existed during the term of the seafarer's
contract. The POEA-SEC defines work-related injury as one "arising out of and in the
course of employment." Jurisprudence is to the effect that compensable illness or
injury cannot be confined to the strict interpretation of said provision in the POEA-
SEC as even pre-existing conditions may be compensable if aggravated by the
seafarer's working condition. It is not necessary that the nature of the employment be
the sole and only reason for the illness or injury suffered by the seafarer. 17 It is
sufficient that there is a reasonable linkage between the disease suffered by the
employee and his work to lead a rational mind to conclude that his work may have
contributed to the establishment or, at the very least, aggravation of any pre-existing
condition he might have had. 18 The Court explained in one case:
Common sense dictates that an illness could not possibly have been
"contracted as a result of the seafarer's exposure to the described risks" if it
has been existing before the seafarer's services are engaged. Still, pre-existing
illnesses may be aggravated by the seafarer's working conditions. To the
extent that any such aggravation is brought about by the work of the seafarer,
compensability ensues x x x. 19
Thus, the CA correctly ruled that petitioners could not harp on the fact of
respondent's previous disability benefits complaint against his former employer to
support their argument that respondent's condition is not work-related as it is pre-
existing. It is noteworthy that despite such back injury history, respondent was able to
pass all the required tests in the PEME. It should also be pointed out that petitioners
were aware of such history as respondent disclosed the same in his PEME.
Nevertheless, petitioners engaged his services. Hence, while it may be true that
respondent's back injury is a recurrence of his previous condition, still, such
recurrence can be attributed to the nature of his work on board petitioners' vessel. As
found by the CA, the normal duties of a Third Engineer include daily maintenance
and operation of the engine room, which entail activities such as lifting of heavy
materials and spare parts. It was also established that respondent felt pain in his back
while lifting some heavy spare engine parts during maintenance operations with his
co-workers. That respondent's condition is work-aggravated and as such,
compensable, cannot be denied.
As to the extent of compensability, the entitlement of an overseas seafarer to
disability benefits is governed by the law, the employment contract, and the medical
findings in accordance with the rules. 20
By law, the seafarer's disability benefits claim is governed by Articles 191 to
193, Chapter VI of the Labor Code, in relation to Rule X, Section 2 of
the Implementing Rules and Regulations (IRR) of the Labor Code. 21 Article 192 (c)
(1) of the Labor Code provides: 
Art. 192. Permanent total disability. x x x
C. The following disabilities shall be deemed total and permanent:
(1) Temporary total disability lasting continuously for more than one
hundred twenty days, except as otherwise provided in the Rules;
xxx xxx xxx
Rule VII, Section 2 (b) of the Amended Rules on Employees'
Compensation also provides:
(b) A disability is total and permanent if as a result of the injury or sickness
the employee is unable to perform any gainful occupation for a continuous
period exceeding 120 days, except as otherwise provided for in Rule X of
these Rules.
The exception to the 120-day rule repeatedly cited above is Rule X of
the Implementing Rules and Regulations (IRR) of Book IV of the Labor Code,
specifically Section 2 thereof which states:
Section 2. Period of entitlement. — (a) The income benefit shall be paid
beginning on the first day of such disability. If caused by an injury or
sickness it shall not be paid longer than 120 consecutive days except
where such injury or sickness still requires medical attendance beyond
120 days but not to exceed 240 days from onset of disability in which case
benefit for temporary total disability shall be paid. However, the System
may declare the total and permanent status at any time after 120 days of
continuous temporary total disability as may be warranted by the degree of
actual loss or impairment of physical or mental functions as determined by the
System. (Emphasis supplied)
By contract, it is governed by the employment contract which the seafarer and
his employer/local manning agency executes prior to employment, and the
applicable POEA-SEC that is deemed incorporated in the employment contract. 22 In
this case, the parties executed the contract of employment on August 22, 2012, thus,
the 2010 POEA-SEC is applicable. Relevant provision of Section 20 (A) thereof
provides:
SECTION 20. COMPENSATION AND BENEFITS —
A. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS
The liabilities of the employer when the seafarer suffers work-related injury or
illness during the term of his contract are as follows:
xxx xxx xxx
6. In case of permanent total or partial disability of the seafarer caused by either
injury or illness the seafarer shall be compensated in accordance with the
schedule of benefits enumerated in Section 32 of his Contract.
Computation of his benefits arising from an illness or disease shall be
governed by the rates and the rules of compensation applicable at the
time the illness or disease was contracted. 
The disability shall be based solely on the disability gradings provided
under Section 32 of this Contract, and shall not be measured or
determined by the number of days a seafarer is under treatment or the
number of days in which sickness allowance is paid.
By the medical findings, the assessment of the company-designated doctor
generally prevails, unless the seafarer disputes such assessment by exercising his right
to a second opinion by consulting a physician of his choice, in which case, the
medical report issued by the latter shall also be evaluated by the labor tribunal and the
court, based on its inherent merit. In case off disagreement in the findings of the
company-designated doctor and the seafarer's personal doctor, the parties may agree
to jointly refer the matter to a third doctor whose decision shall be final and binding
on them. 23
In the landmark case of Elburg Shipmanagement Phils., Inc. v. Quiogue,
Jr., 24 the Court had the occasion to summarize the rules above-cited regarding the
company-designated physician's duty to issue a final medical assessment on the
seafarer's disability grading to determine the extent of compensation:
1. The company-designated physician must issue a final medical assessment on
the seafarer's disability grading within a period of 120 days from the
time the seafarer reported to him;
2. If the company-designated physician fails to give his assessment within the
period of 120 days, without any justifiable reason, then the seafarer's
disability becomes permanent and total;
3. If the company-designated physician fails to give his assessment within the
period of 120 days with a sufficient justification (e.g., seafarer required
further medical treatment or seafarer was uncooperative), then the period
of diagnosis and treatment shall be extended to 240 days. The employer
has the burden to prove that the company-designated physician has
sufficient justification to extend the period; and
4. If the company-designated physician still fails to give his assessment within
the extended period of 240 days, then the seafarer's disability becomes
permanent and total, regardless of any justification.
In this case, respondent was repatriated on March 28, 2013. He was
immediately referred to the company-designated physician upon arrival. While he was
subjected to a series of medications and rehabilitation, no definite disability
assessment was, however, given to respondent at all. The Grade 8 disability rating
given by Dr. Chuasuan cannot be considered as the complete, definite, and final
medical assessment contemplated by the rules. Consider: the Grade 8 disability
assessment given by Dr. Chuasuan was merely addressed to Dr. Lim, who despite
such assessment from the specialist, still advised respondent to continue with his
medications and rehabilitation. Records also show that up to May 2014, respondent
was still ordered to see Dr. Lim for re-evaluation. Respondent's treatment lasted for
over a year, evidencing that respondent's condition remained unresolved. Also worthy
is the fact that Dr. Chuasuan's prognosis on respondent's condition was guarded,
meaning, "the outcome of the patient's illness is in doubt." Clearly, there is nothing
definite and final in the assessment given by the company-designated doctor/s to
respondent's condition. Due to this failure, respondent's disability, under legal
contemplation, is deemed total and permanent. 25
To emphasize, a final and definite disability assessment within the 120-day or
240-day period under the rules is necessary in order to truly reflect the true extent of
the sickness or injuries of the seafarer and his capacity to resume to work as
such. 26 Otherwise, the corresponding disability benefits awarded might not be
commensurate with the prolonged effects of the injuries suffered. 27
Invoking Section 20 (A) (6) of the 2010 POEA-SEC will not help petitioners'
case. Indeed, the recent amendments on the POEA-SEC, specifically Section 20 (A)
(6) thereof, states that "[t]he disability shall be based solely on the disability gradings
provided under Section 32 of this contract, and shall not be measured or determined
by the number of days a seafarer is under treatment or the number of days in which
sickness allowance is paid." Nevertheless, the Court has consistently ruled that before
the disability gradings under Section 32 should be considered, the disability ratings
should be properly established and contained in a valid and timely medical report of a
company-designated physician or the third doctor agreed upon by the parties. In other
words, the periods prescribed by the rules should still be complied with. Thus, the
foremost consideration of the courts should be to determine whether the medical
assessment or report of the company-designated physician was complete and
appropriately issued; otherwise, the medical report shall be set aside and the disability
grading contained therein cannot be seriously appreciated. 28 As above-discussed, no
final and complete assessment was given in this case.
Lastly, we find no cogent reason to deviate from the CA's award of attorney's
fees to the respondent. Considering that respondent was forced to litigate and incur
expenses to protect his right and interest, he is entitled to a reasonable amount of
attorney's fees pursuant to Article 2208 (8) 29 of the New Civil Code. However, in
accordance with prevailing jurisprudence, 30 the Court hereby imposes legal interest
upon the disability benefits and attorney's fees awarded by the CA at the rate of 6%
per annum, reckoned from the finality of this Decision until its full payment.
WHEREFORE, premises considered, the Petition is DENIED. The assailed
Decision dated March 7, 2016 and Resolution dated May 19, 2016 of the Court of
Appeals in CA-G.R. SP No. 142966 are
hereby AFFIRMED with MODIFICATION that the monetary awards made therein
shall earn legal interest of 6% per annum from finality of this Decision until full
payment. 
SO ORDERED.
 (Wilhelmsen Smith Bell Manning, Inc. v. Villaflor, G.R. No. 225425, [January 29,
|||

2020])

SECOND DIVISION
[ G.R. No. 201247, July 13, 2020 ]
ENGINEERING & CONSTRUCTION CORPORATION OF ASIA [NOW FIRST BALFOUR,
INCORPORATED], PETITIONER, VS. SEGUNDINO PALLE, FELIX VELOSA, ALBERTO
PAMPANGA, RANDY GALABO, MARCO GALAPIN AND GERARDO FELICITAS,
RESPONDENTS.

DECISION
HERNANDO, J.:
Challenged in this Petition for Review on Certiorari under Rule 45 of the Rules of Court are the September 13, 2011
Decision[1] of the Court of Appeals (CA) in CA-G.R. SP No. 114599 which held that respondents Segundino Palle
(Palle), Felix Velosa (Velosa), Alberto Pampanga (Pampanga), Randy Galabo (Galabo), Marco Galapin (Galapin)
and Gerardo Felicitas (Felicitas) were regular employees of petitioner Engineering & Construction Corporation of Asia
(ECCA) who were illegally terminated, and its March 22, 2012 Resolution[2] which denied the Motion for Partial
Reconsideration thereof.

The Parties

Petitioner ECCA, now known as First Balfour Incorporated, is a domestic corporation engaged in the construction
business. In 2003, it merged with First Philippine Balfour Beatty Incorporated, with the latter being absorbed by the
former. Subsequently, it was renamed First Balfour Incorporated.[3]

Respondents Palle, Velosa, Pampanga, Galabo, Galapin and Felicitas (collectively, respondents) were hired by
ECCA on various dates to work in its construction business.

The Antecedents

The instant case stemmed from the illegal dismissal complaint filed in 2004 by the respondents with the National
Labor Relations Commission (NLRC) against ECCA and its president, Oscar Lopez.

Petitioner ECCA's Version

ECCA claimed that respondents, as project employees, were validly terminated in view of the project's completion. It
pointed out that respondents were not regular employees, but merely project employees since they were hired for a
specific project or undertaking, the termination of which was determined at the time they were hired.[4]

In addition, it argued that: (i) the company hired respondents as project employees to work at its various construction
projects from the year 1990; (ii) it informed them of the scope and duration of their work at the time they were
engaged in each of those projects; and (iii) their project employment contract expired upon completion of the specific
project. Consequently, they were also separated from service upon completion of each project.[5]

Respondents' Version

Respondents mainly argued that they were not project employees but were regular employees of ECCA.[6] They
claimed that ECCA hired them on different dates to perform tasks which were necessary and desirable in its
construction business. However, ECCA informed them that the cause of their termination was "project completion."
The details of respondents' employment terms were as follows:[7]

Complainants  Date Hired  Nature of Work  Date of Termination 


Palle  1975  Carpenter  Aug. 30, 2001 
Velosa  1982  Carpenter  Feb. 25, 2001 
Felicitas  1982  Carpenter  Aug. 30, 2001 
Pampanga  Feb. 4, 1997  Plumber/ Pipefitter   Sept. 1, 2001 
Galabo  Oct. 1998  Steelman  Sept. 10, 2001 
Galapin  Oct. 1998  Steelman  Sept. 15, 2001 

Respondents further claimed that ECCA continuously employed them for different construction projects of the
company. However, they did not enjoy the benefits given by the company to its regular employees, such as,
Christmas bonuses, hospitalization benefits, sick leaves, vacation leaves and service incentive leaves, among others.
[8]

Respondents further pointed out that they were regular employees, and not project employees, since they performed
tasks which were vital, necessary and indispensable to ECCA's construction business, thus there was a reasonable
connection between their nature of work and ECCA's business.[9]

Moreover, respondents asserted that although they may have signed employment contracts for some of ECCA's
projects, they were asked to work in new projects or transferred to other existing projects without the benefit of
corresponding employment contracts.[10]

Furthermore, respondents claim that ECCA's failure to report the termination of their employment to the Department
of Labor and Employment (DOLE) every time that the company completed a project proved that respondents were
not project employees but its regular employees.[11]

In addition, respondents argued that since they have attained the status as ECCA's regular employees, they were
entitled to all the benefits and rights appurtenant to a regular employee, including security of tenure. Thus,
respondents prayed that they be reinstated to their former positions and that they be awarded wages and other
monetary benefits, as authorized by law.[12]

Labor Arbiter's Decision

In a June 16, 2007 Decision,[13] the Labor Arbiter held that respondents were regular employees of ECCA. The Labor
Arbiter pointed out that the company has not presented any document showing that in every termination of the
project, respondents' employment was also terminated.[14] Furthermore, the Labor Arbiter also noted that respondents
were hired by ECCA for one project but were later repeatedly rehired for more than 20 to 30 years in several other
projects. Thus, this showed that respondents have become regular employees of ECCA. The Labor Arbiter
emphasized that where the employment of project employees is extended long after the first project had been
finished, the employees are removed from the scope of project employment and are considered regular employees.
Furthermore, the Labor Arbiter held that respondents have become regular employees of ECCA by the mere fact that
the company failed to submit termination reports to the DOLE following the termination of respondents' project
employment.[15] Thus, the Labor Arbiter ordered ECCA to reinstate respondents to their former positions effective
June 16, 2007 and to pay them full backwages, 13th month pay, service incentive leave pay, and cost of living
allowance, or a total of P3,655,326.82.[16] The dispositive portion of the Labor Arbiter's Decision partly reads:

WHEREFORE, [petitioner is] hereby directed to reinstate complainants to their former positions effective June 16,
2007 and to pay full backwages in the total amount of P3,655,328.82 [x x x].[17]

National Labor Relations Commission's Decision

Aggrieved, ECCA filed an appeal with the NLRC. In its March 23, 2009 Decision,[18] the NLRC reversed the findings of
the Labor Arbiter and granted ECCA's appeal. The NLRC cited the rulings in Cioco, Jr. v. C.E. Construction
Corporation[19] and Filipinas Pre-Fabricated Building Systems (Filsystems), Inc. v. Puente[20] that repeated hiring does
not change the status of one's employment as project employee or automatically makes one as a regular employee.
[21]
 Thus, the NLRC held that respondents were not illegally terminated but that their employment ended in view of the
completion of the projects.[22] The dispositive portion of said Decision reads:
WHEREFORE, the instant appeal is hereby GRANTED. The assailed decision of the Labor Arbiter dated 16 June
2007 is REVERSED and SET ASIDE and the complaint dismissed for lack of merit.[23]

Respondents filed a Motion for Reconsideration of the foregoing Decision, which was denied in the NLRC's March
24, 2010 Resolution.[24]

Court of Appeals' Decision

Aggrieved, respondents filed a Petition for Certiorari[25] under Rule 65 of the Rules of Court with the CA. In its
September 13, 2011 Decision, the CA held in favor of respondents and ruled that they were regular employees, and
were therefore illegally dismissed. The appellate court pointed out that ECCA failed to present any written contract of
employment to substantiate its claim before the court. Thus, the appellate court held that although the absence of a
written contract does not by itself grant regular stat us to the employees, it is evidence that they were informed of the
duration and scope of their work and their status as project employees at the start of their engagement.[26] The
dispositive portion of said Decision reads:

WHEREFORE, the petition is GRANTED. The assailed March 23, 2009 Decision of public respondent NLRC in
NLRC-NCR CA No. 00-002296-07 [NLRC Case No. NCR 00-09-10553-04] is REVERSED and SET ASIDE. In lieu
thereof, a new judgment is rendered reinstating the Decision dated June 16, 2007 of the Labor Arbiter in NLRC-NCR
Case Nos. 00-08-09014-04, 00-09-09960-04 and 00-09-10553-04 with the MODIFICATION that the liability of
respondent Oscar Lopez for the payment of backwages and other monetary benefits in favor of [respondents]
is DELETED.

SO ORDERED.[27]

ECCA filed a Motion for Reconsideration which was denied in the CA's March 22, 2012 Resolution.[28]

ECCA then filed the instant Petition for Review on Certiorari under Rule 45 of the Rules of Court, raising the following
assignment of error:

The Court of Appeals erred and gravely abused its discretion in granting the petition and finding that respondents
were regular employees of petitioner and were illegally dismissed.[29]

In sum, the main issue in the instant case is whether or not respondents were illegally dismissed as regular
employees or validly terminated in view of the completion of their contract as project employees.

The Court's Ruling

We find ECCA's petition unmeritorious. Thus, we uphold the findings of the CA that respondents were regular
employees who were illegally terminated.

Regular and Project Employees,


distinguished.

Article 295 [280] of the Labor Code provides the following definition of regular and project employees:

ARTICLE 295. [280] Regular and Casual Employment. — The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform activities which are usually necessary or desirable in the
usual business or trade of the employer, except where the employment has been fixed for a specific project
or undertaking the completion or termination of which has been determined at the time of the engagement of
the employee or where the work or service to be performed is seasonal in nature and the employment is for the
duration of the season.

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

On the other hand, DOLE's Department Order No. 19, series of 1993 (D.O. No. 19), otherwise known as the
Guidelines Governing the Employment of Workers in the Construction Industry, provides:

Section 2. EMPLOYMENT STATUS

2.1 Classification of employees. - The employees in the construction industry are generally categorized as a.) project
employees and b.) non-project employees. Project employees are those employed in connection with a particular
construction project or phase thereof and whose employment is co-terminous with each project or phase of the
project to which they are assigned.

xxxx

2.3 Project completion and rehiring of workers. –

xxxx

b.) Upon completion of the project or a phase thereof, the project employee may be rehired for another undertaking
provided, however, that such rehiring conforms with the provisions of law and this issuance. In such case, the last
day of service with the employer in the preceding project should be indicated in the employment agreement.

x x x x 

Thus, based on the foregoing provisions, an employment is generally deemed regular where: (i) the employee has
been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the
employer, subject to exceptions, such as when one is a fixed, project or seasonal employee; or (ii) the employee has
been engaged for at least a year, with respect to the activity he or she is hired, and the employment of such
employee remains while such activity exists.

On the other hand, a project employee "is one whose employment has been fixed for a specific project or
undertaking, the completion or termination of which has been determined at the time of the engagement of the
employee."[30] Thus, the "services of project-based employees are co-terminous with the project and may be
terminated upon the end or completion of the project or a phase thereof for which they were hired."[31]

Generally, length of service is a measure to determine whether or not an employee who was initially hired on a
temporary basis has attained the status of a regular employee who is entitled to security of tenure. However, such
measure may not necessarily be applicable in a construction industry since construction firms cannot guarantee
continuous employment of their workers after the completion stage of a project.[32] In addition, a project employee's
work may or may not be usually necessary or desirable in the usual business or trade of the employer. Thus, the fact
that a project employee's work is usually necessary and desirable in the business operation of his/her employer does
not necessarily impair the validity of the project employment contract which specifically stipulates a fixed duration of
employment.[33]

In Lopez v. Irvine Construction Corp.,[34] it was held that "the principal test for determining whether particular
employees are properly characterized as 'project employees[,]' as distinguished from 'regular employees,' is whether
or not the 'project employees' were assigned to carry out a 'specific project or undertaking,' the duration and scope of
which were specified at the time the employees were engaged for that project."

In the instant case, in order to ascertain whether respondents were project employees, as claimed by ECCA, it is
essential to determine whether notice was given to them that they were being engaged just for a specific project,
which notice must be made at the time of hiring.

We find that ECCA failed to present substantial evidence to show that it informed respondents of the duration and
scope of their work at the time of their hiring. Upon careful review of the company's respective contracts of
employment with respondents, this Court holds that the employment contracts were lacking in details to prove that
respondents had been duly informed of the duration and scope of their work, and of their status as project employees
at the time of their hiring. The respective contracts of respondents may have been dated at the time of their issuance,
but nowhere did said contracts show as to when respondents supposedly signed or received the same or were
informed of the contents thereof. This gives rise to the distinct possibility that respondents were not informed of their
status as project employees, as well as the scope and duration of the projects that were assigned to them at the time
of their engagement. Thus, ECCA failed to refute respondents' claim that they worked in new projects or they were
transferred to other existing projects without the benefit of their corresponding employment contracts.[35] Therefore,
ECCA failed to persuasively show that respondents herein were informed at the time of their engagement that their
work was only for the duration of the project.

Moreover, ECCA failed to present other evidence or other written contracts to show that it informed respondents of
the duration and scope of their work. Settled is the rule that "although the absence of a written contract does not by
itself grant regular status to the employees, it is evidence that they were informed of the duration and scope of their
work and their status as project employees at the start of their engagement. When no other evidence is offered, the
absence of employment contracts raises a serious question of whether the employees were sufficiently apprised at
the start of their employment of their status as project employees."[36]

In addition, We likewise note that the company did not submit a report with the DOLE of the termination of
respondents' employment every time a project is completed, which is an indication that the workers were not project
employees but regular ones.[37]

The employer has the burden to prove


that an employee was hired for project
employment.

It is necessary to note that an employer has the burden to prove that the employee is indeed a project employee.
Thus, "the employer must establish that (a) the employee was assigned to carry out a particular project or
undertaking; and, (b) the duration and scope of which was specified at the time of engagement."[38]

However, this Court finds that ECCA failed to prove that it informed respondents, at the time of engagement, that they
were hired as project employees. Hence, respondents were without prior notice of the duration and scope of their
work. Indeed, "[w]hile the lack of a written contract does not necessarily make one a regular employee, a written
contract serves as proof that employees were informed of the duration and scope of their work and their status as
project employee at the commencement of their engagement."[39]

Therefore, without such proof, it is presumed that respondents are regular employees.[40]

Respondents were illegally 


terminated.

In view of ECCA's indisputable failure to discharge its burden to prove that respondents were project employees, We
find that the CA properly found them to be regular employees. Therefore, respondents, as regular employees, may
only be dismissed for just or authorized causes and upon compliance with procedural due process, i.e., notice and
hearing.[41] This Court notes that completion of a project is not a valid cause to terminate regular employees, such as
respondents herein.[42]

Since the foregoing requirements were not observed, this Court upholds the finding of the CA and Labor Arbiter that
the respondents were illegally dismissed.

Finally, pursuant to prevailing jurisprudence, we hereby impose interest at the rate of six percent (6%) per annum on
all the monetary awards from the finality of this Decision until paid in full.[43]

ACCORDINGLY, the instant Petition is DENIED. The assailed September 13, 2011 Decision and the March 22, 2012
Resolution of the Court of Appeals in CA G.R. SP No. 114599 are hereby AFFIRMED with MODIFICATION that
interest at the rate of six percent (6%) per annum is imposed on all monetary awards from the finality of this Decision
until fully paid. No pronouncement as to costs.

SO ORDERED.

THIRD DIVISION
[G.R. No. 227070. March 9, 2020.]

ADAMSON UNIVERSITY FACULTY AND EMPLOYEES UNION,


represented by its president, and ORESTES DELOS
REYES, petitioners, vs. ADAMSON UNIVERSITY, respondent.

DECISION

LEONEN, J  : p

The use of expletives as a casual expression of surprise or exasperation is not


serious misconduct per se that warrants an employee's dismissal. However, the
employee's subsequent acts showing willful and wrongful intent may be considered in
determining whether there is a just cause for their employment termination.
This Court resolves the Petition 1 assailing the Decision 2 and Resolution 3 of
the Court of Appeals, which affirmed the Panel of Voluntary Arbitrators'
Decision 4 finding that Orestes Delos Reyes (Delos Reyes) was validly dismissed
from employment.
Delos Reyes was a university professor and the assistant chairperson of the
Social Sciences Department of Adamson University (Adamson). 5 He was also the
president of the Adamson University Faculty and Employees Union (the Union), a
duly registered labor union and the sole and exclusive bargaining agent of Adamson's
faculty and non-academic personnel. 6
On September 5, 2014, Adamson received an administrative complaint against
Delos Reyes. Josephine Esplago (Josephine) had apparently sued him on behalf of her
daughter, 17-year-old Paula Mae Perlas (Paula Mae), a third year psychology student
at Adamson. Josephine claimed that Delos Reyes violated the University Code of
Conduct and Republic Act No. 7610 for abusing her child, a minor. 7
By Josephine's account, Paula Mae encountered Delos Reyes as the professor
was about to enter the faculty room of the Department of Foreign Languages. Paula
Mae was holding the doorknob on her way out of the office, while Delos Reyes held
the doorknob on the other side. When Paula Mae stepped aside, Delos Reyes
allegedly exclaimed the words "anak ng puta" and walked on without any remorse.
This caused emotional trauma to Paula Mae. 8
On September 11, 2014, the president of Adamson created an Ad
Hoc Investigating and Hearing Committee (Ad Hoc Committee) to hear the case and
later submit its findings and recommendations to the Vice President for Academic
Affairs for decision-making. 9
On September 12, 2014, the Ad Hoc Committee issued a show cause
memorandum to Delos Reyes, asking him to explain within five days why he should
not be charged with gross misconduct and unprofessional behavior. 10
When Delos Reyes had initially not filed an answer, he was granted a three-day
extension. 11 By then, he submitted a written explanation using the Union's letterhead
and signing as its president, denying the accusations against him. Delos Reyes "also
filed a counter-complaint against Paula Mae for maligning and tarnishing his
established reputation in the university." 12
The two cases were consolidated, and the hearing was held on October 7, 2014.
Delos Reyes was represented by counsel. 13
On October 24, 2014, Delos Reyes was issued a Notice of Dismissal. 14 He
sought reconsideration, but this was denied. 15 On October 30, 2014, Adamson put out
a paid advertisement on the Philippine Daily Inquirer's newspaper and website, which
Delos Reyes claimed tarnished his reputation by announcing his dismissal. 16
Delos Reyes filed a Notice of Strike before the National Conciliation and
Mediation Board, but the parties eventually agreed to refer the matter to voluntary
arbitration. 17
After evaluating the evidence, the Panel of Voluntary Arbitrators ruled that
Delos Reyes was validly dismissed in its May 12, 2015 Decision. 18 It noted that as a
teacher of a Catholic educational institution and the Union's president, Delos Reyes
had been "expected to exhibit conduct worthy of emulation" 19 but failed to do so. It
deemed his use of the words "anak ng puta" without the slightest provocation as a
grave depravity, especially when directed at a minor student. 20 It also weighed
against him other previously filed complaints that showed his unprofessional
behavior. 21
The dispositive portion of the Decision read:
WHEREFORE, premises considered, judgment is hereby rendered
DECLARING that the dismissal of individual complainant Orestes Delos
Reyes is valid and DISMISSING the instant complaint for lack of merit.
SO ORDERED. 22
Delos Reyes filed a Petition for Review, but this was denied. 23 In its April 28,
2016 Decision, 24 the Court of Appeals preliminarily found that Delos Reyes was
"amply accorded his right to procedural due process." 25 It went on to find him guilty
of gross misconduct after considering Paula Mae's minority and her family's
circumstances. 26 It also found his defenses of alibi and denial unsubstantiated and
weak against Paula Mae's positive and categorical testimony. 27
The Court of Appeals further ruled that Adamson was not liable for unfair
labor practice since Delos Reyes's dismissal did not threaten the Union's existence.
According to it, his headship in the Union did not make him immune from suit or
excuse him from liability for gross misconduct and unprofessional behavior. 28
After the Court of Appeals had denied his Motion for Reconsideration in its
August 17, 2016 Resolution, 29 Delos Reyes filed this Rule 45 Petition 30 against
Adamson.
Petitioner claims that respondent treated his case with such disparity from
cases involving other employees. He alleges that respondent has chosen not to dismiss
other employees despite findings of sexual harassment or theft of class records. 31 He
insists that the complaint against him was hastily acted upon without the parties being
able to talk and clarify the matter. 32 Moreover, he argues that the Ad Hoc Committee
was biased against him, 33 recalling how it tackled unrelated complaints that he was
not afforded any opportunity to refute. 34 He further points out that unlike hearings for
other employees, his was attended by the university counsel who assisted the Ad
Hoc Committee. 35 He also claims that the Ad Hoc Committee acted as Paula Mae's
counsel, providing her with pieces of evidence and leading her to change her version
of where the incident took place. 36
As to the actual incident, petitioner denies that he "unjustifiably, angrily"
yelled "anak ng puta" at Paula Mae. 37 He points out inconsistencies in her testimony,
arguing that he was in his classroom, and not where Paula Mae had claimed, when the
incident happened. In any case, he insists that he had no motive to malign Paula Mae,
who was never his student, and whom he did not know before this incident. 38
Petitioner also contends that "anak ng puta" per se is neither defamatory nor
constitutive of gross misconduct and unprofessional behavior. He argues that there
was no proof that he had perverse or corrupt motivations in violating the school
policy. 39
Should he be found guilty, petitioner asserts that dismissal was too harsh a
penalty for the alleged infraction, especially since it would have been his first offense
after 20 years of service. 40 He attests that he was well loved by his students and that
he had been professional throughout his stint, mindful of others' feelings. 41
Petitioner further contends that his dismissal constitutes unfair labor practice as
it was done on account of his union activities, which involved taking a stand against
the school's K-12 policies. He claims that respondent saw the complaint as an
opportunity to get rid of him for being critical of the school's actions. He also asserts
that the dismissal was done at the time the Union was mourning the death of its
secretary. 42
In its Comment, 43 respondent argues that petitioner raises questions of fact not
proper in a Rule 45 petition. 44 It also points out that he is bound by the Panel of
Voluntary Arbitrators' Decision under the parties' Collective Bargaining Agreement,
which provided that during arbitration, the Panel's decision shall be final and cannot
be appealed. 45
Moreover, respondent argues that petitioner impleads the Union in this case —
even without being authorized to do so — just to intimidate Paula Mae and her
mother. It points out that the Verification attached to the Petition only shows him as
the petitioner. It also asserts that the controversy has no connection with the Union's
activities or right to self-organize, as respondent and the Union still have a good
relationship and have entered into a new Collective Bargaining Agreement. 46
Maintaining that petitioner was accorded due process, respondent asserts that
he was given an opportunity to be heard through his written explanation,
memorandum, and an administrative hearing. 47
As to the incident itself, respondent insists on petitioner's guilt for gross
misconduct and unprofessional behavior. 48 It notes that Paula Mae was emotionally
traumatized even weeks after the incident, as she was sensitive to words such as
"anak ng puta," having been raised by a single mother and not being exposed to
swearwords. 49 It contends that as a professor of a Catholic school, petitioner was
expected to protect the students' interests and welfare. 50 It also notes that petitioner
did not say "anak ng puta" jokingly, but in a harsh and angry manner. 51 Petitioner
could not have said it in surprise either, respondent points out, because it was unlikely
that he did not notice Paula Mae through the door's glass window. 52
Respondent likewise argues that petitioner cannot deny the incident
itself. 53 According to it, Paula Mae was not shown to have been motivated by ill will,
and the minor inconsistencies in her testimony had already been clarified in the
hearing. 54 Her testimony was also corroborated by three (3) students who witnessed
the incident and talked to Paula Mae. 55 Against this, respondent posits that
petitioner's alibi cannot prevail especially since his classroom was in the same
building, a mere floor and a five-minute walk from the incident scene. 56
Respondent points out that petitioner refused to apologize to Paula Mae;
instead, he filed a complaint against her to ensure that she would withdraw her
case. 57 It notes that he would do this every time a complaint is filed against him,
causing the other party to withdraw or just amicably settle the matter. 58
According to respondent, Paula Mae's case was among the many complaints
that show petitioner's abrasive personality and propensity to repeat the same
transgressions. 59 His unjust refusal to sign the receiving copy of the documents being
served on him only adds to his unprofessional behavior, respondent notes. 60 It argues
that employers may validly consider previous records, especially if offenses are
similar in nature, 61 and can let go of an employee whose service is inimical to its
interests. 62
Respondent also argues that the length of petitioner's service does not mitigate
his liability, but actually demands a greater responsibility to comply with workplace
rules. 63It asserts that petitioner's previous merits are immaterial and do not disprove
the incident or negate his liability. 64
Respondent contends that it is not guilty of unfair labor practice, since the
dismissal was not related to the Union's activities, its right to self-organize, or its
existence; rather, it was solely due to petitioner's personal actions. Prior to the
incident, respondent submits, it even extended him a cash advance of P200,000.00,
showing their previously good relations. 65 In any case, respondent maintains that the
Union president is not immune from suit or liability for gross misconduct or
unprofessional behavior. 66
Finally, as to the news of petitioner's dismissal being published, respondent
states that this was done to protect its reputation against petitioner's untruthful public
statements that he was dismissed for his views on the K-12 program. Respondent
attests that it only sought to clarify that the cause of his dismissal was his
misconduct. 67
In his Reply, 68 petitioner explains that as the Union's president, he is
sometimes in collision with the school management, especially when promoting the
rights and welfare of association members and, occasionally, students. 69 He also
points out that the cash advance of P200,000.00 is not an extraordinary
accommodation, as it is given to all qualified employees. 70
The issues for this Court's resolution are:
First, whether or not petitioner Orestes Delos Reyes was validly dismissed
from employment; and
Second, whether or not his dismissal constitutes unfair labor practice.
This Court affirms the Court of Appeals' ruling.
We will no longer review the lower tribunals' factual findings. In a Rule 45
petition, this Court only considers questions of law. It is not our function to re-analyze
evidence. In Fuji Television Network, Inc. v. Espiritu: 71
When a decision of the Court of Appeals under a Rule 65 petition is
brought to this court by way of a petition for review under Rule 45, only
questions of law may be decided upon. As held in Meralco Industrial v.
National Labor Relations Commission:
This Court is not a trier of facts. Well-settled is the rule
that the jurisdiction of this Court in a petition for review
on certiorari under Rule 45 of the Revised Rules of Court is
limited to reviewing only errors of law, not of fact, unless the
factual findings complained of are completely devoid of
support from the evidence on record, or the assailed judgment
is based on a gross misapprehension of facts. Besides, factual
findings of quasi-judicial agencies like the NLRC, when
affirmed by the Court of appeals, are conclusive upon the
parties and binding on this Court.
Career Philippines v. Serna, citing Montoya v. Transmed, is
instructive on the parameters of judicial review under Rule 45:
As a rule, only questions of law may be raised in a Rule
45 petition. In one case, we discussed the particular parameters
of a Rule 45 appeal from the CA's Rule 65 decision on a labor
case, as follows:
In a Rule 45 review, we consider the correctness
of the assailed CA decision, in contrast with the review
for jurisdictional error that we undertake under Rule 65.
Furthermore, Rule 45 limits us to the review of
questions of law raised against the assailed CA
decision. In ruling for legal correctness, we have to
view the CA decision in the same context that the
petition for certiorari it ruled upon was presented to
it; we have to examine the CA decision from the prism
of whether it correctly determined the presence or
absence of grave abuse of discretion in the NLRC
decision before it, not on the basis of whether the
NLRC decision on the merits of the case was correct. In
other words, we have to be keenly aware that the CA
undertook a Rule 65 review, not a review on appeal, of
the NLRC decision challenged before it. 72 (Emphasis
in the original, citations omitted)
Here, both the Court of Appeals and the Panel of Voluntary Arbitrators found
that petitioner exclaimed "anak ng puta" upon encountering Paula Mae. Their
findings on his subsequent acts are also similar and were not shown to be devoid of
support. The lower tribunals similarly considered the evidence by both parties. Thus,
this Court accords weight to these findings. 
This Court finds that petitioner was validly dismissed.
The following are grounds for termination under the Labor Code:
ARTICLE 297. [282] Termination by Employer. — An employer may
terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the
lawful orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him
by his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the
person of his employer or any immediate member of his family or his duly
authorized representatives; and
(e) Other causes analogous to the foregoing.
Petitioner was charged with gross misconduct and unprofessional behavior in
violation of Section 16 (4) of Batas Pambansa Blg. 232, or the Education Act of
1982. 73 The provision states:
SECTION 16. Teacher's Obligations. — Every teacher shall:
1. Perform his duties to the school by discharging his responsibilities in
accordance with the philosophy, goals, and objectives of the
school.
2. Be accountable for the efficient and effective attainment of specified
learning objectives in pursuance of national development goals
within the limits of available school resources.
3. Render regular reports on performance of each student and to the
latter and the latter's parents and guardians with specific
suggestions for improvement.
4. Assume the responsibility to maintain and sustain his professional
growth and advancement and maintain professionalism in his
behavior at all times.
5. Refrain from making deductions in students' scholastic ratings for acts
that are clearly not manifestations of poor scholarship.
6. Participate as an agent of constructive social, economic, moral,
intellectual, cultural and political change in his school and the
community within the context of national policies. (Emphasis
supplied)
In National Labor Relations Commission v. Salgarino, 74 this Court elaborated
on what constitutes serious misconduct: 
Misconduct is defined as improper or wrong conduct. It is the
transgression of some established and definite rule of action, a forbidden act, a
dereliction of duty, willful in character and implies wrongful intent and not
mere error of judgment. The misconduct to be serious within the meaning of
the act must be of such a grave and aggravated character and not merely trivial
or unimportant. Such misconduct, however serious, must nevertheless be in
connection with the work of the employee to constitute just cause from his
separation.
In order to constitute serious misconduct which will warrant the
dismissal of an employee under paragraph (a) of Article 282 of the Labor
Code, it is not sufficient that the act or conduct complained of has violated
some established rules or policies. It is equally important and required that the
act or conduct must have been performed with wrongful intent. 75 (Emphasis
in the original, citation omitted)
Misconduct is not considered serious or grave when it is not performed with
wrongful intent. If the misconduct is only simple, not grave, the employee cannot be
validly dismissed. 76
A teacher exclaiming "anak ng puta" after having encountered a student is an
unquestionable act of misconduct. However, whether it is serious misconduct that
warrants the teacher's dismissal will depend on the context of the phrase's use. "Anak
ng puta" is similar to "putang ina" in that it is an expletive sometimes used as a casual
expression of displeasure, rather than a personal attack or insult. In Pader v.
People: 77
In Reyes vs. People, we ruled that the expression "putang ina mo" is a
common enough utterance in the dialect that is often employed, not really to
slander but rather to express anger or displeasure. In fact, more often, it is just
an expletive that punctuates one's expression of profanity. We do not find it
seriously insulting that after a previous incident involving his father, a drunk
Rogelio Pader on seeing Atty. Escolango would utter words expressing anger.
Obviously, the intention was to show his feelings of resentment and not
necessarily to insult the latter. Being a candidate running for vice mayor,
occasional gestures and words of disapproval or dislike of his person are not
uncommon. 78 (Citation omitted)
A review of the records reveals that the utterance in question, "anak ng puta,"
was an expression of annoyance or exasperation. Both petitioner and Paula Mae were
pulling from each side of the door, prompting the professor to exclaim frustration
without any clear intent to maliciously damage or cause emotional harm upon the
student. That they had not personally known each other before the incident, and that
petitioner had no personal vendetta against Paula Mae as to mean those words to
insult her, confirm this conclusion.
However, it is petitioner's succeeding acts that aggravated the misconduct he
committed. He not only denied committing the act, but he also refused to apologize
for it and even filed a counter-complaint against Paula Mae for supposedly tarnishing
his reputation. He even refused to sign the receiving copy of the notices that sought to
hold him accountable for his act. 
While uttering an expletive out loud in the spur of the moment is not grave
misconduct per se, the refusal to acknowledge this mistake and the attempt to cause
further damage and distress to a minor student cannot be mere errors of judgment.
Petitioner's subsequent acts are willful, which negate professionalism in his behavior.
They contradict a professor's responsibility of giving primacy to the students' interests
and respecting the institution in which he teaches. In the interest of self-preservation,
petitioner refused to answer for his own mistake; instead, he played the victim and
sought to find fault in a student who had no ill motive against him.
Indeed, had he been modest enough to own up to his first blunder, petitioner's
case would have gone an entirely different way.
This Court likewise notes the Panel of Voluntary Arbitrators' factual finding
that a similar complaint had already been filed against petitioner. In its Decision, it
found:
In another occasion, a complaint for verbal abuse was filed against
individual complainant by certain parents for and in behalf of their daughter, a
dean's lister of respondent Adamson. However, as indicated by their parents'
subsequent letter to the Director of Office for Student Affairs, they agreed to
withdraw the said complaint. Their decision to withdraw the complaint was
due to the parties' understanding that herein individual complainant should
also withdraw his separate complaint against their daughter and the same
should not reflect to their daughter's academic record. 79
The Panel of Voluntary Arbitrators also noted that his aggressive behavior
extends to his colleagues:
In particular, The Director of Human Resource Department Office
called his attention through a memorandum for his display of unprofessional
behavior. The Director personally witnessed complainant that he openly
shouted and displayed dirty finger sign against his immediate superior
Chairperson Milagros Urbano. 
His subsequent Chairperson Dr. Josielyn Mendoza likewise previously
filed a complaint against him for his unruly and disruptive behavior. Among
others, Chairperson Mendoza stated that when she was presiding their social
science faculty meeting and about to present a fellow professor to report the
financial expenses during the previous academe conference, herein individual
complainant suddenly interrupted and refused the report to proceed and
angrily shouted at her "Tama na! Mag prankahan tayo!; that individual
complainant exclaimed during the same meeting in front of the other faculty
members that Professor Joseph Medillo seems to be the apple of the eyes of
their Chairperson; that sometime in 2012, she was threatened by individual
complainant saying "Kapag binigay mo kay Don-don x x x ang OJT . . .
pasasabugin ko ang departamento x x x Wag kang tumawa, hindi ako
nagbibiro, pasasabugin ko talaga ang departamento."; that she previously
witnessed individual complainant challenging Professor Ricky Maano to a fist
fight; that "although Prof. Delos Reyes and his infamous attitude was never an
urban legend, I and the Social Science department (his mother department)
have remained deaf and silent in dealing with all his temperaments through
the years. There were already a number of incidents that Prof. Delos Reyes
had shown his combative behaviour towards me as the chairperson of the
department."
Another separate complaint, Chairperson Mendoza also stated that
individual complainant without any provocation suddenly confronted her
while she was having a chat with a professor. She reported that "he looked at
me with furious eyes and poked a finger at my face and said: Kaya ikaw
tigilan mo na ang pagsasabi na walang ginagawa ang Union! In a loud voice
and in an intimidating manner. x x x Pasalamat ka at nirerespeto pa kita
dahil kay Buknoy! Referring to my younger brother. x x x his notorious
attitude and unprofessional behaviour is not unknown in the university.
However, no matter how disruptive and unruly his behaviour may be towards
other members of this University, he can freely do so with impunity." 80
The Ad Hoc Committee had the same findings:
The Committee has been apprised as to the existence of a report and
complaint pertaining to his drastic conduct and display of disrespectful
behavior last September 1, 2014 when he confronted Dr. Josielyn M.
Mendoza, his former Chair at the Social Sciences Department. Respondent
has reportedly looked at Ms. Mendoza with furious eyes and poked a finger at
her face and said "Kaya ikaw tigilan mo na ang pagsasabi mo na walang
ginagawa ang Union!" in a loud voice and in an intimidating manner[.] She
pointed in her letter-complaint that it was not the first time that respondent
disrespected her. She further continued in her complaint that "His notorious
attitude and unprofessional behavior is not unknown in the University.
However, no matter how disruptive and unruly his behavior may be towards
other members of this University he can freely do so with impunity."
In 2001, in his 201 File, the then Director for Human Resource
Development Office, Ana Liza M. Ragos even cited the respondent with
"display of unprofessional behavior in the office" when he was personally
seen to have shouted words and resorted to dirty finger sign against his past
Chairperson, Ms. Milagros Urbano. Even granting for the sake of argument,
that there has been a heated exchange argument between the two, a dirty
finger sign smacks of indiscipline and unprofessionalism. 
On a final note, the open defiance and disrespect to school authorities
and processes are magnified in this case as respondent refused to sign any
order served on him. He even used, intentionally or unintentionally the
letterhead of the AUFEA in his letters to the Committee and signed the same
as AUFEA President when he is being complained of as a faculty member and
not in his capacity as the Union President. This only shows that respondent
had the propensity to commit and display among his peers and, more so, to the
students a misbehavior which is a characteristics (sic) of
misconduct. 81 (Citations omitted)
The reports reveal petitioner's pugnacious character and ill-mannered conduct.
In Sy v. Neat, Inc., 82 this Court discussed the principle of totality of infractions:
In determining the sanction imposable on an employee, the employer
may consider the former's past misconduct and previous infractions. Also
known as the principle of totality of infractions, the Court explained such
concept in Merin v. National Labor Relations Commission, et al., thus:
The totality of infractions or the number of violations
committed during the period of employment shall be
considered in determining the penalty to be imposed upon an
erring employee. The offenses committed by petitioner should
not be taken singly and separately. Fitness for continued
employment cannot be compartmentalized into tight little
cubicles of aspects of character, conduct and ability separate
and independent of each other. While it may be true that
petitioner was penalized for his previous infractions, this does
not and should not mean that his employment record would be
wiped clean of his infractions. After all, the record of an
employee is a relevant consideration in determining the penalty
that should be meted out since an employee's past misconduct
and present behavior must be taken together in determining the
proper imposable penalty. Despite the sanctions imposed upon
petitioner, he continued to commit misconduct and exhibit
undesirable behavior on board. Indeed, the employer cannot be
compelled to retain a misbehaving employee, or one who is
guilty of acts inimical to its interests. It has the right to dismiss
such an employee if only as a measure of self-
protection. 83 (Citation omitted)
Likewise, in Sugue v. Triumph International (Phils.), Inc., 84 this Court stated
that employers are not expected to retain an employee whose behavior causes harm to
its establishment:
Indeed, the law imposes many obligations on the employer such as
providing just compensation to workers, and observance of the procedural
requirements of notice and hearing in the termination of employment. On the
other hand, the law also recognizes the right of the employer to expect from
its workers not only good performance, adequate work and diligence, but also
good conduct and loyalty. The employer may not be compelled to continue to
employ such persons whose continuance in the service will patently be
inimical to his interests. 85 (Citation omitted)
Petitioner cannot rely on his 20-year stay in the university to shield him from
liability. Quite the contrary, "the longer an employee stays in the service of the
company, the greater is his responsibility for knowledge and compliance with the
norms of conduct and the code of discipline in the company." 86
For all these reasons, petitioner's dismissal was valid.
II
Likewise, respondent is not guilty of unfair labor practice.
The various acts of unfair labor practice are found under Article 259 of
the Labor Code:
ARTICLE 259. [248] Unfair Labor Practices of Employers. — It shall
be unlawful for an employer to commit any of the following unfair labor
practices:
(a) To interfere with, restrain or coerce employees in the exercise of
their right to self-organization;
(b) To require as a condition of employment that a person or an
employee shall not join a labor organization or shall withdraw from one to
which he belongs;
(c) To contract out services or functions being performed by union
members when such will interfere with, restrain or coerce employees in the
exercise of their right to self-organization;
(d) To initiate, dominate, assist or otherwise interfere with the
formation or administration of any labor organization, including the giving of
financial or other support to it or its organizers or supporters;
(e) To discriminate in regard to wages, hours of work and other terms
and conditions of employment in order to encourage or discourage
membership in any labor organization. Nothing in this Code or in any other
law shall stop the parties from requiring membership in a recognized
collective bargaining agent as a condition for employment, except those
employees who are already members of another union at the time of the
signing of the collective bargaining agreement. Employees of an appropriate
bargaining unit who are not members of the recognized collective bargaining
agent may be assessed a reasonable fee equivalent to the dues and other fees
paid by members of the recognized collective bargaining agent, if such non-
union members accept the benefits under the collective bargaining
agreement: Provided, That the individual authorization required under Article
242, paragraph (o) of this Code shall not apply to the non-members of the
recognized collective bargaining agent; 
(f) To dismiss, discharge or otherwise prejudice or discriminate against
an employee for having given or being about to give testimony under this
Code;
(g) To violate the duty to bargain collectively as prescribed by this
Code;
(h) To pay negotiation or attorney's fees to the union or its officers or
agents as part of the settlement of any issue in collective bargaining or any
other dispute; or
(i) To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding, only the
officers and agents of corporations, associations or partnerships who have
actually participated in, authorized or ratified unfair labor practices shall be
held criminally liable.
Unfair labor practices are violative of the constitutional right of workers to
self-organize:
ARTICLE 258. [247] Concept of Unfair Labor Practice and
Procedure for Prosecution Thereof. — Unfair labor practices violate the
constitutional right of workers and employees to self-organization, are
inimical to the legitimate interests of both labor and management, including
their right to bargain collectively and otherwise deal with each other in an
atmosphere of freedom and mutual respect, disrupt industrial peace and hinder
the promotion of healthy and stable labor-management relations.
Consequently, unfair labor practices are not only violations of the civil
rights of both labor and management but are also criminal offenses against the
State which shall be subject to prosecution and punishment as herein
provided.
Subject to the exercise by the President or by the Secretary of Labor
and Employment of the powers vested in them by Articles 263 and 264 of this
Code, the civil aspects of all cases involving unfair labor practices, which may
include claims for actual, moral, exemplary and other forms of damages,
attorney's fees and other affirmative relief, shall be under the jurisdiction of
the Labor Arbiters. The Labor Arbiters shall give utmost priority to the
hearing and resolution of all cases involving unfair labor practices. They shall
resolve such cases within thirty (30) calendar days from the time they are
submitted for decision.
Recovery of civil liability in the administrative proceedings shall bar
recovery under the Civil Code.
No criminal prosecution under this Title may be instituted without a
final judgment finding that an unfair labor practice was committed, having
been first obtained in the preceding paragraph. During the pendency of such
administrative proceeding, the running of the period of prescription of the
criminal offense herein penalized shall be considered interrupted: Provided,
however, That the final judgment in the administrative proceedings shall not
be binding in the criminal case nor be considered as evidence of guilt but
merely as proof of compliance of the requirements therein set forth. 
In UST Faculty Union v. University of Santo Tomas, 87 this Court ruled that the
person who alleges the unfair labor practice has the burden of proving it with
substantial evidence:
The general principle is that one who makes an allegation has the
burden of proving it. While there are exceptions to this general rule, in the
case of ULP, the alleging party has the burden of proving such ULP.
Thus, we ruled in De Paul/King Philip Customs Tailor v. NLRC that "a
party alleging a critical fact must support his allegation with substantial
evidence. Any decision based on unsubstantiated allegation cannot stand as it
will offend due process."
While in the more recent and more apt case of Standard Chartered
Bank Employees Union (NUBE) v. Confesor, this Court enunciated:
In order to show that the employer committed ULP
under the Labor Code, substantial evidence is required to
support the claim. Substantial evidence has been defined as
such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion. . . .
In other words, whether the employee or employer alleges that the
other party committed ULP, it is the burden of the alleging party to prove such
allegation with substantial evidence. Such principle finds justification in the
fact that ULP is punishable with both civil and/or criminal
sanctions. 88 (Emphasis in the original, citations omitted)
In determining whether an act of unfair labor practice was committed, the
totality of the circumstances must be considered. 89 In Great Pacific Life Employees
Union v. Great Pacific Life Assurance Corporation, 90 this Court discussed that if the
unfair treatment does not relate to or affect the workers' right to self-organize, it
cannot be deemed unfair labor practice. A dismissal of a union officer is not
necessarily discriminatory, especially when that officer committed an act of
misconduct. In fact, union officers are held to higher standards:
While an act or decision of an employer may be unfair, certainly not every
unfair act or decision constitutes unfair labor practice (ULP) as defined and
enumerated under Art. 248 of the Labor Code.
There should be no dispute that all the prohibited acts constituting
unfair labor practice in essence relate to the workers' right to self-
organization. Thus, an employer may be held liable under this provision if his
conduct affects in whatever manner the right of an employee to self-organize.
The decision of respondent GREPALIFE to consider the top officers of
petitioner UNION as unfit for reinstatement is not essentially discriminatory
and constitutive of an unlawful labor practice of employers under the above-
cited provision. Discriminating in the context of the Code involves either
encouraging membership in any labor organization or is made on account of
the employee's having given or being about to give testimony under the Labor
Code. These have not been proved in the case at bar. 
To elucidate further, there can be no discrimination where the
employees concerned are not similarly situated. A union officer has larger
and heavier responsibilities than a union member. Union officers are duly
bound to respect the law and to exhort and guide their members to do the
same; their position mandates them to lead by example. By committing
prohibited activities during the strike, de la Rosa as Vice President of
petitioner UNION demonstrated a high degree of imprudence and
irresponsibility. Verily, this justifies his dismissal from employment. Since
the objective of the Labor Code is to ensure a stable but dynamic and just
industrial peace, the dismissal of undesirable labor leaders should be upheld.
It bears emphasis that the employer is free to regulate all aspects of
employment according to his own discretion and judgment. This prerogative
flows from the established rule that labor laws do not authorize substitution of
judgment of the employer in the conduct of his business. Recall of workers
clearly falls within the ambit of management prerogative. The employer can
exercise this prerogative without fear of liability so long as it is done in good
faith for the advancement of his interest and not for the purpose of defeating
or circumventing the rights of the employees under special laws or valid
agreements. It is valid as long as it is not performed in a malicious, harsh,
oppressive, vindictive or wanton manner or out of malice or
spite. 91 (Emphasis supplied, citations omitted)
In this case, it is clear that petitioner's dismissal, which was brought about by
his personal acts, does not constitute unfair labor practice as provided under the Labor
Code. Dismissing him was not meant to violate the right of the university employees
to self-organize. Neither was it meant to interfere with the Union's
activities. 92 Likewise, petitioner failed to prove that the proceedings were done with
haste and bias. Finally, petitioner cannot raise the defense that he was the Union's
president; this does not make him immune from liability for his acts of misconduct.
Petitioner also insists that respondent's paid advertisement on the Philippine
Daily Inquirer was meant to tarnish his and his family's reputation. 93 However, a
reading of the advertisement reveals that it was only meant to clarify particular
circumstances about the incident. It reads:
STATEMENT AND CLARIFICATION ON THE DISMISSAL FROM
SERVICE OF A FACULTY MEMBER AT ADAMSON UNIVERSITY
Misleading information as to the reason for the dismissal from
employment of Mr. Orestes delos Reyes, Jr. at Adamson University is being
propagated inside and out of the campus. To put the record straight, the
Administration hereby issues this statement regarding the finding of
administrative culpability of Mr. delos Reyes, a faculty member and the
sitting President of the Adamson University Faculty and Employees
Association (AUFEA). 
Mr. delos Reyes was charged and found guilty of gross
misconduct and unprofessional behavior in violation of Section 16 par. 4 of
the Education Act of 1982 when he, without provocation, uttered abusive
language, in a loud and sharp manner, to a minor female student.
Please be informed of the following:
There was a valid charge. Let it be known that the charges against Mr.
delos Reyes stemmed from a complaint of abuse of a minor under RA
7610 filed by a BS Psychology student and her mother last September 2,
2014.
There was an impartial body. The complaint has been taken
cognizance of, heard and investigated by an impartial body created by the
University President.
There was due process and full accord of rights. Mr. delos Reyes has
been fully accorded with his rights. He was given ample opportunity to
explain his side. A hearing has been conducted and parties were given the
right to confront the witnesses against them and adduce further evidence. Mr.
delos Reyes was even represented by his counsel during the hearing.
There is no connection between his stand on the K-12 issue and his
dismissal. Contrary to Mr. delos Reyes's claims, he was not dismissed from
service because of his stand on the K-12 program. Proceedings on the
administrative complaint against him began on September 2, 2014, more than
a month before the K-12 forum organized by the AUFEA on October 20 and
21, 2014. The University recognizes his right to freely express his viewpoint
on the issue. This, however, is irrelevant to the charges made against him by
the student and has no bearing on the decision to dismiss him.
The administration wishes to underscore that culpability attaches to
anyone, regardless of position and status. The speculation that Mr. de los
Reyes is being singled out and persecuted, as being spread by unnamed
individuals, thus, giving the insinuation of union busting is untrue and false.
Position in the academe or in the union does not make one immune from
liability or provide an exempting circumstance. Mr. de los Reyes has been
charged in his capacity as member of Faculty and not his being the President
of AUFEA. His other designation is by far immaterial to the charges leveled
against him.
To this end, the Administration exhorts the community to be
discerning and perceptive of the kind of information and talks being
disseminated on the matter stated. 94(Emphasis in the original)
An employer's management prerogative to dismiss an employee is valid as
long as it is done in good faith and without malice. In Wise and Co., Inc. v. Wise &
Co., Inc. Employees Union-NATU: 95
The Court holds that it is the prerogative of management to regulate,
according to its discretion and judgment, all aspects of employment. This
flows from the established rule that labor law does not authorize the
substitution of the judgment of the employer in the conduct of its business.
Such management prerogative may be availed of without fear of any liability
so long as it is exercised in good faith for the advancement of the employers'
interest and not for the purpose of defeating or circumventing the rights of
employees under special laws or valid agreement and are not exercised in a
malicious, harsh, oppressive, vindictive or wanton manner or out of malice or
spite. 96 (Citations omitted)
In this case, this Court finds no bad faith on respondent's part in dismissing
petitioner.
WHEREFORE, the Petition is DENIED. The Court of Appeals' April 28,
2016 Decision and August 17, 2016 Resolution are AFFIRMED. Petitioner Orestes
Delos Reyes was validly dismissed from employment. 
SO ORDERED.
Gesmundo, Carandang, Zalameda and Gaerlan, JJ., concur.
 
 (Adamson University Faculty v. Adamson University, G.R. No. 227070, [March 9,
|||

2020])
SECOND DIVISION

[G.R. No. 223485. December 4, 2019.]

DEL MONTE FRESH PRODUCE (PHIL.),


INC., petitioner, vs. REYNALDO P. BETONIO, respondent.

DECISION

INTING, J  :p

Before the Court is an Appeal by Certiorari 1 under Rule 45 of the 1997 Rules


of Civil Procedure seeking to nullify and set aside the Decision 2 dated May 13, 2015
and Resolution 3 dated February 16, 2016 of the Court of Appeals (CA) in CA-G.R.
SP No. 05508-MIN. The CA dismissed for lack of merit the Petition
for Certiorari with prayer for Preliminary Injunction and Temporary Restraining
Order 4 filed by Del Monte Fresh Produce (PHIL.), Inc. (DMFPPI), praying for the
following reliefs: (1) the issuance of a Writ of Certiorari to annul the Resolutions
dated November 20, 2012 and February 27, 2013 of the National Labor Relations
Commission (NLRC); and 2) the reinstatement of the Decision dated December 29,
2011 of the NLRC, which dismissed the complaint filed by Reynaldo P. Betonio
(Betonio).
The Antecedents
DMFPPI is a corporation engaged in the business of providing technical
assistance, inspection, and coordination services to Del Monte Fresh International,
Inc. (DMFII). 
On September 1, 2008, Betonio was employed by DMFPPI as its Manager for
Port Operations at Tadeco Wharf, San Vicente, Panabo, Davao del Norte. On April 1,
2009, he was promoted as Senior Manager whose duty is to ensure prompt, efficient,
and accurate loading and shipment of fruits to the market of DMFII. Further, he must
ascertain that the bananas delivered to the port will be promptly loaded to their
assigned vessels, or immediately placed in cold storage to avoid deterioration. 5
Beginning April 2010, the Human Resource (HR) Department of DMFPPI
received reports/complaints about Betonio's inefficiencies in the operation of the port.
The reports/complaints came from the managers and directors of different
departments of DMFPPI, the market of Del Monte International in Japan, and the
local growers of DMFPPI. 6
On account of the problems, reports, and complaints received by the HR
Department of DMFPPI, HR Manager Ma. Cirila Canseco (Canseco) informed
Betonio of the management's plan to commence disciplinary action against him.
Canseco told Betonio that the charge against him would be gross and/or habitual
neglect of duties, punishable with dismissal. To allegedly save Betonio from the
embarrassment of going through an administrative investigation of his case, and for
him to maintain an unblemished record of employment, Canseco gave Betonio the
choice of having a graceful exit by tendering his voluntary resignation. However,
Betonio decided to go through a formal investigation of his case. 7
Through a Show Cause Memo 8 dated June 21, 2010, Betonio was charged
with gross and habitual neglect of duties, and breach of trust and confidence. Betonio
was required to explain the 12 infractions he allegedly committed, as follows:
1. Banana Shipment Monitoring: Non-compliance to the procedures you
proposed, agreed with Anflo/Tadeco, and confirmed by internal audit
which is doing count/tally using the tag and to stop the old system in
arriving at the breakdown of bananas loaded to the vessel per grower,
which is the total load less other growers equals Tadeco.
Reported: April 21, 2010
2. Alarming boxes balance on the ground at 11 AM as reported on April 27,
2010.
April 30, 2010
3. Reduction of the vessel loading capacity of Orion Reefer by almost 10,000
less without coordinating and allegedly upon the instruction of the ship
captain.
Reported: April 22, 2010
4. Huge discrepancy between the shipping advice and actual DMG loaded to
Alcantara-68 bound for Kobe. 
Reported: May 4, 2010
5. Failure to follow loading instructions and erroneous cold storage monitoring
report:
a. 7.2k 6 hands to Korea to be loaded to Almeria 4/30/10 but were not
loaded, instead kept at the cold storage and expected to stay
further for 9 days before the next vessel arrival. This was not
reflected in the cold storage monitoring report.
Reported: May 5, 2010
6. Failure to follow loading instructions:
a. Organic boxes not loaded but still kept at the cold storage.
Reported: May 7, 2010
b. RC's not loaded.
Reported: May 7, 2010
c. Load RC to Valencia but not followed as evidenced in the daily
monitoring of boxes on the ground.
Coordination with Banana Production was also not done. 
Reported: May 8, 2010
d. Loading instructions not followed for Cordoba Carrier V-66 for Japan
and Korea.
Reported: May 14, 2010
7. Erroneous Actual Loading Report — Alcantara Carrier V-69 vs. Delivery
Report:
a. Crate Pack
b. Variances in the box count (loaded vs. delivered)
Reported: May 8, 2010
8. Boxes with 7 days at the cold storage.
Reported: May 12, 2010
9. Failure to maximize loading efficiency of the vessel. Instructed to prepare a
structured & reliable plan for management review.
Reported: May 14, 2010
10. Excessive loading hours of Fruits to Vessel Alcantara 71
Reported: June 5, 2010
11. Inaccuracy in fruit loading to specified destination based on Banana Order:
a. Giralda 204 for Yoko
i. Order 216 boxes, loaded 948 boxes
b. Alcantara 71 for Moji
i. Order 864 boxes, loaded 93 boxes
Reported: June 10, 2010
12. Fruit overstay at the cold storage (6 RH for Japan: packed June 4).
Reported: June 12, 2010 9
In his response to the Show Cause Memo, 10 Betonio explained point by point
the infractions leveled against him, and denied having failed to execute his duties with
utmost diligence.
On July 1, 2010, a meeting was conducted by the Administrative Committee
wherein Betonio was made to explain the charges against him. In the Minutes of the
meeting, 11it was stated that the Administrative Committee will come up with a
recommendatory report — that if the top management disagrees with the
Administrative Committee's recommendation, they will reconvene to discuss the
decision to be adopted.
While the Administrative Committee found Betonio inefficient in the
management and operation of the port, it opined that his lapses were not enough for
his dismissal. As such, the committee recommended that the charges against Betonio
be dismissed. Despite the Administrative Committee's recommendation, a Notice of
Disciplinary Action 12dated July 21, 2010 was issued by the top management,
terminating Betonio's employment on the ground of gross and habitual neglect of
duties and breach of trust and confidence.
The Ruling of the LA
On August 11, 2010, Betonio filed before the Labor Arbiter (LA) a
Complaint 13 for illegal dismissal with money claims.
In a Decision 14 dated. April 25, 2011, the Executive LA Elbert C. Restauro
ruled in favor of Betonio, holding DMFPPI liable for illegally dismissing him. The
LA ordered DMFPPI to pay Betonio the total sum of P2,201,109.19 representing his
separation pay, full backwages, and attorney's fees. According to the LA, while it is
true that Betonio had committed errors and lapses in the performance of his duties and
responsibilities, those lapses or errors did not amount to gross and habitual neglect of
duty as contemplated by law.
Aggrieved, DMFPPI elevated the case before the NLRC.
The Ruling of the NLRC
In a Decision 15 dated December 29, 2011, the NLRC reversed the LA's
Decision, and ruled in favor of DMFPPI. The NLRC held that while Betonio cannot
be dismissed on the ground of gross and habitual neglect of duty, he may be dismissed
on the ground of loss of trust and confidence as he was a Senior Manager of DMFPPI.
According to the NLRC, Betonio's breach of DMFPPI's trust and confidence was
amply proven by substantial evidence. However, in the dissenting opinion 16 of
Commissioner Proculo T. Sarmen (Commissioner Sarmen), he affirmed the LA's
Decision. 
Betonio filed a Motion for Reconsideration 17 of the NLRC's Decision.
Pending resolution of his motion, the case was re-raffled to Commissioner Sarmen, as
the newponente of the case.
In a Resolution 18 dated November 20, 2012, the NLRC reversed itself and
reinstated the ruling of the LA in favor of Betonio. The Resolution was dissented to
by the Presiding Commissioner Bario-Rod M. Talon (Presiding Commissioner
Talon).
DMFPPI moved for a reconsideration 19 of the November 20, 2012 Resolution
of the NLRC, but it was denied on February 27, 2013, 20 Presiding Commissioner
Talon again dissented to the denial of DMFPPI's Motion for Reconsideration.
Aggrieved, DMFPPI filed a Petition for Certiorari with prayer for Preliminary
Injunction and Temporary Restraining Order 21 before the CA.
The Ruling of the CA
On July 29, 2013, the CA granted DMFPPI's application for TRO. 22 In the
Resolution 23 dated October 16, 2013, the CA issued the Writ of Preliminary
Injunction 24 prayed for by DMFPPI, enjoining the implementation of the Resolutions
dated November 20, 2012 and February 27, 2013 of the NLRC. Consequently,
DMFPPI's Petition for Certiorari with Preliminary Injunction and Temporary
Restraining Order was submitted for decision.
On May 13, 2015, the CA rendered a Decision 25 affirming the November 20,
2012 and February 27, 2013, Resolutions of the NLRC in favor of Betonio. 26 The CA
ruled that Betonio should only be liable for ordinary breach, not for breach of trust
and confidence; as such, dismissal from employment was too harsh and
incommensurate to his infractions. According to the CA, admonition, warning,
reprimand or suspension would have been sufficient punishment for Betonio. The CA
likewise opined that DMFPPI should have taken into account the recommendation of
the Administrative Committee to dismiss the charges against Betonio.
Lastly, the CA found that Betonio's termination was made without due process
of law. According to the CA, Betonio was informed of his termination from
employment as early as June 1, 2010. Having been notified of his dismissal on June 1,
2010, the issuance of his Show Cause Memo dated June 22, 2010; the subsequent
creation of Administrative Committee; and the hearing conducted on July 1, 2010
were empty ceremonies to show compliance with due process of law. All told, the CA
held DMFPPI liable for illegally dismissing Betonio. 
DMFPPI moved for a reconsideration 27 of the CA's Decision, but it was
denied on February 16, 2016. 28
Hence, the instant petition.
DMFPPI imputes error on the part of the CA in affirming the November 20,
2012 and February 27, 2013 Resolutions of the NLRC in favor of Betonio. It argues
that even if Betonio cannot be dismissed on the ground of gross and habitual neglect
of duty, he may be terminated on the ground of loss of trust and confidence as he was
a senior manager of DMFPPI.
DMFPPI contends that Betonio's breach of trust and confidence was amply
proven by substantial evidence, which consisted of the Affidavits of its General
Manager, its HR Manager, and the Senior Director for Banana Production. Likewise,
DMFPPI maintains that the emails, reports, and complaints of some of its employees
and clients established Betonio's incompetence — a ground for it to lose trust and
confidence in Betonio.
The core issues at hand are the following:
1. Whether or not Betonio was legally dismissed on the ground of loss of trust
and confidence; and
2. Whether or not his dismissal was made with due process of law.
The Court finds merit in the petition.
At the outset, it is to be emphasized that the Court is not a trier of facts; thus,
its jurisdiction is limited only to reviewing errors of law. The rule, however, admits of
certain exceptions, one of which is where the findings of fact of the quasi-judicial
bodies and the appellate court are contradictory. 29 Considering the divergent
positions of the NLRC and the CA in this case, the Court deems it necessary to
review, re-evaluate, and re-examine the evidence presented and draw conclusions
therefrom.
After a thorough examination of the records, the Court agrees with the findings
and conclusion of the NLRC in the Decision dated December 29, 2011 that Betonio's
dismissal from employment on the ground of loss of trust and confidence was valid.
It is well-settled that to justify a valid dismissal based on loss of trust and
confidence, the concurrence of two conditions must be satisfied: (1) the employee
concerned must be holding a position of trust and confidence; and (2) there must be
an act that would justify the loss of trust and confidence. 30
These two requisites are present in this case.
Anent the first requisite, it should be noted that Betonio was the Senior
Manager for Port Operations of DMFPPI. In charge of the operations at the port, he
was required to ensure that the correct volume and pack type of bananas were
promptly and accurately loaded on the vessels for specific market destinations. For
this purpose, Betonio was expected to regularly prepare a stowage plan for each
vessel, taking into account different data coming from various departments of
DMFPPI — such as the Production Planning Department and the Banana Production
Department. For the Production Planning Department to know how much boxes of
fruits were to be harvested and delivered to the port, Betonio needed to provide them
data on the total volume of fruits he had actually loaded on the vessels. For other
departments to be able to monitor the accurate and timely shipment of bananas to
specific markets, Betonio also needed to regularly and promptly supply information
on them. In cases of deviation from the normal standard procedure in the port,
Betonio should promptly report the deviation to all concerned departments in order
for the affected market to make the necessary arrangements to address the changes.
Betonio also needed to ascertain that bananas which were not for immediate loading
to the vessel be at once placed in the cold storage to preserve their quality, to avoid
deterioration.
From the foregoing, Betonio, as the Senior Manager for Port Operations of
DMFPPI, was expected to be always on top of any situation that may occur at the
port. Such intricate position undoubtedly required the full trust and confidence of
DMFPPI. Indubitably, Betonio, held a position of trust and confidence in the
company.
As to the second requisite, that there must be an act that would justify the loss
of trust and confidence, the degree of proof required in proving loss of trust and
confidence differs between a managerial employee and a rank and file
employee. 31 In Lima Land, Inc., et al. v. Cuevas, 32 the Court distinguished between
managerial employees and rank-and-file personnel insofar as terminating them on the
basis of loss of trust and confidence; thus:
But as regards a managerial employee, the mere existence of a basis
for believing that such employee has breached the trust of his employer would
suffice for his dismissal. x x x 33
As firmly entrenched in our jurisprudence, loss of trust and
confidence, as a just cause for termination of employment, is premised on the
fact that an employee concerned holds a position where greater trust is placed
by management and from whom greater fidelity to duty is correspondingly
expected. The betrayal of this trust is the essence of the offense for which an
employee is penalized. 
It must be noted, however, that in a plethora of cases, this Court has
distinguished the treatment of managerial employees from that of rank-and-
file personnel, insofar as the application of the doctrine of loss of trust and
confidence is concerned. Thus, with respect to rank-and-file personnel, loss of
trust and confidence, as ground for valid dismissal, requires proof of
involvement in the alleged events in question, and that mere uncorroborated
assertions and accusations by the employer will not be sufficient. 34
Set against these parameters, Betonio's employment, as DMFPPI's Senior
Manager for Port Operations, may be terminated for breach of trust under Article
312[297] (c) of the Labor Code of the Philippines (Labor Code).
As earlier discussed, Betonio was not an ordinary company employee. His
position as DMFPPI's Senior Manager for Port Operations was clearly a position of
responsibility demanding an extensive amount of trust from DMFPPI. The proper
operation of port activities depended mainly on his strict compliance with the
protocols, and his prompt and regular coordination with the other departments.
Significantly, the nature of goods which Betonio was tasked to handle for DMFPPI
were all fresh fruits which were extremely perishable in nature. On account of this,
time was certainly of the essence in loading them on the vessels or storing them in
cold storage.
However, Betonio failed to properly manage the port. The General Manager of
DMFPPI, Mr. Guido Bellavita (Mr. Bellavita), noticed the problems that transpired in
the operation of the port, to wit: (1) inaccurate loading/shipment of fruits on the
vessels; (2) delay in the loading of fruits in the cold storage; (3) fruit overstay in the
cold storage; and (4) erroneous reporting to the other departments. According to Mr.
Bellavita's Affidavit 35 dated October 22, 2010, the above problems were deviations
from the normal procedure that could have been avoided through close monitoring of
port activities and constant communication with the other departments. As Betonio's
lapses affected not only the operations of the port, but also DMFPPI's market, Mr.
Bellavita called the attention of Betonio to address the problems. However, despite
this, the same problems recurred.
DMFPPI's Senior Director for Banana Production, Mr. Juan Carlos Arredondo
(Mr. Arredondo), likewise, noticed similar lapses and inefficiencies on the part of
Betonio. In his Affidavit, 36 he told that: (1) the loading capacity of the vessels were
not maximized by Betonio; (2) he was heavily dependent on his subordinates and not
fully cognizant of what was going on in his department; and (3) whenever problems
would occur in the port, Betonio was quick to come up with convenient excuses by
pointing the blame on others instead of taking full responsibility for the lapses of his
department.
In fact, beginning April 2010, the HR Department of DMFPPI received
reports/complaints about Betonio's inefficiencies in the operation of the port. The
reports/complaints came from managers and directors of different departments of
DMFPPI, the market of Del Monte International in Japan, and the local growers of
DMFPPI. This was reported by no less than the HR Manager of DMFPPI. 
One of Betonio's gross transgressions was the discrepancy between the fruits
ordered by the clients in Japan and those he actually shipped. In one instance, Betonio
shipped 948 boxes of fruits to Japan when only 216 boxes were ordered. Also,
Betonio only shipped 93 boxes to Moji, Japan when the order was 864 boxes. This
incident resulted in substantial monetary damages to DMFPPI, not to mention the
damage it caused to DMFPPI's reputation and standing in the market. General
Manager Bellavita attested to the prejudice suffered by DMFPPI due to Betonio's
failure to maximize the vessel's loading capacity, and the mix up in the loading and
shipment of bananas to the Japan market, viz.:
6.4. The lapses and inefficiencies of Mr. Betonio and his department
resulted in extra costs to DMFPPI and DMFII. His failure to maximize the
loading capacity of vessels by as much as 10,000 boxes of bananas per vessel
had deprived DMFII of the corresponding income that those excluded bananas
would have fetched in the market. Not only that, the fewer boxes of bananas
shipped had effectively increased the cost of each box of bananas actually
delivered to the markets. Likewise, the grossly erroneous mix-up in the
loading of bananas had completely upset DMFII's contractual obligations with
its market in Japan. 37
The infractions of Betonio were duly set forth in the Show Cause Memo issued
to him, charging him with gross and habitual neglect of duties and breach of trust and
confidence. For the CA, the 12 infractions committed by Betonio from April 2010
until June 2010 were not habitual; hence, he should only be meted out an admonition,
warning, reprimand or suspension. According to the CA, dismissal from employment
was too harsh and incommensurate to the infractions committed by Betonio.
We disagree.
It has long been established that an employer cannot be compelled to retain an
employee who is guilty of acts inimical to his interests, 38 especially when
circumstances exist justifying loss of confidence to the employee. This is more so in
cases involving managerial employees or personnel occupying positions of
responsibility, such as Betonio's position. In Jumuad vs. Hi-Flyer Food, Inc. and/or
Montemayor, 39 the Court held:
x x x In breach of trust and confidence, so long as it is shown that there is
some basis for management to lose its trust and confidence, and that the
dismissal was not used as an occasion for abuse, as a subterfuge for causes
which are illegal, improper, and unjustified and is genuine, that is, not a mere
afterthought intended to justify an earlier action taken in bad faith, the free
will of management to conduct its own business affairs to achieve its purpose
cannot be denied. 40
In this case, it cannot be disputed that Betonio committed lapses and
inefficiencies in the performance of his duty as DMFPPI's Senior Manager for Port
Operations. While there may be a debate whether his negligence was gross and
habitual, the factual background of the case undoubtedly shows that he breached his
duties as to be unworthy of the trust and confidence of DMFPPI. After an assiduous
review of the facts as contained in the records, the Court is convinced that Betonio
was validly dismissed on the ground of DMFPPI's loss of trust and confidence on
him. 
Finally, although there was a just cause for Betonio's dismissal, he was not
afforded procedural due process. Under the internal rules of DMFPPI, the
administrative committee will first come up with a recommendatory report on the case
of Betonio; that if the top management disagrees with the committee's
recommendation, they will reconvene to discuss the decision to be adopted.
While the administrative committee found Betonio to be inefficient and
ineffectual in the operation of the port, it opined that his lapses were not enough for
his dismissal. Consequently, the top management disagreed to the administrative
committee's recommendation. However, instead of reconvening with the
administrative committee to discuss the final decision to be adopted on Betonio's case,
DMFPPI unilaterally proceeded to terminate Betonio's employment. This deprived
Betonio of his last chance to be heard by DMFPPI.
Following the prevailing jurisprudence on the matter, if the dismissal is based
on a just cause, then the noncompliance with the procedural due process should not
render the termination from employment illegal or ineffectual. 41 Instead, the
employer must indemnify the employee in the form of nominal damages. The law and
jurisprudence allow the award of nominal damages in favor of an employee in a case
where a valid cause for dismissal exists but the employer fails to observe due process
in dismissing the employee. 42 Considering all the circumstances surrounding this
case, the Court finds the award of nominal damages in the amount of P30,000.00 to be
in order.
While We uphold the dismissal of Betonio, the Court, as a measure of social
justice and equitable concession, grants financial assistance to him. As a general rule,
an employee who has been dismissed for any of the just causes enumerated under
Article 297 [282] of the Labor Code is not entitled to separation pay. However, by
way of exception, separation pay or financial assistance may be granted to an
employee who was dismissed for a just cause as a measure of social justice or on
grounds of equity. 43 The Court thoroughly discussed this concept in Solid Bank
Corp. v. NLRC, et al. 44
Applying in this case the concept of equity or the principle of social and
compassionate justice to the cause of labor, the Court agrees with the NLRC, in the
Decision dated December 29, 2011, that Betonio is entitled to separation pay as a
measure of financial assistance — equivalent to one month salary for every year of
service, a fraction of at least six months being considered as one whole year. This is in
consideration of the fact that Betonio's dismissal was not due to any act attributable to
his moral character. 
WHEREFORE, the instant petition is GRANTED. The Decision dated May
13, 2015 and Resolution dated February 16, 2016 of the Court of Appeals in CA-G.R.
SP No. 05508-MIN are REVERSED and SET ASIDE. The Decision dated
December 29, 2011 of the National Labor Relations Commission is
hereby REINSTATED. For noncompliance with procedural due process, the
petitioner Del Monte Fresh Produce (Phil.), Inc. is ORDERED to pay respondent
Reynaldo P. Betonio nominal damages in the amount of P30,000.00.
SO ORDERED.
 (Del Monte Fresh Produce (Phil.), Inc. v. Betonio, G.R. No. 223485 , [December 4,
|||

2019])

THIRD DIVISION
[G.R. No. 236322. November 27, 2019.]

COKIA INDUSTRIES HOLDINGS MANAGEMENT, INC. and/or


GEORGE LEE CO, President & Chief Operating
Officer, petitioners, vs. BEATRIZ C. BUG-OS, respondent.

DECISION

CARANDANG, J  : p

This is a Petition for Review on Certiorari 1 assailing the Decision 2 dated


August 25, 2017 and Resolution 3 dated November 24, 2017 of the Court of Appeals
(CA) in CA-G.R. SP No. 07982. The CA affirmed the Resolutions dated December
29, 2016 4 and February 14, 2017 5 of the National Labor Relations Commission
(NLRC), which granted respondent Beatriz Bug-Os' (Bug-Os) motion for
reconsideration and set aside its Resolution 6 dated June 16, 2016 and the
Decision 7 dated November 23, 2015 of the Labor Arbiter. The NLRC found Cokia
Industries Holdings Management, Inc. (CIHMI) and its President and Chief Operating
Officer George Lee Co (George; collectively, petitioners) to have illegally dismissed
Bug-Os and ordered them to pay her backwages, 13th month pay, and service
incentive leave pay. The NLRC also ordered Bug-Os' reinstatement to her previous
position without loss of seniority rights and privileges. 8
Antecedents
Bug-Os was employed as CIHMI's accounting personnel on January 2, 2001.
She was tasked to do the following: (1) prepare salary payrolls, vouchers, and
contributions; (2) process loans and submit remittances of the company to various
government agencies like the Social Security System (SSS), Philippine Health
Insurance Corporation (PhilHealth), and Pagtutulungan sa Kinabukasan: Ikaw,
Bangko, Industria at Gobyerno (Pag-IBIG) Fund; and (3) serve as liaison
officer/authorized n representative to various government agencies, including the
Department of Labor and Employment. 9
When Biange L. Co (Biange) died, he was replaced by his sister, Shirley L. Co
(Shirley), as Corporate Finance Officer/Treasurer of CIHMI in May 2015. Shirley
reviewed the documents of the company and discovered that there was a record of a
Pag-Ibig loan in her name even though she did not apply for it. After she informed
George of her discovery, they began investigating the matter. They discovered several
irregularities, including forgeries and falsifications on the Pag-Ibig loan supposedly
obtained by Shirley, and on the remittances to Pag-Ibig. The documents for the loan
under Shirley's name bore her forged signature and that of Biange's. 10
On July 4, 2015, George issued an Office Memorandum to Bug-Os, directing
her to explain: "(1) why she participated and connived in applying, processing, and
securing a multi-purpose loan in the name of stockholder and corporate officer(s)
Shirley Co; (2) why she lied and told Shirley that the latter did not have any loan with
Pag-Ibig; and (3) why she attempted to cover up the fact that Shirley has an existing
loan with Pag-Ibig that she never applied for." Bug-Os submitted her handwritten
explanation on the same day. 11She denied having any knowledge of the irregularities.
Allegedly, Gina Co (Gina), sister-in-law of George and Bug-Os' immediate
supervisor, was the one responsible for the forgery. Bug-Os claimed that she merely
prepared the loan forms and submitted it to Pag-Ibig. 12
On July 6, 2015, Bug-Os tendered her departure through a handwritten
resignation letter, which became effective at the close of office hours on the same day.
The following day, she sent another handwritten letter authorizing her cousin,
Corazon P. Etac (Etac), to withdraw her salaries, 13th month pay and other amounts
due her. On July 30, 2015, Etac received the check for Bug-Os worth P9,163.50
covering her salary for July 1 to 6, 2015, 13th month pay, and proportionate service
incentive leave pay. Bug-Os filed a complaint for illegal dismissal against petitioners
on August 11, 2015. 13
Ruling of the Labor Arbiter
On November 23, 2015, the Labor Arbiter dismissed Bug-Os' complaint with
prejudice and for lack of merit. 14 The Labor Arbiter held that her unjustified failure to
submit her position paper is sufficient ground to dismiss her complaint. 15 In any case,
the Labor Arbiter ruled that petitioners were able to show that Bug-Os voluntarily
resigned. 16There was no proof that she was merely compelled to do so. She even sent
another letter authorizing Etac to claim her monetary benefits on her behalf to CIHMI
after she resigned. For the Labor Arbiter, Bug-Os opted for a graceful exit rather than
be dismissed. 17 Bug-Os appealed to the NLRC.
Ruling of the NLRC
In its June 16, 2016 Resolution, the NLRC dismissed the appeal and affirmed
the ruling of the Labor Arbiter. 18 The NLRC agreed with the Labor Arbiter that Bug-
Os' failure to submit her position paper was inexcusable. 19 The NLRC also held that
Bug-Os resigned without waiting for the outcome of the investigation. 20 The contents
of her resignation, position, an undergraduate degree in accounting, 18 units of
Masters in Business Administration, 21 work experience, and the circumstances before
and after her departure, constitute substantial proof of her voluntary resignation. 22 In
addition, she did not submit evidence that George was hostile towards her. Overall,
there was no proof of Bug-Os' constructive dismissal. 23
Bug-Os filed a motion for reconsideration. In its December 29, 2016
Resolution, 24 the NLRC granted her motion and ruled as follows:
WHEREFORE, the motion for reconsideration is GRANTED.
The assailed Resolution is SET ASIDE and a new one is entered
finding respondents guilty of illegal dismissal. Complainant is entitled to
backwages of P211,431.00, and reinstatement to her previous position without
loss of seniority rights and privileges.
In addition, since complainant is not a minimum wage earner, the
award of backwages, 13th month pay and SILP is subject to 5% withholding
tax pursuant to Revenue Memorandum Circular No. 39-2012 dated August 3,
2012 as restated in NLRC Administrative Order No. 11-17, dated November
16, 2012.
SO ORDERED. 25
The NLRC held that Bug-Os was forced to resign because petitioners subjected
her to harsh words and treatment. 26 George gave his orders in a high-pitched voice,
directed her to do something despite being busy working on the payroll, forced her to
run when she was given orders, and made her feel like a slave. 27 Bug-Os' act of filing
her complaint shows that she had no real intention to give up her office. 28
Petitioners filed a motion for reconsideration, but the NLRC denied it in its
Resolution 29 dated February 14, 2017. Thus, they filed a petition for certiorari before
the CA to assail the ruling of the NLRC.
Ruling of the CA
The CA denied the petition and affirmed the Resolutions of the NLRC in its
Decision 30 dated August 25, 2017. The CA was convinced that Bug-Os would not
have resigned if not for the harsh words and treatment from petitioners. 31 Therefore,
the CA held that the NLRC did not commit grave abuse of discretion amounting to
lack or excess of jurisdiction. 32
Petitioners filed a motion for reconsideration. After the CA denied it in its
Resolution 33 dated November 24, 2017, petitioners filed a petition before this Court
to assail the ruling of the NLRC.
Issue
The issue before Us is whether the CA erred in affirming the finding of the
NLRC that Bug-Os was illegally dismissed.
Ruling of the Court
The petition is meritorious.
Constructive dismissal exists if an act of clear discrimination, insensibility, or
disdain by an employer becomes so unbearable on the part of the employee that it
could foreclose any choice by him or her except to forego his or her continued
employment. 34 The test for determining if an employee was constructively dismissed
is whether a reasonable person in the employee's position would feel compelled to
give up his or her employment under the prevailing circumstances. 35
In contrast, resignation refers to the voluntary act of an employee who is in a
situation where one believes that personal reasons cannot be sacrificed in favor of the
exigency of the service, and one has no other choice but to dissociate oneself from
employment. The acts of the employee before and after the alleged resignation must
be considered in determining whether he or she, in fact, intended to sever his or her
employment. 36
The employer has the burden of proving that an employee voluntarily resigned.
However, an allegation of constructive dismissal must be proven by the
employee, 37especially when he or she has given a resignation letter to the employer,
as held in the appropriate case of Gan v. Galderma Philippines, Inc. 38 Whether the
parties were able to discharge their respective burdens involves a review of the factual
findings of the courts a quo. While the Court generally does not perform such
function, the conflicting findings of the Labor Arbiter, the NLRC, and the CA call for
the same in this case. 39
As proof of Bug-Os' voluntary resignation, petitioners submitted a copy of her
handwritten resignation letter. Bug-Os' resignation letter states:
Sirs/Madams,
Good day!
Effective at the close of office hours of July 6, 2015, I will tender my
resignation as an OFFICE EMPLOYEE of your 2 (two) PRESTIGIOUS
COMPANIES.
Thank you for the OPPORTUNITY working w/you. 40
On its face, the letter does not have any indication that Bug-Os was forced to
execute it. She made no mention of what she claims are false accusations against her.
Her words of gratitude further undermine her assertion that she was coerced to
resign. 41
Nonetheless, Bug-Os claims that George and his mother subjected her to harsh
treatment the moment the irregular transactions were discovered. This made working
for CIHMI unbearable and compelled her to resign. However, she did not submit
proof in support of her contentions. Bare allegations alone are insufficient to establish
constructive dismissal. 42 Notably, Lolita Perez (Perez), CIHMI's employee in charge
of bookkeeping, recording, and preparation of its vouchers and even Bug-Os herself
claimed that the latter was never scolded or subjected to disciplinary action by
petitioners prior to the discovery of the irregularities. 43 In addition, Perez refuted
Bug-Os and averred that George scolded the latter only once in relation to the
irregularities. 44
Moreover, strong words from the employer do not necessarily make the
working environment unbearable. When these are uttered "without palpable reason or
are expressed only for the purpose of degrading the dignity of the employee, then a
hostile work environment will be created." 45 Bug-Os did not cite the statements made
by George that were demeaning to her. Hence, We cannot say whether George uttered
words which made working in CIHMI unbearable for her, or simply expressed his
anger over the misappropriation of CIHMI's funds.
We also take note of the fact that Bug-Os resigned merely two days after she
was given the Office Memorandum, or from July 4 to 6, 2015. It is incredulous that in
that short span of time, she was subjected to so much harassment that it made working
for CIHMI unbearable. While there is no fixed period for constructive dismissal, the
period from the time Bug-Os was asked to explain the irregularities discovered until
she resigned simply does not lend credibility to her claim that she was constructively
dismissed.
Conversely, petitioners submitted evidence to prove that Bug-Os committed
irregularities, such as the affidavits of Shirley, Perez, and Edem Manlangit
(Manlangit), another employee of CIHMI. Shirley attested to the fact that she did not
obtain a loan from Pag-Ibig. Perez enumerated the irregularities she discovered after
auditing CIHMI's transactions with SSS and Pag-Ibig of which are: 1) Bug-Os
reported an amount for remittance to Pag-Ibig in excess of what was actually deducted
from the employees' salaries. She then credited the excess to her loan; 46 2) Bug-Os
deducted from the salaries of other employees but credited the amount deducted to the
payment of her own loan and that of other persons; 47 and 3) Bug-Os reported an
amount for remittance that is higher than what was actually deducted from her
salary. 48 As for Manlangit, he affirmed Perez's statement that P5,000 was deducted
from his salary but it was credited to the payment of Bug-Os' loan. 
Bug-Os admitted that she was in charge of processing the payroll, vouchers,
loan application, and remittances to SSS, Pag-Ibig, and PhilHealth of CIHMI's
employees except for herself. However, she denied committing any irregularity and
ascribed it to Gina. The determination of whether Bug-Os defrauded CIHMI is
unnecessary to resolve this case. Even so, the evidence presented by petitioners in
relation to this matter and the January 11, 2019 Judgment 49 of the Municipal Trial
Court in Cities of Cagayan de Oro City, Branch 5 convicting Bug-Os of six counts of
estafa, in relation to the remittances to Pag-Ibig, support the finding of the Labor
Arbiter that Bug-Os resigned on her own volition, perhaps to avoid further
questioning from petitioners.
We, therefore, disagree with the NLRC and the CA's ruling that Bug-Os was
constructively dismissed. There is a lack of evidence to support this conclusion. As
such, the Labor Arbiter was correct in dismissing Bug-Os' complaint.
WHEREFORE, the petition is GRANTED. The Decision dated August 25,
2017 and the Resolution dated November 24, 2017 of the Court of Appeals in CA-
G.R. SP No. 07982 are REVERSED and SET ASIDE. The Decision dated
November 23, 2015 of the Labor Arbiter in NLRC Case No. RAB-10-08-00675-2015
is REINSTATED. 
SO ORDERED.
 (Cokia Industries Holdings Management, Inc. v. Bug-Os, G.R. No. 236322, [November
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27, 2019])

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