Republic of the Philippines

SUPREME COURT
Baguio City

FIRST DIVISION

G.R. No. 187232               April 17, 2013

ZENAIDA D. MENDOZA, Petitioner, 
vs.
HMS CREDIT CORPORATION and/or FELIPE R. DIEGO, MA. LUISA B. DIEGO, HONDA MOTOR SPORTS
CORPORATION and/or FELIPE R. DIEGO, MA. LUISA B. DIEGO, BETA MOTOR TRADING INCORPORATED
and/or FELIPE DIEGO, MA. LUISA B. DIEGO, JIANSHE CYCLE WORLD IN CORPORATED and/or JOSE B.
DIEGO, Respondents.

DECISION

SERENO, CJ.:

Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the Decision
dated 14 November 20081 issued by the Court of Appeals (CA) in CA G.R. SP No. 82653.

Petitioner Zenaida D. Mendoza (Mendoza) was the Chief Accountant of respondent HMS Credit Corporation (HMS
Credit) beginning 1 August 1999.2 During her employment, she simultaneously serviced three other respondent
companies, all part of the Honda Motor Sports Group (HMS Group),3 namely, Honda Motor Sports Corporation
(Honda Motors), Beta Motor Trading Incorporated (Beta Motor) and Jianshe Cycle World (Jianshe).4 Respondent
Luisa B. Diego (Luisa) was the Managing Director of HMS Credit, while respondent Felipe R. Diego (Felipe) was the
company officer to whom Mendoza directly reported.5

Mendoza avers that on 11 April 2002, after she submitted to Luisa the audited financial statements of Honda Motors,
Beta Motor, and Jianshe, Felipe summoned Mendoza to advise her of her termination from service.6

She claims that she was even told to leave the premises without being given the opportunity to collect her personal
belongings.7

Mendoza also contends that when she went back to the office building on 13 April 2012, the stationed security guard
stopped her and notified her of the instruction of Felipe and Luisa to prohibit her from entering the premises.8 Later
that month, she returned to the office to pick up her personal mail and to settle her food bills at the canteen, but the
guard on duty told her that respondents had issued a memorandum barring her from entering the building.9

On the other hand, respondents maintain that Mendoza was hired on the basis of her qualification as a Certified
Public Accountant (CPA),10 which turned out to be a misrepresentation.11 They likewise contend that not only did she
fail to disclose knowledge of the resignations of two HMS Group officers, Art Labasan (Labasan) and Jojit de la Cruz
(de la Cruz), and their subsequent transfer to a competitor company, but she also had a hand in pirating them. Thus,
on 12 April 2002, they supposedly confronted her about these matters. In turn, she allegedly told them that if they had
lost their trust in her, it would be best for them to part ways.12 Accordingly, they purportedly asked her to propose an
amount representing her entitlement to separation benefits. Before she left that night, they allegedly handed
her P30,000 as payment for the external auditor she had contracted to examine the books of the HMS Group.13

On 30 April 2002, Mendoza filed with the National Labor Relations Commission (NLRC) a Complaint for Illegal
Dismissal and Non-payment of Salaries/Wages, 13th Month Pay and Mid-Year Bonus.14 The case was docketed as
NLRC-NCR North Sector Case No. 00-04-02576-2002.15

On 28 January 2003, the Labor Arbiter rendered a Decision ruling that Mendoza had been illegally dismissed, and
that the dismissal had been effected in violation of due process requirements.16 Thus, the Labor Arbiter held
respondents jointly and severally liable for the payment of separation pay, backwages, moral and exemplary
damages, and attorney’s fees in the total amount of P1,025,081.82.17

Respondents filed an Appeal dated 14 March 200318 and a Motion to Reduce Appeal Bond dated 21 March 2003 with
the National Labor Relations Commission (NLRC), tendering the amount of only P650,000 on the ground of purported
business losses.19 In its Order dated 30 May 2003, the NLRC denied the request for the reduction of the appeal bond,
and directed respondents to put up the additional amount of P122,801.66 representing the differential between the
judgment award – not including the moral and exemplary damages and attorney’s fees – and the sum previously
tendered by them.20 Respondents complied with the Order.21

On 30 September 2008, the NLRC rendered a Decision reversing the ruling of the Labor Arbiter.22 In declaring that
Mendoza had not been summarily dismissed, the NLRC held as follows: (a) her claim that she was terminated was
incompatible with respondents’ act of entrusting the amount of P30,000 to her as payment for the external auditor; (b)
the same act demonstrated that the parties parted amicably, and that she had the intention to resign; and (c) her
admission that respondents allowed her to take a leave of absence subsequent to their confrontation also belied her
claim that she was dismissed.23 Further, it also ruled that her misrepresentation as to her qualifications, her
concealment of her meeting with a rival motorcycle dealership, and her non-disclosure of her meeting with the officers
and mechanics of HMS Group amounted to a breach of trust, which constituted a just cause for termination,
especially of managerial employees like her.24 Nevertheless, it ordered respondents to pay her separation pay
equivalent to one month for every year of service.25

The NLRC denied the Motion for Reconsideration filed by Mendoza,26 prompting her to file a Petition for Certiorari with
the CA, which rendered a Decision affirming that of the lower tribunal.27 The CA ruled that that there was no dismissal,
as the parties had entered into a compromise agreement whereby respondents offered to pay Mendoza separation
benefits in exchange for her voluntary resignation.28 It further explained:

On the merits, this case involves neither dismissal on the part of the employer nor abandonment on the part of the
employee. On the evening of April 11, 2002, respondents and petitioner had already agreed on an amicable
settlement with petitioner voluntarily resigning her employment and respondents paying her separation benefits. This
is evident from the amiable manner with which the parties ended their meeting, with respondents entrusting to
petitioner the P30,000.00 payment for the external auditor and the petitioner considering her absence the following
day as a previously approved leave from work. It appears, however, that respondents had a sudden change of heart
while petitioner was away on leave on April 12, 2002 because when the latter returned on April 13, 2002 she was
already prevented from entering the office premises per strict instructions from respondents. Clearly, this was an
attempt on the part of respondents to effectively renege on its commitment to pay separation benefits to petitioner.

While, generally, an employee who voluntarily resigns from employment is not entitled to separation pay, an
arrangement whereby the employee would receive separation pay despite having resigned voluntarily constitutes a
contract which is freely entered into and which must be performed in good faith. Thus, the NLRC correctly sustained
the prior commitment of respondents to pay separation benefits to petitioner. For although loss of trust and
confidence could have been a valid ground available to respondents, they did not institute the appropriate dismissal
procedures against petitioner. Instead, they opted to enter into a compromise agreement with an offer to pay
separation benefits in exchange for the latter’s voluntary resignation. It is an accepted practice for parties to adjust
their difficulties by mutual consent and, through the execution of a compromise agreement, prevent or to put an end
to a lawsuit. And, since there was no dismissal, valid or otherwise, involved in this case, the non-observance of the
notice requirements is of no relevance.29

Mendoza consequently filed the present Petition for Review, raising the following grounds:

a. The CA erred in concluding that respondents had timely filed their appeal with the NLRC.

b. The CA erred in ruling that there was no illegal dismissal.30

Thus, in disposing of the instant case, the following issues must be discussed: (a) whether the appeal of respondents
to the NLRC was timely filed, and (b) whether Mendoza was illegally dismissed.

First issue: Timely filing of the

appeal before the NLRC

The relevant portion of Article 223 of the Labor Code on appeals of decisions, awards or orders of the Labor Arbiter
as follows:

Art. 223. x x x In case of a judgment involving a monetary award, an appeal by the employer may be perfected only
upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the
Commission in the amount equivalent to the monetary award in the judgment appealed from.
In Pasig Cylinder v. Rollo,31 this Court explained that the required posting of a bond equivalent to the monetary award
in the appealed judgment may be liberally interpreted as follows:

x x x. True, Article 223 of the Labor Code requires the filing of appeal bond "in the amount equivalent to the monetary
award in the judgment appealed from." However, both the Labor Code and this Court’s jurisprudence abhor rigid
application of procedural rules at the expense of delivering just settlement of labor cases. Petitioners’ reasons for
their filing of the reduced appeal bond — the downscaling of their operations coupled with the amount of the
monetary award appealed — are not unreasonable. Thus, the recourse petitioners adopted constitutes substantial
compliance with Article 223 consistent with our ruling in Rosewood Processing, Inc. v. NLRC, where we allowed the
appellant to file a reduced bond of P50,000 (accompanied by the corresponding motion) in its appeal of an arbiter’s
ruling in an illegal termination case awarding P789,154.39 to the private respondents.32

In the case at bar, respondents filed a Motion to Reduce Appeal Bond, tendering the sum of P650,000 – instead of
the P1,025,081.82 award stated in the Decision of the Labor Arbiter – because it was allegedly what respondents
could afford, given the business losses they had suffered at that time.33 Upon the denial by the NLRC of this Motion,
respondents promptly complied with its directive to post the differential in the amount of P122,801.66, which had
been computed without including the award of moral and exemplary damages and attorney’s fees.34Following the
pronouncement in Pasig Cylinder, the CA was correct in holding that the appeal was timely filed on account of
respondents’ substantial compliance with the requirement under Article 223.

Second issue: Illegal dismissal of

Mendoza

The Labor Code provides for instances when employment may be legally terminated by either the employer or the
employee, to wit:

Art. 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.

x x x           x x x          x x x

Art. 285. Termination by employee.

a. An employee may terminate without just cause the employee-employer relationship by serving a written
notice on the employer at least one (1) month in advance. The employer upon whom no such notice was
served may hold the employee liable for damages.

b. An employee may put an end to the relationship without serving any notice on the employer for any of the
following just causes:

1. Serious insult by the employer or his representative on the honor and person of the employee;

2. Inhuman and unbearable treatment accorded the employee by the employer or his
representative;
 3. Commission of a crime or offense by the employer or his representative against the person of
the employee or any of the immediate members of his family; and

4. Other causes analogous to any of the foregoing.

In instances in which the termination of employment by the employer is based on breach of trust, a distinction must
be made between rank-and-file employees and managerial employees, thus:

The degree of proof required in labor cases is not as stringent as in other types of cases. It must be noted, however,
that recent decisions of this Court have 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. 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. Hence, in the case of
managerial employees, proof beyond reasonable doubt is not required, it being sufficient that there is some basis for
such loss of confidence, such as when the employer has reasonable ground to believe that the employee concerned
is responsible for the purported misconduct, and the nature of his participation therein renders him unworthy of the
trust and confidence demanded by his position.35 (Emphasis supplied)

Further, in the case of termination by the employer, it is not enough that there exists a just cause therefor, as
procedural due process dictates compliance with the two-notice rule in effecting a dismissal: (a) the employer must
inform the employee of the specific acts or omissions for which the dismissal is sought, and (b) the employer must
inform the employee of the decision to terminate employment after affording the latter the opportunity to be heard.36

On the other hand, if the termination of employment is by the employee, the resignation must show the concurrence
of the intent to relinquish and the overt act of relinquishment, as held in San Miguel Properties v. Gucaban:37

Resignation — the formal pronouncement or relinquishment of a position or office — is the voluntary act of an
employee who is in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency
of the service, and he has then no other choice but to disassociate himself from employment. The intent to relinquish
must concur with the overt act of relinquishment; hence, the acts of the employee before and after the alleged
resignation must be considered in determining whether he in fact intended to terminate his employment. In illegal
dismissal cases, fundamental is the rule that when an employer interposes the defense of resignation, on him
necessarily rests the burden to prove that the employee indeed voluntarily resigned.38(Emphases supplied)

In this case, the NLRC and the CA were in agreement that although Mendoza committed acts that amounted to
breach of trust, the termination of her employment was not on that basis.39 Instead, both tribunals held that the parties
parted amicably, with Mendoza evincing her voluntary intention to resign and respondents’ proposed settlement to
pay her separation benefits.40 This Court does not agree with these findings in their entirety.

Whether Mendoza was a Chief Accountant of HMS Credit, as stated in her appointment letter,41 or a Finance Officer
of all the corporations under the HMS Group, as claimed by respondents,42 what is certain is that she was a
managerial employee. In securing this position, she fraudulently misrepresented her professional qualifications by
stating in her Personal Information Sheet that she was a CPA. Based on the records, she never controverted this
imputation of dishonesty or, at the very least, provided any explanation therefor. Thus, this deceitful action alone was
sufficient basis for respondents’ loss of confidence in her as a managerial employee.

In addition, this Court finds no reason to deviate from the factual findings of the NLRC and the CA as regards the
existence of other circumstances that demonstrated Mendoza’s breach of trust. The NLRC held in this wise:

In sum, the commission finds that Mendoza was not illegally dismissed.  Respondents could have validly dismissed
1âwphi1

her for just cause because she had forfeited her employment by having incurred breach of trust that they had reposed
in her. She had concealed from them the fact that she was going to visit a rival motorcycle dealership in Tarlac, called
Honda Mar, on the afternoon of April 5, 2002, in the company of its owner; the notice she had given was that, on the
morning of that date, she would get her child’s report card from her school. She also failed to disclose to them the fact
that she saw in that store Labasan and De la Cruz, and respondents’ mechanics, Gatus and Mejis, who cleaned and
painted the same. And she gave the appearance of giving aid and support to respondents’ competitor, to the
prejudice of their business standing and goodwill. These were acts of disloyalty for which [they] would have been
justified in terminating her service on the ground of loss of confidence.43
However, despite the existence of a just cause for termination, Mendoza was nevertheless dismissed from service in
violation of procedural due process, as respondents failed to observe the two-notice requirement. Instead,
respondents insisted that she voluntarily resigned, which argument the NLRC and the CA sustained. This Court is not
persuaded.

Respondents were unable to discharge their burden to prove the contemporaneous existence of an intention on the
part of Mendoza to resign and an overt act of resignation. Aside from their self-serving allegation that she had offered
to resign after they had expressed their loss of trust in her, there is nothing in the records to show that she voluntarily
resigned from her position in their company. In this regard, it is worthy to underscore the established rule that the
filing of a complaint for illegal dismissal is inconsistent with resignation or abandonment.44

Moreover, the conclusion of the NLRC and the CA that Mendoza voluntarily resigned in consideration of respondents’
supposed payment of a settlement is bereft of any basis. The lower tribunals merely surmised that the parties forged
a compromise agreement despite respondents’ own admission that they never decided thereon.45 In fact, the records
are clear that none of the parties claimed the existence of any settlement in exchange for her resignation.

From the foregoing discussion, it is evident that although there was a just cause for terminating the services of
Mendoza, respondents were amiss in complying with the two-notice requirement. Following the prevailing
jurisprudence on the matter, if the dismissal is based on a just cause, then the non-compliance with procedural due
process should not render the termination from employment illegal or ineffectual.46 Instead, the employer must
indemnify the employee in the form of nominal damages.47 Therefore, the dismissal of Mendoza should be upheld,
and respondents cannot be held liable for the payment of either backwages or separation pay. Considering all the
circumstances surrounding this case, this Courts finds the award of nominal damages in the amount of P30,00048 to
be in order.

WHEREFORE, the Petition for Review is DENIED. The Decision dated 14 November 2008 of the CA in CA G.R. SP
No. 82653 is AFFIRMED WITH MODIFICATION: the award of separation pay is deleted and in lieu thereof, nominal
damages in the amount of P30,000 is awarded in favor of petitioner.

SO ORDERED.

MARIA LOURDES P. A. SERENO

Chief Justice
 THIRD DIVISION

[G.R. No. 112965. January 30, 1997]

PHILIPPINES TODAY, INC., BETTY GO-BELMONTE, MAXIMO V. SOLIVEN, ARTURO A. BORJAL, and ISAAC
G. BELMONTE petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and FELIX R. ALEGRE,
JR., respondents.

DECISION
PANGANIBAN, J.:

May a "Memorandum for File" which did not mention the words "resign" and/or "resignation" nonetheless
juridically constitute voluntary resignation? In answering this question, the Court took into account not merely the
literal meaning of the words and phrases used but, more importantly, the peculiar circumstances attendant to its
writing as well as antecedent, contemporaneous and subsequent actions, which were inconsistent with the desire for
continued employment of the writer, an intelligent executive occupying a position of trust in the Philippine Star and
gifted with an unusual writing ability.
These circumstances and actions are explained by this Court in re- solving this petition for certiorari assailing
the Decision   of the National Labor Relations Commission (Second Division)   in NLRC NCR CA 001863-91 entitled
[1] [2]

"Felix R. Alegre, Jr. vs. Philippines Today, Inc." promulgated on September 30, 1993, which reversed the decision of
Labor Arbiter Pablo C. Espiritu, Jr., dated May 15; 1991. In a Resolution dated November 16, 1993, petitioners'
motion for reconsideration was denied.  [3]

The Facts

The undisputed facts are as follows: Petitioner Philippines Today, Inc. (PTI) is the owner of the Philippine Star, a
daily newspaper of national and international circulation, while the individual petitioners are officers and members of
the board of directors of PTI, namely, Betty Go-Belmonte, chairman of the board; Arturo A. Borjal, president; Maximo
V. Soliven, publisher and chairman, editorial board; and Isaac G. Belmonte, treasurer. Private Respondent Felix R.
Alegre, Jr. was employed by PTI in July 1986 as a senior investigative reporter of the Philippine Star with a monthly
salary of eight thousand pesos (P8,000.00). He later became chief investigative writer and then assistant to the
publisher. His monthly compensation was correspondingly increased to ten thousand pesos (P10,000.00).
On October 20, 1988, Respondent Alegre filed a request for a thirty-day leave of absence effective on the same
date, citing the advice of his personal physician for him to undergo further medical consultations abroad.   Four days
[4]

later, on October 24, 1988, he wrote a "Memorandum for File"   addressed to Petitioner Betty Go-Belmonte with
[5]

copies furnished to members of the board of directors of PTI, the text of which is reproduced below:

"MEMORANDUM FOR FILE.

FOR : BETTY GO-BELMONTE

Chairman & CEO, The STAR Group of Publications

FROM : FELIX R. ALEGRE, JR.

DATE : 24 October 1988

SUBJECT : HAVING IT ALL

Truth like medicine hurts. But it cures.

The nice little chat we had last Thursday was most revealing. And certainly disconcerting.
What you had to tell me pained me, of course. But it has helped me just as much. It enabled me to see things clearly in their right
perspectives. More importantly, it provided me with the answers to the questions that had long nagged me in my wakeful state.

For quite a time, I got this sinking feeling of being treated like a pariah of sorts by most of the senior executives around here. The
frustration at my inability to put a finger at such a feeling somehow enhanced the angst within me. Until our chat. Now all the
demons of my anxiety have been exorcised. And I am left alone to lick the wounds of my betrayal. It isn't easy, I know. But I
shall pull through. Your candor and demonstrated faith in my person have been most assuaging. And for that alone, I am most
grateful.

It has never occurred to me that, in my acceptance of the invitation from no less than the publisher himself, to join him at the
Philippines Today, Inc., and the STAR Group of Publications, I was unwittingly signing my own death warrant as well. The
insults he had later on hurled at my person, the malicious innuendoes he had spread around, casting doubts on my personal and
professional integrity, had mercilessly torn at my soul, causing metaphysical death.

My credentials as a working journalist, I'd like to believe, got me this job at the STAR in the first place. And my bylines in the
series of articles in the STAR From Day One of my official affiliation with the Company, should establish that fact.

I was an investigative reporter at the Manila Times when the publisher offered me to work with him at the STAR in 1986. I was
given the assignment as senior investigative reporter, then chief investigative writer, until I was given a fancy title of assistant to
the publisher.

As a corporate guy assisting the publisher in his day-to-day official functionand this is where I feel very strongly about citing
some specifics of the things I did in this area, to wit:

. . . (omitted are said "specifics" of Respondent Alegre's accomplishments as assistant to the publisher deemed by this Court as
not relevant to the appreciation of this memorandum in relation to the consideration of the petition.)

As can be gleaned from this recital of some of the "things done" (despite my distaste for trumpeting one's deeds, but has to be
said, to set the record straight, in this instance), one can see that I obviously don different hats at any one time, doing
administration and operations functions, apart from my journalistic duties. That I work as a teamplayer, and trying hard to be
good at (sic) it, cannot be denied.

FOR DOING ALL THESE in the best spirit of corporate team-upmanship, what did I get in RETURN?

1. A pittance, salary/compensation-wise

2. Being conveniently bypassed in promotions, pay hikes, and other perks

3. Hindered from active participation in corporate affairs, by shooting at my ideas that otherwise would have been workable
and profitable for the Company and its people (CF. Item 2 of my memo dtd 06 September 88 which had you interested
in and supportive of).

4. Personally and professionally maligned, and accused of being an NPA (non-performing asshole, pardon my French).

By and large, all that I got are the twin demons of a civilized, unconscionable society: ECONOMIC INJUSTICE and
PROFESSIONAL SABOTAGE.

When push comes to a shove . . . anything or everything comes crashing down. I'M HAVING IT ALL!

Since I am on leave, I guess I won't be able to see you for a while. I wish to take this opportunity to express my profound
appreciation and sincere thanks for your genuine con-cren (sic) and honest initiatives to do a good turn on my behalf. You have
been most candid and forthright with me. I can't be any less.

Thank you for everything. God bless.

Very sincerely,

(Sgd.) FELIX R. ALEGRE, JR.

copy furnished:

Members-of the Board, Phils. Today, Inc.

Dr. Ronaldo G. Asuncion

Mr. Antonio Roces"

On December 6, 1988, Respondent Alegre received from Petitioner Belmonte a letter,   as follows: [6]

"November 9, 1988

MR. FELIX ALEGRE

Dear Jun,

During our board meeting yesterday, we discussed your letter dated October 24, 1988, and the Board decided to accept your
resignation and that it would take effect on November 22, 1988 upon expiration of your one-month leave.

I would like to take this opportunity to say that we were happy to have had you with the STAR Group of Publications and that we
would like to wish you the best of luck.

God bless. Thank you.

Very truly yours,

BETTY GO BELMONTE

Chairman of the Board

The Philippine Star"

The following day, Respondent Alegre wrote Petitioner Belmonte expressing surprise over the acceptance of his
"resignation" as stated in the above-quoted letter. His letter   partly stated:
[7]

"It certainly beats me to be told that my 'resignation' has been accepted, when in truth and in fact no such move, however implicit
it may be, and no such letter has ever been made from my end.

xxx xxx xxx

I am writing this letter not, certainly, to make any appeal, but simply to go on record that I did not resign. I filed a leave of
absence. Yes. And that was dully (sic.,) approved. Then I sent you a memorandum for file expressing my sentiments on certain
things, candid statements that came to b4 (sic) expressed inspired by your candor and sincerity in our last little chat. Now, if you
read that memo to mean resignation, that is your responsibility. And I am not just about to contest it. x x x"

This was followed by another letter on January 2, 1989, wherein Alegre, through counsel,   reiterated that he
[8]

never resigned. He accused petitioners of illegal dismissal as can be perceived allegedly from the discrimination
against him in promotions, benefits and the ploy to oust him by considering his memorandum as a resignation. He
claimed that as a result, he suffered mental anguish, social humiliation, besmirched reputation and moral shock. He
thus demanded indemnification for "the material and moral losses he has incurred". He further wrote that he was not
insisting to be taken back after being shown that he was no longer wanted in the company.
Counsel   for petitioners, in a reply on January 19, 1989, explained that the acceptance of Alegre's resignation
[9]

was a collective decision of the board of directors since "nobody in his right mind would write a memorandum of the
sort he wrote and still not resign. To them, the memorandum was tantamount to a resignation even if Mr. Alegre did
not say so in so much words." With respect to his claim for damages, petitioners' counsel said, "he has not shown
any specific fact or circumstance that would justify his claim, even remotely." Hence, "the Star cannot accede to the
same."
 On May 17, 1989, Respondent Alegre filed a complaint for illegal dismissal and damages against herein
petitioners.   The labor arbiter dismissed said complaint in his decision of May 15, 1991. We quote significant
[10]

portions of said decision:

"This office has minutely disected (sic) the letter and while it be said that nothing therein mentions about resigning from his
position as Assistant to the Publisher, a perusal of the letter as a whole shows that the intention of the complainant was to resign
from his post. The subject as "Having it all" together with his frustrations and disappointment in the office coupled with his
statement that "when push comes to a shove, everything comes crushing (sic) down" and that: he is "having it all" and with his
concluding sentence of "Thank you for everything" are (sic) clear indications that he was in fact resigning.

As a journalist and a writer, complainant need not write his letter of resignation in black and white. He can do so in many other
ways, words and actions to show his real intention of leaving his job.

xxx xxx xxx

Complainant's subsequent overt acts particularly his failure to report to his job after the expiration of his leave of absence, his
being gainfully employed with the Office of Senator Laurel (as Chief of Staff) and his act of clearing and removing his personal
files, things and belongings from his desk prior to his (complainant) knowledge or receipt of the letter accepting his resignation(,)
clearly indicates that complainant was not terminated from his job but rather he resigned from his job...

xxx xxx xxx

WHEREFORE, premises considered, judgment is hereby rendered dismissing the complaint for illegal dismissal and damages for
lack of merit, and ordering respondent, Philippines Today, Inc., to pay complainant the amount of THIRTY THOUSAND
(P30,000.00) PESOS by way of separation pay in the interest of compassionate labor justice and; dismissing Respondents (sic)
counterclaim for damages for lack of merit.  [11]

On appeal by Alegre, the above decision was set aside by the NLRC. Adopting the definition in Black's Law
Dictionary (5th Edition) of resignation as a "formal renouncement or relinquishment of an office," it held that herein
Respondent Alegre did not resign as there was no actual act of relinquishment to constitute complete and operative
resignation. According to the NLRC, the request for a leave of absence by Respondent Alegre meant that he
intended to return after the period of his absence. Such intent was bolstered by his filing of a request for an extension
of his leave. Further, when he received the letter of Petitioner Belmonte dated November 9, 1988 informing him of the
acceptance by the Board of his resignation, he immediately wrote a letter to Petitioner Belmonte, expressing in no
uncertain terms that he did not resign. These circumstances led the NLRC to hold that Respondent Alegre was
constructively dismissed without just cause and to order petitioners to pay him full backwages for three years from the
time of dismissal, separation pay in lieu of reinstatement, moral and exemplary damages and attorney's fees.  [12]

Issues

Petitioners argue that the NLRC committed grave abuse of discretion:

1. in finding them guilty of illegally dismissing Respondent Alegre;

2. in awarding Respondent Alegre moral and exemplary damages and attorney's fees without any factual and legal basis;
and,

3. even assuming that Respondent Alegre was illegally dismissed, in contravening and disregarding this Court's ruling in
Alex Ferrer, et al. vs. NLRC (Second Division)   by erroneously computing backwages, as it did not deduct the
[13]

amounts earned by Respondent Alegre while he was admittedly employed in the office of Senator Sotero H. Laurel.

The pivotal question is whether the Memorandum for File of Respondent Alegre addressed to Petitioner
Belmonte constitutes a letter of resignation.
In construing it so, petitioners advance these arguments: (1) Respondent Alegre had spoken openly to
Petitioner Belmonte of his desire to leave the Philippine Star; (2) the contents of his memorandum indicate an
intention on his part not to return to his job even if he did not categorically mention resignation; (3) he never returned
to work after his authorized leave expired and even cleared his desk of his personal belongings; and, (4) he obtained
employment as chief of staff of the office of Senator Sotero Laurel for which he was paid a higher salary. Having been
led to believe that Alegre wanted to resign and in honestly perceiving his memorandum as a resignation letter,
petitioners cannot be held liable for moral and exemplary damages because they believe their action was in
accordance with law. Lastly, petitioners contend that, even assuming they were liable for illegal dismissal, the NLRC,
in granting backwages, should have deducted the amount earned by Alegre from his subsequent employment.
Private respondent, on the other hand, maintains that he had no intention of resigning from PTI. He insists that:
(1) in writing the memorandum, he was merely lamenting the work environment at PTI and apprising Petitioner
Belmonte of the situation; (2) a resignation should be unequivocal in nature; (3) his non-return to work after his
original leave expired is explained by his subsequent request for an extension thereof due to medical reasons; (4)
and the letter of Petitioner Belmonte obviated any desire for him to return to his work since petitioners practically
terminated his employment. He further contends that petitioners' tenacious resistance in admitting their mistake
bespeaks of bad faith and shows their real intention to end his services, which entitles him to moral and exemplary
damages. In representation of public respondent, the Solicitor General supported private respondent's position.

The Court's Ruling

The petition is meritorious.

Pivotal Issue: Did the Memorandum for File Constitute Voluntary Resignation?

After a thorough scrutiny of the Memorandum for File of Respondent Alegre and a careful deliberation on the
peculiar circumstances attendant to its writing and the antecedent, contemporaneous and subsequent actions of
private respondent, we hold that said memorandum juridically constituted a letter of resignation.
We see merit in the findings and conclusions drawn by the labor arbiter. They are more in accord with prudence,
common sense and sound judgment. The labor arbiter correctly deduced from Alegre's memorandum and attendant
actuations that he resigned. In contrast, the NLRC was too strict in its interpretation of what constitutes "resignation."
It adhered literally to the dictionary meaning of the word without relating it to the peculiarity of the factual
circumstances surrounding the case. Courts and quasi-judicial bodies, in the exercise of their functions and in making
decisions, must not be too dogmatic as to restrict themselves to literal interpretations of words, phrases and
sentences. A complete and wholistic view must be taken in order to render a just and equitable judgment.

Incendiary words and sarcastic remarks negate alleged desire to improve relations

Alegre's choice of words and way of expression betray his allegation that the memorandum was simply an
"opportunity to open the eyes of (Petitioner) Belmonte to the work environment in petitioners' newspaper with the end
in view of persuading (her) to take a hand at improving said environment." Apprising his employer (or top-level
management) of his frustrations in his job and differences with his immediate superior is certainly not done in an
abrasive, offensive and disrespectful manner. A cordial or, at the very least, civil attitude, according due deference to
one's superiors, is still observed, especially among high-ranking management officers. The Court takes judicial notice
of the Filipino values of pakikisama and paggalang which are not only prevalent among members of a family and
community but within organizations as well, including work sites. An employee is expected to extend due respect to
management, the employer being the "proverbial hen that lays the golden egg,"   so to speak. An aggrieved
[14]

employee who wants to unburden himself of his disappointments and frustrations in his job or relations with his
immediate superior would normally approach said superior directly or otherwise ask some other officer possibly to
mediate and discuss the problem with the end in view of settling their differences without causing ferocious conflicts.
No matter how the employee dislikes his. employer professionally, and even if he is in a confrontational disposition,
he cannot afford to be disrespectful and dare to talk with an unguarded tongue and/or with a baleful pen. Here,
respondent Alegre was anything but respectful and polite. His memorandum is too affrontive, combative and
confrontational. It certainly causes resentment, even when read by an objective reader. His incendiary words and
sarcastic remarks, to quote some:

"For quite a time, I got this sinking feeling of being treated like a pariah of sorts by most of the senior executives around here.
The frustration at my inability to put a finger at such a feeling somehow enhanced the angst within me. . . .Now all the demons of
my anxiety have been exorcised. And I am left alone to lick the wounds of my betrayal. x x x
It has never occurred to me that, in my acceptance of the invitation from no less than the publisher himself, to-join him . . . I was
unwittingly signing my own death warrant as well. The insults he had later on hurled at my person, the malicious innuendoes he
had spread around casting doubts on my personal and professional integrity, had mercilessly torn at my soul, causing
metaphysical death."

negate any desire to improve work relations with Petitioner Soliven and other PTI executives. Such strongly worded
letter constituted an act of "burning his bridges" with the officers of the company.

Seeking relief incompatible withwriting offensive letter

Any management officer, much so an immediate superior, would be offended, if not enraged, with the insults
and innuendoes stated in said memorandum; more so because the memorandum was not directly addressed to him
but to the chairman and CEO and copy furnished all other officers and members of the board of directors. Any
discerning mind can perceive that the letter is not simply a recitation of respondent Alegre's gripes, disappointments,
frustrations and heartaches against the company and its officers particularly Petitioner Soliven, as postulated by the
Solicitor General in his comment.   If it were so, why was it not addressed directly to the person concerned? His
[15]

memorandum clearly indicated that his problems involved, or were supposedly caused by only one person, Mr.
Soliven, his immediate superior. But it was not even addressed to him! How can he expect amends in their relations if
that was all he wanted? The Solicitor General was simply turning a blind eye to the obvious fact that said
memorandum, for all intents and purposes, was intended, wittingly or unwittingly, to end employment relations.

Respondent Alegre a well-educated journalist

It should not escape our attention that respondent Alegre is a. professional journalist and persuasive writer. On
top of that, he was a law graduate. He must have known the drilling effect of his bitter and sarcastic remarks upon the
petitioners and must have intended the same. Ordinary words are to be construed in their ordinary meaning.
Commonsense dictates that Alegre meant to resign when he wrote the memorandum. Otherwise, he should have
used a more tempered language and a less confrontational tone. Moreover, he held a position of evident
responsibility requiring the utmost confidence of his immediate superior. As assistant to the publisher doing, in his
very own words, "administration and operations functions, apart from (my) journalistic duties," it is apparent that
Alegre was not employed simply for his writing skills. Top management certainly reposed full trust and confidence in
him and placed him in a position of considerable management influence.

PTI officers of uncommon intelligence and perception

Furthermore, his memorandum was addressed to the chairman and chief executive officer of PTI and furnished
all members of the board of directors. These officers which include the likes of the late Betty Go-Belmonte, Maximo
V. Soliven and Arturo A. Borjal, long-time and well-respected journalists acclaimed locally and internationally, are
themselves people of uncommon perception and intellect. They will not miscomprehend the meaning and intent of
Alegre's memorandum, which was not by any means a simple way of seeking relief but well a way to get out of the
company. What else could he have meant with these concluding remarks:

"By and large, all that I got are the twin demons of a civilized, unconscionable society: ECONOMIC INJUSTICE and
PROFESSIONAL SABOTAGE.

When push comes to a shove . . . . anything or everything comes crashing down. I'M HAVING IT ALL!"

Respondent Alegre, being a journalist himself and having worked with them for sometime, knew how his letter
would be perceived and received. Besides, as discussed earlier, Alegre is likewise a well-educated man of more than
average intelligence. The conclusion is inevitable that he had more than enough sense to anticipate the
consequences and effects of his words and actions. Indeed, what a man sows, he reaps.

Trust and confidence breached

 In addition, respondent Alegre is a highly confidential employee who holds his job at the pleasure of his
employer or, stated otherwise, for as long as he enjoys the trust and confidence of his employer. Corollarily, he
likewise must repose trust and confidence in his employer or, at the very least, his immediate superior. But any
superior hurled with invectives from a confidential employee, much more one occupying a managerial position at the
same time, will definitely lose trust and confidence in the latter. And there can be no way to interpret such letter other
than as a withering of trust and confidence by the employee in his boss. The use of offensive language can only
mean expression of disloyalty and disrespect. It renders the writer unworthy of the trust and confidence demanded by
his position. It is beyond human nature to expect two persons with underlying mistrust in each other to continue to
work together effectively, not to say, harmoniously.

Antecedent, Contemporaneous and Subsequent Actions Affirming Resignation

In addition to his memorandum and the circumstances attendant thereto which were just discussed, the Court
notes some peculiar actions confirming Alegres' intention to terminate his employment with the Star.

(1) Medical reasons for leave of absence not proved

First, he claims that his leave of absence was due to medical reasons, for which he was supposed to seek relief
abroad. However, the Court scoured the records but found nothing to show that he actually underwent any medical
check-up. Much less, medical examination abroad. Nothing really backs up such claim except his bare statements
which, evidentially, are at best self-serving.

(1) Cleared desk of personal belongings

Second, respondent Alegre cleared his desk of his personal belongings even before he knew of the acceptance
of his resignation.   Such act certainly bares his intent to leave his job. Respondent Alegre has not refuted nor offered
[16]

any sufficient explanation for this action. We cannot but-give due credit to the petitioners' contention that such act
was expressive of his intent to resign.

(1) Did not report back to work

Third, respondent Alegre did not return to his job after his authorized leave of absence expired in November
1988. Although he sent another letter   requesting for an extension of his leave, there is no showing on record that
[17]

the same was approved by petitioners. It is standard office procedure that applications for leave of absence are
subject to the approval of the employer. These are not automatically granted upon filing. Except to cite in his request
"travel log (sic) coupled with advice of my physician," respondent Alegre has not proven the emergency nature of the
cause/s of his extended leave. Again, we cannot but give due credence to petitioners' contention that this was
another operative evidence of Alegre's intent to resign.
His non-return to work, though, is not equivalent to abandonment of work. For in the latter, it is necessary to
prove "clear and deliberate intent" coupled with unjustified. absence and overt acts unerringly pointing to the fact that
the employee simply does not want to work anymore.   In the case at bench, Alegre voluntarily resigned through his
[18]

memorandum albeit written in the guise of a grievance letter. The law and jurisprudence on abandonment have thus
no application in the present case.

(4) Not deprived of chance to return to work

Fourth, if Respondent Alegre had really no intention to resign, he could have reported back to work. His
contention that he was effectively deprived of any chance to return to his work because of the acceptance of his
purported resignation cannot be sustained. He claims that he received the notice dated November 9, 1988 only on
December 6, 1988. But this means that for about two weeks after his leave expired, he had all chances to return to
his work. Yet he chose not to. The obvious reason is that he had actually no intention of doing so.

(5) Alegre expressly manifested intention to resign

Prior to sending his memorandum, Respondent Alegre informed Petitioner Belmonte of his intention to resign
from the Philippine Star. This is shown by the testimony (cross examination) of the late Mrs. Belmonte before the
labor arbiter on January 13, 1990 as follows:

"ATTY. BORRETA:

And you took that action, meaning the Board acted on this Memo for File which you considered as his letter of resignation
without consulting or talking with the complainant first?

WITNESS:

The complainant had also applied for leave of absence and he talked with me that he was leaving for the United States. Actually I
remember he requested a conversation but he did not specify what the conversation was about, Your Honor. He was telling me
that he wanted to leave, has signed another job. And I told him that is not my prerogative and I am only Chairman of the Board;
and he came upon the recommendation of our Publisher and he was at that time Assistant to the Publisher; that he should talk to
the Publisher first and I even advised him to patch up whatever differences he might have. In that conversation, he said
something about leaving and he even said to me that when he leaves, he would ask his two (2) sons who were working with us to
leave too. And I think I made a comment, and that must be what he was referring to. I said; oh, but your sons are very
hardworking. In fact I said the Publisher, Max Soliven, told me that 'sana you were as good as your sons' maybe that was his
feeling. That is my way of trying to tell him that your sons are very hard-working because he said when I leave I am going to ask
them to leave too. Maybe because of that he gave me the impression that he wanted to leave.

ATTY. BORRETA:

And this happened before he wrote this memo for file on October 24, 1988?

WITNESS:

Yes, sir

ATTY. BORRETA:

And because of that you got the impression that he had the intention to resign?

WITNESS:

Yes sir"  [19]

(6) Assumed job in another office

Finally, the most telling of the actions undertaken by Respondent Alegre which evidently demonstrate his intent
to resign was his immediate employment as chief of staff of the office of then Senator Sotero H. Laurel, with a much
higher compensation at P14,600.00 per month plus P2,000.00 per month driver's allowance. He admitted in his
testimony before the labor arbiter on November 6, 1989 that he was employed therein about a year before (the date
of his testimony) or sometime in November 1988.   The date coincided with the period of his leave of absence or
[20]

immediately thereafter. If he had no intention of resigning and was on leave for medical reasons as he alleged, why
then did he commence a new job in another office at about the same period? His assumption of a new job prior to
receiving Mrs. Belmonte's letter on December 6, 1988 is clearly inconsistent with any desire to remain in employment
with PTI. This is particularly evident because both jobs required full-time work. Moreover, working in a newspaper
which prides in its independence from partisan activities is incompatible with a concurrent political office held by
respondent.

Side Issue: May a Resignation Be Unilaterally Withdrawn?

 Having established that Respondent Alegre resigned, we now tackle the corollary issue of whether he can
unilaterally withdraw his resignation. We hold that he cannot do so.
The case of Intertrod Maritime, Inc. vs. NLRC   is in point. The employee therein who was a ship engineer,
[21]

while at Port Pylus, Greece, requested for relief due to "personal reasons." The master of the ship, who had authority
to "sign off" an employee requesting relief, approved his request but informed the employee that repatriation
expenses were for his account and that he had to give thirty days notice in view of clause 5 of the employment
contract. When the vessel was at Port Said, Egypt four days later, the master "signed him off" and paid him in cash
all amounts due him less repatriation expenses. On his return to the Philippines, the employee filed a complaint
charging his employer with breach of employment contract and violation of the National Seamen Board rules and
regulations. He claimed that his request for relief was only for the sole purpose of enabling him to take care of a
fellow member of the crew who was hospitalized in Greece. Hence, after he was disallowed from disembarking
thereat, the reason no longer existed and, consequently, he was illegally dismissed when he was forced to "sign off"
in Egypt even as he signified his intention of continuing his work.
The Court ruled against the employee. It held that resignations, once accepted, may not be withdrawn without
the consent of the employer. If the employer accepts the withdrawal, the employee retains his job. If the employer
does not, the employee cannot claim illegal dismissal. To say that an employee who has resigned is illegally
dismissed, is to encroach upon the right of employers to hire persons who will be of service to them.
Obviously, this is a recognition of the contractual nature of employment which requires mutuality of consent
between the parties. An employment contract is consensual and voluntary. Hence, if the employee "finds-himself in a
situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service, then he
has no other choice but to disassociate himself from his employment".   If accepted by the employer, the consequent
[22]

effect of resignation is severance of the contract of employment.

A resigned employee who desires to take his job back has to re-apply therefor and he shall have the status of a
stranger who cannot unilaterally demand an appointment. He cannot arrogate unto himself the same position which
he earlier decided to leave. To allow him to do so would be to deprive the employer of his basic right to choose whom
to employ. Such is tantamount to undue oppression of the employer. It has been held that an employer is free to
regulate, according to his own discretion and judgment, all aspects of employment including hiring.   The law, in
[23]

protecting the rights of the laborer, impels neither the oppression nor self-destruction of the employer. 
[24]

Consistent with our ruling in Intertrod, the resignation of respondent Alegre after its acceptance by petitioners
can no longer be withdrawn without the consent of the latter. In fairness to the employer, an employee cannot
backtrack on his resignation at his whim and without the conformity of the former.
The instant case is unlike Molave Tours Corporation vs. NLRC   and People's Security, Inc. vs.
[25]

NLRC.   In Molave, acting on reports that the employee was on several occasions found drunk within work premises,
[26]

the employer required him to explain in writing said charges. Notwithstanding his explanation and request for a
confrontation with his accusers, the employee was made to sign a resignation letter. Two months after, he filed a
complaint for illegal dismissal. The labor arbiter, affirmed by the NLRC, found that the employee was merely forced
and intimidated into resigning. The Court reiterated that resignation must be voluntary on the part of the employee. It
thus ordered the employer to reinstate the employee and award backwages and other benefits due him since there
was no effective resignation.
Likewise in People's Security, there was a finding of involuntary resignation. The employees therein who were
security guards were not given assignments by their employer after the latter's security services contract with Meralco
expired. The employees requested for loans to be deducted from their security bond deposits, which requests were
denied by the employer who insisted that they must turn in their resignations first before their security bond deposits
could be released. Not having been given new work assignments and being in dire financial need, the employees
submitted their resignation letters. Three months later, they filed money claims which were later amended to include
illegal dismissal. The employer contended that the employees voluntarily severed their employment because they
turned in their resignation letters and assumed jobs with another security agency. Again the Court held that
resignation is a voluntary act of the employee. When the employees were told that they would not be granted loans
unless they resigned, they had no choice since they desperately needed money to meet their respective families'
needs. They were also forced to accept jobs at another agency as a practical solution to their employment problems
which were caused by the employer's refusal and failure to provide them with new assignments.
In the case of Indophil vs. NLRC,   on the other hand, the employee voluntarily submitted a resignation letter but
[27]

later tried to retrieve the same. He contended though, that he was thereafter prevented by the company guard from
entering the work premises because of his resignation. He sued for illegal dismissal. His employer claimed
abandonment of work since he was required to report and to explain his unauthorized absences but did not. In
holding that there was no dismissal, the Court regarded the employer's act of requiring the employee to report and
explain his unauthorized absences as non-acceptance of the previous resignation of the employee. Thus, the
employer still considered him as its employee in spite of the filed resignation letter. With respect to the latter's
allegation that he was prevented by the company guard from entering the premises, the Court chided him for not
having inquired into its veracity and for simply relying on the bare statement of the guard. It said that the employee
should be more vigilant of his rights.
The above three cases are dissimilar to the case at bar. In the first two cases, there were involuntary
resignations while in the third there was an unaccepted resignation. In the instant case, however, the resignation was
voluntary and it was accepted by the employer. Thus, our grant of the petition.
Since we find no case of illegal dismissal, we will no longer pass upon the two other issues raised by petitioners
which are mere consequences of the contrary finding made by the NLRC. Necessarily, there can be no award of any
moral or exemplary damages, backwages and separation pay.

Epilogue

Both the Constitution and the Labor Code mandate a bias in favor of labor. Hence, this Court, as a matter of
judicial policy, leans backwards to protect labor and the working class against the machinations and incursions of
their more financially entrenched employers. In the present case, however, it is obvious to us that private
respondent's memorandum could not have been intended merely to persuade management to improve the work
environment at the Philippine Star. Rather, it was evidently a recitation of the facts and reasons why respondent
Alegre could no longer continue working under what he believed were unbearable conditions in the work place. The
offensive language used by a well-educated man endowed with unusual writing skill could not have been intended
merely for the "suggestion box." That it was addressed and given to persons of uncommon perception themselves
takes the letter out of ordinary employer employee communications. It is true that there was no direct mention of the
word "resignation." However, the incendiary words employed denote a clear intent to end the writer's association of
trust and confidence with his superiors and employer. This intent becomes even more manifest when viewed in light
of attendant acts of Alegre, particularly his prolonged leave of absence, his clearing of his own desk of personal
belongings, his failure to report back to work after the expiration of his approved leave, his verbal expression of his
intent to resign, and most notably, his assumption of a higher paying job in a political office which was incompatible
with his work at the Star.
In deciding cases, this Court does not matter-of-factly apply and interpret laws in a vacuum. General principles
do not decide specific cases. Rather, laws are interpreted always in the context of the peculiar factual situation of
each case. Each case has its own flesh and blood and cannot be decided simply on the basis of isolated clinical
classroom principles. The circumstances of time, place, event, person, and particularly attendant circumstances and
actions before, during and after the operative fact should all be taken in their totality so that justice can be rationally
and fairly dispensed.
WHEREFORE, premises considered, the petition is GRANTED. The assailed Decision and Resolution of the
NLRC are SET ASIDE. The temporary restraining order issued by this Court is made PERMANENT . No costs.
SO ORDERED.
Narvasa, (Chairman), C.J, Davide, Jr., Melo,  and  Francisco, JJ.,  concur.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 81087             June 19, 1991

INTERTROD MARITIME, INC. and TROODOS SHIPPING CO., petitioners, 

vs.
NATIONAL LABOR RELATIONS COMMISSION and ERNESTO DE LA CRUZ, respondents.

Del Rosario & Del Rosario for petitioners.

PADILLA, J.:

This petition seeks the annulment and/or modification of the resolution * of the First Division of the National Labor
Relations Commission promulgated on 11 December 1987 in NSB Case No. 3997-82 entitled "Ernesto de la Cruz vs.
Intertrod Maritime, Inc. and Troodos Shipping Company," which reversed the decision of then POEA Administrator
Patricia Sto. Tomas dated 20 December 1983.

On 10 May 1982, private respondent Ernesto de la Cruz signed a shipboard employment contract with petitioner
Troodos Shipping Company as principal and petitioner Intertrod Maritime, Inc., as agent to serve as Third Engineer
on board the M/T "BREEDEN" for a period of twelve (12) months with a basic monthly salary of US$950.00. 1

Private respondent eventually boarded a sister vessel, M/T "AFAMIS" and proceeded to work as the vessel's Third
Engineer under the same terms and conditions of his employment contract previously referred to. 2

On 26 August 1982, while the ship (M/T "Afamis") was at Port Pylos, Greece, private respondent requested for relief,
due to "personal reason."  The Master of the ship approved his request but informed private respondent that
3

repatriation expenses were for his account and that he had to give thirty (30) days notice in view of the Clause 5 of
the employment contract so that a replacement for him (private respondent) could be arranged. 4

On 30 August 1982, while the vessel was at Port Said in Egypt and despite the fact that it was only four (4) days after
private respondent's request for relief, the Master "signed him off" and paid him in cash all amounts due him less the
amount of US$780.00 for his repatriation expenses, as evidenced by the wages account signed by the private
respondent. 5

On his return to the Philippines, private respondent filed a complaint with the National Seamen Board (NSB)(now
POEA) charging petitioners for breach of employment contract and violation of NSB rules and regulations.  Private
6

respondent alleged that his request for relief was made in order to take care of a Filipino member of the crew of M/T
"AFAMIS" who was hospitalized on 25 August 1982 in Athens, Greece. However, the Master of the ship refused to let
him immediately disembark in Greece so that the reason for his request for relief ceased to exist. Hence, when the
Master of the ship forced him to step out in Egypt despite his protestations to the contrary, there being no more
reason to request for relief, an illegal dismissal occurred and he had no other recourse but to return to the Philippines
at his own expense. 7

In its Answer to the complaint, petitioners denied the allegations of the complainant and averred that the contract was
cut short because of private respondent's own request for relief so that it was only proper that he should pay for his
repatriation expenses in accordance with the provisions of their employment contract. 8

The sole issue to be resolved in this case is whether or not complainant's termination is illegal.

POEA rendered a decision dismissing the complaint for lack of merit.  On appeal to the NLRC, the decision was
9

reversed.

The dispositive portion of the NLRC decision reads:

 WHEREFORE, the appealed decision is hereby SET ASIDE and another one entered, directing
respondents-appellees to: (1) pay complainant-appellant the amount of US$780.00 representing his plane
fare from Egypt to Manila; and (2) pay complainant-appellant the amount of US$6,300.00 representing his
unearned salary for nine (9) months, the unexpired portion of the contract.

Foreign exchange conversions shall be paid in Philippine currency at the rate of exchange at the actual
payment thereof.

SO ORDERED. 10

Hence, this petition.

Article 21(c) of the Labor Code requires that the Philippine Overseas Employment Administration (formerly NSB)
should approve and verify a contract for overseas Employment.  A contract, which is approved by the National
11

Seamen Board, such as the one in this case, is the law between the contracting parties; and where there is nothing in
it which is contrary to law, morals, good customs, public policy or public order, the validity of said contract must be
sustained.12

In its resolution, the NLRC held that the immediate approval of private respondent's request for relief should have
resulted in his disembarkation in Port Pylos, Greece; that failure of the Master to allow disembarkation in Greece
nullified the request for relief and its approval, such that private respondent's subsequent disembarkation in Egypt is
no longer his doing but rather an illegal dismissal on the part of the Master.  We cannot support such a ruling for it
13

fails to consider the clear import of the provisions of the employment contract between petitioners and private
respondent.

Paragraph 5 of the Employment Contract between petitioners and private respondent Ernesto de la Cruz provides as
follows:

5. That, if the seaman decide to terminate his contract prior to the expiration of the service period as stated
and defined in paragraph 4 of this Employment Contract, without due cause, he will give the Master thirty
(30) days notice and agree to allow his repatriation expenses to be deducted from wages due him. 14

Clearly, therefore, private respondent Ernesto de la Cruz was required by the employment contract not only to pay his
own repatriation expenses but also to give thirty (30) days notice should he decide to terminate his employment prior
to the expiration of the period provided in the contract. When the Master approved his request for relief, the Master
emphasized that private respondent was required to give thirty (30) days notice and to shoulder his own repatriation
expenses. Approval of his request for relief, therefore, did not constitute a waiver by petitioners of the provisions of
the contract, as private respondent would have us believe, for it was made clear to him that the provisions of the
contract, insofar as the thirty (30) days notice and repatriation expenses were concerned, were to be enforced.

Private respondent claims that his request for relief was only for the reason of taking care of a fellow member of the
crew so much so that when he was not allowed to disembark in Port Pylos, Greece, the reason no longer existed
and, therefore, when he was forced to "sign off" at Port Said, Egypt even when he signified intentions of continuing
his work, he was illegally dismissed.  We sympathize with the private respondent; however, we cannot sustain such
15

contention. Resignation is the voluntary act of an employee who "finds himself in a situation where he believes that
personal reasons cannot be sacrificed in favor of the exigency of the service, then he has no other choice but to
disassociate himself from his employment."  The employer has no control over resignations and so, the notification
16

requirement was devised in order to ensure that no disruption of work would be involved by reason of the resignation.
This practice has been recognized because "every business enterprise endeavors to increase its profits by adopting
a device or means designed towards that goal." 17

Resignations, once accepted and being the sole act of the employee, may not be withdrawn without the consent of
the employer. In the instant case, the Master had already accepted the resignation and, although the private
respondent was being required to serve the thirty (30) days notice provided in the contract, his resignation was
already approved. Private respondent cannot claim that his resignation ceased to be effective because he was not
immediately discharged in Port Pylos, Greece, for he could no longer unilaterally withdraw such resignation. When he
later signified his intention of continuing his work, it was already up to the petitioners to accept his withdrawal of his
resignation. The mere fact that they did not accept such withdrawal did not constitute illegal dismissal for acceptance
of the withdrawal of the resignation was their (petitioners') sole prerogative.
Once an employee resigns and his resignation is accepted, he no longer has any right to the job. If the employee
later changes his mind, he must ask for approval of the withdrawal of his resignation from his employer, as if he were
re-applying for the job. It will then be up to the employer to determine whether or not his service would be continued.
If the employer accepts said withdrawal, the employee retains his job. If the employer does not, as in this case, the
employee cannot claim illegal dismissal for the employer has the right to determine who his employees will be. To say
that an employee who has resigned is illegally dismissed, is to encroach upon the right of employers to hire persons
who will be of service to them.

Furthermore, the employment contract also provides as follows:

4. That all terms and conditions agreed herein are for a service period of twelve (12) months provided the
vessel is in a convenient port for his repatriation, otherwise at Master's discretion, on vessel's arrival at the
first port where repatriation is practicable provided that such continued service shall not exceed three
months. 18

Under the terms of the employment contract, it is the ship's Master who determines where a seaman requesting relief
may be "signed off." It is, therefore, erroneous for private respondent to claim that his resignation was effective only in
Greece and that because he was not immediately allowed to disembark in Greece (as the employer wanted
compliance with the contractual conditions for termination on the part of the employee), the resignation was to be
deemed automatically withdrawn.

The decision of the NLRC is therefore set aside. To sustain it would be to authorize undue oppression of the
employer.  After all, "the law, in protecting the rights of the laborer, authorizes neither oppression nor self-destruction
1âwphi1

of the employer." 19

WHEREFORE, the petition is GRANTED. The questioned resolution of the National Labor Relations Commission
dated 11 December 1987 is hereby REVERSED and SET ASIDE and the decision of then POEA Administrator
Patricia Sto. Tomas dated 20 December 1983 is REVIVED. No pronouncement as to costs.

SO ORDERED.

Melencio-Herrera, Paras and Regalado, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 115884 July 20, 1995

CJC TRADING, INC. and/or MS. CELIA J. CARLOS, petitioners, 

vs.
NATIONAL LABOR RELATIONS COMMISSION, RICARDO AUSAN, JR. and ERNESTO ALANAN, respondents.

RESOLUTION

FELICIANO, J.:

Private respondents Ricardo Ausan, Jr. and Ernesto Alanan were employed by petitioner since 1983 and 1978,
respectively, as truck drivers and were paid on a "per trip or task basis." They filed separate complaints on 23 August
1992 and 15 September 1992, respectively, against petitioner CJC Trading, Incorporated and/or Ms. Celia J. Carlos
for illegal dismissal and non-payment of premium pay for holiday and rest day, service incentive leave pay and
thirteenth month pay. These cases were consolidated.

On 22 July 1993, a decision was rendered by the Labor Arbiter dismissing the complaints for lack of merit and holding
that: (1) respondent Ausan, Jr., after figuring in a non-work related accident which affected his right foot, told
petitioner that he no longer wanted to work because his injury might affect his driving; (2) respondent Alanan
voluntarily quit his job because of old age and weakness; and (3) private respondents were not entitled to the labor
standards benefits claimed by them because they were paid on a "per trip or per task basis."

On appeal, the National Labor Relations Commission ("NLRC") in a decision dated 29 November 1993 affirmed in
toto the decision of the Labor Arbiter.

A motion for reconsideration of the NLRC's decision of 29 November 1993 was filed by private respondents praying
that:

xxx xxx xxx

Invoking justice, fairness and equitable consideration, it is respectfully submitted that this
Honorable Commission can easily grant termination pay instead to complainants who have served
their master for a considerable period of time and help assuage their financial worries now that they
are in the twilight of their lives. 1

In a minute resolution of 28 February 1994, the NLRC denied the motion for reconsideration but awarded private
respondents separation pay equivalent to one-half month salary for every year of service.

Petitioner filed a motion for reconsideration of the NLRC's 28 February 1994 resolution, without success.

Hence, this Petition assailing the award of separation pay to private respondents.

Petitioner contends that the NLRC committed a grave abuse of discretion in rendering the minute resolutions dated
28 February 1994 and 7 April 1994 (which denied its motion for reconsideration). It argues that because there was no
finding that private respondents had been dismissed illegally, they are deemed to have abandoned their jobs and that
accordingly, there was no legal basis for the award of separation pay.
Private respondents, on the other hand, claim that there was no grave abuse of discretion on the part of the NLRC in
awarding them separation pay and also aver that the NLRC's resolution of 7 April 1994 had already become final and
executory on 16 May 1994, and hence there is nothing more for this Court to examine.

Public respondent finds support for the grant of separation pay on compassionate justice considering the long years
private respondents had served petitioner.

After a careful scrutiny of the Petition, separate comments of public and private respondents and the manifestation
and motion to dismiss filed by private respondents, the Court finds merit in petitioner's argument.

The award of separation pay is authorized in the situations dealt with in articles 283 and 284 of the Labor Code 2, and
as well in cases where there is illegal dismissal and reinstatement is no longer feasible under Section 4 (b), Rule I, Book VI of the
Implementing Rules and Regulations of the Labor Code. 3

By way of exception, this Court has allowed grants of separation pay to stand as "a measure of social justice" where
the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral
character. 4

The instant case, however, does not fall under any of the above mentioned instances. The facts, as found by the
NLRC, show that private respondents had informed petitioner that they intended to quit their jobs and this decision
was arrived at by private respondents on their own volition. We find no reason and petitioner has shown none, for
departing from the rule that this Court is bound by the findings of fact of the NLRC, there being no showing that the
latter had gravely abused their discretion or otherwise acted without or in excess of its jurisdiction. 5 There wasno
dismissal of private respondents by petitioner here. Neither, upon the other hand, can this be considered a case of abandonment as
petitioner claims because the elements of abandonment are not present. Rather, we have before us a case of voluntary resignation.

An employee who voluntarily resigns is not entitled to separation pay 6 unless otherwise stipulated in an employment
contract or collective bargaining agreement, or sanctioned by established employer practice or policy.  7 The Labor Code is devoid of
any provision which grants separation pay to employees who voluntarily resign. Neither was there anything in the record that shows
that, in the instant case, there is a collective bargaining agreement or any other agreement or established company policy
concerning the payment of separation pay to employees who resign.

The Court notes that private respondents, in their motion for reconsideration from the NLRC's 29 November 1993
decision prayed for an award of termination pay. Considering that private respondents were close to the age of sixty
(60) at the time they stopped working for petitioner and that they had been in the employ of petitioner for several
years, the Court, taking the view most favorable to private respondents, considers that this could be deemed to be in
effect a prayer for the grant of retirement benefits.

The pertinent law is Article 287 of the Labor Code, as amended by R.A. No. 7641, which reads:

Art. 287. Retirement. — Any employee may be retired upon reaching the retirement age
established in the collective bargaining agreement or other applicable employment contract.

In case of retirement, the employee shall be entitled to receive such retirement benefits as he may
have earned under existing laws and any collective bargaining agreement and other
agreements:Provided, however, That an employee's retirement benefits under any collective
bargaining and other agreements shall not be less than those provided herein.

In the absence of a retirement plan or agreement providing for retirement benefits of employees in
the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond
sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at
least five (5) years in the said establishment, may retire and shall be entitled to retirement pay
equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six
(6) months being considered as one whole year.

xxx xxx xxx

The above amended law took effect on 7 January 1993 and was applied by the Court in the case of Oro Enterprises,
Inc. vs. National Labor Relations Commission 8 where a sixty-five (65) year old employee filed a claim for retirement
pay with her employer in September 1990. A few days later, a complaint was filed with the Office of the Labor Arbiter,
which complaint was eventually resolved by the Labor Arbiter with an award of retirement benefits in favor of the
employee. During the pendency of the appeal (which involved determination of the issue of whether or not the
employer-employee relationship between petitioner and private respondent had persisted or whether it had
terminated by resignation of the employee) in the NLRC, R.A. No. 7641 took effect. The new statute was used as a
basis by the NLRC for the grant of retirement benefits to the employee — i.e., service rendered before the effectivity
of the statute was taken into account — and the decision of the NLRC was upheld by this Court. We read Oro
Enterprises as holding that R.A. No. 7641 may be given effect where (1) the claimant for retirement benefits was still
the employee of the employer at the time the statute took effect; and (2) the claimant was in compliance with the
requirements for eligibility under the statute for such retirement benefits.

In the instant case, the complaints of private respondents were still being resolved on the labor arbiter level when
R.A. No. 7641 took effect. However, it was quite clear, and both the Labor Arbiter and the NLRC so held, that private
respondents had ceased to be employees of petitioner, by reason of voluntary resignation, before the statute went
into effect. Moreover, it appears that private respondents did not qualify for the benefits of R.A. No. 7641 under the
terms of this law itself. The Court notes that when private respondents filed their complaints more than one (1) year
after they had been allegedly illegally dismissed, respondent Ausan, Jr. was fifty-seven (57) years old while
respondent Alanan was sixty (60) years old. That would make Ausan, Jr. fifty-five (55) years old and Alanan fifty-eight
(58) years old at the time their services with petitioner were ended by their resignation. Since the record does not
show any retirement plan or collective bargaining agreement providing for retirement benefits to petitioner's
employees, the applicable retirement age is the optional retirement age of sixty (60) years according to Article 287,
which would qualify the retiree to retirement benefits equivalent to one-half (1/2) month's salary for every year of
service. Unfortunately, at the time private respondents stopped working for petitioner, they had not yet reached the
age of sixty (60) years.

We stress, however, that there is nothing to prevent petitioner from voluntarily giving private respondents some
financial assistance on an ex gratia basis.

Private respondents' averment that the resolution of the NLRC dated 7 April 1994 had already become final and
executory before the instant Petition for Certiorari was filed, must be disregarded.

The rule is that where the NLRC has gravely abused its discretion, the remedy of the losing party is not appeal within
thirty (30) days from receipt of the assailed decision/resolution under Rule 45 of the Rules of Court butcertiorari under
Rule 65 within a reasonable time from receipt of the assailed decision or resolution. A period of three (3) months is
considered reasonable. The fact that the assailed decision or resolution becomes final and executory ten (10)
calendar days from receipt thereof by the parties does not preclude the adverse party from challenging it by way of an
original special civil action for certiorari under Rule 65. 9 The instant Petition was filed pursuant to Section 1, Rule 65 of the
Rules of Court. The records show that petitioner received the NLRC's resolution dated 7 April 1994 on 5 May 1994 and the instant
Petition was seasonably filed with this Court on 4 July 1994.

ACCORDINGLY, in view of the foregoing, the instant Petition for Certiorari is hereby GRANTED, and the resolutions
of the National Labor Relations Commission dated 28 February 1994 and 7 April 1994 in NLRC NCR CA Nos.
005419-93 and 00-8-04652-92 are hereby SET ASIDE insofar as the award of separation pay to private respondents
is concerned.

Romero, Melo, Vitug and Francisco, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 93059             June 3, 1991

EDMUNDO SAMANIEGO, ANTONIO L. ACOSTA, JAIME L. DIAZ and PABLO MANAHAN, petitioners, 

vs.
NATIONAL LABOR RELATIONS COMMISSION, SANDVIK PHILIPPINES, INC., KRISTER BROBECK and AKE
FRIBERG, respondents.

Herras Law Office for petitioners.

Siguion Reyna, Montecillo & Ongsiako for private respondents.

GANCAYCO, J.:

The post-employment status of certain managerial employees is in issue in this special civil action for certiorari. The
employees contend that the termination of their employment with the company was illegally undertaken. On the other
hand, the company maintains that the said employees voluntarily resigned. Thus put, the Court is tasked to resolve
the controversy.

The facts are not disputed.

The herein petitioners Edmundo Samaniego, Antonio L. Acosta, Jaime L. Diaz and Pablo Manahan used to be
managerial employees of the private respondent company, Sandvik Philippines, Inc. The other private respondents,
Krister Brobeck and Ake Friberg, are ranking officials of the said company.

Sometime before 1987, the management was of the view that a serious financial crisis was confronting the company.
For this reason, the management resolved to reorganize the company by streamlining its operations and eliminating
middle management positions, including those of the petitioners. The management eventually decided that the
managerial employees so affected by the reorganization should be given the option of either facing termination of
their employment and receiving separation pay, or resigning voluntarily from the company under terms more
financially advantageous than those as regards the first option.

Meanwhile, as early as April 1987, three of the petitioners filed a labor case against the company for the purpose of
seeking the payment of certain money claims, and for the purpose of calling public attention to some alleged
anomalous activities of private respondent Krister Brobeck. The matter, however, remained unresolved.

On August 24, 1987, representatives of the company held a meeting with the petitioners at the Hotel Intercontinental
Manila for the purpose of discussing the company reorganization. In time, the petitioners were given the following
options.

(1) Termination of employment on account of the company reorganization, with payment of separation
benefits; or

(2) Voluntary resignation from the company, with more benefits fits.

It appears that the petitioners negotiated with the company representatives for an improvement of the benefits under
the voluntary resignation option. By the end of the day, no agreement was reached by the parties.

Negotiations were resumed the next day, August 25, 1987. The company representatives eventually offered better
benefits under the voluntary resignation option. Three of the petitioners found the proposal satisfactory and thus
accepted the same. The fourth employee, petitioner Diaz, at first decided to take the first option but he eventually
changed his mind and opted to resign from the company under the improved terms. The petitioners signed company-
prepared resignation letters. They acknowledged therein that they have received the benefits agreed upon and that
they have no legal claim against the company or its officers and representatives. On the same day, the petitioners
received the checks corresponding to their benefits under the voluntary resignation option.

It appears, however, that sometime later in the day, the petitioners sent a letter to the company, through registered
mail, informing the latter that they received their benefits under protest. Later on, the petitioners deposited their
checks in their respective bank accounts. Petitioners Diaz and Samaniego eventually received documents effectively
transferring in their favor the ownership rights over the company vehicles assigned to them in the course of their
employment, pursuant to their corresponding benefits. In time, the petitioners received all the benefits appertaining to
the voluntary resignation option.

On September 2, 1987, the petitioners filed a complaint for illegal dismissal, discrimination and damage against the
private respondents before the National Labor Relations Commission (NLRC). The case was docketed as NLRC-
NCR Case No. 00-09-03062-87 and assigned to Labor Arbiter Ceferina J. Diosana. A formal trial on the merits
ensued and upon the conclusion thereof, the parties submitted their respective memoranda. As stated earlier, the
petitioners contended that the termination of their employment was illegally undertaken. The private respondents
maintained that this case is one of voluntary resignation.

On November 28, 1989, the labor arbiter rendered a decision in favor of the petitioners. The labor arbiter opined that
the reorganization of the company was merely a scheme to dismiss the petitioners inasmuch as the same was
haphazardly carried out and considering the haste attending the termination of the employment of the petitioners. The
labor arbiter also opined that the termination of the employment of the petitioners was in retaliation against them for
the complaint they filed against the private respondents earlier. In sum, the labor arbiter concluded that the petitioners
did not voluntarily sign their resignation letters.
1

The private respondents brought an appeal to the NLRC. On April 24, 1990, the NLRC promulgated a resolution
setting aside the decision of the labor arbiter and entering a new one dismissing the complaint filed by the
petitioners.  The NLRC stressed that the issue to be resolved is not whether the company reorganization was valid,
2

but whether or not the petitioners voluntarily resigned from the company. All told, the NLRC held that the petitioners
voluntarily resigned from the company. The pertinent portions of the said resolution are quoted herein —

The issue in this case is not whether the company's reorganization announced to the complainants (the
herein petitioners) on August 24, 1987 is valid. Rather, the pivotal issue is whether or not the complainants
voluntarily resigned from the . . . company.

The appeal is impressed with merit. Contrary to the findings of the Arbiter a quo, there is nothing on record
which will support her conclusions that the complainants were terminated in due haste, much less under the
guise of a reorganization. Perhaps because of this mistaken impression, the issues were diverted to whether
or not there was an honest-to-goodness reorganization. This particular issue, however, is material only if the
complainants were indeed dismissed from employment due to said ground. The facts of the case do not
show that this is the controversy.

Although it is true that in the morning of August 24, 1987, the complainants were notified that their positions
would be abolished due to the company's reorganization program and hence, their services will no longer be
needed, it is equally true that their termination from employment did not materialize. There is no dispute that
notwithstanding the announced reorganization plan of the company, the respondents offered the
complainants an alternative avenue for exit which is voluntary resignation. We see nothing illegal with this
applicable approach. Indeed, the practice of allowing an employee to resign instead of being terminated for
just cause so as not to smear his employment record is commonly practiced in some companies. . . .

In the present case, the propriety of the choice given to the complainants by the company is even reinforced
by the fact that the separation benefits due to resignation offered to them were much higher than what they
would receive under termination due to the reorganization. A more attractive scheme, therefore, was merely
tendered to the complainants. It was not imposed upon them. In fact, two of the complainants, . . ., admitted
in their testimonies that they were made to choose between the two (2) options . . . And if they eventually
chose the alternative of resigning from the company with greater benefits, as in this case, the complainants
cannot subsequently repudiate their choice nor be heard to say later on that they were terminated without
just cause. It is inconsistent with dismissal (where the concerned employee is left with no option). In
termination cases, the employer decides for the employee and not the other way around. In the instant case,
the complainants decided to resign.

. . . In their resignation letters, they all acknowledged receipt of substantial amounts of money plus the
transfer of the company car assigned to them as part of their compensation package. There is also no
 dispute that this package is greater than that provided by law or the separation pay that may be due on
account of the reorganization. These benefits, in turn, were obtained by the complainants through
negotiations and haggling with the company . . . Under the circumstances, it is difficult to believe that the
complainants were really forced to resign so as to render their act nugatory. It must be noted that it took the
complainants at least one day before they signed their resignation letters. In the interim, complainant
Manahan even admitted that he had already consulted his lawyer before he signed his resignation letter the
following day . . . Considering the lapse of time, it is evident that the complainants had the opportunity to
carefully deliberate on their choices and evaluate the consequence thereof. In short, there intervened a
sufficient period of time that enabled the complainants to meditate and decide on their action . . . Moreover,
the absence of force or compulsion is also evident from the fact that complainants did not sign their
resignation letters on that meeting of August 24, 1987 but rather, they stalled and executed the said
documents only the following day . . . We take note that the complainants were not ordinary laborers who
may not be able to fully appreciate the consequences of their acts. They were all admittedly managerial
employees holding responsible positions. Well-educated and experienced in various business dealings on
account of their high positions, complainants very well know that their resignation constituted a bar against
any charge of unlawful dismissal and they cannot now be allowed to conveniently invalidate or disregard the
same . . .

x x x           x x x          x x x

In this connection, we also doubt the accuracy of the impression of the Labor Arbiter a quo that the
company's act was in retaliation to the actions taken by the complainants against Mr. Brobeck. . . . . . ., had
the respondent company really wanted to retaliate against the complainants, then they should have been
terminated outrightly by virtue of the reorganization, rather than being given the opportunity to voluntarily
resign and receive higher financial compensation packages. Certainly, this act of the respondent company
negates any allegation of vindictiveness or retaliatory attitude.

All told, it is evident that the surrounding circumstances of the case indubitably point to the conclusion that
complainant's resignation from the company was valid and hence, operated to effectively sever the
employment relationship. . . .

Finally, the fact that complainant Samaniego, on September 1987, immediately assumed the position of
Chief Executive Officer of Universal Sales, Inc., a corporation similar to, if not in competition with,
respondent company, is highly indicative of his intention to really leave the company and work
elsewhere. . . . His subsequent employment thereat as one of the highest executives barely a few days after
he tendered his resignation is an unmistakable sign of his decision to relinquish his position at the company
and sever his employment relationship. 3

On May 4, 1990, the petitioners elevated the case to this Court by way of the instant petition. 4

It is alleged therein that the decision of the NLRC is contrary to law and is not supported by the evidence on record. It
is also alleged therein that the decision of the NLRC will cause grave and irreparable injury to the petitioners and that
the NLRC committed a grave abuse of discretion in resolving the case against the petitioners. 5

The private respondents filed their comment on the petition, reiterating therein their position on the matter.  The Office
6

of the Solicitor General filed its "Manifestation In Lieu Of Comment" praying therein that the challenged resolution be
set aside and the decision of the labor arbiter be reinstated. The Solicitor General opines that the petitioners did not
voluntarily resign from the company inasmuch as they were forced to choose between two extreme choices, and that
the receipt of separation benefits does not bar them from contesting the validity of their dismissal.  Considering the
7

position taken by the Solicitor General, the NLRC, through counsel, filed its memorandum reiterating therein the
discussion in the challenged resolution. 8

In due time, the case was deemed submitted for decision.

After a careful evaluation of the entire record of the case, the Court finds the petition devoid of merit.

As correctly pointed out by the NLRC, the issue to be resolved is not whether the company reorganization is valid, but
whether or not the petitioners voluntarily resigned from the company.
The discussions relating to the validity of the company reorganization are, therefore, immaterial. This matter is
pertinent only if the petitioners were indeed dismissed from their employment due to such reorganization. The Court
is convinced that this is a case of voluntary resignation on the part of the petitioners.

It should be emphasized that notwithstanding the intended reorganization of the company, the petitioners were given
the option to resign from the company with corresponding benefits attending such option. They opted for resignation
on account of these negotiated benefits. In termination cases, the employee is not afforded any option; the employee
is dismissed and his only recourse is to institute a complaint for illegal dismissal against his employer, assuming of
course that there are valid grounds for doing so. In this particular case, the petitioners were given the option to resign.
It was the option they chose. Thus, there is no illegal dismissal to speak of.

The record is devoid of any indication that the petitioners were coerced into resigning from the company.  On the
1âwphi1

contrary, the record supports the view that the petitioners chose to resign without any element of coercion attending
their option. The petitioners negotiated for an improvement of the resignation package offered to them. The
negotiations lasted for at least two days. As a matter of fact, they managed to obtain a better package under the
voluntary resignation option. Petitioner Manahan even admitted that he consulted his lawyer before he signed his
resignation letter.  Some of the petitioners managed to obtain ownership rights over the company vehicles originally
9

assigned to them. The petitioners admittedly deposited the checks given to them by the company in their respective
bank accounts. If their intention was to receive their benefits in protest, they could have just held on to the checks
instead of depositing the same. Although the resignation letters signed by the petitioners were apparently prepared
by the company, it is important to note that the petitioners signed the same voluntarily.

It must be emphasized as well that the petitioners are not ordinary laborers or rank-and-file personnel who may not
be able to completely comprehend and realize the consequences of their acts. The petitioners are managerial
employees holding responsible positions. They are educated individuals. For his part, petitioner Samaniego
immediately assumed a ranking position in a competing company after his resignation from Sandvik Philippines, Inc.
Under these circumstances, it can hardly be said that they were coerced into resigning from the company.

The Solicitor General maintains that receipt of separation pay is not a bar to contesting the legality of dismissal from
employment.  The observation is beside the point. As stated earlier, there is no illegal dismissal in the case at bar.
10

From the foregoing, it clearly appears that the petitioners voluntarily resigned from the company for a valuable
consideration. The quitclaim they executed in favor of the company amounts to a valid and binding compromise
agreement. To allow the petitioners to repudiate the same will be to countenance unjust enrichment on their part. The
Court will not permit such a situation.

At this juncture, We find it appropriate to call attention to Our pronouncement in Periquet v. National Labor Relations
Commission,  to wit —
11

Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered
into and represents a reasonable settlement, it is binding on the parties and may not later be disowned
simply because of a change of mind. It is only where there is clear proof that the waiver was wangled from
an unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law
will step in to annul the questionable transaction. But where it is shown that the person making the waiver
did so voluntarily, with full understanding of what he was doing, and the consideration for the quitclaim is
credible and reasonable, the transaction must be recognized as a valid and binding undertaking . . .

This observation holds true for the case at bar.

Finally, the remedy of certiorari does not lie absent any showing of abuse of power properly vested in the Ministry
(now Department) of Labor and Employment.  No such abuse or jurisdictional infirmity on the part of the NLRC has
12

been demonstrated in this case. Accordingly, the writ of certiorari sought will not issue.

WHEREFORE, the instant petition is hereby DISMISSED for lack of merit. The Court makes no pronouncement as to
costs.

SO ORDERED.

Narvasa, Griño-Aquino and Medialdea, JJ., concur.

Cruz, J., took no part.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 175481               November 21, 2012

DIONISIO F. AUZA, JR., ADESSA F. OTARRA, and ELVIE JEANJAQUET, Petitioners. 

vs.
MOL PHILIPPINES, INC. and CESAR G. TIUTAN, Respondents.

DECISION

DEL CASTILLO, J.:

"Justice is in every case for the deserving, to be dispensed in the light of the established facts and the applicable law
and doctrine,"1 Although we are committed to protect the working class, it behooves us to uphold the rights of
management too if only to serve the interest of fair play. As applied in this case, the employees who voluntarily
resigned and executed quitclaims are barred from instituting an action or claim against their employer.

By this Petition for Review on Certiorari,2 petitioners Dionisio F. Auza, Jr. (Auza), Adessa F. Otarra (Otarra) and Elvie
Jeanjaquet (Jeanjaquet) assail the August 17, 2006 Decision3 and November 15, 2006 Resolution4 of the Court of
Appeals (CA) in CA-G.R. SP No. 01375, which reversed the July 22, 2005 Decision5 and November 30, 2005
Resolution6 of the National Labor Relations Commission (NLRC) and consequently dismissed their Complaints for
illegal dismissal against respondents MOL (Mitsui O.S.K Lines) Philippines, Inc. (MOL) and Cesar G. Tiutan (Tiutan),
in his capacity as its President.

Factual Antecedents

Respondent MOL is a common carrier engaged in transporting cargoes to and from the different parts of the world.
On October 1, 1997, it employed Auza and Jeanjaquet as Cebu’s Branch Manager and Administrative Assistant,
respectively. It also employed Otarra as its Accounts Officer on November 1, 1997.

On October 14, 2002, Otarra tendered her resignation7 letter effective November 15, 2002 while Auza and Jeanjaquet
submitted their resignation letters8 on October 30, 2002 to take effect on November 30, 2002. Petitioners were then
given their separation pay and the monetary value of leave credits, 13th month pay, MOL cooperative shares and
unused dental/optical benefits as shown in documents entitled "Remaining Entitlement Computation,"9 which
documents were signed by each of them acknowledging receipt of such benefits. Afterwhich, they executed Release
and Quitclaims10 and then issued Separation Clearances.11

In February 2004 or almost 15 months after their severance from employment, petitioners filed separate
Complaints12 for illegal dismissal before the Arbitration Branch of the NLRC against respondents and MOL’s Manager
for Corporate Services, George Dolorfino. These complaints were later consolidated.

Proceedings before the Labor Arbiter

In an Order13 dated May 26, 2004, Labor Arbiter Ernesto F. Carreon directed the parties to submit their respective
Position Papers within 10 days from receipt of notice. Petitioners’ counsel of record, Atty. Narciso C. Boiser (Atty.
Boiser), received the same on June 22, 2004.

In their Position Paper,14 respondents alleged that petitioners were not dismissed but voluntarily resigned from
employment. In fact, separation benefits were paid to them for which quitclaims were duly executed. Hence,
petitioners are effectively barred from instituting any action or claim in connection with their employment. They
likewise posited that petitioners are guilty of laches by estoppel considering that they filed their complaints only after
the lapse of 15 months from their severance from employment. To support these allegations, respondents submitted
together with the said Position Paper, documentary evidence, affidavit of witnesses and a formal offer of exhibits.

Instead of promptly filing their Position Paper, petitioners, on the other hand, wrote the Labor Arbiter on July 7, 2004
requesting for additional time as they were looking for another lawyer because Atty. Boiser was frequently out of
town.15 They were able to secure the services of Atty. Amorito V. Cañete (Atty. Cañete), who filed on July 29, 2004 an
Entry of Appearance with Motion for Extension of Time to File Complainants’ Position Paper.16However, in an
Order17 of even date, the Labor Arbiter refused to recognize Atty. Cañete’s appearance without the corresponding
withdrawal of appearance of Atty. Boiser. Nevertheless, petitioners were given 10 days from date to submit their
Position Paper. The next day, Atty. Boiser filed a Manifestation that Atty. Cañete had been engaged by petitioners as
a co-counsel.

Subsequently and notwithstanding the earlier refusal of the Labor Arbiter to recognize the appearance of Atty.
Cañete, petitioners filed on August 11, 2004 a verified Position Paper18 signed by the said counsel. They averred in
said pleading that their consent to resign was not voluntarily given but was instead obtained through mistake and
fraud. They claimed that they were led to believe that MOL’s Cebu branch would be downsized into a mere skeletal
force due to alleged low productivity and profitability volume. Pressured into resigning prior to the branch’s closure as
they might be denied separation pay, petitioners were constrained to resign.

Petitioners further averred that their separation from employment amounts to constructive dismissal due to the
shabby treatment they received from Tiutan at the time they were being compelled to quit employment. Aside from
Tiutan’s incessant imputations that the Cebu branch is overstaffed, manned by incompetent employees, and is
heavily losing money, Auza was stripped of his authority to sign checks for the branch’s expenditures; his and
Otarra’s assigned company cars, cellphones and landline phones were recalled; representation expenses were cut
off; and travel and hotel expenses were drastically reduced. These were done to them despite the fact that the Cebu
branch had consistently surpassed the performance goal set by the Manila office as shown by documentary evidence
submitted. Later, they discovered that the planned downsizing of the Cebu branch was a mere malicious scheme to
oust them and to accommodate Tiutan’s own people. This is because after they were duped to resign, additional
employees were hired by the management as their replacement; they moved to a bigger office; and more telephone
lines were installed. In view of their illegal dismissal, petitioners thus prayed for reinstatement plus backwages as well
as for damages and attorney’s fees.

Petitioners also filed a Supplemental Position Paper19 to show an itemized computation of backwages due them and
to further reiterate that their signatures in the resignation letters and quitclaims were conditioned upon respondents’
misrepresentation that the Cebu office will eventually be manned by a skeletal force, which, however, did not take
place.

Subsequently, respondents filed a Motion to Expunge and/or Strike Out Position Paper for Complainants Dated
August 9, 2004 Filed by Atty. Amorito V. Cañete.20 They pointed out the belated filing of petitioners’ Position Paper
and the lack of authority of Atty. Cañete to file and sign the same, among others. The Labor Arbiter granted the
Motion in an Order21 dated November 12, 2004 ratiocinating that a Position Paper must be filed within the inextendible
10-day period as provided under Section 4, Rule V of the NLRC Rules of Procedure. In this case, petitioners’ counsel
of record, Atty. Boiser, received on June 22, 2004 the May 26, 2004 Order requiring the parties to file position papers
within 10 days from receipt thereof. However, petitioners were only able to file their Position Paper on August 11,
2004, way beyond the said 10-day period. And for being filed late, said pleading must be stricken off the records.
Consequently, the Labor Arbiter dismissed the Complaints without prejudice for failure to prosecute pursuant to
Section 3, Rule 17 of the Rules of Court.

Proceedings before the National Labor Relations Commission

Petitioners appealed to the NLRC22 claiming that the Labor Arbiter defied judicial pronouncements that the failure to
submit a Position Paper on time is not a ground for dismissing a complaint. Moreover, considering their dilemma at
the time when Atty. Boiser could hardly be reached and the unfortunate non-recognition order by the Labor Arbiter of
their new counsel, Atty. Cañete, petitioners prayed for the relaxation of the rules to admit their Position Paper which,
they contended, was filed only two days late since they were given an extension of 10 days from July 29, 2004 to file
the same in an Order of even date.

In their Reply,23 respondents countered that petitioners’ Position Paper was filed more than 60 days late from receipt
by Atty. Boiser (who remained petitioners’ counsel of record) of the Labor Arbiter’s May 26, 2004 Order. They insisted
that this inexcusable delay should not be allowed. The Labor Arbiter should have dismissed the Complaints with
prejudice in the first place; a fortiori, the NLRC should also dismiss the appeal for want of merit. Moreover, petitioners’
appeal deserves outright dismissal as no appeal may be taken from an order dismissing an action without prejudice,
the remedy being only to revive or re-file the case with the Labor Arbiter.

In its Decision24 dated July 22, 2005, the NLRC set aside the Labor Arbiter’s ruling that petitioners’ Position Paper
was filed late. It held that the 10-day period given to petitioners for filing their Position Paper should be reckoned from
Atty. Cañete’s receipt on August 9, 2004 of the July 29, 2004 Order of the Labor Arbiter. The filing, therefore, of
petitioners’ Position Paper on August 11, 2004 is well within the allowed period, hence, there was no basis in
dismissing the Complaints for failure to prosecute.

Also, instead of remanding the case to the Labor Arbiter, the NLRC opted to decide the same on the merits, in
consonance with its mandate to speedily dispose of cases. In so doing, it found that petitioners’ resignation letters
and quitclaims are invalid and were signed under duress. The NLRC noted that contrary to the representations made
to petitioners, the Cebu branch was not actually closed but merely transferred to another location with a bigger office
space and with new employees hired as petitioners’ replacements. Further, the NLRC noted that under MOL’s
employment manual, an employee who voluntarily resigns shall only be entitled to benefits if he/she has rendered 10
years of continuous service. Hence, the grant of benefits to petitioners is questionable considering that each of them
rendered only five years of service. It therefore opined that petitioners’ receipt of benefits is just part of respondents’
plan to secure their resignations.

The NLRC concluded that petitioners were illegally dismissed and thus granted them the relief of reinstatement, full
backwages computed in accordance with the computation presented by petitioners in their Supplemental Position
Paper, and attorney’s fees. For Tiutan’s bad faith in pressuring both Auza and Otarra to resign, moral and exemplary
damages were likewise awarded to the two. The dispositive portion of the NLRC Decision reads:

WHEREFORE, we find respondents guilty of illegally dismissing complainants consequently they are ordered to
reinstate complainants to their positions without loss of seniority rights with full backwages from the time they were
illegally dismissed until their actual reinstatement, the backwages are computed as of June 30, 2005 as follows:
Dionisio F. Auza, Jr. – P2,106,165.90;

P1,203,705.13 for Adessa F. Otarra and P685,027.68 for Elvie Jeanjaquet, subject to further recomputation. In
addition, respondents are ordered to pay moral and exemplary damages of P500,000.00 to Dionisio F. Auza, Jr. and
P100,000.00 to Adessa F. Otarra. Further, respondents are ordered to pay complainants equivalent to 10% of the
total amount awarded as attorney’s fees.

SO ORDERED.25

Both parties filed their respective Motions for Reconsideration.26 With respect to petitioners, they moved that their
entitlement to 27 sacks of rice, which was discussed in the body of the NLRC Decision but omitted in the dispositive
portion thereof, be declared. For their part, respondents alleged that the NLRC has no jurisdiction to entertain
petitioners’ appeal; hence, it usurped the jurisdiction and function of the Labor Arbiter to hear and decide the case
which had been dismissed without prejudice. Reiterating this argument, respondents also subsequently filed An
Urgent Motion to Dismiss Instant Appeal for Lack of Jurisdiction.27

The NLRC, in its Resolution28 dated November 30, 2005, granted petitioners’ motion by awarding 27 sacks of rice to
each of them in addition to the monetary awards. On the other hand, it denied respondents’ motions by upholding its
jurisdiction to entertain petitioners’ appeal in line with its authority to correct errors made by the Labor Arbiter and in
order to prevent delays in the disposition of labor cases.

Proceedings before the Court of Appeals

A Petition for Certiorari with Prayer for the Issuance of a Temporary Restraining Order (TRO) and/or Writ of
Preliminary Injunction29 was filed by respondents with the CA. In a Resolution30 dated January 13, 2006, the CA
issued a temporary restraining order to prevent the enforcement of the NLRC Decision of July 22, 2005 upon
respondents’ posting of a bond. A writ of preliminary Injunction31 was then issued to further restrain the
implementation of the assailed Decision.

On August 17, 2006, the CA rendered its Decision32 annulling and setting aside the Decision of the NLRC. The CA did
not find any element of coercion and force in petitioners’ separation from employment but rather upheld the voluntary
execution of their resignation letters as gleaned from the tenor thereof. It opined that petitioners were aware of the
consequences of their acts in voluntarily resigning and executing quitclaims. Notably, however, the CA did not touch
upon the issue raised by respondents regarding the NLRC’s lack of jurisdiction. The dispositive portion of the CA’s
Decision reads:

WHEREFORE, the petition for certiorari filed by the petitioners is hereby GRANTED. Accordingly, the assailed
decision of the public respondent National Labor Relations Commission (NLRC) 4th Division of Cebu City dated 22
July 2005 in NLRC Case No. V-000079-2005 (RAB-VII-02-0342-04 and RAB-VII-02-0418-04) as well as the
Resolution of the public respondent Commission dated 30 November 2005 are REVERSED and SET ASIDE. A new
decision is entered dismissing the complaints filed by private respondents for illegal dismissal against petitioners.

SO ORDERED.33

A motion for reconsideration34 was filed by the petitioners but the same was denied by the CA in a Resolution35dated
November 15, 2006.

Hence, this petition.

Issues

Petitioners ascribe upon the CA the following errors:

1. THE HONORABLE COURT OF APPEALS ACTED WITHOUT JURISDICTION AND GRAVELY ERRED
WHEN IT REVERSED AND SET ASIDE THE NLRC DECISION RENDERED ON THE BASIS OF FACTUAL
FINDINGS WHICH WERE NOT CONTROVERTED BY HEREIN PRIVATE RESPONDENTS;

2. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT RULING THAT THE
RESPONDENTS CONSTRUCTIVELY DISMISSED PETITIONERS;

3. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT PETITIONERS WERE
NOT DISMISSED BUT VOLUNTARILY RESIGNED FROM THEIR JOBS;

4. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT RULING THAT THE RELEASES
AND QUITCLAIMS WERE INVALID AND THEREFORE NOT A BAR TO THE FILING OF A COMPLAINT
FOR ILLEGAL DISMISSAL;

5. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN CONCLUDING THAT THE TENOR OF
THE LETTERS OF RESIGNATIONS IS PROOF THAT PETITIONERS WERE NOT FORCED TO RESIGN;

6. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT DISMISSING THE PETITION
FOR CERTIORARI FOR THE FAILURE OF THE PRIVATE RESPONDENTS TO ATTACH THE
PETITIONERS’ POSITION PAPER AND SUPPLEMENTAL POSITION OR EVEN THE PRO-FORMA
COMPLAINTS;

7. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT ORDERING THE

REINSTATEMENT OF PETITIONERS TO THEIR FORMER POSITIONS WITH FULL BACKWAGES
FROMTHE DATES THEY WERE ILLEGALLY DISMISSED UNTIL THEIR ACTUAL REINSTATEMENT; and

8. THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF DISCRETION IN NOT

AWARDING DAMAGES AND ATTORNEYS FEES.36

Petitioners insist that they were not given any choice but to resign after respondents informed them of the impending
closure of the branch and that they would not receive any separation pay if the closure would precede their
resignation. They claim that they had no personal reasons to forego their employment from which they were receiving
huge salaries and benefits. Thus, the CA gravely erred in holding that their resignations were voluntarily made and in
not dismissing respondents’ Petition for Certiorari despite their failure to attach thereto petitioners’ Position Paper and
Supplemental Position Paper.

In their Comment,37 respondents assert that the CA’s finding of petitioners’ voluntary resignation from employment is
based on substantial evidence and is final and conclusive on this Court. Further, the CA was correct in giving due
course to their petition since they have attached all the pleadings and documents required for sufficient compliance
with the rules. They counter that it is this instant petition which should be dismissed as its certification of non-forum
shopping was signed only by Auza without authority to sign in behalf of the other petitioners. Finally, respondents ask
this Court to resolve the issue regarding the NLRC’s jurisdiction over petitioners’ appeal filed before it.

Our Ruling
This Court finds no merit in the petition.

On Procedural Issues:

The NLRC has jurisdiction to entertain

petitioners’ appeal filed before it.

To settle the issue of the NLRC’s jurisdiction over petitioners’ appeal, we quote in part Article 223 of the Labor Code
concerning the appellate jurisdiction of the NLRC:

Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any
or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. Such appeal may be
entertained only on any of the following grounds:ART. 223. APPEAL.

(a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter;

xxxx

and Section 2, Rule VI of the NLRC Rules of Procedure38 which provides:

Section 2. Grounds. – The appeal may be entertained only on any of the following grounds:

(a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter x x x;

xxxx

Clearly, the NLRC is possessed of power to rectify any abuse of discretion committed by the Labor Arbiter. Here, the
NLRC, in taking cognizance of petitioners’ appeal and in resolving it on the merits, merely exercised such power. This
is because the Labor Arbiter, in not admitting petitioners’ Position Paper (albeit filed late) and in dismissing
petitioners’ Complaints for failure to prosecute, acted with grave abuse of discretion as hereinafter explained.

First, "the failure to submit a Position Paper on time is not a ground for striking out the paper from the records, much
less for dismissing a complaint in the case of the complainant."39 As mandated by law, the Labor Arbiter is enjoined
"to use every reasonable means to ascertain the facts of each case speedily and objectively, without technicalities of
law or procedure, all in the interest of due process."40

Next, the Labor Arbiter committed grave error in dismissing the Complaints on the ground of failure to prosecute
under Section 3, Rule 17 of the Rules of Court.41 Under this rule, a case may be dismissed on the ground of non-
prosequitur, if, under the circumstances, the "plaintiff is chargeable with want of due diligence in failing to proceed
with reasonable promptitude."42 In the case at bench, no negligence can be attributed to petitioners in pursuing their
case. The records show that petitioners themselves wrote the Labor Arbiter on July 7, 2004 to request for additional
time to submit a Position Paper since their counsel, Atty. Boiser, was frequently out of town and so they had to
secure the services of an additional counsel to prepare and file their Position Paper. Unfortunately, the Labor Arbiter
refused to recognize the appearance of their new counsel, Atty. Cañete. Under the circumstances, petitioners should
be given consideration for their vigilance in pursuing their causes. As aptly held by the NLRC, the delay in the filing of
their Position Paper cannot be interpreted as failure to prosecute on their part. "Failure to prosecute" is akin to lack of
interest.43 Here, petitioners did not sleep on their rights and obligations as party litigants.

In view of these, it is clear that the NLRC did not err in entertaining petitioners’ appeal and in considering their
Position Paper in resolving the same. It merely liberally applied the rules to prevent a miscarriage of justice in accord
with the provisions of the Labor Code. As it is, "technicality should not be allowed to stand in the way of equitably and
completely resolving the rights and obligations of the parties."44

Petitioners’ subsequent and substantial

compliance with the rules on verification

and certification of non-forum shopping

calls for the relaxation of technical rules.

Respondents assail this Court’s authority to entertain the instant petition despite the defective verification and
certification of non-forum shopping attached to it.

True, the verification and certification of non-forum shopping was executed and signed solely by Auza without proof
of any authority from his co-petitioners. Thence, in a Minute Resolution45 dated February 26, 2007, this Court required
petitioners to submit such proof of authority. In compliance therewith, petitioners thereafter submitted a Verification
and Certification of Non-Forum Shopping46 this time executed and signed by Auza, Otarra and Jeanjaquet.

Ample jurisprudence provides that subsequent and substantial compliance may call for the relaxation of the
rules.47 Indeed, "imperfections of form and technicalities of procedure are to be disregarded, except where substantial
rights would otherwise be prejudiced."48 Due to petitioners’ subsequent and substantial compliance, we thus apply the
rules liberally in order not to frustrate the ends of justice.

The CA did not err in giving due course

to respondents’ petition for certiorari
despite failure to attach petitioners’
Position Paper and Supplemental
Position Paper.

Petitioners deplore the CA’s refusal to dismiss respondents’ Petition for Certiorari for deliberately failing to attach a
copy of petitioners’ Position Paper as well as their Supplemental Position Paper, pleadings which are relevant in
rendering a decision.

This contention fails to impress.

It is within the CA’s determination whether the documents attached by a petitioner are sufficient to make out a prima
facie case since the acceptance of a petition as well as the grant of due course thereto are addressed to the sound
discretion of the appellate court. The Rules of Court, aside from the judgment, final order or resolution being assailed,
do not specify the documents, pleadings or parts of the records that should be appended to the petition but only those
that are relevant or pertinent to such judgment, final order or resolution.49 As such, the CA has discerned to judiciously
resolve the merits of the petition based on what have been submitted by the parties. At any rate, the subject Position
Paper and Supplemental Position Paper were submitted by petitioners themselves in their Comment to the Petition
for Certiorari and, hence, had also been brought to the attention of the CA.

On the Substantive Issues:

Petitioners voluntarily resigned from employment.

After a careful scrutiny and review of the records of the case, this Court is inclined to affirm the findings of the CA that
petitioners voluntarily resigned from MOL.

"Resignation is the formal pronouncement or relinquishment of an office."50 The overt act of relinquishment should be
coupled with an intent to relinquish, which intent could be inferred from the acts of the employee before and after the
alleged resignation.51

It appears that petitioners, on their own volition, decided to resign from their positions after being informed of the
management’s decision that the Cebu branch would eventually be manned by a mere skeletal force. As proven by
the email correspondences presented, petitioners were fully aware and had, in fact, acknowledged that Cebu branch
has been incurring losses and was already unprofitable to operate.52 Note that there was evidence produced to prove
that indeed the Cebu branch’s productivity had deteriorated as shown in a Profit and Loss Statement53 for the years
2001 and 2002. Also, there was a substantial reduction of workforce as all of the Cebu branch staff and personnel,
except one, were not retained. On the other hand, petitioners’ assertions that the Cebu branch was performing well
are not at all substantiated. What they presented was a document entitled "1999 Performance Standards",54 which
only provides for performance objectives but tells nothing about the branch’s progress. Likewise, the Cebu
Performance Reports55 submitted which showed outstanding company performance only pertained to the year 1999
and the first quarter of year 2000. No other financial documents were submitted to show that such progress continued
until year 2002.
Contrary to their assertions, petitioners were not lured by any misrepresentation by respondents.  Instead, they
1âwphi1

themselves were convinced that their separation was inevitable and for this, they voluntarily resigned. As aptly
observed by the CA, no element of force can be deduced from their letters of resignation as the same even contained
expressions of gratitude and thus contradicting their allegations that same were prepared by their employer. In Globe
Telecom v. Crisologo,56 we held that allegations of coercion are belied by words of gratitude coming from an
employee who is just forced to resign.

Petitioners aver that right after receiving their separation pay, they found out that the Cebu branch was not closed but
merely transferred to a bigger office and staffed by newly hired employees. Notably, however, despite such
knowledge, petitioners did not immediately contest their resignations but waited for more than a year or nearly 15
months before contesting them. This negates their claim that they were victims of deceit.57 Moreover, no adequate
proof was presented to show that the planned downsizing of Cebu branch did not take place. Similarly, petitioners’
allegations of bad faith on the part of respondents are unsupported by records. No proof whatsoever was advanced
to show that there was threat of withholding their separation pay unless their resignation letters were submitted prior
to the actual closure of the Cebu branch or that they were subjected to ill treatment and unpalatable working
conditions immediately prior to their resignation.

In addition, it is well to note that Auza and Otarra are managerial employees and not ordinary workers who cannot be
easily coerced or intimidated into signing something against their will.58 As borne out by the records, Auza was the
Local Chairman of International Shipping Lines Association for five years, president of their Homeowner’s Association
and an active member of his community. Otarra, on the other hand, was officer of various church organizations and a
college professor at the University of the Visayas.59 Their standing in society depicts how highly educated and
intelligent persons they are as to know fully well the consequences of their acts in executing and signing letters of
resignation and quitclaims. Although quitclaims are generally against public policy, voluntary agreements entered into
and represented by a reasonable settlement are binding on the parties which may not be later disowned simply
because of a change of mind.60 "It is only where there is clear proof that the waiver was wangled from an
unsuspecting or gullible person, or the terms of the settlement are unconscionable, that the law will step in to bail out
the employee."61 Hence, we uphold the validity of the quitclaims signed by petitioners in exchange for the separation
benefits they received from respondents.

All told, the Court affirms the finding of the CA that petitioners were not illegally dismissed from employment but
instead voluntarily resigned therefrom.

WHEREFORE, the petition is DENIED. The Decision dated August 17, 2006 and Resolution dated November 15,
2006 of the Court of Appeals in CA-G.R. SP No. 01375, are AFFIRMED.

SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 131523 August 20, 1998

TRAVELAIRE & TOURS CORP. and/or CHRISTINE B. OJEDA, petitioners, 

vs.
NATIONAL LABOR RELATIONS COMMISSION and NENITA I. MEDELYN, respondents.

ROMERO, J.:

Before us is a petition for certiorari under Rule 65 of the Rules of Court assailing the decision of the National Labor Relations
Commission in NLRC NCR CA No. 009593-95 entitled "Nenita I. Medelyn v. Travelaire and Tours Corporation and/or Christine
1
Ojeda" involving an award of separation pay in favor of Nenita Medelyn. 

Private respondent, Nenita Medelyn, was employed as chief accountant of petitioner, Travelaire and
Corporation. In a letter dated April 25, 1994, 2 private respondent irrevocably resigned from her position in
petitioner's corporation. On January 18, 1995, she filed a complaint before the National Labor Relations
Commission praying for separation pay, service incentive leave pay, and 13th month pay.

In a decision dated June 22, 1995, Labor Arbiter Potenciano S. Canizares, Jr., 3 awarded private respondent's
13th month pay but dismissing, however, the other claims. The dispositive portion of the decision reads as follows:

WHEREFORE, the respondents are hereby ordered to pay the complainant her
proportionate 13th month pay for the year 1994 in the amount it of P2,866.67 as
computed by MR. BENJAMIN MARTIN of the Commission's NLRC NCR Branch.

All other claims are dismissed for lack of merit.

Not satisfied with the decision, private respondent filed an appeal before the National Labor Relations
Commission, alleging that she is entitled to separation pay since other employees of the company who
had also resigned were granted the same benefit. The NLRC thus modified the labor arbiter's decision
and ordered petitioner to pay private respondent separation pay in the amount of P55,400.00.

Petitioner's motion for reconsideration from the decision of the NLRC was denied, hence this petition.

We affirm the ruling of the public respondent NLRC.

The general rule is that an employee who voluntarily resigns from employment is not entitled to
separation pay unless, however, there is a stipulation for payment of such in the employment contract or
Collective Bargaining Agreement (CBA), or payment of the amount is sanctioned by established
employer practice or policy. 4 Private respondent claims that she is entitled to separation pay inasmuch as, for the
period 1991 to 1996, three former employees of the company who had resigned ahead of private respondent and on
separate dates, namely Rogelio Abendan, Anastacio Cabate, and Raul C. Loya 5 were given separation pay. It is,
therefore, the contention of private respondent that payment of separation pay to resigning employees already
constitutes company practice and an established policy of her employer, hence she should also be entitled to this
benefit. Petitioner, on the other hand, admits giving certain sums of money to Anastacio Cabate and Raul C. Loya out
of the company's generosity and which are not equivalent to separation pay. 6
In ordering petitioner to give private respondent separation pay, public respondent NLRC ruled that there exists a
company policy/practice, to wit:

. . . . However, we agree with the complainant that the Labor Arbiter erred in not awarding
separation pay and service incentive leave pay.

The record shows that the respondent had paid separation pay to at least three (3)
employees, namely, Rogelio Abenden (page 9, Record), Anastacio Cabate (page 16,
Record); Raul C. Loya (pages 16 and 33). Athough in the case of Cabate and Loya the
amount given was called ex gratia payment, it was nevertheless given upon separation of
the employees from the company. The respondent said it was not separation pay but an
amount given by the company out of generosity. If the respondent could be generous to
some of its employees, why did it deny the complainant the same consideration. There is
no reason why the company should discriminate against the complainant who had also
served the company for a long time. 7

Well-established is the principle that findings of fact of quasi-judicial bodies, like the NLRC, are accorded with
respect, even finality, if supported by substantial evidence. Substantial evidence is defined as such amount of
relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. 8

In the case at bar, the public respondent NLRC's finding that there is a company policy/practice of paying separation
pay to its resigning employees, is supported by substantial evidence. This is shown by the fact that before private
respondent resigned and for the period 1991 to 1996, on separate dates, three (3) resigning employees were given
separation pay, even though the payments given to two of these employees (namely Rogelio Abendan, Anastacio
Cabate) were termed "ex-gratia payments". Regardless of terminology and amount, the fact exists that upon
resignation from petitioner corporation, the concerned employees were given certain sums of money occasioned by
their separation from the company. While petitioner has denied that such company policy/practice exists, it
nevertheless failed to present countervailing evidence, such as presenting the records of other resigned employees
who were not given separation pay.

In certiorari proceedings under Rule 65 of the Rules of Court, judicial review does not go as far as to
evaluate the sufficiency of evidence upon which the Labor Arbiter and NLRC based their determinations,
the inquiry being limited essentially to whether or not said public respondents had acted without or in
excess of its jurisdiction or with grave abuse of discretion. 9 The said rule directs us to merely determine
whether there is basis established on record to support the findings of a tribunal and such findings meet the required
quantum of proof, which in this case, is substantial evidence. Our deference to the expertise acquired by quasi-
judicial agencies and the limited scope granted to us in the exercise of certiorari jurisdiction restrain us from going so
far as to probe into the correctness of a tribunal's evaluation of evidence, unless there is palpable mistake and
complete disregard thereof in which case certiorari would be
proper. 10

Upon evaluation of the records of this case, as discussed previously, we finds substantial evidence to support the
finding of public respondent NLRC that it is a company policy/practice of petitioner to give separation pay to its
resigning employees. Thus, no grave abuse of discretion was committed by public respondent in awarding separation
pay to private respondent.

Lastly, it is a well-settled doctrine that if doubts exist between the evidence presented by the employer
and the employee, the scales of justice must be tilted in favor of the employee. Since it is a time-honored
rule that in controversies between a laborer and his master, doubts reasonably arising from the evidence
or in the interpretation of agreements and writings should be resolved in the former's favor. 11 The policy is
to extend the applicability to a greater number of employees who can avail of the benefits under the law, which is in
consonance with the avowed policy of the State to give maximum aid and protection to labor. 12 This gives us wider
latitude to affirm the finding of the public respondent NLRC.

WHEREFORE, in view of the foregoing, the instant petition is hereby DISMISSED and the decision of the National
Labor Relations Commission in NLRC NCR CA No. 009593-95 dated September 18, 1997 is hereby AFFIRMED. No
pronouncement as to costs.

SO ORDERED.Narvasa, C.J., Kapunan and Purisima, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. Nos. 92777-78             March 13, 1991

ISAGANI ECAL, CRISOLOGO ECAL, NELSON BUENAOBRA, NARDING BANDOGELIO, WILMER ECHAGUE,
ROGELIO CASTILLO, ALFREDO FERNANDO, OLIGARIO BIGATA, ROBERTO FERRER AND HONESTO
TANAEL, Represented by ISAGANI ECAL, petitioners, 
vs.
NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION), JIMMY MATCHUKA AND HI-LINE TIMBER,
INC., respondents.

Armando A. San Antonio for petitioners.

Chicote Abad & Macaisip Law Offices for private respondents.

GANCAYCO, J.:

Is there an employer-employee relationship between petitioners and private respondent Hi-Line Timber, Inc. or
merely an employer-independent contractor relationship between said private respondent and petitioner Isagani Ecal
with the other petitioners being mere contract workers of Ecal? In the case of the latter, is Ecal engaged in "job"
contracting or "labor-only" contracting? What then is the extent of the liability of private respondent? These are the
questions raised in this petition.

This case traces its origin from two consolidated complaints for illegal dismissal and money claims filed by petitioners
Isagani Ecal, Crisologo Ecal, Nelson Buenaobra, Narding Bandogelio, Wilmer Echague, Rogelio Castillo, Alfredo
Fernando, Oligario Bigata, Roberto Ferrer and Honesto Tanael against private respondents Hi-Line Timber, Inc.
(hereinafter referred to as Hi-Line) and Jimmy Matchuka, the company foreman, with the Department of Labor and
Employment docketed as NLRC case No. RAB-03-09-0107-87 and No. RAB III-09-0116-87.

In their complaints/position papers, petitioners alleged, among others, that they have been employed by Hi-Line as
follows: Isagani Ecal, from February, 1986; Crisologo Ecal, Buenaobra, Bandogelio, Fernando, Bigata, Ferrer and
Tanael, from March 3, 1986; and Castillo and Echague, from May 1, 1986; that except for Isagani Ecal, they were all
receiving a salary of P 35.00 a day; that they were required to report for work 7 days a week including rest days, legal
holidays, except Christmas and Good Friday from 7:00 A.M. to 7:00 P.M.; that they were not given living allowance,
overtime pay, premium pay for rest days and legal holidays, 13th month pay and service incentive leave pay; and,
that on June 6, 1987, they were not allowed to work and instead were informed that their services were no longer
needed.

Private respondents, on the other hand, denied the existence of an employer-employee relationship between the
company and the petitioners claiming that the latter are under the employ of an independent contractor, petitioner
Isagani Ecal, an employee of the company until his resignation on February 4, 1987.

After submission of the supplemental position papers and other evidence by the parties, the labor arbiter rendered his
decision dated June 10, 1988 finding no employer-employee relationship between the parties. Thus, he dismissed the
two cases for lack of merit. 
1

On appeal, public respondent National Labor Relations Commission (NLRC) affirmed the aforesaid decision of the
labor arbiter in a resolution dated October 2, 1989. 2

The motion for reconsideration of petitioners was denied in a resolution dated March 12, 1990. 3

In this petition for certiorari, petitioners primarily question the finding of the public respondent NLRC that no employer-
employee relationship existed between them and Hi-Line Timber, Inc. They contend that petitioner Isagani Ecal is not
an independent contractor but a mere employee of Hi-Line Line.
In response, the Solicitor General points out that the issue of whether or not an employer-employee relationship
exists between the parties is a question of fact and the findings of the labor arbiter and the NLRC on this issue are
conclusive upon this Court if they are supported by substantial evidence   as in this case.
4

The NLRC ruled —

We have carefully examined and evaluated the basis of the decision of the Labor Arbiter and to Our mind his
factual findings are indeed supported by substantial evidence. Thus, we cite a few of the clear and
convincing evidence and record which compelled the Labor Arbiter to disregard the claim of the
complainants that there was (an) employer-employee relationship between the contending parties. Firstly,
the affidavit of respondents' personnel officer, Elizabeth Natividad, dated 22 April 1988, clearly attesting to
the fact that complainants, except Isagani Ecal, who worked at their plant at Bocaue, Bulacan, from 24 April
1986 up to 4 February 1987 and who tendered his resignation on the latter date, were not at all employees
of respondents; secondly, the payrolls of the respondents do not indicate that said complainants were
employees of the respondents; thirdly, the Sinumpaang Salaysay of Jose Mendoza, the Secretary-Treasurer
of the Hi-Line Workers Union-Confederation of Free Laborers (CFL), a registered labor Union under Reg.
Cert. No. (FED-425)-6756-11, issued March, 1987, to the effect that none of the complainants, except
Isagani Ecal, were listed as members of the union and/or employees of respondents; and lastly, two (2)
Sinumpaang Salaysay dated 22 April 1988 executed by respondents' company guard Honorio T. Battung
and Foreman Clemente S. Sales, respectively, attesting that it was only Isagani Ecal who worked with
respondents but resigned on 4 February 1987 to work as (an) independent contractor.  5

Petitioners claim that the NLRC based its decision solely on the evidence aforestated and completely ignored the
evidence they presented thus denying them due process. The Court carefully examined the records of the case and
finds that the NLRC limited itself to a superficial evaluation of the relationship of the parties based mainly on the
aforestated documents with emphasis on the company payrolls without regard to the particular circumstances of the
case.

The finding of the NLRC that Isagani Ecal is no longer an employee of Hi-Line line is amply supported by the
evidence on record. His resignation letter dated February 4, 1987 stating "ako po ay magreresign na sa aking trabaho
bilang "laborer" sapagka't nakita ko na mas malaki ang kikitain kung mangongontrata na lamang "  speaks for itself.
6

This was unsuccessfully rebutted by petitioners.

To determine whether there exists an employer-employee relationship, the four-way test should be applied, namely:
(1) selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the
power to control the employee's conduct—the last being the most important element.   Neither the NLRC nor the
7

labor arbiter utilized these guides in their disposition of the complaint.

The records show that Hi-Line does not choose the workers but merely accepts whoever may be selected by
petitioner Isagani Ecal. Petitioners are not included in the payroll. Instead a lump sum of P1,400.00 is given to Isagani
Ecal or his representative Solomon de los Santos, every four days, to cover their wages for the period which the
petitioners divide among themselves.

Private respondents allege that Isagani Ecal customarily removes some of his laborers at the Hi-Line sawmill and
assigns them to other sawmills; however, there was no evidence adduced to show that indeed Ecal regularly or even
once transferred some of his workers to other sawmills. Petitioners worked at the company compound at Wakas,
Bocaue, Bulacan, at least eight hours a day, for seven days a week so that it would be impossible for them to find
time to work in some other sawmill. On June 6, 1987, the company unilaterally terminated the services of petitioners
without notice allegedly on the ground that its contract with Isagani Ecal has already expired.

As to the matter of control, it would seem that petitioners were mostly left on their own to devise the most expeditious
way of segregating lumber materials as to sizes and of loading and unloading the same in the chamber for drying.
However, their task is performed within the work premises of Hi-Line, specifically at its Kiln Drying Section, so it
cannot be said that no amount of control and supervision is exerted upon them by the company through their
foremen, private respondent Matchuka and Clemente S. Sales. Moreover, the very nature of the task performed by
petitioners requires very limited supervision as there are only so many ways of segregating lumber according to their
sizes and of loading and unloading them in the dryer so that all that the company has to do is to check on the results
of their work.

The foregoing observation suggests that there is a certain relationship existing between the parties although a clear-
cut characterization of such relationship — whether it is an employer-employee relationship or an employer-
independent contractor relationship — is unavailing. Hence, a closer scrutiny of said relationship is in order.
Petitioners urge that even assuming arguendo that Isagani Ecal is an independent contractor, he should be
considered only a labor supplier who is deemed an agent of the company so that petitioners should enjoy the status
of being its employees; therefore, Hi-Line should be held liable for illegally dismissing petitioners and for the non-
payment of benefits due them. Private respondents, however, maintain that Isagani Ecal is an independent contractor
or a job contractor.

The Solicitor General adopts the theory that Ecal is an independent contractor. However, he faults the labor arbiter
for his failure to determine the benefits due petitioners, an issue raised by the latter, on the ground that Hi-Line, being
an indirect employer, is jointly and severally liable with Isagani Ecal to the extent of the work performed by the
employees as if they were directly employed by it. He, therefore, seeks the remand of the case to the labor arbiter for
determination of the unpaid benefits of petitioners.

The pertinent provisions of the Labor Code, as amended, are:

Art. 106. Contractor or subcontractor. — Whenever an employer enters into a contract with another person
for the performance of the former'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.

In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with
this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such
employees to the extent of the work performed under the contract, in the same manner and extent that he is
liable to employees directly employed by him.

The Secretary of Labor 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.

Art. 107. Indirect Employer. — The provisions of the immediately preceding Article shall likewise apply to
any person, partnership, association or corporation which, not being an employer, contracts with an
independent contractor for the performance of any work, task, job or project.

Under the provisions of Article 106, paragraphs 1 and 2, an employer who enters into a contract with a contractor for
the performance of work for the employer does not thereby establish an employer-employee relationship between
himself and the employees of the contractor. The law itself, however, creates such a relationship when a contractor
fails to pay the wages of his employees in accordance with the Labor Code, and only for this limited purpose, i.e. to
ensure that the latter will be paid the wages due them. 8

On the other hand, the legal effect of a finding that a contractor is merely a "labor only" contractor was explained
in Philippine Bank of Communications vs. National Labor Relations Commission, et al.,   — 9

. . . The "labor-only" contractor — i.e., "the person or intermediary" — is considered "merely as an agent of
the employer." The employer is made by the statute responsible to the employees of the "labor only"
contractor as if such employee had been directly employed by the employer. Thus, where "labor-only"
contracting exists in a given case, the statute itself implies or establishes an employer-employee relationship
between the employer (the owner of the project) and the employees of the "labor-only" contractor, this time
for a comprehensive purpose: "employer for purposes of this Code, to prevent any violation or circumvention
of any provision of this Code." The law in effect holds both the employer and the 'labor-only' contractor
responsible to the latter's employees for the more effective safeguarding of the employees' rights under the
Labor Code.

Sections 8 and 9, Rule VIII, Book III of the Omnibus Rules implementing the Labor Code set forth the distinctions
between "job" contracting and "labor-only" contracting —
 Sec. 8. Job contracting. — There is job contracting permissible under the Code if the following conditions
are met:

(1) The contractor carries on an independent business and undertakes the contract work on his own account
under his own responsibility according to his own manner and method, free from control and direction of his
employer or principal in all matters connected with the performance of the work except as to the results
thereof, and

(2) The contractor has substantial capital or investment in the form of tools, equipments, machineries, work
premises, and other materials which are necessary in the conduct of his business.

Sec. 9. Labor-only contracting — (a) Any person who undertakes to supply workers to an employer shall be
deemed to be engaged in labor-only contracting where such person:

(1) Does not have substantial capital or investment in the form of tools, equipments, machineries,
work premises and other materials; and

(2) The workers recruited and placed by such person are performing activities which are directly
related to the principal business or operations of the employer in which workers are habitually
employed.

(b) Labor-only contracting as defined herein is hereby prohibited and the person acting as contractor shall
be considered merely as an agent or intermediary 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.

x x x           x x x          x x x

Applying the foregoing provisions, the Court finds petitioner Isagani Ecal to be a "labor-only" contractor, a mere
supplier of manpower to Hi-Line. Isagani Ecal was only poor laborer at the time of his resignation on February 4,
1987 who cannot even afford to have his daughter treated for malnutrition. He resigned and became a supplier of
laborers for Hi-Line, because he saw an opportunity for him to earn more than what he was earning while still in the
payroll of the company. At the same time, he continued working for the company as a laborer at the kiln drying
section. He definitely does not have sufficient capital to invest in tools and machineries. Private respondents,
however, claim that the business contracted by Ecal did not require the use of tools, equipment and machineries and
the contracted task had to be executed in the premises of Hi-Line. Precisely, the job assigned to petitioners has to be
executed within the work premises of Hi-Line where they use the machineries and equipment of the company for the
drying of lumber materials. Even the company's personnel officer Elizabeth Natividad admitted that Ecal resigned in
order to supply manpower to the company on a task basis.   By the very allegations of private respondents, it is quite
10

clear that Isagani Ecal only supplies manpower to Hi-Line within the context of "labor-only" contracting as defined by
law.

There is also no question that the task performed by petitioners is directly related to the business of Hi-
Line. Petitioners were assigned to sort out the lumber materials whether wet or fresh kiln as to sizes and to carry
1âwphi1

them from the stockpile to the dryer where they are loaded for drying after which they are unloaded. The work of
petitioners is an integral part of the operation of the sawmill of Hi-Line without which production and company sales
will suffer.

A finding that Isagani Ecal is a "labor-only" contractor is equivalent to a finding that an employer-employee
relationship exists between the company and Ecal including the latter's "contract workers" herein petitioners, the
relationship being such as provided by the law itself.  11

Indeed, the law prohibits "labor-only" contracting and creates an employer- employee relationship for the protection of
the laborers. The Court had in fact observed that businessmen, with the aid of lawyers, have tried to avoid the
bringing about of an employer-employee relationship in some of their enterprises because that juridical relation
spawns obligations connected with workmen's compensation, social security, medicare, minimum wage, termination
pay and unionism. 12

This unscrupulous practice is quite evident in the case at bar. It is company policy that once an employee is assigned
to the kiln drying section, he is no longer included in the payroll and is then paid on a task basis, even if he had long
been employed with the company. Since the employee will no longer be included in the payroll, it becomes easy for
the company to deny the regular employment of such a worker and is able to avoid whatever obligations it may have
under an employer-employee relationship. Moreover, Hi-Line limits the period of undertaking to only four days
presumably to make termination of the services of petitioners easier and to prevent them from attaining regular
status. The company had no doubt taken advantage of these laborers in order to escape liability for benefits and
privileges accruing to one holding a regular employment. Without a law prohibiting "labor-only" contracting to protect
the rights of labor, these poor workers will always be at the mercy of the employer.

Since petitioners perform tasks which are usually necessary or desirable in the main business of Hi-Line, they should
be deemed regular employees of the latter   and as such are entitled to all the benefits and rights appurtenant to
13

regular employment.

Being regular employees, they should have been afforded due process prior to their dismissal.   Instead they were
14

unceremoniously dismissed on June 6, 1987 when they were not allowed to enter the company's premises by the
security guards. The argument of private respondents that the contract of Ecal with the company expired cannot be
sustained. Petitioners may only be dismissed for an authorized or just cause and after due process.

At this juncture, We note that petitioners and private respondents allege conflicting dates of employment of the
former. Petitioners claim that as early as March or May, 1986, they have already been working with Hi-Line Line,
while private respondents contend that it was only in April, 1987 that they had been engaged by the company. This
Court is not a trier of facts and there is not enough basis in the records to enable Us to come up with definite dates of
employment. However, whatever be the date of their employment, petitioners will still be considered employees of the
company. If petitioners had started their employment in 1986, they would have rendered more than 1 year of service
at the time of their dismissal and, therefore, should be considered regular employees. Even if they have been
engaged only in April of 1987, they will still be deemed regular employees for as earlier indicated, Isagani Ecal is a
"labor-only" contractor and petitioners perform activities directly related to the principal business of Hi-Line Line.

Petitioners, having been illegally dismissed on June 6, 1987, are entitled to backwages equivalent to three years
without qualifications and deductions in line with prevailing jurisprudence.

WHEREFORE, the decision of public respondent NLRC is hereby REVERSED and SET ASIDE. Private respondent
Hi-Line Timber, Inc. is hereby ordered to reinstate petitioners to their former positions with backwages equivalent to
three (3) years without deductions and qualifications. The records of the case are remanded to the labor arbiter for
determination of the unpaid benefits due petitioners. No costs.

SO ORDERED.

Narvasa, Cruz, Griño-Aquino and Medialdea, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 153290             September 5, 2007

BMG RECORDS (PHILS.), INC. and JOSE YAP, JR., petitioners, 

vs.
AIDA C. APARECIO and NATIONAL LABOR RELATIONS COMMISSION, respondents.

DECISION

AZCUNA, J.:

This is a petition for review under Rule 45 of the Rules of Court assailing the November 20, 2001 Decision1 and April
26, 2002 Resolution2 of the Court of Appeals (CA) in C.A. G.R. SP No. 65403 affirming the August 23, 2000
Decision3 of the National Labor Relations Commission (NLRC) which reversed and set aside the October 27, 1998
Decision4 of the Labor Arbiter finding that private respondent voluntarily resigned and was not illegally dismissed.

Petitioner BMG Records (Phils.), Inc. (BMG) is engaged in the business of selling various audio records nationwide.
On September 2, 1990, it hired private respondent Aida C. Aparecio (Aparecio) as one of the promo girls in its Cebu
branch. For working from Monday to Sunday, she received a salary of P181.00 per day.

On May 25, 1998, Aparecio filed a complaint against BMG and its Branch Manager, Jose Yap, Jr., co-petitioner
herein, for illegal dismissal and non-payment of overtime pay, holiday pay, premium pay for rest day, 13th month pay,
service incentive leave, and separation pay.5 In her Position Paper, she alleged:

xxx

b. That she was illegally dismissed or terminated [from] employment on April 30, 1998; that before said
date[,] however, she was asked by respondent to resign and will be paid (sic)  all her benefits due – like a
one-month pay for every year of service, payment of services rendered, overtime and holiday pay, rest day,
13th month, service incentive leave and separation pay – and to [execute] a letter of resignation;

c. That in view of respondent's insistence to prepare and [execute] a letter-resignation[,] even without proper
accounting of any accountability, the complainant was lured, induced and compelled to submit a letter of
resignation believing on respondent's promise and assurance to pay all the benefits due her as aforesaid;

d. That after executing said resignation letter, the respondent did not make good its promise and [instead]
did an accounting by themselves in the absence of herein complainant and arrived on a computation that
complainant's liability per their accounting reached to the staggering amount of P8,000.00; that since they
offered to pay a separation pay of only P12,000.00, minus complainant's alleged accountability ofP8,000.00,
they are ready to pay the balance thereof any time;

e. That herein complainant was under respondent's employ for seven (7) years, seven (7) months and
twenty-eight (28) days when illegally terminated [from] her employment xxx. 6

Petitioners, however, proffer a different version of the facts. They narrate that Aparecio was initially performing well
as an employee but as years passed by she seemed to be complacent in the performance of her job and had been
comparing the salaries of promo girls in other companies. It appeared that she was no longer interested in her job. In
April 1998, Aparecio and two other promo girls, Jovelina V. Soco and Veronica P. Mutya, intimated to their supervisor
that they were intending to resign and were requesting for some financial assistance. BMG made it clear that, as a
company policy, an employee who resigns from service is not entitled to financial assistance, but considering the
length of their service and due to humanitarian consideration it would accede to the request after they secure their
respective clearances. Forthwith, the three employees tendered their resignations, which were accepted. When they
processed the required individual clearance, it was found out that they had incurred some shortages after inventory.
Per agreement, said shortages were deducted from the amounts due them. Thus, Soco and Mutya received their last
salary, a proportion of the 13th month pay, tax refund and financial assistance less the deductions, and they executed
their releases and quitclaims. Except for the financial assistance, Aparecio also obtained the same yet refused to sign
the release and quitclaim, protesting the amount of P9,170.12 deducted from the financial assistance. She was
adamant but BMG stood by the previous agreement.

Attached to petitioners' Position Paper7 were the sworn statements of Jose Yap, Jr. and Evangeline A. Magno,
supervisor of BMG.

On October 27, 1998, the labor arbiter dismissed Aparecio's complaint. Since the letter of resignation showed no
signs that it was made through duress or compulsion, it was concluded that the severance of her employment in BMG
was brought about by her resignation and not by the illegal dismissal supposedly committed by the latter.
Nonetheless, realizing petitioners' promise to pay financial assistance to Aparecio, the labor arbiter ordered the
payment of P18,824.00 (fixed at half month pay for every year of service, with a fraction of at least six [6] months
being considered as one year) instead of P9,170.12 which was not amply substantiated.8

Upon appeal, however, the NLRC found that Aparecio was illegally dismissed from service, disposing in its August
23, 2000 Decision9 thus:

WHEREFORE, prescinding from the foregoing consideration, the Decision appealed from is REVERSED
and SET ASIDE and a new one ENTERED finding the dismissal of complainant illegal thus ordering the
respondent to pay her backwages from April 30, 1998 up to date hereof and in lieu of reinstatement, the
respondent is further ordered to pay complainant separation pay computes at the rate of one (1) month pay
for every year of service from date of hiring on September 2, 1990 up to the finality of this decision.

All other claims are dismissed for lack of merit.

SO ORDERED.10

The NLRC admitted its dilemma in determining whether Aparecio offered to resign on the condition that she would be
paid with termination benefits or whether the resignation was triggered by BMG which offered the monetary
consideration. While saying that Aparecio "offered no other evidence except her bare allegations," it was held that the
sworn statement of Magno was not sufficient to establish the position of petitioners. For the NLRC, the testimonies of
Soco and Mutya would have been helpful had these been presented by either side. Notwithstanding the "scanty data"
available, it concluded:

x x x We find that the elements of a valid resignation are not obtaining in this case. It must be stressed that
resignation is inconsistent with the filing of the complaint. Moreover, even in the absence of physical force,
duress or compulsion applied upon complainant when she executed the alleged resignation letter, factual
circumstances tend to show the strong and irresistible economic pressure originating from respondent if only
to push the complainant into accepting the offer. For, as ever, "[i]n the matter of employment bargaining,
there is no doubt that the employer stands on higher footing than the employee. First of all, there is greater
supply than demand for labor. Secondly, the need for employment by labor comes from vital, and even
desperate, necessity. Consequently, the law must protect labor, at least, to the extent of raising him to equal
footing in bargaining relations with capital and to shield him from abuses brought about by the necessity of
survival. It is safe therefore to presume that an employee or laborer who waives in advance any benefit
granted him by law does so, certainly not in his interest or through generosity, but under the forceful
intimidation or urgent need, and hence, he could not have done so acted freely and voluntarily." xxx
(citations omitted)11

A motion for reconsideration of the Decision was filed by petitioners. Attached therein were the sworn statements of
Soco and another promo girl, Marietta Cinco, both dated September 21, 2000, confirming Aparecio's voluntary
resignation. The NLRC, however, resolved to deny the motion.12

On appeal, the CA affirmed in toto the judgment of the NLRC. In its November 20, 2001 Decision,13 the appellate
court held:

xxx

Based on the evidence submitted, the [petitioners] failed to support [their] claim that [Aparecio's] resignation
was made out of her own volition. Granting arguendo that [Aparecio] executed a resignation letter, it appears
that she did it in consideration of the separation pay and other benefits promised by the petitioner.
 Resignation, moreover, is inconsistent with the filing of a complaint for illegal dismissal. It would have been
illogical for the employee to resign and then file a complaint for illegal dismissal x x x Thus, had the private
respondent been determined to resign and relinquish her position in the petitioner company, she would not
have commenced an action for illegal dismissal.

It must be remembered that the petitioner is in a more advantageous position than [Aparecio] considering
the ratio of the demand for workers and the number of unemployed persons, so much so that the employee
is vulnerable to submit to whatever offer the employer may give. Most often than not, employees are placed
in a position where there is only one choice which is to accede to the employer's proposal.14

xxx

Petitioners' motion for reconsideration was subsequently denied on April 26, 2002;15 hence, this petition.

In a Resolution dated August 12, 2002, this Court initially resolved to deny the petition for:

(a.) failure of the petitioners to sufficiently show that the Court of Appeals committed any reversible error in
the challenged decision and resolution as to warrant the exercise by this Court of its discretionary appellate
jurisdiction in this case; and

(b.) failure of the petition to show extraordinary circumstance justifying a departure from the established
doctrine that findings of facts of the Court of Appeals are well-nigh conclusive on this Court and will not be
reviewed or disturbed on appeal.16

Considering, however, the Motion for Reconsideration17 filed and the Comment18 as well as the Reply19 thereon, this
Court resolved20 on April 23, 2003 to reinstate the petition and require the parties to submit their respective
memoranda.

The petition is meritorious.

As a rule, only questions of law may be raised in and resolved by this Court on petitions brought under Rule 45 of the
Rules of Court. The reason being that the Court is not a trier of facts; it is not duty-bound to re-examine and calibrate
the evidence on record. Moreover, findings of facts of quasi-judicial bodies like the NLRC, as affirmed by the CA, are
generally conclusive on this Court.21 In exceptional cases, however, we may be constrained to delve into and resolve
factual issues when there is insufficient or insubstantial evidence to support the findings of the tribunal or court below,
or when too much is concluded, inferred or deduced from the bare or incomplete facts submitted by the parties.22 The
present case is an exception to the rule. Hence, this Court finds the need to review the records to determine the facts
with certainty not only because the NLRC and the labor arbiter have come up with conflicting positions but also
because the findings of the NLRC, as supported by the CA on substantial matters, appear to be contrary to the
evidence at hand.

Reading through the records would ineluctably reveal that the evidence upon which both the NLRC and the CA based
their conclusion rests on rather shaky foundation. After careful analysis, this Court finds and so holds that the
submissions of Aparecio in all her pleadings failed to substantiate the allegation that her consent was vitiated at the
time she tendered her resignation and that petitioners are guilty of illegal dismissal.

In her memorandum of appeal before the NLRC, Aparecio asserted in main:

xxx The arbiter should have seriously considered the temper of the time in relation to our deteriorating
economy on the issue [of] whether or not the resignation letter was voluntary. But he did not. To the arbiter[,]
resignation letter can only be set aside if it is shown that it was made through duress or compulsion. What
about FRAUD? The complainant did not offer to resign. She was offered by respondents that all labor
standard benefits including but not limited to payment of overtime, salary differentials and separation pay
should be given if she [would] resign. This she was made to believe by the respondents. And complainant
really believed them. Unfortunately, however, complainant found herself jobless and penniless. Her
resignation was obtained through fraud xxx It is clear that complainant submitted her resignation letter not
because she has some accountabilities but because of respondents' offer which was hard to resist xxx23

On the other hand, her Comment before the CA stated further:

 xxx

At any rate, respondents wish to point out that the finding of the NLRC that private respondent (employee)
did not voluntarily resign but was illegally dismissed is well-supported by evidence. The following
considerations clearly show this, to wit:

One. It is admitted by both petitioners and the respondents that the supposed resignation of private
respondent was conditional in nature. It was premised on petitioners' (employers) performance of certain
prestations or petitioners' compliance with certain conditions.

Two. The supposed decision of private respondent to tender a resignation is vitiated by vices of consent.
The resignation letter was wrongfully obtained from private respondent on petitioners' inducement and
promise to pay employment benefits and financial assistance without any deductions. However, it is now
very clear that right from the start, petitioners did not intend to comply with their promise. After private
respondent handed in a resignation letter, petitioners raised all obstacles to prevent private respondent from
actually receiving the promised employment benefits and financial assistance. Accordingly, it can be easily
said that fraud vitiated private respondent's consent.

Three. The resignation letter was also obtained from private respondent through undue pressure and
influence which again vitiates the same. The respondent NLRC made this finding:

"Moreover, even in the absence of physical force, duress or compulsion applied upon complainant when she
executed the alleged resignation letter, factual circumstances tend to show the strong and irresistible
economic pressure originating from respondent if only to push the complainant into accepting the
offer." (NLRC Decision, 23 August 2000, p. 5; underscoring ours)

Four. At the very least, it could be easily said that the decision to resign is vitiated by mistake. It is
unrebutted that private respondent handed in a resignation letter on the firm belief that petitioners would pay
her the promised employment benefits and financial assistance without deductions. Resignation is also a
form of contract. Like any other contracts, it can be vitiated by mistake and other vices of consent x x x

Five. Finally, it could also be said that the resignation letter was ineffective because there was no meeting
of the minds on the matter of resignation. As pointed out earlier, it is an admitted fact that the supposed
resignation was conditional in character in the sense that it was premised on certain conditions.
Accordingly, the resignation letter could only be considered as a mere offer. Since the petitioners obviously
did not accept the conditions attendant to the offer to resign, there is no resignation to speak of. (emphasis
supplied) 24

xxx

In a nutshell, Aparecio submits that fraud, undue influence, intimidation, and/or mistake were attendant upon her
resignation from BMG. As her consent was allegedly vitiated, the act of resigning became involuntary; hence,
petitioners are guilty of illegal dismissal.

The argument is not tenable.

Based on the pleadings, this Court finds nothing to support Aparecio's allegation that fraud was employed on her to
resign. Fraud exists only when, through insidious words or machinations, the other party is induced to act and without
which, the latter would not have agreed to.25 This Court has held that the circumstances evidencing fraud and
misrepresentation are as varied as the people who perpetrate it, each assuming different shapes and forms and may
be committed in as many different ways. Fraud and misrepresentation are, therefore, never presumed; it must be
proved by clear and convincing evidence and not mere preponderance of evidence.26 Hence, this Court does not
sustain findings of fraud upon circumstances which, at most, create only suspicion; otherwise, it would be indulging in
speculations and surmises.27

In this case, Aparecio alleged that her resignation was wrongfully obtained when petitioners did not keep the promise
of giving her employment benefits and financial assistance without any deductions. Without a showing of the nature
and extent of such "inducement," however, such submission fails to establish that there was in fact a deception on
the part of petitioners. Even if it is considered that there was an assurance given by petitioners and that they later
reneged on their promise, this Court still finds no injustice made since Aparecio, who only questioned the manner by
which the inventory was conducted – that it was held without her presence – but did not categorically deny her
accountabilities with BMG, would unjustly be enriched without the deduction.

Likewise, Aparecio did not adduce any competent evidence to prove that force or threat was applied by petitioners.
For intimidation to vitiate consent, the following requisites must be present: (1) that the intimidation caused the
consent to be given; (2) that the threatened act be unjust or unlawful; (3) that the threat be real or serious, there being
evident disproportion between the evil and the resistance which all men can offer, leading to the choice of doing the
act which is forced on the person to do as the lesser evil; and (4) that it produces a well-grounded fear from the fact
that the person from whom it comes has the necessary means or ability to inflict the threatened injury to his person or
property. In the instant case, not one of these essential elements was amply proven by Aparecio. Bare allegations of
threat or force do not constitute substantial evidence to support a finding of forced resignation.28

On the contrary, petitioners correctly point out that the NLRC finding, which the CA erroneously affirmed, of a "strong
and irresistible economic pressure originating from [petitioners] if only to push [Aparecio] into accepting the offer" is
not supported by any evidence in the records but is merely based on conjectures and guesswork. Truly, the factual
circumstances upon which the legal conclusion was based were lacking as no less than the NLRC itself admitted the
absence of proof of any kind of pressure, economic or otherwise, that petitioners applied to force Aparecio's
resignation. What is clear is that there is no concrete evidence, direct or circumstantial, showing that undue influence
was used by petitioners in such a way that it took improper advantage of its power over the will of Aparecio and
deprived the latter of a reasonable freedom of choice.29 Granting for the sake of argument that BMG was in a "more
advantageous position," as the CA had opined, it would nonetheless be unfair to presume that it utilized the same
against Aparecio. Indeed, the allegation of exploitation is a very serious matter and should not be taken lightly. Proof
is absolutely essential.

Resignation is 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. It is a formal pronouncement or relinquishment of an office, with the intention of relinquishing the
office accompanied by the act of relinquishment. As the intent to relinquish must concur with the overt act of
relinquishment, the acts of the employee before and after the alleged resignation must be considered in determining
whether in fact, he or she intended to sever from his or her employment.30

Thus, this Court agrees with petitioners' contention that the circumstances surrounding Aparecio's resignation should
be given due weight in determining whether she had intended to resign. In this case, such intent is very evident:

First, Aparecio already communicated to other people that she was about to resign to look for a better paying job
since she had been complaining that employees like her in other companies were earning much more;

Second, prior to the submission of her resignation letter, Aparecio and two other promo girls, Soco and Mutya,
approached their supervisor, intimated their desire to resign, and requested that they be given financial assistance,
which petitioners granted on the condition that deductions would be made in case of shortage after inventory;

Third, Aparecio, Soco, and Mutya submitted their duly signed resignation letters, which were accepted by petitioners;
and

Fourth, Aparecio already initiated the processing of her clearance; thus, she was able to receive her last salary,
13th month pay, and tax refund but refused to receive the financial assistance less the deductions made.

The foregoing facts were affirmatively narrated and attested to in the notarized affidavit of Soco and Cinco and have
remained incontrovertible as they were never denied by Aparecio. The NLRC, thus, erred when it did not give
probative weight to their testimonies even if belatedly presented in petitioners' motion for reconsideration.

Now, the acceptance by petitioners of Aparecio's resignation rendered the same effective.31 Upon such acceptance, it
may not be unilaterally withdrawn without the consent of petitioners.32 When the employee later signified the intention
of continuing his or her work, it was already up to the employer to accept the withdrawal of his or her resignation. The
mere fact that the withdrawal was not accepted does not constitute illegal dismissal, the acceptance of the withdrawal
of the resignation being the employer's sole prerogative. As held in Intertrod Maritime, Inc. v. NLRC:33

Once an employee resigns and his resignation is accepted, he no longer has any right to the job. If the
employee later changes his mind, he must ask for approval of the withdrawal of his resignation from his
employer, as if he were re-applying for the job. It will then be up to the employer to determine whether or not
his service would be continued. If the employer accepts said withdrawal, the employee retains his job. If the
 employer does not x x x the employee cannot claim illegal dismissal for the employer has the right to
determine who his employees will be. To say that an employee who has resigned is illegally dismissed, is to
encroach upon the right of employers to hire persons who will be of service to them.34

Subsequently, in Philippine Today, Inc. v. NLRC,35 it was further held that:

Obviously, this is a recognition of the contractual nature of employment which requires mutuality of consent
between the parties. An employment contract is consensual and voluntary. Hence, if the employee "finds
himself in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency
of the service, then he has no other choice but to disassociate himself from his employment". If accepted by
the employer, the consequent effect of resignation is severance of the contract of employment.

A resigned employee who desires to take his job back has to re-apply therefor, and he shall have the status
of a stranger who cannot unilaterally demand an appointment. He cannot arrogate unto himself the same
position which he earlier decided to leave. To allow him to do so would be to deprive the employer of his
basic right to choose whom to employ. Such is tantamount to undue oppression of the employer. It has been
held that an employer is free to regulate, according to his own discretion and judgment, all aspects of
employment including hiring. The law, in protecting the rights of the laborer, impels neither the oppression
nor self-destruction of the employer.36

Certainly, what transpired here was caused by an employee's error of judgment and not by the employer's application
of means vitiating the consent to resign. It would be utterly unfair to attribute to petitioners the commission of illegal
dismissal and to impose upon them the burden of accepting back Aparecio who unequivocally manifested her intent
and willingness to sever her employment ties.

WHEREFORE, the petition is GRANTED and the November 20, 2001 Decision and April 26, 2002 Resolution of the
Court of Appeals in C.A. G.R. SP No. 65403 affirming the August 23, 2000 Decision of the National Labor Relations
Commission are hereby REVERSED AND SET ASIDE. The October 27, 1998 Decision of the Labor Arbiter finding
that private respondent was not illegally dismissed is hereby REINSTATED AND AFFIRMED.

No costs.

SO ORDERED.

Puno, C.J., Chairperson, Sandoval-Gutierrez, Corona, Garcia, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 159371               July 29, 2013

D.M. CONSUNJI CORPORATION, Petitioner, 

vs.
ROGELIO P. BELLO, Respondent.

DECISION

BERSAMIN, J.:

For the resignation of an employee to be a viable defense in an action for illegal dismissal, an employer must prove
that the resignation was voluntary, and its evidence thereon must be clear, positive and convincing. The employer
cannot rely on the weakness of the employee's evidence.

The Case

We now review the decision promulgated on February 18, 2003,1 whereby the Court of Appeals (CA) granted the
petition for certiorari of respondent Rogelio P. Bello, reversed and set aside the resolutions dated January 3,
20022 and February 26, 20023 of the National Labor Relations Commission (NLRC), and reinstated the decision
rendered on January 9, 2001 by the Executive Labor Arbiter (ELA) declaring Bello to have been illegally dismissed
and ordering petitioner D.M. Consunji Corporation (DMCI) to reinstate him, and to pay him full backwages reckoned
from the time of his dismissal until his actual reinstatement.4

Antecedents

Bello brought a complaint for illegal dismissal and damages against DMCI and/or Rachel Consunji. In his position
paper, he claimed that DMCI had employed him as a mason without any interruption from February 1, 1990 until
October 10, 1997 at an hourly rate of P25.081; that he had been a very diligent and devoted worker and had served
DMCI as best as he could and without any complaints; that he had never violated any company rules; that his job as
a mason had been necessary and desirable in the usual business or trade of DMCI; that he had been diagnosed to
be suffering from pulmonary tuberculosis, thereby necessitating his leave of absence; that upon his recovery, he had
reported back to work, but DMCI had refused to accept him and had instead handed to him a termination paper; that
he had been terminated due to "RSD" effective November 5, 1997; that he did not know the meaning of "RSD" as the
cause of his termination; that the cause had not been explained to him; that he had not been given prior notice of his
termination; that he had not been paid separation pay as mandated by law; that at that time of his dismissal, DMCI’s
projects had not yet been completed; and that even if he had been terminated due to an authorized cause, he should
have been given at least one month pay or at least one-half month pay for every year of service he had rendered,
whichever was higher.

In its position paper submitted on March 6, 2000,5 DMCI contended that Bello had only been a project employee, as
borne out by his contract of employment and appointment papers; that after his termination from employment, it had
complied with the reportorial requirements of the Department of Labor and Employment (DOLE) pursuant to the
mandates of Policy Instruction No. 20, as revised by Department Order No. 19, series of 1993; and that although his
last project employment contract had been set to expire on October 7, 1997, he had tendered his voluntary
resignation on October 4, 1997 for health reasons that had rendered him incapable of performing his job, per his
resignation letter.

On January 9, 2001, ELA Isabel G. Panganiban-Ortiguerra rendered a decision,6 disposing thusly:

WHEREFORE, premises considered, judgment is hereby rendered declaring respondent company DM Consunji, Inc.,
guilty of illegal dismissal and it is hereby ordered to reinstate complainant to his former position without loss of
seniority rights and to pay him full backwages reckoned from the time of his dismissal up to his actual reinstatement
which as of this date is in the amount of P232,648,81.
SO ORDERED.

DMCI appealed to the NLRC, citing the following grounds, namely:

I. THE LABOR ARBITER A QUO GRAVELY ABUSED HER DISCRETION IN HOLDING THAT
COMPLAINANT IS A REGULAR EMPLOYEE NOT EVEN AS THIS IS CONTRARY TO LAW, EVIDENCE
AND JURISPRUDENCE.

II. THE LABOR ARBITER A QUO GRAVELY ABUSED HER DISCRETION IN DECLARING
COMPLAINANT’S TERMINATION AS ILLEGAL EVEN AS HE HAD VOLUNTARILY RESIGNED

FROM HIS LAST PROJECT EMPLOYMENT.7

On January 3, 2002, the NLRC issued its resolution setting aside the decision of ELA Panganiban-Ortiguerra, and
dismissing Bello’s claims,8 viz:

Addressing the first issue on appeal, a cursory reading of the records indeed show that contrary to the declaration of
the Labor Arbiter that complainant’s years of service was without any gaps and was continuous to warrant regularity
of employment, the same was not so. In fine what was clearly illustrated by respondents in their appeal memorandum
by way of matrix, there were considerable and substantial gaps between complainant’s employment. In addition, it is
of judicial notice that respondent company, being one of the biggest and well known construction company, as even
admitted by the Executive Labor Arbiter, cater to so many clients/projects. So much that it is not improbable that
complainant may be hired continuously one after the other in different projects considering that he is a mason whose
functions are more than highly needed in construction. Even as it is, the matrix presented by respondents still showed
considerable gaps. The fact that sometimes complainant’s contract is extended beyond approximated date of finish
contract, do not in anyway (sic) readily make his employment regular. For it is common among construction projects
for a certain phase of work to be extended, depending on varied factors such as weather, availability of materials,
whims and caprice of clients and many more. So much so, it was error on the part of the Executive Labor Arbiter to
take this against respondents and pin it as another determining factor of regularity of employment. Neither can it be
said that as mason complainant’s function is necessary and desirable to respondents business hence, he is a regular
employee. x x x we simply cannot close our eyes to the reality that complainant is a project employee and that the
case she is citing does not fit herein as it is akin to a square peg being in a round hole. To top it all, records show that
respondents have faithfully complied with the provision of Policy Instruction No. 20 on project employees.

Lastly, records do show that complainant executed a voluntary resignation. And while there may indeed be a slight
difference in the signature and handwriting, this do not readily mean that complainant did not execute the same as
was the inclination of the Executive Labor Arbiter. For one, she has no expertise to determine so. Secondly, and as
was validly pointed out, complainant if indeed he was coerced, cheated or shortchanged, would ordinarily almost
immediately seek redress. In the case at bar, he sat it out and waited two (2) years. Is this case, an afterthought? We
believe so.1âwphi1

ACCORDINGLY, finding merit in respondent’s appeal, the decision of the Executive Labor Arbiter is hereby SET
ASIDE and this case DISMISSED for want of merits (sic).

SO ORDERED.

Bello moved for a reconsideration,9 but the NLRC denied his motion on February 26, 2002.10

Ruling of the CA

Bello then assailed the dismissal of his complaint via petition for certiorari,11 averring that the NLRC committed grave
abuse of discretion amounting to lack of jurisdiction in upholding DMCI’s appeal, in setting aside the decision of the
ELA, and in dismissing his complaint and denying his motion for reconsideration.

On February 18, 2003, the CA promulgated its assailed decision,12 finding Bello to have acquired the status of a
regular employee although he had started as a project employee of DMCI by his having been employed as a mason
who had performed tasks that had been usually necessary and desirable in the business or trade of DMCI
continuously from February 1, 1990 to October 5, 1997; that his repeated re-hiring and the continuing need for his
services over a long span of time had undeniably made him a regular employee; that DMCI’s compliance with the
reportorial requirements under Policy Instruction No. 20 (by which the project employer was required to make a report
to the Department of Labor and Employment of every termination of its projects) could not preclude the acquisition of
tenurial security by the employee; that the cause of his dismissal after he had acquired the status of a regular
employee – the completion of the phase of work – could not be considered as a valid cause under Article 282 of the
Labor Code; and that his supposedly voluntary resignation could not be accorded faith after the ELA had concluded
that the handwriting in the supposed resignation letter was "undeniably different from that of complainant," a fact "not
rebutted by herein respondents."

DMCI sought the reconsideration of the decision, but the CA denied its motion on July 24, 2003.13

Issues

Hence, DMCI appeals, presenting the following issues for our consideration and resolution, to wit:

I. WHETHER OR NOT PRIVATE RESPONDENT WAS A REGULAR EMPLOYEE; AND

II. WHETHER OR NOT PRIVATE RESPONDENT WAS DISMISSED OR VOLUNTARILY RESIGNED.

Ruling of the Court

The petition for review lacks merit.

The provision that governs the first issue is Article 280 of the Labor Code, which is quoted hereunder as to its
relevant part, viz:

Article 280. Regular and Casual Employment – The provisions of written agreement to the contrary notwithstanding
and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the
employee has been engaged to perform activities which are usually necessary and desirable to 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.
(Emphasis supplied)

xxxx

A project employee is, therefore, one who is hired for a specific project or undertaking, and the completion or
termination of such project or undertaking has been determined at the time of engagement of the employee.14 In the
context of the law, Bello was a project employee of DMCI at the beginning of their employer-employee relationship.
The project employment contract they then entered into clearly gave notice to him at the time of his engagement
about his employment being for a specific project or phase of work. He was also thereby notified of the duration of the
project, and the determinable completion date of the project.

However, the history of Bello’s appointment and employment showed that he performed his tasks as a mason in
DMCI’s various constructions projects, as the following tabulation indicates, to wit:15

Project Duration of Employment Actual Termination Cause Annexes

SM Megamall 2-01-90 to 05-01-90 10-28-91 CPW 1 & 1-A
JMT 10-28-91 to 01-28-91 05-29-92 CPW 2 & 2-A
Renaissance 05-29-92 to 08-29-92 09-10-92 CPW 3 & 3-A
Bayview 09-11-92 to 12-11-92 06-15-93 CPW 4 &4-A
Golden Bay I 06-17-93 to 09-17-93 04-18-94 CPW 5 & 5-A
Golden Bay II 04-18-94 to 07-18-94 09-06-94 CPW 6& 6-A
ADC 09-07-94 to 10-07-94 02-09-96 CPW 7 & 7-A
ADC 02-10-96 to 03-10-96 10-01-96 CPW 8 & 8-A
ICEC 09-07-97 to 10-07-97 10-07-97 CPW 9 & 9-A
Based on the foregoing, we affirm the CA’s conclusion that Bello acquired in time the status of a regular employee by
virtue of his continuous work as a mason of DMCI. The work of a mason like him – a skilled workman working with
stone or similar material16 – was really related to building or constructing, and was undoubtedly a function necessary
and desirable to the business or trade of one engaged in the construction industry like DMCI. His being hired as a
mason by DMCI in not one, but several of its projects revealed his necessity and desirability to its construction
business.

It is settled that the extension of the employment of a project employee long after the supposed project has been
completed removes the employee from the scope of a project employee and makes him a regular employee.17 In this
regard, the length of time of the employee’s service, while not a controlling determinant of project employment, is a
strong factor in determining whether he was hired for a specific undertaking or in fact tasked to perform functions
vital, necessary and indispensable to the usual business or trade of the employer.18 On the other hand, how DMCI
chose to categorize the employment status of Bello was not decisive of his employment status. What were of
consequence in that respect were his actual functions and the length of his stay with DMCI. Verily, the principal test
for determining whether an employee is a project employee, as distinguished from a regular employee, is whether or
not he is assigned to carry out a specific project or undertaking, the duration and scope of which are specified at the
time he is engaged for the project.19

Still, DMCI contends that Bello’s services as a mason were deemed necessary and desirable in its usual business
only for the period of time it had taken it to complete the project.

The contention may be correct if each engagement of Bello as a mason over the span of eight years was to be
treated separately. The contention cannot be upheld, however, simply because his successive reengagement in
order to perform the same kind of work as a mason firmly manifested the necessity and desirability of his work in
DMCI’s usual business of construction.20

Lastly, DMCI claims that Bello voluntarily resigned from work. It presented his supposed handwritten resignation letter
to support the claim. However, Bello denied having resigned, explaining that he had signed the letter because DMCI
had made him believe that the letter was for the purpose of extending his sick leave.

In resolving the matter against DMCI, the CA relied on the conclusion by ELA Panganiban-Ortiguerra that she could
not give credence to the voluntary resignation for health reasons in the face of Bello’s declaration that he had been
led to sign the letter to obtain the extension of his leave of absence due to illness, and on her observation that "the
handwriting in the supposed resignation letter is undeniably different from that of complainant," something that she
said DMCI had not rebutted.21

The CA’s reliance on the conclusion and finding by ELA Panganiban-Ortiguerra was warranted. Her observation that
the handwriting in the resignation letter was "undeniably different" from that of Bello could not be ignored or shunted
aside simply because she had no expertise to make such a determination, as the NLRC tersely stated in its decision.
To begin with, her supposed lack of expertise did not appear in the records, rendering the NLRC's statement
speculative and whimsical. If we were now to outrightly discount her competence to make that observation, we would
disturb the time-honored practice of according respect to the findings of the first-line trier of facts in order to prefer the
speculative and whimsical statement of an appellate forum like the NLRC. Yet, even had the letter been actually
signed by him, the voluntariness of the resignation could not be assumed from such fact alone. His claim that he had
been led to believe that the letter would serve only as the means of extending his sick leave from work should have
alerted DMCI to the task of proving the voluntariness of the resignation. It was obvious that, if his claim was true, then
he did not fully comprehend the import of the letter, rendering the resignation farcical. The doubt would then be
justifiably raised against the letter being at all intended to end his employment. Under the circumstances, DMCI
became burdened with the obligation to prove the due execution and genuineness of the document as a letter of
resignation.22

We reiterate that it is axiomatic in labor law that the employer who interposes the defense of voluntary resignation of
the employee in an illegal dismissal case must prove by clear, positive and convincing evidence that the resignation
was voluntary; and that the employer cannot rely on the weakness of the defense of the employee.23The requirement
rests on the need to resolve any doubt in favor of the working man.

WHEREFORE, the Court AFFIRMS the decision promulgated on February 18, 2003; and ORDERS petitioner to pay
the costs of suit. SO ORDERED.LUCAS P. BERSAMIN
Associate Justice