Labor Lesson 2

2. limitation to the principle of promotion of social justice

a. Guido v. Rural Progress, GR No L-2089, October 31, 1949

[G.R. No. L-2089. October 31, 1949.]

JUSTA G. GUIDO, Petitioner, v. RURAL PROGRESS ADMINISTRATION, c/o FAUSTINO AGUILAR, Manager, Rural Progress
Administration, Respondent.

Guillermo B. Guevara for Petitioner.

Luis M. Kasilag and Lorenzo B. Vizconde for Respondent.

SYLLABUS

1. CONSTITUTIONAL LAW; DEMOCRACY AS ENSHRINED IN THE CONSTITUTION, FREEDOMS EMBRACED IN. — Democracy, as a
way of life enshrined in the Constitution, embraces as its necessary components freedom of conscience, freedom of expression, and freedom in the
pursuit of happiness. Along with these freedoms are included economic freedom and freedom of enterprise within reasonable bounds and under
proper control.

2. ID.; POWER OF EMINENT DOMAIN IN ARTICLE XIII, SECTION 4 OF THE CONSTITUTION, EXTENT AND SCOPE. — In paving the
way for the breaking up of existing large estates, trusts in perpetuity, feudalism, and their concomitant evils, the Constitution did not propose to
destroy or undermine property rights, or to advocate equal distribution of wealth, or to authorize the taking of what is in excess of one’s personal
needs and the giving of it to another.

3. ID.; CONSTITUTION ALLOWS AND PROTECTS OWNERSHIP OF PROPERTY IN REASONABLE QUANTITIES. — The Constitution
realizes the indispensable role which property, owned in reasonable quantities and used legitimately, plays in the stimulation to economic effort and
the formation and growth of a solid social middle class that is said to be the bulwark of democracy and the backbone of every progressive and happy
country.

4. ID.; PROMOTION OF SOCIAL JUSTICE AS ORDAINED BY THE CONSTITUTION, ITS NATURE, EXTENT AND SCOPE. — The
promotion of social justice ordained by the Constitution does not supply paramount basis for untrammeled expropriation of private land by the Rural
Progress Administration or any other government instrumentality. Social justice does not champion division of property or equality of economic
status; what it and the Constitution do guaranty are equality of opportunity, equality of political rights, equality before the law, equality between
values given and received, and equitable sharing of the social and material goods on the basis of efforts exerted in their production.

5. ID.; EXPROPRIATION OF LARGE ESTATES, TRUSTS IN PERPETUITY; INTENTION AS ORDAINED BY THE CONSTITUTION. —
Expropriation of large estates, trusts in perpetuity, and land that embraces a whole town, or a large section of a town or city, bears direct relation to
the public welfare. The size of the land expropriated, the large number of people benefited, and the extent of social and economic reform secured by
the condemnation, clothes the expropriation with public interest and public use. The expropriation in such cases tends to abolish economic slavery,
feudalistic practices, endless conflicts between landlords and tenants, and other evils inimical to community prosperity and contentment and public
peace and order.

6. ID.; EMINENT DOMAIN; PUBLIC USE. — Some courts go so far as to hold that public use is synonymous with public benefit, public utility, or
public advantage, and to authorize the exercise of the power of eminent domain to promote such public benefit, etc., especially where the interests
involved are of considerable magnitude.

7. ID.; ID.; CONDEMNATION OF A SMALL PROPERTY IN BEHALF OF FEW PERSONS DOES NOT INURE TO BENEFIT OF PUBLIC
USE. — The condemnation of a small property in behalf of 10, 20 or 50 persons and their families does not inure to the benefit of the public to a
degree sufficient to give the use public character.

DECISION

TUASON, J.:

This is a petition for prohibition to prevent the Rural Progress Administration and Judge Oscar Castelo of the Court of First Instance of
Rizal from proceeding with the expropriation of petitioner Justa G. Guido’s land, two adjoining lots, part commercial, with a combined
area of 22,655 square meters, situated in Maypajo, Caloocan, Rizal, just outside the north Manila boundary, on the main street running
from this city to the north. Four grounds are adduced in support of the petition, to wit: jgc:chanrobles.com.ph

"(1) That the respondent RPA (Rural Progress Administration) acted without jurisdiction or corporate power in filing the expropriation
complaint and has no authority to negotiate with the RFC a loan of P100,000 to be used as part payment of the value of the land.

"(2) That the land sought to be expropriated is commercial and therefore excluded within the purview of the provisions of Act 539.

"(3) That majority of the tenants have entered with the petitioner valid contracts for lease, or option to buy at an agreed price, and
expropriation would impair those existing obligation of contract.

"(4) That respondent Judge erred in fixing the provisional value of the land at P118,780 only and in ordering its delivery to the
respondent RPA." cralaw virtua1aw library

We will take up only ground No. 2. Our conclusion on this branch of the case will make superfluous a decision on the other questions
raised.

Sections 1 and 2 of Commonwealth Act No. 539, copied verbatim, are as follows: jgc:chanrobles.com.ph

"SECTION 1. The President of the Philippines is authorized to acquire private lands or any interest therein, through purchase or
expropriation, and to subdivide the same into home lots or small farms for resale at reasonable prices and under such conditions as he
may fix to their bona fide tenants or occupants or to private individuals who will work the lands themselves and who are qualified to
acquire and own lands in the Philippines.
"SEC. 2. The President may designate any department, bureau, office, or instrumentality of the National Government, or he may
organize a new agency to carry out the objectives of this Act. For this purpose, the agency so created or designated shall be
considered a public corporation." cralaw virtua1aw library

The National Assembly approved this enactment on the authority of section 4 of Article XIII of the Constitution which, copied verbatim,
is as follows:
jgc:chanrobles.com.ph

"The Congress may authorize, upon payment of just compensation, the expropriation of lands to be subdivided into small lots and
conveyed at cost to individuals." cralaw virtua1aw library

What lands does this provision have in view? Does it comprehend all lands regardless of their location, nature and area? The answer is
to be found in the explanatory statement of Delegate Miguel Cuaderno, member of the Constitutional Convention who was the author
or sponsor of the above-quoted provision. In his speech, which was entitled "Large Estates and Trusts in Perpetuity" and is transcribed
in full in Aruego’s "The Framing of the Philippine Constitution," Mr. Cuaderno said: jgc:chanrobles.com.ph

"There has been an impairment of public tranquility, and to be sure a continuous impairment of it, because of the existence of these
conflicts. In our folklore the oppression and exploitation of the tenants are vividly referred to; their sufferings at the hand of the
landlords are emotionally pictured in our drama; and even in the native movies and talkies of today, this theme of economic slavery
has been touched upon. In official documents these same conflicts are narrated and exhaustively explained as a threat to social order
and stability.

"But we should go to Rizal for inspiration and illumination in this problem of the conflicts between landlords and tenants. The national
hero and his family were persecuted because of these same conflicts in Calamba, and Rizal himself met a martyr’s death because of his
exposal of the cause of the tenant class, because he would not close his eyes to oppression and persecution with his own people as
victims.

"I ask you, gentlemen of the Convention, knowing this as you do and feeling deeply as you must feel a regret over the immolation of
the hero’s life, would you not write in the Constitution the provision on large estates and trusts in perpetuity, so that you would be the
very instrument of Providence to complete the labors of Rizal to insure domestic tranquility for the masses of our people?

"If we are to be true to our trust, if it is our purpose in drafting our constitution to insure domestic tranquility and to provide for the
well-being of our people, we cannot, we must not fail to prohibit the ownership of large estates, to make it the duty of the government
to break up existing large estates, and to provide for their acquisition by purchase or through expropriation and sale to their
occupants, as has been provided in the Constitutions of Mexico and Jugoslavia." cralaw virtua1aw library

No amendment was offered and there was no debate. According to Dean Aruego, Mr. Cuaderno’s resolution was readily and totally
approved by the Convention. Mr. Cuaderno’s speech therefore may be taken as embodying the intention of the framers of the organic
law, and Act No. 539 should be construed in a manner consonant with that intention. It is to be presumed that the National Assembly
did not intend to go beyond the constitutional scope of its powers.

There are indeed powerful considerations, aside from the intrinsic meaning of section 4 of Article XIII of the Constitution, for
interpreting Act No. 539 in a restrictive sense. Carried to extremes, this Act would be subversive of the Philippine political and social
structure. It would be in derogation of individual rights and the time-honored constitutional guarantee that no private property shall be
taken for private use without due process of law. The protection against deprivation of property without due process of law and against
the taking of private property for public use without just compensation occupies the forefront positions (paragraphs 1 and 2) in the Bill
of Rights (Article III). The taking of private property for private use relieves the owner of his property without due process of law; and
the prohibition that "private property should not be taken for public use without just compensation" (Section 1 [par. 2], Article III, of
the Constitution) forbids by necessary implication the appropriation of private property for private uses (29 C. J. S., 819). It has been
truly said that the assertion of the right on the part of the legislature to take the property of one citizen and transfer it to another,
even for a full compensation, when the public interest is not promoted thereby, is claiming a despotic power, and one inconsistent with
every just principle and fundamental maxim of a free government. (29 C. J. S., 820.)

Hand in hand with the announced principle, herein invoked, that "the promotion of social justice to insure the well-being and economic
security of all the people should be the concern of the state," is a declaration, with which the former should be reconciled, that "the
Philippines is a Republican state" created to secure to the Filipino people "the blessings of independence under a regime of justice,
liberty and democracy." Democracy, as a way of life enshrined in the Constitution, embraces as its necessary components freedom of
conscience, freedom of expression, and freedom in the pursuit of happiness. Along with these freedoms are included economic freedom
and freedom of enterprise within reasonable bounds and under proper control. In paving the way for the breaking up of existing large
estates, trusts in perpetuity, feudalism, and their concomitant evils, the Constitution did not propose to destroy or undermine property
rights, or to advocate equal distribution of wealth, or to authorize the taking of what is in excess of one’s personal needs and the giving
of it to another. Evincing much concern for the protection of property, the Constitution distinctly recognizes the preferred position
which real estate has occupied in law for ages. Property is bound up with every aspect of social life in a democracy as democracy is
conceived in the Constitution. The Constitution realizes the indispensable role which property, owned in reasonable quantities and used
legitimately, plays in the stimulation to economic effort and the formation and growth of a solid social middle class that is said to be
the bulwark of democracy and the backbone of every progressive and happy country.

The promotion of social justice ordained by the Constitution does not supply paramount basis for untrammeled expropriation of private
land by the Rural Progress Administration or any other government instrumentality. Social justice does not champion division of
property or equality of economic status; what it and the Constitution do guaranty are equality of opportunity, equality of political
rights, equality before the law, equality between values given and received, and equitable sharing of the social and material goods on
the basis of efforts exerted in their production. As applied to metropolitan centers, especially Manila, in relation to housing problems, it
is a command to devise, among other social measures, ways and means for the elimination of slums, shambles, shacks, and houses
that are dilapidated, overcrowded, without ventilation, light and sanitation facilities, and for the construction in their place of decent
dwellings for the poor and the destitute. As will presently be shown, condemnation of blighted urban areas bears direct relation to
public safety, health, and/or morals, and is legal.

In reality, section 4 of Article XIII of the Constitution is in harmony with the Bill of Rights. Without that provision the right of eminent
domain, inherent in the government, may be exercised to acquire large tracts of land as a means reasonably calculated to solve
serious economic and social problem. As Mr. Aruego says "the primary reason" for Mr. Cuaderno’s recommendation was "to remove all
doubts as to the power of the government to expropriate the then existing landed estates to be distributed at cost to the tenant-
dwellers thereof in the event that in the future it would seem such expropriation necessary to the solution of agrarian problems
therein.."

In a broad sense, expropriation of large estates, trusts in perpetuity, and land that embraces a whole town, or a large section of a
town or city, bears direct relation to the public welfare. The size of the land expropriated, the large number of people benefited, and
the extent of social and economic reform secured by the condemnation, clothes the expropriation with public interest and public use.
The expropriation in such cases tends to abolish economic slavery, feudalistic practices, endless conflicts between landlords and
tenants, and other evils inimical to community prosperity and contentment and public peace and order. Although courts are not in
agreement as to the tests to be applied in determining whether the use is public or not, some go so far in the direction of a liberal
construction as to hold that public use is synonymous with public benefit, public utility, or public advantage, and to authorize the
exercise of the power of eminent domain to promote such public benefit, etc., especially where the interests involved are of
considerable magnitude. (29 C. J. S. 823, 824. See also People of Puerto Rico v. Eastern Sugar Associates, 156 Fed. [2nd], 316.) In
some instances, slumsites have been acquired by condemnation. The highest court of New York State has ruled that slum clearance
and erection of houses for low-income families were public purposes for which New York City Housing authorities could exercise the
power of condemnation. And this decision was followed by similar ones in other states. The underlying reasons for these decisions are
that the destruction of congested areas and insanitary dwellings diminishes the potentialities of epidemics, crime and waste, prevents
the spread of crime and diseases to unaffected areas, enhances the physical and moral value of the surrounding communities, and
promotes the safety and welfare of the public in general. (Murray v. La Guardia, 52 N.E. [2nd], 884; General Development Coop. v.
City of Detroit, 33 N.W. [2nd], 919; Weizner v. Stichman, 64 N. Y. S. [2nd], 50.) But it will be noted that in all these cases and others
of similar nature extensive areas were involved and numerous people and the general public benefited by the action taken.

The condemnation of a small property in behalf of 10, 20 or 50 persons and their families does not inure to the benefit of the public to
a degree sufficient to give the use public character. The expropriation proceedings at bar have been instituted for the economic relief of
a few families devoid of any consideration of public health, public peace and order, or other public advantage. What is proposed to be
done is to take plaintiff’s property, which for all we know she acquired by sweat and sacrifice for her and her family’s security, and sell
it at cost to a few lessees who refuse to pay the stipulated rent or leave the premises.

No fixed line of demarcation between what taking is for public use and what is not can be made; each case has to be judged according
to its peculiar circumstances. It suffices to say for the purpose of this decision that the case under consideration is far wanting in those
elements which make for public convenience or public use. It is patterned upon an ideology far removed from that consecrated in our
system of government and embraced by the majority of the citizens of this country. If upheld, this case would open the gates to more
oppressive expropriations. If this expropriation be constitutional, we see no reason why a 10-, 15-, or 25-hectare farm land might not
be expropriated and subdivided, and sold to those who want to own a portion of it. To make the analogy closer, we find no reason why
the Rural Progress Administration could not take by condemnation an urban lot containing an area of 1,000 or 2,000 square meters for
subdivision into tiny lots for resale to its occupants or those who want to build thereon.

The petition is granted without special findings as to costs.

Moran, C.J., Feria, Bengzon, Padilla and Montemayor, JJ., concur.

Paras and Reyes, JJ., concur in the result.

Separate Opinions

TORRES, J., concurring: chanrob1es virtual 1aw library

I fully concur in the above opinion of Mr. Justice Tuason. I strongly agree with him that when the framers of our Constitution wrote in
our fundamental law the provision contained in section 4 of Article XIII, they never intended to make it applicable to all cases, wherein
a group of more or less numerous persons represented by the Rural Progress Administration, or some other governmental
instrumentality, should take steps for the expropriation of private land to be resold to them on the installment plan. If such were the
intention of the Constitution, if section 4 of its Article XIII will be so interpreted as to authorize that government corporation to institute
the corresponding court proceedings to expropriate for the benefit of a few interested persons a piece of private land, the consequence
that such interpretation will entail will be incalculable.

In addition to the very cogent reasons mentioned by Mr. Justice Tuason in support of his interpretation of that constitutional provision,
I wish to state in this connection the situation created by the acquisition of the so-called friar lands at the beginning of the
establishment of civil government by the United States in these islands. After the lapse of a few years, the tenants for whose benefit
those haciendas were purchased by the government, and who signed contracts of purchase by installments of the lots occupied by
them, having defaulted in their partial payments, had to be sued by the government. Thousands of cases were filed by the Director of
Lands accordingly, and, in the meantime, the Government which had been administering those haciendas for a long period of years
went into much expense in order to achieve the purpose of the law. I take for granted that in this case the prospective purchasers, in
inducing the government to buy the land to be expropriated and sold to them by lots on the installment plan do from the beginning
have the best of intentions to abide by the terms of the contract which they will be required to sign.

If I am not misinformed, the whole transaction in the matter of the purchase of the friar lands has been a losing proposition, with the
government still holding many lots originally intended for sale to their occupants, who for some reason or other failed to comply with
the terms of the contract signed by them.

Without the sound interpretation thus given by this Court restricting within reasonable bounds the application of the provision of
section 4 of Article XIII of our Constitution and clarifying the powers of the Rural Progress Administration under Commonwealth Act No.
539, said corporation — or, for that matter, some other governmental entity — might embark in a policy of indiscriminate acquisition of
privately-owned land, urban or otherwise, just for the purpose of taking care of the wishes of certain individuals and, as outlined by Mr.
Justice Tuason, regardless of the merits of the case. And once said policy is carried out, it will place the Government of the Republic in
the awkward predicament of veering towards socialism, a step not foreseen nor intended by our Constitution. Private initiative will thus
be substituted by government action and intervention in cases where the action of the individual will be more than enough to
accomplish the purpose sought. In the case at bar, it is understood that contracts, for the sale by lots of the land sought to be
expropriated to the present tenants of this herein petitioner, have been executed. There is, therefore, not the slightest reason for the
intervention of the government in the premises.

b. Gustilo v. Wyeth Phils., GR No 149629, October 4, 2004

[G.R. NO. 149629 : October 4, 2004]

ALAN D. GUSTILO, Petitioner, v. WYETH PHILIPPINES, INC., FILEMON VERZANO, JR., AURELIO MERCADO and EDGAR
EPILEPSIA, Respondents.

DECISION

SANDOVAL-GUTIERREZ, J.:

At bar is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the
Decision1 dated January 24, 2001 and Resolution2 dated August 10, 2001 rendered by the Court of Appeals in CA-G.R. SP No. 57545,
entitled "Wyeth Phils., Inc. and/or Filemon Verzano, Jr., Aurelio Mercado and Edgar Epilepsia v. National Labor Relations Commission
(Fourth Division) and Alan Gustilo."

The facts as borne by the records are:

On November 7, 1990, Alan D. Gustilo, Petitioner, was employed by Wyeth Philippines, Inc., respondent company, as a pharmaceutical
territory manager. Eventually, he was placed in charge of its various branches in Metro Bacolod City and Negros Occidental. To ensure
a profitable sale of its pharmaceutical products, he performed various functions, such as visiting hospitals, pharmacies, drugstores and
physicians concerned; preparing and submitting his pre-dated itinerary; and submitting periodic reports of his daily call visits, monthly
itinerary, and weekly locator and incurred expenses.

Petitioner's employment records show that respondent company, on various dates, reprimanded and suspended him for habitually
neglecting to submit his periodic reports. On November 28, 1994, respondent company sent petitioner a notice reprimanding him for
submitting late his weekly expense report. Again, on July 5, 1995, he was late in submitting the same report, prompting respondent
company to suspend him for five (5) days. Still, petitioner repeatedly incurred delay in submitting his daily call reports dated October
16-20, 1995, October 23-27, 1995, November 6-10, 1995, and November 13-17, 1995. He did not submit his daily call reports for the
period from November 20 to 24, 1995. As a consequence, respondent company sent petitioner another notice suspending him for
fifteen (15) days or from January 2 to 22, 1996.

Meantime, respondent company, after integrating its pharmaceutical products with Lederle, a sister company, conducted a nationwide
on-the-job training of sales personnel. With this development, petitioner was assigned in charge of promoting four
(4) Lederle pharmaceutical products.

Subsequently, petitioner submitted to respondent company a plan of action dated February 6, 1996 where he committed to make an
average of 18 daily calls to physicians; submit promptly all periodic reports; and ensure 95% territory program performance for every
cycle.

However, petitioner failed to achieve the above objectives, prompting respondent company to send him two (2) separate notices dated
February 20, 1996 and April 10, 1996, charging him with willful violation of company rules and regulations and directing him to submit
a written explanation.

In his explanation, petitioner stated that he was overworked and an object of reprisal by his immediate supervisor.

On May 22, 1996, upon recommendation of a Review Panel, respondent company terminated the services of petitioner.

Aggrieved, petitioner, on June 21, 1996, filed with the Regional Arbitration Branch No. VI at Bacolod City a complaint against
respondent company for illegal suspension, illegal dismissal and payment of allowances, other monetary benefits, damages and
attorney's fees, docketed as RAB Case No. 06-10267-96. Impleaded also as party respondents were Filemon Verzano, Jr., petitioner's
immediate supervisor, and Aurelio Mercado and Edgar Epilepsia, corporate officers of respondent company.

On March 5, 1998, the Labor Arbiter rendered a Decision holding that petitioner was illegally dismissed from employment and ordering
respondents company and Verzano, jointly and severally, to pay him P991,157.90 representing his backwages, separation pay, car
reimbursement, damages and attorney's fees. The dispositive portion of the Decision reads:

"WHEREFORE, premises considered, judgment is hereby rendered against respondent company WYETH PHILS., INC. and respondent
FILEMON VERZANO, JR., ordering them to pay jointly and severally, complainant ALAN D. GUSTILO, the following:

1. Backwages - '. P 676,162.64

2. Separation pay '. 106,890.00
3. Car reimbursement '. 68,000.00
4. Moral damages '. 25,000.00
5. Exemplary damages '. 25,000.00
6. Attorney's fees '. 90,105.26

Grand Total '. P 991,157.90

Respondents are further directed to deposit the total amount of NINE HUNDRED NINETY ONE THOUSAND ONE HUNDRED FIFTY SEVEN
PESOS and 90/100 (P991,157.90) with the Cashier, this Arbitration Branch, within ten (10) days from receipt hereof, for proper
disposition.

SO ORDERED."

Respondents then appealed to the National Labor Relations Commission (NLRC), Fourth Division at Cebu City.

On August 13, 1999, the NLRC (Fourth Division) promulgated a Decision affirming with modification the Labor Arbiter's Decision in the
sense that respondent company is ordered to reinstate petitioner, or in lieu of reinstatement, to pay his separation benefits, thus:

"WHEREFORE, premises considered, the appeal filed by complainant is GRANTED and that of respondents is DENIED. The Decision of
Labor Arbiter Reynaldo J. Gulmatico dated March 5, 1998 is MODIFIED, to wit:

Respondents are ordered:

1. To reinstate complainant Alan Gustilo to his former position without loss of seniority rights and other privileges and to pay his full
backwages, inclusive of allowances and other benefits, or their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement. If reinstatement is no longer feasible, complainant may opt to receive his
separation pay equivalent to at least one month salary for every year of service, in lieu of reinstatement.

2. To refund, jointly and severally, complainant in the amount of P4,190.00; and cralawlibrary

3. To pay 10% of the total monetary award as attorney's fees.

SO ORDERED."

Respondents filed their motion for reconsideration but was denied by the NLRC in a Resolution dated December 28, 1999.

As a consequence, respondents filed with the Court of Appeals a petition for certiorari with prayer for issuance of a temporary
restraining order and a writ of preliminary injunction.
On January 24, 2001, the Appellate Court rendered a Decision reversing the NLRC's Decision and dismissing petitioner's complaint for
illegal dismissal, but awarding him separation pay considering the mitigating "factors" of length of service, the loyalty awards he
received, and respondent Verzano's "grudge" against him.

The Court of Appeals held:

"Respondent Gustilo cannot deny the numerous violations of company rules during his employment with Wyeth. Gustilo's 201 file
reveal the following:

1. On February 2, 1993, he was suspended for falsifying, tampering and/or altering the gasoline receipt (Annex '12', Wyeth's Position
Paper, Rollo, p. 142).

2. On June 28, 1993, he was warned for false reporting of his trade outlet calls (Annex '13', Wyeth's Position Paper, Rollo, p. 143).

3. On September 8, 1993, he was guilty of unauthorized availment of sick leaves, emergency leaves, vacation leaves and unauthorized
absences (Annex '14', Wyeth's Position Paper, Rollo, p. 144).

4. On November 28, 1994, he was cited for his repeated delay in submitting his expense reports (Annex '4', Wyeth's Position Paper,
Rollo, p. 132).

5. On July 10, 1995, he was cited for failure to submit his expense report on time (Annex '5', Wyeth's Position Paper, Rollo, p. 133).

6. On September 26, 1995, he was charged with breach of the rule on submission of required reports (Annex '8', Wyeth's Position
Paper, Rollo, p. 136).

7. On November 28, 1995, he was again cited for unauthorized absence on October 19, 1995 and other violations of company rules as
contained in a letter of the same date (Annex '9', Wyeth's Position Paper, Rollo, p. 137).

From 1993 up to 1995, respondent has repeatedly guaranteed not to repeat transgressing company rules under pain of termination,
but to no avail (Letter dated January 16, 1993; Rollo, p. 141; Internal Memo dated February 1, 1993; Rollo, p. 142; Internal Memo
dated July 11, 1995; Rollo, p. 134; Plan of Action dated February 6, 1996; Rollo, p. 147). It has become clear that respondent
Gustilo is a habitual offender whose numerous contraventions of company rules has left Wyeth with no choice but to
terminate him based on Article 282 of the Labor Code, gross and habitual neglect by the employee of his duties, being a
valid cause for termination.

While dismissal is proper, the Court however considers the length of service of respondent Gustilo with Wyeth, the
loyalty awards he received and the grudge of petitioner Verzano, Jr. as mitigating factors. The Court is inclined to
reinstate respondent Gustilo to his former position without backwages and other benefits. However in view of the
strained relationship between respondent Gustilo and petitioner Verzano, Jr., the Court rules to award separation pay to
respondent Gustilo in the amount of P106,890.00.

In view of our finding that there are valid causes for dismissal, it follows that the award for payment of backwages, damages and
attorney's fees has to be recalled for want of basis.

Being uncontested, the refund of car expenses in the amount of P4,190.00 to respondent Gustilo and payment of P68,000.00
representing the difference between the KIA car, the supposed car and the NISSAN LEC have to be maintained.

In view of our finding that there was a valid dismissal, petitioners Aurello Mercado and Edgar Epilepsia, as a consequence, cannot be
held personally liable to respondent Gustilo. Even assuming ex grati argumenti that termination is illegal, corporate officers like
petitioners Mercado and Epilepsia are mere agents of Wyeth and acts done in good faith and in representation or on behalf of said
company and within the scope of their authority cannot give rise to any liability on their part as said acts are considered corporate
acts.

xxx

WHEREFORE, the subject Decision and Resolution, promulgated on August 13, 1999 and December 28, 1999, respectively, by
respondent National Labor Relations Commission are SET ASIDE and REVERSED and a new judgment is rendered, as follows:

1. The Complaint for illegal dismissal against petitioners Wyeth Philippines, Inc., Aurelio Mercado and Edgar Epilepsia is dismissed for
lack of merit;

2. Petitioner Wyeth Philippines, Inc. is ordered to pay respondent Alan Gustilo P106,890.00 as separation pay;

3. Wyeth Philippines, Inc. is ordered to pay respondent Gustilo P68,000.00 representing the difference between the prices of the
supposed car, KIA and the NISSAN LEC, and P4,190.00 equivalent to the cost of one piece of tire, headlight and tire wrench.

SO ORDERED."

On February 16, 2001, petitioner filed a motion for reconsideration, but was denied by the Appellate Court in a Resolution dated
August 10, 2001.

Hence, this Petition for Review on Certiorari .

Petitioner, in the present petition, contends that he was illegally dismissed from the service by respondent company. Hence, he should
be reinstated and paid his full backwages and other benefits and privileges.

In Philippine Journalists, Inc. v. Mosqueda,3 we reiterated the well-established rule that "findings of fact by the Court of Appeals are
conclusive on the parties and are not reviewable by this Court. x x x. The rationale behind this doctrine is that review of the findings of
fact by the Court of Appeals is not a function that the Supreme Court normally undertakes."

Here, the Court of Appeals unequivocally ruled that "Gustilo (herein petitioner) is a habitual offender whose numerous
contraventions of company rules has left Wyeth (herein respondent) with no choice but to terminate his services x x x."

Evidently, there is no cogent reason why we should not accord deference and finality to the Appellate Court's factual findings which are
supported by substantial evidence as shown by the records.

In Family Planning Organization of the Philippines, Inc. v. NLRC,4 we held:

"It is the employer's prerogative to prescribe reasonable rules and regulations necessary or proper for the conduct of its business or
concern, to provide certain disciplinary measures to implement said rules and to assure that the same be complied with. At the same
time, it is one of the fundamental duties of the employee to yield obedience to all reasonable rules, orders, and instructions of the
employer, and willful or intentional disobedience thereof, as a general rule, justifies rescission of the contract of service and the
preemptory dismissal of the employee."

Records show the various violations of respondent company's rules and regulations committed by petitioner. His dismissal from the
service is, therefore, in order. Indeed, in Piedad v. Lanao del Norte Electric Cooperative, Inc.,5 we ruled that a series of irregularities
when put together may constitute serious misconduct, which under Article 282 of the Labor Code, as amended, 6 is a just cause for
dismissal.

But the Court of Appeals still awarded him separation pay of P106,890.00 by reason of several mitigating factors mentioned in its
assailed Decision. The issue for our determination now is whether he is entitled to such an award.

The rule embodied in the Omnibus Rules Implementing the Labor Code is that a person dismissed for cause as defined therein is not
entitled to separation pay.7 However, in PLDT v. NLRC and Abucay,8 we held:

"x x x henceforth, separation pay shall be allowed as a measure of social justice only in those instances where the
employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where
the reason for the valid dismissal is, x x x an offense involving moral turpitude x x x, the employer may not be required to give the
dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice."

Similarly, in Telefunken Semiconductors Employees Union-FFW v. Court of Appeals,9 we ruled:

"The same view holds with respect to the award of financial assistance or separation pay. The assumption for granting financial
assistance or separation pay, which is, that there is an illegally dismissed employee and that illegally dismissed employee would
otherwise have been entitled to reinstatement, is not present in the case at bench. Here, the striking workers have been validly
dismissed Where the employee's dismissal was for a just cause, it would be neither fair nor just to allow the employee to recover
something he has not earned or could not have earned. This being so, there can be no award of backwages, for it must be pointed out
that while backwages are granted on the basis of equity for earnings which a worker or employee has lost due to his illegal dismissal,
where private respondent's dismissal is for just cause, as in the case herein, there is no factual or legal basis to order the payment of
backwages; otherwise, private respondent would be unjustly enriching herself at the expense of petitioners.' (Cathedral School of
Technology v. National Labor Relations Commission,  214 SCRA 551). Consequently, granting financial assistance to the strikers is
clearly a 'specious inconsistency' (supra). We are of course aware that financial assistance may be allowed as a measure of
social justice in exceptional circumstances and as an equitable concession. We are likewise mindful that financial
assistance is allowed only in those instances where the employee is validly dismissed for causes other than serious
misconduct or those reflecting on his moral character (Zenco Sales, Inc. v. National Labor Relations Commission, 234 SCRA
689). x x x."

In the case at bar, we find no exceptional circumstances to warrant the grant of financial assistance or separation pay to petitioner. It
bears stressing that petitioner did not only violate company disciplinary rules and regulations. As found by the Court of
Appeals, he falsified his employment application form by not stating therein that he is the nephew of Mr. Danao,
respondent Wyeth's Nutritional Territory Manager. Also, on February 2, 1993, he was suspended for falsifying a gasoline
receipt. On June 28, 1993, he was warned for submitting a false report of his trade outlet calls. On September 8, 1993, he
was found guilty of unauthorized availment of sick, vacation and emergency leaves. These infractions manifest his slack
of moral principle. In simple term, he is dishonest.

Neither can petitioner find reliance on the policy of social justice. As aptly held by this Court in the same case of Philippine Long
Distance Telephone v. NLRC and Abucay,10 "[T]hose who invoke social justice may do so only if their hands are clean and their motives
blameless x x x." Here, petitioner failed to measure up to such requirement.

In sum, we find that petitioner was legally dismissed from employment and is, therefore, not entitled to reinstatement or an award of
separation pay or other benefits. Unfortunately, respondent company did not interpose an appeal to this Court. Hence, no affirmative
relief can be extended to it. A party in a case who did not appeal is not entitled to any affirmative relief. 11 Thus, respondent company
has to comply with the Appellate Court's mandate to grant petitioner his separation pay.

WHEREFORE, the petition is DENIED. Costs against petitioner.

SO ORDERED.

Panganiban, Corona, and Carpio Morales*, JJ., concur.

c. Phil. Geothermal Inc. v. NLRC, GR No 106370, September 8, 1994

G.R. No. 106370 September 8, 1994

PHILIPPINE GEOTHERMAL, INC., petitioner,

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

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

Fidel Angelito I. Arias for private respondent.

PADILLA, J.:

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

The relevant facts of this case are as follows:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

xxx xxx xxx

Any absences you may incur in the future will be subject to our existing policy on leaves and absences. . . .  2

Since Alvarez failed to report for work from 2 to 10 January 1990, petitioner again wrote him stating:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

As a consequence, petitioner terminated Alvarez, employment on

9 March 1990.

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

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

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

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

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

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

RESPONDENT COMMISSION ABUSED ITS DISCRETION AND ACTED BEYOND ITS JURISDICTION BY ENTERTAINING AN APPEAL
THAT WAS FILED OUT OF TIME

EVEN ON THE MERITS OF THE CASE, RESPONDENT COMMISSION ABUSED ITS DISCRETION BY FAILING TO APPRECIATE
OVERWHELMING EVIDENCE UNIFORMLY SHOWING THAT THE TERMINATION OF MR. ALVAREZ WAS VALID AND JUSTIFIED.  9

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

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

We will not disturb this factual finding of the NLRC.

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

the desired objective of deciding the case on the merits demand that the appeal be given due course."

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

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

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

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

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

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

Petitioner, in its fourth and last warning letter to Alvarez, was willing to allow him to resume his work in spite of the eighteen (18) days he went on AWOL. It
was made clear, however, that should private respondent still fail to report for work on 5 March 1990, his employment would be terminated.

Private respondent failed to report for work on 5 March 1990. Petitioner validly dismissed him not only for violation of company policy but also for violation
of Section 282(c) of the Labor Code aforecited.

While it is true that compassion and human consideration should guide the disposition of casses involving termination of employment since it affects one's
source or means of livelihood, it should not be overlooked that the benefits accorded to labor do not include compelling an employer to retain the services
of an employee who has been shown to be a gross liability to the employer. The law in protecting the rights of the employees authorizes neither oppression
nor self-destruction of the employer.   It should be made clear that when the law tilts the scale of justice in favor of labor, it is but a recognition of the
12

inherent economic inequality between labor and management. The intent is to balance the scale of justice; to put the two parties on relatively equal
positions. There may be cases where the circumstances warrant favoring labor over the interests of management but never should the scale be so tilted if
the result is an injustice to the employer. Justitia nemini neganda est (Justice is to be denied to none).
In Cando v. National Labor Relations Commission   the Court awarded separation pay to an employee who was terminated for unuathorized absences.
13

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

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

SO ORDERED.

d. PNCC v. NLRC, GR No. 83320, Feb. 9, 1989

G.R. No. 83320 February 9, 1989

PHILIPPINE NATIONAL CONSTRUCTION CORPORATION (formerly CONSTRUCTION AND DEVELOPMENT CORPORATION OF THE
PHILIPPINES), petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (Fourth Division) and CDCP TOLLWAYS OPERATION EMPLOYEES AND WORKERS UNION-CLLC
IN BEHALF OF DOMINGO MANREZA, respondents.

Apolo, Añasco & Associates for petitioners.

Nicolas and Nicolas Law Offices for private respondents.

GRIÑO-AQUINO, J.:

This is a petition for certiorari filed by petitioner Philippine National Construction Corporation seeking to modify the decision dated November 4, 1987, of
the National Labor Relations Commission awarding to private respondent Manreza separation pay despite its finding that he was legally dismissed.

Domingo Manreza was hired by the CDCP in 1972, as a janitor and later promoted to Leadsman, having the main duty of removing and/or changing
damaged flexbeams on the expressway. On May 24, 1983, the North Luzon Expressway (NLE) Security Services Investigation and. Intelligence Unit
discovered NLE flexbeams in the house of Alfonso Eusebio in Sipat, Plaridel, Bulacan, and also in the house of Nene Enriquez. Both declared that the
items were deposited there by Manreza and his companions. On June 23, 1983, Foreman Salvador Bautista sent a memo to Manreza asking him to
explain within 48 hours why no disciplinary action should be taken against him for alleged violations of the CDCP Code of Employee Discipline.
Complainant explained in writing that he and his men merely deposited the NLE properties. in the homes of Eusebio and Enriquez temporarily. The case
was referred to the Union pursuant to the CBA, which concluded that complainant was merely negligent and recommended suspension for ten to twenty
days as penalty. Respondent conducted a separate investigation. On October 7, 1983, the NLE administrative officer issued a memorandum finding the
complainant guilty of stealing or unauthorized taking of company property, a violation of Section 7 (a) (10) of the CDCP Code of Employee Discipline. It
placed the complainant under preventive suspension for thirty (30) days, and thereafter terminated his employment.

Manreza filed a complaint for unfair labor practice and illegal dismissal, with a prayer for backwages, moral damages, exemplary damages, and attorney's
fees. After due hearing, Labor Arbiter Ireneo Bernardo directed the petitioner to reinstate Manreza to his former or equivalent position without loss of
seniority rights and other benefits, but without backwages. The complaint for unfair labor practice and other claims were dismissed.

Petitioner appealed to the National Labor Relations Commission, which set aside the Labor Arbiter's decision and entered a new one, "finding the
dismissal of the complainant (Manreza) to be valid and with just cause. However, in the spirit of compassionate justice, the respondent-appellant is hereby
ordered to pay one (1) month pay for every year of service. The complainant for unfair labor practice and other claims, being unsubstantiated, are
dismissed for lack of merit." (P. 28, Rollo).

Not satisfied with that decision, PNCC filed a petition for certiorari in this Court, alleging that the NLRC gravely abused its discretion in awarding separation
pay to the employee despite its own finding that he was legally dismissed for cause.

The petition is meritorious.

While it is true that in some earlier cases, We held that employees dismissed for cause are nevertheless entitled to separation pay on the ground of social
and compassionate justice (Firestone Tire & Rubber Co. of the Philippines vs. Lariosa, 148 SCRA 187; Soco vs. Mercantile Corp. of Davao, 148 SCRA
526; Filipro, Inc. vs. NLRC, 145 SCRA 123), that doctrine was abandoned by this Court in the recent case of Philippine Long Distance Telephone Co. vs.
NLRC and Marilyn Bucay, G.R. No. 80609, August 23, 1988, where We held that:

... henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly
dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is,
for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the
employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called,
on the ground of social justice. (Emphasis supplied.)

xxx xxx xxx

The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best it may
mitigate the penalty but it certainly will not condone the offense. Compassion for the poor is an imperative of every humane society but only
when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot be permitted to be the refuge of scoundrels any
more than can equity be an impediment to the punishment of the guilty. Those who invoke social justice may do so only if their hands are
clean and their motives blameless and not simply because they happen to be poor. This great policy of our Constitution is not meant for the
protection of those who have proved they are not worthy of it, like the workers who have tainted the cause of labor with the blemishes of
their own character.

Since Manreza was found guilty of dishonesty for having stolen company property and was dismissed for cause, he is not entitled to separation pay.

WHEREFORE, the petition is granted. The decision of the NLRC is modified by deleting the award of separation pay to the private respondent Domingo
Manreza.

SO ORDERED.

3. Balancing Interest

a. Fuentes v. NLRC, GR No 110017, Januray 2, 1997

FIRST DIVISION

[G.R. No. 110017. January 2, 1997.]

RODOLFO FUENTES, RAINERIO DURON, JULIET VISTAL, ELENA DELLOMES, LEODEGARIO BALHINON, ROGELIO MALINAO,
LILY BASANEZ, MALIZA ELLO, VILMA NOQUERA, JESSICA CASTILLO, ROGELIO TABLADILLO, REMELDA VISCAYA,
MELANIA VISCAYA, CELIA LUBRICO, EDITH LLACUNA, ELPIDIO FERRER, NORBERTO MIRANDA, FERNANDO MIRANDA,
CORDIO DUMAY, LEONARDO DELA VEGA, ISIDRO ALIDO, AQUINO MACABEHA, LEOPOLDO ABAA, PAULINO ASIS, JR.,
REYNALDO BLANCO, MADILYN FABON, MARCIANA OSOK, BEBIANO OSOK, FRANCISCO SEMULTA, MARCIA LLAMES,
PRINCIPE DANIEL, MARIA BAYA, NENITA RASONABLY, SORIANO PENALOSA, JOSE PENALOSA, RODOLFO VILLAR,
REMEGIAS DEMINGOY, TEODORO TUGOGON, DIONISIO APOLINARIO, EDYING DE LA CRUZ, RODOLFO BUTAUAN, CRISPIN
FABON, ARCADIO FABON, NENITA SARDINOLA, ALEX LICAYAN, MARIO DAL, BADON EDUARDO, FELISA VILLAREL, EMILY
GARAN, ROGELIO GARAN, RODOLFO COLITE, RODOLFO MENIANO, ROMERO TERRY, ZOILO VALLEJOS, VIRGINIA
BANDERA, BLANDINA LUNA, FLAXIANA CARLON, CRESENCIO CARLON, NOTARTE LEONARDA, EFREN CANTERE, ROWENA
CAGUMAY, ALFONSO PARAJES, VIOLETA MONTECLAR, NESTOR ALLADO, JR., APOLONIO CULATAS, LANNIE CAPARAS,
ANGELICO NUNEZ, JR., NICOLAS CANAL, HERMOGENA TAGLOCOP, ALEJO BAUMBAD, CARLITO DE LA PENA, AMANCIO
ABOYLO, JERRY PARALES, LYDIA ALLADO, AGAPITO ODAL, MAGNO BARIOS, FLORENDO MARIANO, SOLATORIO
BONIFACIO, RENE DEMINGOY, FELIMON ADORNO, VIRGILLO INOCENCIO, RUEL INOCENCIO, AVELINO LUNA, ALLAN
MARCELLANA, FELIX SANCHEZ, AVELINO PANDI, VILLA SORIO, NOEL LAS PENAS, FRANCISCO GARDO, ROGELIO
CULLABA, GEORGE RAGAR, CARMELITO CABRIADAS, ANANIAS MELLORIA, ALFONSO ALLADO, MARLINO MARTINEZ, LINO
MARTINEZ, ERNESTO OLARAN, JOHNNY JOSAYAN, ANECITO SOBIONO, MARGARITO DUMALAGAN, FRANCISCO CABALES,
FELIX ROCERO, PABLITO DAPAR, FRANCISCA CABALHIN, FORTUNATA BAUMBAD, CARMEN RADAY, NICOLAS TAMON,
REYNALDO CANTORIA, ELMER NAPONE, ANTONIO VALLAR, BERNADITH TOLOZA, EMETERIA FERRER, CLANICA CABALES,
CLAUDIO OJUYLAN, ERLINDA BLANCO, ROSITA DURON, FRANCISCA ADLAWON, CARDINAL MAGLISANG, JOVEN ASIS,
JOSE FLORES, ALICIA FLORES, JULIETO ADORNO, LORENZO CANINES, ISAAC CELLASAY, ANDRES INDIABLE, ARSENIO
DURON, NARCISA MALASPINA, ROQUE SUBAAN, GRACE DURON, JAIME BALMORIA, PEDRO PECASALES, PRIMITORAGAS
and GRACE GOMA, Petitioners, v. NATIONAL LABOR RELATIONS COMMISSION, 5TH DIVISION, CAGAYAN DE ORO CITY,
AGUSAN PLANTATION INC., AND/OR CHANG CHEE KONG, Respondents.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; EMPLOYMENT; RETRENCHMENT; REQUISITES FOR VALIDITY. — Under Art. 283
retrenchment may be valid only when the following requisites are met: (a) it is to prevent losses; (b) written notices were served on
the workers and the Department of Labor and Employment (DOLE) at least one (1) month before the effective date of retrenchment;
and (c) separation pay is paid to the affected workers.

2. ID.; ID.; ID.; ID.; BUSINESS LOSSES, MUST BE SUFFICIENTLY PROVED; CLAIM NOT PROVED IN CASE AT BAR. — The closure of a
business establishment is a ground for the termination of the services of an employee unless the closing is for the purpose of
circumventing pertinent provisions of the Labor Code. But while business reverses can be a just cause for terminating employees, they
must be sufficiently proved by the employer. There is no question that an employer may reduce its work force to prevent losses.
However, these losses must be serious, actual and real. Otherwise, this ground for termination of employment would be susceptible to
abuse by scheming employers who might be merely feigning losses in their business ventures in order to ease out employees. Indeed,
private respondents failed to prove their claim of business losses. What they submitted to the Labor Arbiter were mere self-serving
documents and allegations. Private respondents never adduced evidence which would show clearly the extent of losses they suffered as
a result of lack of capital funding, which failure is fatal to their cause.

3. ID.; ID.; ID.; ID.; ID.; ONE MONTH NOTICE, MANDATORY; REQUIREMENT NOT COMPLIED WITH IN CASE AT BAR. — The one-
month notice of retrenchment filed with the DOLE and served on the workers before the intended date thereof is mandatory. Private
respondents failed to comply with this requisite. The earliest possible date of termination should be 12 October 1990 or one (1) month
after notice was sent to DOLE unless the notice of termination was sent to the workers later than the notice to DOLE on 12 September
1990, in which case, the date of termination should be at least one (1) month from the date of notice to the workers. Petitioners were
terminated less than a month after notice was sent to DOLE and to each of the workers.

4. ID.; ID.; ID.; ID.; MONETARY AWARDS AVAILABLE. — We uphold the monetary award of the Labor Arbiter for: (a) the balance of
the separation pay benefits of petitioners equivalent to fifteen (15) days for every year of service after finding that reinstatement is no
longer feasible under the circumstances, and (b) the salary differentials for complainants who were relieved during the pendency of the
case before the Labor Arbiter and full back wages for the rest of the complainants. This is in accord with Art. 279 of the Labor Code as
amended by R.A. 6715 under which petitioners who were unjustly dismissed from work shall be entitled to full back wages inclusive of
allowances and other benefits or their monetary equivalent computed from the time their compensation was withheld up to the date of
this decision.

DECISION

BELLOSILLO, J.:

The State is bound under the Constitution to afford full protection to labor and when conflicting interests of labor and capital are to be
weighed on the scales of social justice the heavier influence of the latter should be counterbalanced with the sympathy and compassion
the law accords the less privileged workingman. This is only fair if the worker is to be given the opportunity and the right to assert and
defend his cause not as a subordinate but as part of management with which he can negotiate on even plane. Thus labor is not a mere
employee of capital but its active and equal partner. 1

Petitioners, numbering seventy-five (75) in all, seek to set aside the decision of respondent National Labor Relations Commission dated
27 November 1992 reversing that of the Labor Arbiter which granted their claims, for having been rendered with grave abuse of
discretion amounting to lack or excess of jurisdiction.

Petitioners were regular employees of private respondent Agusan Plantations, Inc., which was engaged in the operation of a palm tree
plantation in Trento, Agusan del Sur, since September 1982. Claiming that it was suffering business losses which resulted in the
decision of the head office in Singapore to undertake retrenchment measures, private respondent sent notices of termination to
petitioners and the Department of Labor and Employment (DOLE).

On 31 October 1990 petitioners filed with the DOLE office in Cagayan de Oro City a complaint for illegal dismissal with prayer for
reinstatement, backwages and damages against private respondent Agusan Plantation, Inc., and/or Chang Chee Kong. In their answer
respondents denied the allegations of petitioners and contended that upon receipt of instructions from the head office in Singapore to
implement retrenchment, private respondents conducted grievance conferences or meetings with petitioners’ representative labor
organization, the Association of Trade Unions through its national president Jorge Alegarbes, its local president and its board of
directors. Private respondents also contended that the 30-day notices of termination were duly sent to petitioners.
After both parties submitted their position papers articulating their respective theses, the Labor Arbiter rendered a decision on 27 May
1992 in favor of petitioners ordering private respondents to pay the former separation pay equivalent to fifteen (15) days pay for every
year of service plus salary differentials and attorney’s fees.

On appeal by respondents to the National Labor Relations Commission, the decision of the Labor Arbiter was reversed on 27 November
1992.

Petitioners elevated their plight to this Court on a special civil action for certiorari under Rule 65 of the Rules of Court alleging that
respondent NLRC gravely abused its discretion amounting to lack or excess of jurisdiction in ruling that petitioners were legally
terminated from their employment. They argued that their dismissal or retrenchment did not comply with the requirements of Art. 283
of the Labor Code.

We sustain petitioners. The ruling of the Labor Arbiter that there was no valid retrenchment is correct. Article 283 of the Labor Code
clearly states: chanrob1es virtual 1aw library

Art 283. Closure of establishment and reduction of personnel. — The employer may also terminate the employment of any employee
due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of
the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of the title, by serving a written
notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. In case of
termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation
pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In
case of retrenchment to prevent losses and in case of closure or cessation of operations of establishment or undertaking not due to
serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2)
month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year.

Under Art. 283 therefore retrenchment may be valid only when the following requisites are met: (a) it is to prevent losses; (b) written
notices were served on the workers and the Department of Labor and Employment (DOLE) at least one (1) month before the effective
date of retrenchment; and, (c) separation pay is paid to the affected workers.

The closure of a business establishment is a ground for the termination of the services of an employee unless the closing is for the
purpose of circumventing pertinent provisions of the Labor Code. But while business reverses can be a just cause for terminating
employees, they must be sufficiently proved by the employer. 2

In the case before us, private respondents merely alleged in their answer and position paper that after their officials from the head
office had visited the plantation respondent manager Chang Chee Kong received a letter from the head office directing him to proceed
immediately with the termination of redundant workers and staff, and change the operations to contract system against direct
employment. They also alleged that after five (5) years of operations, the return of investments of respondent company was meager;
that the coup attempt in August 1987 as well as that of December 1989 aggravated the floundering financial state of respondent
company; that the financial losses due to lack of capital funding resulted in the non-payment of long-overdue accounts; that the
untimely cut in the supply of fertilizers and manuring materials and equipment parts delayed the payment of salaries and the
implementation of weekly job rotations by the workers. Except for these allegations, private respondents did not present any other
documentary proof of their alleged losses which could have been easily proven in the financial statements which unfortunately were
not shown. chanroblesvirtual|awlibrary

There is no question that an employer may reduce its work force to prevent losses. However, these losses must be serious, actual and
real. 3 Otherwise, this ground for termination of employment would be susceptible to abuse by scheming employers who might be
merely feigning losses in their business ventures in order to ease out employees. 4

Indeed, private respondents failed to prove their claim of business losses. What they submitted to the Labor Arbiter were mere self-
serving documents and allegations. Private respondents never adduced evidence which would show clearly the extent of losses they
suffered as a result of lack of capital funding, which failure is fatal to their cause.

As regards the requirement of notices of termination to the employees, it is undisputed that the Notice of Retrenchment was submitted
to the Department of Labor and Employment on 12 September 1990. 5 The findings of both the Labor Arbiter and NLRC show that
petitioners were terminated on the following dates in 1990 after they received their notices of termination, to wit:chanrob1es virtual 1aw library

Name of Employee Date of Notice of Effectivity of

Termination Termination

1. Noquera, Vilma 22 Sept. 25 Sept.

2. Dumalagan, Margarito 22 Sept. 30 Sept.

3. Osok, Marciano 20 Sept. 30 Sept.

4. Abaa, Leopoldo 01 Sept. 30 Sept.

5. Aboylo, Amancio 01 Sept. 30 Sept.

6. Allado, Nestor Jr. 01 Sept. 30 Sept.

7. Bandera, Verginia 01 Sept. 30 Sept.

8. Basanez, Lily 01 Sept. 30 Sept.

9. Baumbad, Alejo 01 Sept. 30 Sept.

10. Blanco, Myrna 01 Sept. 30 Sept.

11. Blanco, Reynaldo 01 Sept. 30 Sept.

12. Canal, Marieto 01 Sept. 30 Sept.

13. Fabon, Madilyn 01 Sept. 30 Sept.

14. Ferrer, Elpidio 01 Sept. 30 Sept.

15. Meniano, Rodolfo 01 Sept. 30 Sept.

16. Nunez, Angelico 01 Sept. 30 Sept.

17. Osok, Bebiano 01 Sept. 30 Sept.

18. Penaloga, Jose Jr. 01 Sept. 30 Sept.

19. Taglocop, Hermogena 01 Sept. 30 Sept.

20. Allado, Lydio 22 Aug. 30 Sept.

21. Baya, Maria 22 Aug. 30 Sept.

22. Carlon, Flaviana 22 Aug. 30 Sept.

23. Carlon, Cresencio 22 Aug. 30 Sept.

24. Culaba, Rogelio 22 Aug. 30 Sept.

25. Cabriades, Carmelito 22 Aug. 30 Sept.

26. Dellomes, Elma 22 Aug. 30 Sept.

27. Fabon, Arcadio 22 Aug. 30 Sept.

28. Gordo, Francisco 22 Aug. 30 Sept.

29. Inocencio, Virgilio 22 Aug. 30 Sept.

30. Inocencio, Ruel 22 Aug. 30 Sept.

31. Luna, Blandina 22 Aug. 30 Sept.

32. Luna, Avelino 22 Aug. 30 Sept.

33. Lubrico, Celia 22 Aug. 30 Sept.

34. Monteclar, Violeta 22 Aug. 25 Sept.

35. Macabecha, Aquino 22 Aug. 25 Sept.

36. Melloria, Ananian 22 Aug. 25 Sept.

37. Malinao, Rogelio 22 Aug. 25 Sept.

38. Leonarda, Notarte 22 Aug. 25 Sept.

39. Parejas, Jerry 22 Aug. 25 Sept.

40. Parejas, Alfonso 22 Aug. 25 Sept.

41. Sardinola, Alfonso 22 Aug. 25 Sept.

42. Solaterio, Bonifacio 22 Aug. 25 Sept.

Culled from the above data, the termination of petitioners could not have validly taken effect either on 25 or 30 September 1990. The
one-month notice of retrenchment filed with the DOLE and served on the workers before the intended date thereof is mandatory.
Private respondents failed to comply with this requisite. The earliest possible date of termination should be 12 October 1990 or one (1)
month after notice was sent to DOLE unless the notice of termination was sent to the workers later than the notice to DOLE on 12
September 1990, in which case, the date of termination should be at least one (1) month from the date of notice to the workers.
Petitioners were terminated less than a month after notice was sent to DOLE and to each of the workers.

We agree with the conclusion of the Labor Arbiter that the termination of the services of petitioners was illegal as there was no valid
retrenchment. Respondent NLRC committed grave abuse of discretion in reversing the findings of the Labor Arbiter and ruling that
there was substantial compliance with the law. This Court firmly holds that measures should be strictly implemented to ensure that
such constitutional mandate on protection to labor is not rendered meaningless by an erroneous interpretation of applicable laws.

We uphold the monetary award of the Labor Arbiter for: (a) the balance of the separation pay benefits of petitioners equivalent to
fifteen (15) days for every year of service after finding that reinstatement is no longer feasible under the circumstances, and (b) the
salary differentials for complainants who were relieved during the pendency of the case before the Labor Arbiter and full back wages
for the rest of the complainants. This is in accord with Art. 279 of the Labor Code as amended by R.A. 6715 under which petitioners
who were unjustly dismissed from work shall be entitled to full back wages inclusive of allowances and other benefits or their monetary
equivalent computed from the time their compensation was withheld up to the date of this decision. chanroblesvirtuallawlibrary:red

WHEREFORE, the Petition is GRANTED. The decision of the Labor Arbiter of 27 March 1992 granting petitioners their claim for the
balance of their separation pay benefits equivalent to fifteen (15) days for every year of service, and salary differentials for
complainants who were relieved during the pendency of the case before the Labor Arbiter, and full back wages for the rest of the
complainants is REINSTATED. Consequently, the decision of the National Labor Relations Commission dated 27 September 1992 is
REVERSED and SET ASIDE.

SO ORDERED.
III. Other Constitutional Provisions

1. Article II 1987 Constitution Sec 9, 11, 13, 14, 18, and 20

Section 9. The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the
people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved
quality of life for all.
Section 11. The State values the dignity of every human person and guarantees full respect for human rights.
Section 13. The State recognizes the vital role of the youth in nation-building and shall promote and protect their physical, moral,
spiritual, intellectual, and social well-being. It shall inculcate in the youth patriotism and nationalism, and encourage their involvement in
public and civic affairs.

Section 14. The State recognizes the role of women in nation-building, and shall ensure the fundamental equality before the law of
women and men.

Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare.
Section 20. The State recognizes the indispensable role of the private sector, encourages private enterprise, and provides incentives to needed
investments.
2. Article III 1987 Constitution Sec 1, 4, and 8

SECTION 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the
equal protection of the laws.

SECTION 4. No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the people
peaceably to assemble and petition the government for redress of grievances.

SECTION 8. The right of the people, including those employed in the public and private sectors, to form unions, associations, or
societies for purposes not contrary to law shall not be abridged.

3. Article XIII 1987 Constitution Sec 1, 2, and 14

Social Justice and Human Rights

SECTION 1. The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people
to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and
political power for the common good.

To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments.

SECTION 2. The promotion of social justice shall include the commitment to create economic opportunities based on freedom of
initiative and self-reliance.

Women

SECTION 14. The State shall protect working women by providing safe and healthful working conditions, taking into account their
maternal functions, and such facilities and opportunities that will enhance their welfare and enable them to realize their full potential in
the service of the nation.

c. Civil Code Provisions on Labor

i. Arts. 1700-1703

SECTION 2. - Contract of Labor (n)

Art. 1700. The relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to
the common good. Therefore, such contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages,
working conditions, hours of labor and similar subjects.

Art. 1701. Neither capital nor labor shall act oppressively against the other, or impair the interest or convenience of the public.

Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer.

Art. 1703. No contract which practically amounts to involuntary servitude, under any guise whatsoever, shall be valid.

1. Principle of non-oppression

d. Labor Code – Preliminary Title

i. Declaration of Policy

1. Protection to Labor

2. Management Prerogative

a. Rural Bank of Cantilan v. Julve, GR No 169750, February 27, 2007

G.R. No. 169750             February 27, 2007

RURAL BANK OF CANTILAN, INC., and WILLIAM HOTCHKISS III, Petitioners,

vs.
ARJAY RONNEL H. JULVE, Respondent.

DECISION

SANDOVAL-GUTIERREZ, J.:

For our resolution is the instant Petition for Review on Certiorari assailing the Decision 1 of the Court of Appeals (Twenty Second Division, Cagayan de Oro
City) dated September 23, 2004 in CA-G.R. SP No. 77206 and its Resolution of September 6, 2005.

The facts of this case as found by the Court of Appeals are:

On August 1, 1997, the Rural Bank of Cantilan, Inc., petitioner, hired respondent as a management trainee. Later, he was appointed as planning and
marketing officer.
On June 18, 2001, William Hotchkiss III (also a petitioner), president of petitioner bank, issued a memorandum addressed to all its branch managers
informing them of the abolition of the positions of planning and marketing officer and remedial officer; that this was undertaken in accordance with the
bank’s Personnel Streamlining Program; and that the operations officer shall absorb the functions of the abolished offices.

On July 18, 2001, Hotchkiss sent respondent a memorandum stating that he has been appointed bookkeeper I at the bank’s branch in Madrid, Surigao del
Sur effective immediately with the same salary corresponding to his old position. Initially, respondent agreed to accept the appointment, but eventually, he
changed his mind and made the following notation on Hotchkiss’ memorandum, thus:

I am withdrawing my signature on this appointment because I feel that this is a demotion (on the position itself and allowances) and not a lateral transfer as
what the President told me yesterday. I believe I do not deserve a demotion.

Thank you.

On August 9, 2001, Hotchkiss appointed respondent as bookkeeper I and assistant branch head of the Madrid branch. However, he did not report for work.

On September 11, 2001, Hotchkiss directed respondent to explain why he should not be sanctioned for his failure to assume his new post at the Madrid
branch.1awphi1.net

The following day, respondent submitted his written explanation, which partly reads:

I regret to say that I am not accepting the position of Asst. Branch Head of RBCI-Madrid Branch for the very reason that the papers were not left with me
by the Admin. Officer after she let me read them. Considering that Asst. Branch Head is a newly-created position, I requested her for a copy of the said
papers first so I can thoroughly study them before making my decision. But she immediately took them back from me after I told her about this.

On September 14, 2001, respondent filed with the Regional Arbitration Branch No. XIII, National Labor Relations Commission (NLRC), Butuan City, a
complaint for constructive dismissal against petitioners, docketed as NLRC Case No. RAB-13-09-00276-2001.

On January 14, 2002, the Labor Arbiter rendered a Decision, the dispositive portion of which is partly reproduced below:

WHEREFORE, premises considered, judgment is hereby entered:

1. Declaring complainant as constructively illegally dismissed;

2. Ordering respondents to reinstate complainant to his former or equivalent position without loss of seniority rights with full backwages from the
time his salary was withheld from him up to the time he is actually reinstated;

3. To pay complainant his partial backwages in the amount of ₱57,165.33 computed up to the date of this decision as follows:

A. BACKWAGES FROM 16 Oct 2001 to 15 Jan 2002 (4 months) (Partial)

₱12,192.50 + 1,000 x 4 = ₱52,768.00

Plus ₱52,768/13 (13th mo. Pay) = ₱4,397.33

TOTAL BACKWAGES ₱57,165.33

and

4. Ordering respondents to pay complainant moral and exemplary damages in the total amount of ₱100,000.00 plus ₱15,718.53, as attorney’s fees which
is equivalent to 10% of the total monetary award.

Complainant’s other claims are dismissed for lack of merit.

SO ORDERED.

On appeal by petitioners, the NLRC, in its Resolution dated November 19, 2002, set aside the Labor Arbiter’s judgment, thus:

WHEREFORE, foregoing premises considered, the appealed decision is Vacated and Set Aside. In lieu thereof, a new judgment is rendered
dismissing the above-entitled case for lack of merit.

SO ORDERED.

The NLRC held that respondent’s reassignment is not a demotion. There was neither diminution in functions and pay. Thus, he was not
constructively dismissed from employment. Moreover, respondent himself admitted that he decided not to report for work at his new station.
Yet, he continued receiving his salaries and allowances.

Respondent filed a motion for reconsideration but it was denied by the NLRC.

Respondent then filed with the Court of Appeals a petition for certiorari, docketed as CA-G.R. SP No. 77206.

On September 23, 2004, the Court of Appeals rendered its Decision granting the petition, thus:

WHEREFORE, the instant Petition is hereby GRANTED. The NLRC Resolutions dated 19 November 2002 and 26 February 2003 are hereby
ANNULLED and SET ASIDE. The Labor Arbiter’s Decision dated 14 January 2002 is hereby REINSTATED.

SO ORDERED.

Petitioners filed a motion for reconsideration. However, it was denied by the appellate court in its Resolution dated September 6, 2005.

The only issue before us is whether the Court of Appeals erred in holding that respondent was constructively dismissed from employment.

In resolving this issue, we rely on the following guide posts:

Under the doctrine of management prerogative, every employer has the inherent right to regulate, according to his own discretion and
judgment, all aspects of employment, including hiring, work assignments, working methods, the time, place and manner of work, work
supervision, transfer of employees, lay-off of workers, and discipline, dismissal, and recall of employees. 2 The only limitations to the exercise of
this prerogative are those imposed by labor laws and the principles of equity and substantial justice.
While the law imposes many obligations upon the employer, nonetheless, it also protects the employer’s right to expect from its employees not
only good performance, adequate work, and diligence, but also good conduct and loyalty.3 In fact, the Labor Code does not excuse employees
from complying with valid company policies and reasonable regulations for their governance and guidance.

Concerning the transfer of employees, these are the following jurisprudential guidelines: (a) a transfer is a movement from one position to
another of equivalent rank, level or salary without break in the service or a lateral movement from one position to another of equivalent rank or
salary;4 (b) the employer has the inherent right to transfer or reassign an employee for legitimate business purposes; 5 (c) a transfer becomes
unlawful where it is motivated by discrimination or bad faith or is effected as a form of punishment or is a demotion without sufficient
cause;6 (d) the employer must be able to show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee. 7

Constructive dismissal is defined as "quitting when continued employment is rendered impossible, unreasonable, or unlikely as the offer of
employment involves a demotion in rank and diminution of pay."8

In light of the above guidelines, we agree with the NLRC in ruling that respondent was not constructively dismissed from employment.

Respondent contends that the abolition of his position as planning and marketing officer and his appointment as bookkeeper I and assistant
branch head of the Madrid Branch is a demotion. However, a look at the functions of his new position shows the contrary. The bookkeeper and
assistant branch head is not only charged with preparing financial reports and monthly bank reconciliations, he is also the head of the
Accounting Department of a branch. Under any standard, these are supervisory and administrative tasks which entail great responsibility.
Moreover, respondent’s transfer did not decrease his pay.

Nor was respondent’s transfer motivated by ill-will or prejudice on the part of petitioners. His position was not the only one abolished pursuant
to the bank’s Personnel Streamlining Program. We recall that the position of remedial officer was likewise abolished. Petitioners’ reason was to
acquire savings from the salaries it would pay to full-time personnel in these positions.

Finally, we note that despite respondent’s refusal to accept the new appointment, petitioners did not dismiss him. Rather, it was he who opted
to terminate his employment when he purposely failed to report for work.

In fine, we hold that the Court of Appeals erred when it concluded that respondent was constructively dismissed from employment.

WHEREFORE, we GRANT the petition and REVERSE the Decision of the Court of Appeals in CA-G.R. SP No. 77206. The Resolutions of the
NLRC dated November 19, 2002 and February 26, 2003, dismissing respondent’s complaint are AFFIRMED.

SO ORDERED.

ANGELINA SANDOVAL GUTIERREZ

Associate Justice

WE CONCUR:

REYNATO S. PUNO
Chief Justice
Chairperson

(On official leave)

RENATO C. CORONA ADOLFO S. AZCUNA
Associate Justice Asscociate Justice

CANCIO C. GARCIA
Associate Justice

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO
Chief Justice

ii. Constuction in Favor of Labor

1. Meralco v. NLRC, GR No. 78763, July 12, 1989

G.R. No. 78763 July 12,1989

MANILA ELECTRIC COMPANY, petitioner,

vs.
THE NATIONAL LABOR RELATIONS COMMISSION, and APOLINARIO M. SIGNO, respondents.

Angara, Abello, Concepcion, Regala & Cruz for petitioner.

Dominador Maglalang for private respondent.

MEDIALDEA, J.:

This is a petition for certiorari under Rule 65 of the Rules of Court seeking the annulment of the resolution of the respondent National Labor Relations
Commission dated March 12, 1987 (p. 28, Rollo) in NLRC Case No. NCR-8-3808-83, entitled, "Apolinario M. Signo, Complainant, versus Manila Electric
Company, Respondents", affirming the decision of the Labor Arbiter which ordered the reinstatement of private respondent herein, Apolinario Signo, to his
former position without backwages.

The antecedent facts are as follows:

Private respondent Signo was employed in petitioner company as supervisor-leadman since January 1963 up to the time when his services were
terminated on May 18, 1983.

In 1981, a certain Fernando de Lara filed an application with the petitioner company for electrical services at his residence at Peñafrancia Subdivision,
Marcos Highway, Antipolo, Rizal. Private respondent Signo facilitated the processing of the said application as well as the required documentation for said
application at the Municipality of Antipolo, Rizal. In consideration thereof, private respondent received from Fernando de Lara the amount of P7,000.00.
Signo thereafter filed the application for electric services with the Power Sales Division of the company.

It was established that the area where the residence of de Lara was located is not yet within the serviceable point of Meralco, because the place was
beyond the 30-meter distance from the nearest existing Meralco facilities. In order to expedite the electrical connections at de Lara's residence, certain
employees of the company, including respondent Signo, made it appear in the application that the sari-sari store at the corner of Marcos Highway, an
entrance to the subdivision, is applicant de Lara's establishment, which, in reality is not owned by the latter.

As a result of this scheme, the electrical connections to de Lara's residence were installed and made possible. However, due to the fault of the Power
Sales Division of petitioner company, Fernando de Lara was not billed for more than a year.

Petitioner company conducted an investigation of the matter and found respondent Signo responsible for the said irregularities in the installation. Thus, the
services of the latter were terminated on May 18, 1983.

On August 10 1983, respondent Signo filed a complaint for illegal dismissal, unpaid wages, and separation pay.

After the parties had submitted their position papers, the Labor Arbiter rendered a decision (p. 79, Rollo) on April 29, 1985, which stated, inter alia:

Verily, complainant's act of inducing the Meralco employees to effectuate the installation on Engr. de Lara's residence prejudiced the
respondent, and therefore, complainant himself had indeed became a participant in the transactions, although not directly, which turned out
to be illegal, not to mention that some of the materials used therein belongs to Meralco, some of which were inferior quality. . . .

While complainant may deny the violation, he cannot do away with company's Code on Employee Discipline, more particularly Section 7,
par. 8 and Section 6, par. 24 thereof However, as admitted by the respondent, the infraction of the above cited Code is punishable by
reprimand to dismissal."

... . And in this case, while considering that complainant indeed committed the above-cited infractions of company Code of Employee
Discipline, We shall also consider his records of uninterrupted twenty (20) years of service coupled with two (2) commendations for
honesty. Likewise, We shall take note that subject offense is his first, and therefore, to impose the extreme penalty of dismissal is certainly
too drastic. A penalty short of dismissal is more in keeping with justice, and adherence to compassionate society.

WHEREFORE, respondent Meralco is hereby directed to reinstate complainant Apolinario M. Signo to his former position as Supervisor
Leadman without backwages, considering that he is not at all faultless. He is however, here warned, that commission of similar offense in
the future, shall be dealt with more severely.

SO ORDERED.

Both parties appealed from the decision to the respondent Commission. On March 12, 1987, the respondent Commission dismissed both appeals for lack
of merit and affirmed in toto the decision of the Labor Arbiter.

On June 23, 1987, the instant petition was filed with the petitioner contending that the respondent Commission committed grave abuse of discretion in
affirming the decision of the Labor Arbiter. A temporary restraining order was issued by this Court on August 3, 1987, enjoining the respondents from
enforcing the questioned resolution of the respondent Commission.

The issue to resolve in the instant case is whether or not respondent Signo should be dismissed from petitioner company on grounds of serious
misconduct and loss of trust and confidence.

Petitioner contends that respondent Signo violated Sections 6 and 7 of the company's Code on Employee Discipline, which provide:

Section 6, Par. 24—Encouraging, inducing or threatening another employee to perform an act constituting a violation of this Code or of
company work, rules or an offense in connection with the official duties of the latter, or allowing himself to be persuaded, induced or
influenced to commit such offense.

Penalty—Reprimand to dismissal, depending upon the gravity of the offense.

Section 7, Par. 8—Soliciting or receiving money, gift, share, percentage or benefits from any person, personally or through the mediation of
another, to perform an act prejudicial to the Company.

Penalty—Dismissal. (pp. 13-14, Rollo)

Petitioner further argues that the acts of private respondent constituted breach of trust and caused the petitioner company economic losses resulting from
the unbilled electric consumption of de Lara; that in view thereof, the dismissal of private respondent Signo is proper considering the circumstances of the
case.

The power to dismiss is the normal prerogative of the employer. An employer, generally, can dismiss or lay-off an employee for just and authorized causes
enumerated under Articles 282 and 283 of the Labor Code. However, the right of an employer to freely discharge his employees is subject to regulation by
the State, basically in the exercise of its paramount police power. This is so because the preservation of the lives of the citizens is a basic duty of the State,
more vital than the preservation of corporate profits (Euro-Linea, Phil. Inc. v. NLRC, G.R. No. 75782, December 1, 1987,156 SCRA 78).

There is no question that herein respondent Signo is guilty of breach of trust and violation of company rules, the penalty for which ranges from reprimand
to dismissal depending on the gravity of the offense. However, as earlier stated, the respondent Commission and the Labor Arbiter found that dismissal
should not be meted to respondent Signo considering his twenty (20) years of service in the employ of petitioner, without any previous derogatory record,
in addition to the fact that petitioner company had awarded him in the past, two (2) commendations for honesty. If ever the petitioner suffered losses
resulting from the unlisted electric consumption of de Lara, this was found to be the fault of petitioner's Power Sales Division.

We find no reason to disturb these findings. Well-established is the principle that findings of administrative agencies which have acquired expertise
because their jurisdiction is confined to specific matters are generally accorded not only respect but even finality. Judicial review by this Court on labor
cases does not go so far as to evaluate the sufficiency of the evidence upon which the proper labor officer or office based his or its determination but is
limited to issues of jurisdiction or grave abuse of discretion (Special Events and Central Shipping Office Workers Union v. San Miguel Corporation, G.R.
Nos. L-51002-06, May 30,1983,122 SCRA 557).

This Court has held time and again, in a number of decisions, that notwithstanding the existence of a valid cause for dismissal, such as breach of trust by
an employee, nevertheless, dismissal should not be imposed, as it is too severe a penalty if the latter has been employed for a considerable length of time
in the service of his employer. (Itogon-Suyoc Mines, Inc. v. NLRC, et al., G.R. No. L- 54280, September 30,1982,117 SCRA 523; Meracap v. International
Ceramics Manufacturing Co., Inc., et al., G.R. Nos. L-48235-36, July 30,1979, 92 SCRA 412; Sampang v. Inciong, G.R. No. 50992, June 19,1985,137
SCRA 56; De Leon v. NLRC, G.R. No. L-52056, October 30,1980, 100 SCRA 691; Philippine Airlines, Inc. v. PALEA, G.R. No. L-24626, June 28, 1974, 57
SCRA 489).

In a similar case, this Court ruled:

 As repeatedly been held by this Court, an employer cannot legally be compelled to continue with the employment of a person who
admittedly was guilty of breach of trust towards his employer and whose continuance in the service of the latter is patently inimical to its
interest. The law in protecting the rights of the laborers, authorized neither oppression nor self- destruction of the employer.

However, taking into account private respondent's 'twenty-three (23) years of service which undisputedly is unblemished by any previous
derogatory record' as found by the respondent Commission itself, and since he has been under preventive suspension during the pendency
of this case, in the absence of a showing that the continued employment of private respondent would result in petitioner's oppression or
self-destruction, We are of the considered view that his dismissal is a drastic punishment. ... .

xxx xxx xxx

The ends of social and compassionate justice would therefore be served if private respondent is reinstated but without backwages in view
of petitioner's obvious good faith. (Itogon- Suyoc Mines, Inc. v. NLRC, et al., 11 7 SCRA 528)

Further, in carrying out and interpreting the Labor Code's provisions and its implementing regulations, the workingman's welfare should be the primordial
and paramount consideration. This kind of interpretation gives meaning and substance to the liberal and compassionate spirit of the law as provided for in
Article 4 of the New Labor Code which states that "all doubts in the implementation and interpretation of the provisions of the Labor Code including its
implementing rules and regulations shall be resolved in favor of labor" (Abella v. NLRC, G.R. No. 71812, July 30,1987,152 SCRA 140).

In view of the foregoing, reinstatement of respondent Signo is proper in the instant case, but without the award of backwages, considering the good faith of
the employer in dismissing the respondent.

ACCORDINGLY, premises considered, the petition is hereby DISMISSED and the assailed decision of the National Labor Relations Commission dated
March 12, 1987 is AFFIRMED. The temporary restraining order issued on August 3, 1987 is lifted.

SO ORDERED.

iii. Enforcing Agency

iv. Applicability of the Labor Code

1. Exceptions

a. Prudential Bank v. Reyes FR No 141093, February 20, 2001

G.R. No. 141093      February 20, 2001

PRUDENTIAL BANK and TRUST COMPANY, petitioner,

vs.
CLARITA T. REYES, respondent.

GONZAGA-REYES, J.:

Before the Court is a petition for review on certiorari of the Decision,1 dated October 15, 1999 of the Court of Appeals in C.A.-G.R. SP No. 30607 and of its
Resolution, dated December 6, 1999 denying petitioner's motion for reconsideration of said decision. The Court of Appeals reversed and set aside the
resolution2 of the National Labor Relations Commission (NLRC) in NLRC NCR CA No.009364-95, reversing and setting aside the labor arbiter's decision
and dismissing for lack of merit private respondent's complaint. 3

The case stems from NLRC NCR Case No.00-06-03462-92, which is a complaint for illegal suspension and illegal dismissal with prayer for moral and
exemplary damages, gratuity, fringe benefits and attorney's fees filed by Clarita Tan Reyes against Prudential Bank and Trust Company (the Bank) before
the labor arbiter. Prior to her dismissal, private respondent Reyes held the position of Assistant Vice President in the foreign department of the Bank,
tasked with the duties, among others, to collect checks drawn against overseas banks payable in foreign currency and to ensure the collection of foreign
bills or checks purchased, including the signing of transmittal letters covering the same.

After proceedings duly undertaken by the parties, judgment was rendered by labor Arbiter Cornelio L. Linsangan, the dispositive portion of which reads:

"WHEREFORE, finding the dismissal of complainant to be without factual and legal basis, judgment is hereby rendered ordering the respondent
bank to pay her back wages for three (3) years in the amount of P540,000.00 (P15,000.00 x 36 mos.). In lieu of reinstatement, the respondent is
also ordered to pay complainant separation pay equivalent to one month salary for every year of service, in the amount of P420,000.00 (P15,000 x
28 mos.). In addition, the respondent should. also pay complainant profit sharing and unpaid fringe benefits. Attorney's fees equivalent to ten (10%)
percent of the total award should likewise be paid by respondent.

SO ORDERED."4

Not satisfied, the Bank appealed to the NLRC which, as mentioned at the outset, reversed the Labor Arbiter's decision in its Resolution dated 24 March
1997. Private respondent sought reconsideration which, however, was denied by the NLRC in its Resolution of 28 July 1998. Aggrieved, private
respondent commenced on October 28, 1998, a petition for certiorari before the Supreme Court. 5 The subject petition was referred to the Court of Appeals
for appropriate action and disposition per resolution of this Court dated November 25, 1998, in accordance with the ruling in St. Marlin Funeral Homes vs.
NLRC.6

In its assailed decision, the Court of Appeals adopted the following antecedent facts leading to Reyes's dismissal as summarized by the NLRC:

"The auditors of the Bank discovered that two checks, No.011728-7232-146, in the amount of US$109,650.00, and No. 011730-7232-146, in the
amount of US$115,000.00, received by the Bank on April 6, 1989, drawn ,by the Sanford Trading against Hongkong and Shanghai Banking
Corporation, Jurong Branch, Singapore, in favor of Filipinas Tyrom, were not sent out for collection to Hongkong Shanghai Banking Corporation on
the alleged order of the complainant until the said checks became stale.

The Bank created a committee to investigate the findings of the auditors involving the two checks which were not collected and became stale.

On March 8, 1991, the president of the Bank issued a memorandum to the complainant informing her of the findings of the auditors and asked her
to give her side. In reply, complainant requested for an extension of one week to submit her explanation. In a "subsequent letter, dated March 14,
1991, to the president, complainant stated that in view of the refusal of the Bank that she be furnished copies of the pertinent documents she is
requesting and the refusal to grant her a reasonable period to prepare her answer, she was constrained to make a general denial of any
misfeasance or malfeasance on her part and asked that a formal investigation be made.

As the complainant failed to attend and participate in the formal investigation conducted by the Committee on May 24, 1991, despite due notice,
the Committee proceeded with its hearings and heard the testimonies of several witnesses.

The Committee's findings were:

 'a) The two (2) HSBC checks were received by the Foreign Department on 6 April 1989. On the same day, complainant authorized the
crediting of the account of Filipinas Tyrom in the amount of P4,780,102.70 corresponding to the face value of the checks, (Exhibits 6, 22 to
22-A and 23 to 23-A). On the following day, a transmittal letter was prepared by Ms. Cecilia Joven, a remittance clerk then assigned in the
Foreign Department, for the purpose of sending out the two (2) HSBC checks for collection. She then requested complainant to sign the
said transmittal letters (Exhibits 1, 7 and 25; TSN, 11 March 1993, pp. 42-52), as it is complainant who gives her instructions directly
concerning the transmittal of foreign bills purchased. All other transmittal letters are in fact signed by complainant.

b) After Ms. Joven delivered the transmittal letters and the checks to the Accounting Section of the Foreign Department, complainant
instructed her to withdraw the same for the purpose of changing the addressee thereon from American Express Bank to Bank of Hawaii
(ibid.) under a special collection scheme (Exhibits 4 and 5 to 5-B).

c) After complying with complainant's instruction, Ms. Joven then returned to complainant for the latter to sign the new transmittal letters.
However, complainant told Ms. Joven to just hold on to the letters and checks and await further instructions (ibid.). Thus, the new
transmittal letters remained unsigned. (See Exhibits 5 to 5-B).

d) In June 1989, Ms. Joven was transferred to another department. Hence, her duties, responsibilities and functions, including the
responsibility over the two (2) HSBC checks, were turned over to another remittance clerk, Ms. Analisa Castillo (Exhibit 14; TSN, 4 June
1993, pp. 27-29).

e) When asked by Ms. Castillo about the two (2) HSBC checks, Ms. Joven relayed to the latter complainant's instruction (Exhibit 14; TSN, 4
June 1993, p. 42).

f) About fifteen (15) months after the HSBC checks were received by the Bank, the said checks were discovered in the course of an audit
conducted by the Bank's auditors. Atty. Pablo Magno, the Bank's legal counsel, advised complainant to send the checks for collection
despite the lapse of fifteen (15) months.

g) Complainant, however, deliberately withheld Atty. Magno's advice from her superior, the Senior Vice-President, Mr. Renato Santos and
falsely informed the latter that Atty . Magno advised that a demand letter be sent instead, thereby further delaying the collection of the
HSBC checks.

h) On 10 July 1990, the HSBC checks were finally sent for collection, but were returned on 16 July 1990 for the reason 'account closed'
(Exhibits 2-A and 3-A).'

After a review of the Committee's findings, the Board of Directors of the Bank resolved not to re-elect complainant any longer to the position of
assistant president pursuant to the Bank's By-laws.

On July 19, 1991, complainant was informed of her termination of employment from the Bank by Senior Vice President Benedicto L. Santos, in a
letter the text of which is quoted in full:

'Dear Mrs. Reyes:

After a thorough investigation and appreciation of the charges against you as contained in the Memorandum of the President dated March
8, 1991, the Fact Finding Committee which was created to investigate the commission and/or omission of the acts alluded therein, has
found the following:

1. You have deliberately held the clearing of Checks Nos. 11728 and 11730 of Hongkong and Shanghai Banking Corporation in the total
amount of US$224,650.00 by giving instructions to the collection clerk not to send the checks for collection. In view thereof, when the said
checks were finally sent to clearing after the lapse of 15 months from receipt of said checks, they were returned for the reason 'Account
closed.' To date, the value of said checks have not been paid by Filipinas Tyrom, which as payee of the checks, had been credited with
their peso equivalent;

2. You tried to influence the decision of Atty. Pablo P. Magno, Bank legal counsel, by asking him to do something allegedly upon
instructions of a Senior Vice President of the Bank or else lose his job when in truth and in fact no such instructions was given; and

3. You deliberately withheld from Mr. Santos, Senior Vice President, the advice given by the legal counsel of the Bank which Mr. Santos
had asked you to seek. As a matter of fact, you even relayed a false advice which delayed further the sending of the two checks for
collection. Likewise, you refused to heed the advice of the Bank's legal counsel to send the checks for collection.

These findings have given rise to the Bank's loss of trust and confidence in you, the same being acts of serious misconduct in the
performance of your duties resulting in monetary loss to the Bank. In view thereof, the Board has resolved not to re-elect you to the position
of Assistant Vice President of the Bank. Accordingly, your services are terminated effective immediately. In relation thereto, your monetary
and retirement benefits are forfeited except those that have vested in you.'

In her position paper, complainant alleged that the real reason for her dismissal was her filing of the criminal cases against the bank president, the
vice president and the auditors of the Bank, such filing not being a valid ground for her dismissal. Furthermore, she alleged that it would be self-
serving for the respondent to state that she was found guilty of gross misconduct in deliberately withholding the clearing of the two dollar checks.
She further alleged that she was not afforded due process as she was not given the chance to refute the charges mentioned in the letter of
dismissal. Hence, she was illegally dismissed.

On the other hand, respondent argues that there were substantial bases for the bank to lose its trust and confidence on the complainant and,
accordingly, had just cause for terminating her services. Moreover, for filing the clearly unfounded suit against the respondent's officers,
complainant is liable to pay moral and exemplary damages and attorney's fees." 7

The Court of Appeals found that the NLRC committed grave abuse of discretion in ruling that the dismissal of Reyes is valid. In effect, the Court of Appeals
reinstated the judgment of the labor arbiter with modification as follows:

"WHEREFORE, in the light of the foregoing, the decision appealed from is hereby REVERSED and SET ASIDE. In lieu thereof, judgment is hereby
rendered ordering respondent Bank as follows:

1. To pay petitioner full backwages and other benefits from July 19, 1991 up to the finality of this judgment;

2. To pay petitioner separation pay equivalent to one (1) month salary for every year of service in lieu of reinstatement; and

3. To pay attorney's fee equivalent to ten (10%) percent of the total award.

SO ORDERED."8

Hence, the Bank's recourse to this Court contending in its memorandum that:
 "IN SETTING ASIDE THE DECISION DATED 24 MARCH 1997 AND THE RESOLUTION DATED 28 JULY 1998 OF THE NLRC AND
REINSTATING WITH MODIFICATION THE DECISION DATED 20 JULY 1995 OF LABOR ARBITER CORNELIO L. LINSANGAN, THE
HONORABLE COURT OF APPEALS SERIOUSLY ERRED, IN VIEW OF THE FOLLOWING:

I.

IT IS THE SEC (NOW THE REGIONAL TRIAL COURT) AND NOT THE NLRC WHICH HAS ORIGINAL AND EXCLUSIVE JURISDICTION OVER
CASES INVOLVING THE REMOVAL FROM OFFICE OF CORPORATE OFFICERS.

II.

EVEN ASSUMING ARGUENDO THAT THE NLRC HAS JURISDICTION, THERE WAS SUBSTANTIAL EVIDENCE OF RESPONDENT'S
MISCONDUCT JUSTIFYING THE BANK'S LOSS OF TRUST AND CONFIDENCE ON (sic) HER.

III.

EVEN ASSUMING ARGUENDO THAT RESPONDENT WAS ENTITLED TO BACKWAGES, THE HONORABLE COURT OF APPEALS ERRED IN
AWARDING UNLIMITED AND UNQUALIFIED BACKWAGES THEREBY GOING FAR BEYOND THE LABOR ARBITER'S DECISION LIMITING
THE SAME TO THREE YEARS, WHICH DECISION RESPONDENT HERSELF SOUGHT TO EXECUTE." 9

In sum, the resolution of this petition hinges on (1) whether the NLRC has jurisdiction over the complaint for illegal dismissal; (2) whether complainant
Reyes was illegally dismissed; and (3) whether the amount of back wages awarded was proper.

On the first issue, petitioner seeks refuge behind the argument that the dispute is an intra-corporate controversy concerning as it does the non-election of
private respondent to the position of Assistant Vice-President of the Bank which falls under the exclusive and original, jurisdiction of the Securities and
Exchange Commission (now the Regional Trial Court) under Section 5 of Presidential Decree No. 902-A. More specifically, petitioner contends that
complainant is a corporate officer, an elective position under the corporate by-laws and her non-election is an intra-corporate controversy cognizable by the
SEC invoking lengthily a number of this Court's decisions. 10

Petitioner Bank can no longer raise the issue of jurisdiction under the principle of estoppel. The Bank participated in the proceedings from start to finish. It
filed its position paper with the Labor Arbiter. When the decision of the Labor Arbiter was adverse to it, the Bank appealed to the NLRC. When the NLRC
decided in its favor, the bank said nothing about jurisdiction. Even before the Court of Appeals, it never questioned the proceedings on the ground of lack
of jurisdiction. It was only when the Court of Appeals ruled in favor of private respondent did it raise the issue of jurisdiction. The Bank actively participated
in the proceedings before the Labor Arbiter, the NLRC and the Court of Appeals. While it is true that jurisdiction over the subject matter of a case may be
raised at any time of the proceedings, this rule presupposes that laches or estoppel has not supervened. In this regard, Bañaga vs. Commission on the
Settlement of Land Problems,11 is most enlightening. The Court therein stated:

"This Court has time and again frowned upon the undesirable practice of a party submitting his case for decision and then accepting the judgment,
only if favorable, and attacking it for lack of jurisdiction when adverse. Here, the principle of estoppel lies. Hence, a party may be estopped or
barred from raising the question of jurisdiction for the first time in a petition before the Supreme Court when it failed to do so in the early stages of
the proceedings."

Undeterred, the Bank also contends that estoppel cannot lie considering that "from the beginning, petitioner Bank has consistently asserted in all its
pleadings at all stages of the proceedings that respondent held the position of Assistant Vice President, an elective position which she held by virtue of her
having been elected as such by the Board of Directors." As far as the records before this Court reveal however, such an assertion was made only in the
appeal to the NLRC and raised again before the Court of Appeals, not for purposes of questioning jurisdiction but to establish that private respondent's
tenure was subject to the discretion of the Board of Directors and that her non-reelection was a mere expiration of her term. The Bank insists that private
respondent was elected Assistant Vice President sometime in 1990 to serve as such for only one year. This argument will not do either and must be
rejected.

It appears that private respondent was appointed Accounting Clerk by the Bank on July 14, 1963. From that position she rose to become supervisor. Then
in 1982, she was appointed Assistant Vice-President which she occupied until her illegal dismissal on July 19, 1991. The bank's contention that she merely
holds an elective position and that in effect she is not a regular employee is belied by the nature of her work and her length of service with the Bank. As
earlier stated, she rose from the ranks and has been employed with the Bank since 1963 until the termination of her employment in 1991. As Assistant
Vice President of the foreign department of the Bank, she is tasked, among others, to collect checks drawn against overseas banks payable in foreign
currency and to ensure the collection of foreign bills or checks purchased, including the signing of transmittal letters covering the same. It has been stated
that "the primary standard of determining regular employment is the reasonable connection between the particular activity performed by the employee in
relation to the usual trade or business of the employer. 12 Additionally, "an employee is regular because of the nature of work and the length of service, not
because of the mode or even the reason for hiring them." 13 As Assistant Vice-President of the Foreign Department of the Bank she performs tasks integral
to the operations of the bank and her length of service with the bank totaling 28 years speaks volumes of her status as a regular employee of the bank. In
fine, as a regular employee, she is entitled to security of tenure; that is, her services may be terminated only for a just or authorized cause. 14 This being in
truth a case of illegal dismissal, it is no wonder then that the Bank endeavored to the very end to establish loss of trust and confidence and serious
misconduct on the part of private respondent but, as will be discussed later, to no avail.

This brings us to the second issue wherein the Bank insists that it has presented substantial evidence to prove the breach of trust on the part of private
respondent warranting her dismissal. On this point, the Court of Appeals disagreed and set aside the findings of the NLRC that Reyes deliberately withheld
the release of the two dollar checks; that she is guilty of conflict of interest that she waived her right to due process for not attending the hearing; and that
she was dismissed based on loss of trust and confidence. We quote pertinent portions of the decision, to wit:

"FIRST: Respondent Bank heavily relied on the testimony and affidavit of Remittance Clerk Joven' in trying to establish loss of confidence.
However, Joven's allegation that petitioner instructed her to hold the subject two dollar checks amounting to $224,650.00 falls short of the requisite
proof to warrant petitioner's dismissal. Except for Joven's bare assertion to withhold the dollar checks per petitioner's instruction, respondent Bank
failed to adduce convincing evidence to prove bad faith and malice. It bears emphasizing that respondent Bank's witnesses merely corroborate
Joven's testimony.

Upon this point, the rule that proof beyond reasonable doubt is not required to terminate an employee on the charge of loss of confidence and that
it is sufficient that there is some basis for such loss of confidence, is not absolute. The right of an employer to dismiss employees on the ground
that it has lost its trust and confidence in him must not be exercised arbitrarily and without just cause. For loss of trust and confidence to be valid
ground for an employee's dismissal, it must be substantial and not arbitrary, and must be founded on clearly established facts sufficient to warrant
the employee's separation from work (Labor vs. NLRC, 248 SCRA 183).

SECOND. Respondent Bank's charge of deliberate withholding of the two dollar checks finds no support in the testimony of Atty. Jocson, Chairman
of the Investigating Committee. On cross examination, Atty. Jocson testified that the documents themselves do not show any direct withholding
(pp. 186-187, Rollo). There being conflict in the statement of witnesses, the court must adopt the testimony which it believes to be true (U.S. vs.
Losada, 18 Phil. 90).

THIRD. Settled is the rule that when the conclusions of the Labor Arbiter are sufficiently substantiated by the evidence on record, the same should
be respected by appellate tribunals since he is in a better position to assess and evaluate the credibility of the contending parties (Ala Mode
Garments, Inc. vs. NLRC, 268 SCRA 497). In this regard, the Court quotes with approval the following disquisition of Labor Arbiter Linsangan, thus:

This Office has repeatedly gone over the records of the case and painstakingly examined the testimonies of respondent bank's witnesses.
One thing was clearly established: that the legality of complainant's dismissal based on the first ground stated in respondent's letter of
 termination (exh. 25-J, supra) will rise or fall on the credibility of Miss Joven who undisputedly is the star witness for the bank. It will be
observed that the testimonies of the bank's other witnesses, Analiza Castillo, Dante Castor and Antonio Ragasa pertaining to the non-
release of the dollar checks and their corresponding transmittal letters were all anchored on what was told them by Ms. Joven, that is: she
was instructed by complainant to hold the release of subject checks. In a nutshell, therefore, the issue boils down to who between
complainant and Ms. Joven is more credible.

After painstakingly examining the testimonies of Ms. Joven and respondent's other witnesses' this Office finds the evidence still wanting in
proof of complainant's guilt. This Office had closely observed the demeanor of Ms. Joven while testifying on the witness stand and was not
impressed by her assertions. The allegation of Ms. Joven in that her non-release of the dollar checks was upon the instruction of
complainant Reyes is extremely doubtful. In the first place, the said instruction constitutes a gross violation of the bank's standard operating
procedure. Moreover, Ms. Joven was fully aware that the instruction, if carried out, will greatly prejudice her employer bank. It was
incumbent upon Ms. Joven not only to disobey the instruction but even to report the matter to management, if same was really given to her
by complainant.

Our doubt on the veracity of Ms. Joven's allegation even deepens as we consider the fact that when the non-release of the checks was
discovered by Ms. Castillo the former contented herself by continuously not taking any action on the two dollar checks. Worse, Ms. Joven
even impliedly told by Ms. Castillo (sic) to ignore the two checks and just withhold their release. In her affidavit Ms. Castillo said:

'4. When I asked Cecille Joven what I was supposed to do with those checks, she said the same should be held as per instruction
of Mrs. Reyes.' (Exh. "14", supra).

The evidence shows that it was only on 16 May 1990 that Ms. Joven broke her silence on the matter despite the fact that on 15 November
1989, at about 8:00 p.m. the complainant, accompanied by driver Celestino Banito, went to her residence and confronted her regarding the
non-release of the dollar checks. It took Ms. Joven eighteen (18) months before she explained her side on the controversy. As to what
prompted her to make her letter of explanation was not even mentioned.

On the other hand, the actions taken by the complainant were spontaneous. When complainant was informed by Mr. Castor and Ms.
Castillo regarding the non-release of the checks sometime in November, 1989 she immediately reported the matter to Vice President
Santos, Head of the Foreign Department. And as earlier mentioned, complainant went to the residence of Ms. Joven to confront her. In this
regard, Celestino Bonito, complainant's driver, stated in his affidavit, thus:

'1. Sometime on November 15, 1989 at about 7:00 o'clock in the evening, Mrs. Clarita Tan Reyes and I were in the residence of
one Ms. Cecille Joven, then a Processing Clerk in the Foreign Department of Prudential Bank;

2. Ms. Cecille Joven, her mother, myself, and Mrs. Clarita Tan Reyes were seated in the sala when the latter asked the former, Ms.
Cecille Joven, how it came about that the two dollar checks which she was then holding with the transmittal letters, were found in a
plastic envelope kept day-to-day by the former;

3. Hesitatingly, Cecille Joven said: "Eh, Mother (Mrs. Tan Reyes had been intimately called Mother in the Bank) akala ko bouncing
checks yon mga yon.

4. Mrs. Clarita Tan Reyes, upon hearing those words, was surprised and she said: "Ano, papaano mong alam na bouncing na hindi
mo pa pinadadala:

5. Mrs. Cecille Joven turned pale and was not able to answer.'

There are other factors that constrain this Office to doubt even more the legality of complainant's dismissal based on the first ground stated
in the letter of dismissal. The non-release of the dollar checks was reported to top management sometime on 15 November 1989 when
complainant, accompanied by Supervisor Dante Castor and Analiza Castillo, reported the matter to Vice President Santos. And yet, it was
only on 08 March 1991, after a lapse of sixteen (16) months from the time the non-release of the checks was reported to the Vice
President, that complainant was issued a memorandum directing her to submit an explanation. And it took the bank another four (4) months
before it dismissed complainant.

The delayed action taken by respondent against complainant lends credence to the assertion of the latter that her dismissal was a mere
retaliation to the criminal complaints she filed against the bank's top officials.

It clearly appears from the foregoing that the complainant herein has no knowledge of, much less participation in, the non-release of the
dollar checks under discussion. Ms. Joven is solely responsible for the same. Incidentally, she was not even reprimanded by the bank.

FOURTH. Respondent Bank having failed to furnish petitioner necessary documents imputing loss of confidence, petitioner was not amply afforded
opportunity to prepare an intelligent answer. The Court finds nothing confidential in the auditor's report and the affidavit of Transmittal Clerk Joven.
Due process dictates that management accord the employees every kind of assistance to enable him to prepare adequately for his defense,
including legal representation.

The issue of conflict of interest not having been covered by the investigation, the Court finds it irrelevant to the charge." 15

We uphold the findings of the Court of Appeals that the dismissal of private respondent on the ground of loss of trust and confidence was without basis.
The charge was predicated on the testimony of Ms. Joven and we defer to the findings of the Labor Arbiter as confirmed and adopted by the Court of
Appeals on the credibility of said witness. This Court is not a trier of facts and will not weigh anew the evidence already passed upon by the Court of
Appeals.16

On the third issue, the Bank questions the award of full backwages and other benefits from July 19, 1991 up to the finality of this judgment; separation pay
equivalent to one (1) month salary for every year of service in lieu of reinstatement; and attorney's fees equivalent to ten (10%) percent of the total award.
The Bank argues, in the main, that private respondent is not entitled to full backwages in view of the fact that she did not bother to appeal that portion of
the labor arbiter's judgment awarding back wages limited to three years. It must be stressed that private respondent filed a special civil action for certiorari
to review the decision of the NLRC17 and not an ordinary appeal. An ordinary appeal is distinguished from the remedy of certiorari under Rule 65 of the
Revised Rules of Court in that in ordinary appeals it is settled that a party who did not appeal cannot seek affirmative relief other than the ones granted in
the decision of the court below.18 On the other hand, resort to a judicial review of the decisions of the National Labor Relations Commission in a petition for
certiorari under Rule 65 of Rules of Court is confined to issues of want or excess of jurisdiction and grave abuse of discretion. 19 In the instant case, the
Court of Appeals found that the NLRC gravely abused its discretion in finding that the private respondent's dismissal was valid and so reversed the same.
Corollary to the foregoing, the appellate court awarded backwages in accordance with current jurisprudence.

Indeed, jurisprudence is clear on the amount of backwages recoverable in cases of illegal dismissal. Employees illegally dismissed prior to the effectivity of
Republic Act No. 6715 on March 21, 1989 are entitled to backwages up to three (3) years without deduction or qualification, while those illegally dismissed
after are granted full backwages inclusive of allowances and other benefits or their monetary equivalent from the time their actual compensation was
withheld from them up to the time of their actual reinstatement. 20 Considering that private respondent was terminated on July 19, 1991, she is entitled to full
backwages from the time her actual compensation was withheld from her (which, as a rule, is from the time of her illegal dismissal) up to the finality of this
judgment (instead of reinstatement) considering that reinstatement is no longer feasible as correctly pointed out by the Court of Appeals on account of the
strained relations brought about by the litigation in this case. Since reinstatement is no longer viable, she is also entitled to separation pay equivalent to
one (1) month salary for every year of service.21 Lastly, since private respondent was compelled to file an action for illegal dismissal with the labor arbiter,
she is likewise entitled to attorney's fees 22 at the rate above-mentioned. There is no room to argue, as the Bank does here, that its liability should be
mitigated on account of its good faith and that private respondent is not entirely blameless. There is no showing that private respondent is partly at fault or
that the Bank acted in good faith in terminating an employee of twenty-eight years. In any event, Article 279 of Republic Act No. 6715 23 clearly and plainly
provides for "full backwages" to illegally dismissed employees. 1âwphi1.nêt

WHEREFORE, the instant petition for review on certiorari is DENIED, and the assailed Decision of the Court of Appeals, dated October 15, 1999,
is AFFIRMED.

SO ORDERED.

Melo, Vitug, Panganiban, and Sandoval-Gutierrez, JJ., concur.