SECOND DIVISION G.R. No.

166411 August 3, 2010 ELPIDIO CALIPAY, Petitioner, - versus NATIONAL LABOR RELATIONS COMMISSION, TRIANGLE ACE CORPORATION and JOSE LEE, Respondents. DECISION PERALTA, J.: Before the Court is a petition for review on certiorari seeking to annul and set aside the Decision1[1] and Resolution2[2] of the Court of Appeals (CA), dated August 24, 2004 and December 10, 2004, respectively, in CA-G.R. SP No. 79277. The CA Decision dismissed the special civil action for certiorari filed by petitioner, while the CA Resolution denied petitioner‘s motion for reconsideration.The pertinent facts of the case are as follows:On July 16, 1999, a Complaint3[3] for illegal dismissal, unfair labor practice, underpayment of wages and 13 th month pay, non-payment of service incentive leave pay, overtime pay, premium pay for holiday, rest day, night shift allowances and separation pay was filed by herein petitioner Elpidio Calipay, together with Alfredo Mission and Ernesto Dimalanta against herein private respondents Triangle Ace Corporation (Triangle) and Jose Lee. Calipay and the other complainants alleged in their Position Paper that in the course of their employment, they were not given any specific work assignment; they performed various kinds of work imposed upon them by Lee; in discharging their functions, they were required by Lee to work for nine (9) hours a day, beginning from 7:00 a.m. and ending at 6:00 p.m. with a break of one hour at 12:00 noon; they were also required to report from Monday to Sunday; for work rendered from Mondays to Saturdays beyond the normal eight (8) working hours in a day, they were paid a uniform daily wage in the amount of P140.00 even during holidays; for work performed on Sundays, they were not paid any wage due to the policy of Lee that his workers must provide work without pay at least a day in the week under his so-called ―bayanihan system‖; in receiving their wages, they were not given any duly accomplished payslips; instead, they were forced to sign a blank form of their daily time records and salary vouchers. It was further alleged that in May 1998, Lee confronted Calipay and Mission regarding their alleged participation and assistance in Dimalanta‘s claim for disability benefits with the Social Security System; despite their denials, Lee scolded Calipay and Mission; this incident later led to their dismissal in the same month.In their Position Paper, private respondents countered that the termination of Calipay and the other complainants was for a valid or just cuse and that due process was observed. They claimed, among others, that Calipay was on absence without leave (AWOL) status from November 2, 1998 up to November 17, 1998; a memorandum dated November 17, 1998, requiring him to explain why his services should not be terminated, was sent by mail but he refused to receive the same; for failure to explain his side, another memorandum dated December 11, 1998 was issued terminating Calipay‘s employment on the ground of abandonment of work; there is no unfair labor practice because there is no union; there is full compliance with the law regarding payment of wages and other benefits due to their employees; non-payment of nightshift premium is true, because the company does not operate at night. On July 10, 2000, the Labor Arbiter handling the case rendered a Decision4[4] dismissing the Complaint for lack of merit. Calipay and the other complainants filed an appeal with the National Labor

Relations Commission (NLRC).5[5]On February 1, 2002, the NLRC rendered judgment via a Resolution6[6] based on the findings that: (a) in dismissing the complainants from their employment, respondents failed to faithfully observe the requirements of notice and hearing rendering the said dismissals invalid and illegal; (b) the dismissals were not based on any of the just causes provided in Article 282 of the Labor Code; (3) the complainants‘ failure to report for work were justified by their sudden termination from employment which nullified respondents‘ contention that complainants were guilty of abandonment of work. The dispositive portion of the NLRC Decision reads as follows: WHEREFORE, the Decision appealed from is hereby MODIFIED, ordering respondents Triangle Ace Corporation Inc./Jose Lee to reinstate the complainants to their former position without loss of seniority rights and benefits and to pay them full backwages reckoned from the date of dismissals up to actual reinstatement which as of even date amount to P149,017.57 for Alfredo Mission, P148,705.44 for Elpidio Calipay, and P165,961.77 for Ernesto Dimalanta, plus ten (10%) percent of the total award as and for attorney‘s fees totaling P46,368.47 computed as follows: xxxx Should reinstatement be not feasible, the payment of separation pay in lieu thereof is awarded. The Decision is AFFIRMED in all other respects. SO ORDERED.7[7] Aggrieved, private respondents filed a Motion for Reconsideration. On September 24, 2002, the NLRC issued a Resolution8[8] granting private respondents‘ Motion for Reconsideration, the dispositive portion of which reads:

WHEREFORE, the instant motion being meritorious is GIVEN DUE COURSE. Accordingly, Our Resolution promulgated on February 1, 2002 is hereby RECONSIDERED and the decision of the Arbiter a quo dated 10 July 2002 is REINSTATED and AFFIRMED en (sic) toto. SO ORDERED.9[9] As a consequence, Calipay and the other complainants moved for the reconsideration of the above-quoted Resolution, but the same was denied by the NLRC in a Resolution dated June 30, 2003.Calipay and the other complainants then filed a special civil action for certiorari, with the CA assailing the September 24, 2002 and June 30, 2003 Resolutions of the NLRC.On August 24, 2004, the CA rendered its presently disputed Decision dismissing the abovementioned petition for certiorari.Calipay filed a Motion for Reconsideration, but the CA denied it in its Resolution dated December 10, 2004.Hence, the instant petition of Calipay raising the following issues: I. WHETHER OR NOT PUBLIC RESPONDENT COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT ISSUED ITS DECISION DATED 24 AUGUST 2004 AND RESOLUTION DATED 10 DECEMBER 2004 DISMISSING THE PETITION FOR CERTIORARI AND AFFIRMING THE RESOLUTIONS OF PUBLIC RESPONDENT NLRC DATED 30 JUNE 2003 AND 24 SEPTEMBER 2002, WHICH RESOLUTIONS DISMISSED PETITIONER‘S COMPLAINT FOR ILLEGAL DISMISSAL BY REVERSING RESPONDENT NLRC‘S PREVIOUS RESOLUTION DATED 01 FEBRUARY 2002.

II. WHETHER OR NOT PUBLIC RESPONDENT COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT AFFIRMED THE SUBJECT RESOLUTIONS OF PUBLIC RESPONDENT NLRC DISMISSING THE APPEAL FILED BY PETITIONER AND REINSTATED THE DECISION OF LABOR ARBITER PANGANIBAN ORDERING

THE DISMISSAL OF THE COMPLAINT FOR ILLEGAL TERMINATION NOTWITHSTANDING THE PREVIOUS RESOLUTION OF PUBLIC RESPONDENT NLRC DATED 01 FEBRUARY 2002 DECLARING THE ILLEGALITY OF PETITIONER‘S DISMISSAL FROM EMPLOYMENT.

III. WHETHER OR NOT SUBSTANTIAL JUSTICE WAS UNDULY COMPROMISED WHEN PUBLIC RESPONDENT COURT OF APPEALS AFFIRMED NLRC‘S DISMISSAL OF PETITIONER‘S APPEAL DATED 06 SEPTEMBER 2000 AND RULED AGAINST PETITIONER‘S COMPLAINT FOR ILLEGAL DISMISSAL BASED SOLELY ON TECHNICAL RULES OF PROCEDURE WHEN THE SAME SHOULD HAVE BEEN RELAXED TO GIVE WAY TO MERITORIOUS AND JUDICIOUS CASES SUCH AS THIS INVOLVING DISMISSAL FROM WORK OF AN EMPLOYEE.10[10] Petitioner‘s basic contention is that the CA erred in dismissing the petition filed with it on the basis of strictly adhering to purely technical grounds. Petitioner argues that he cannot be solely faulted for his failure to timely file his appeal with the NLRC, considering that his former counsel suddenly and unexpectedly withdrew his services at the time that said counsel should have been preparing his appeal, leaving petitioner without anyone to help him prepare his appeal on time. Petitioner avers that in a number of cases, this Court allowed the late filing of an appeal where such appeal by a dismissed worker is, like in the present case, impressed with merit in order that the ends of substantial justice would be served. The petition lacks merit.It bears to reiterate the settled rule that the timely perfection of an appeal is a mandatory requirement, which cannot be trifled with as a ―mere technicality‖ to suit the interest of a party.11[11] The rules on periods for filing appeals are to be observed religiously, and parties who seek to avail themselves of the privilege must comply with the rules.12[12]Procedural rules setting the period for perfecting an appeal or filing a petition for review are generally inviolable.13[13] It is doctrinally entrenched that appeal is not a

constitutional right, but a mere statutory privilege.14[14] Hence, parties who seek to avail themselves of it must comply with the statutes or rules allowing it.15[15] The requirements for perfecting an appeal within the reglementary period specified in law must, as a rule, be strictly followed.16[16] Such requirements are considered indispensable interdictions against needless delays and are necessary for the orderly discharge of the judicial business.17[17] Furthermore, the perfection of an appeal in the manner and within the period permitted by law is not only mandatory, but also jurisdictional.18[18] Failure to perfect the appeal renders the judgment of the court final and executory.19[19] Just as a losing party has the privilege to file an appeal within the prescribed period, so does the winner also have the correlative right to enjoy the finality of the decision.20[20]It is true that procedural rules may be waived or dispensed with in the interest of substantial justice.21[21] This

Court may deign to veer away from the general rule if, on its face, the appeal appears to be absolutely meritorious.22[22] Indeed, in a number of instances, procedural rules are relaxed in order to serve substantial justice. However, the Court sees no reason to do so in this case as there is no reason to reverse the findings of the CA, to wit: It must be considered that his [Calipay‘s] former counsel had manifested in his ―Withdrawal of Appearance‖ (p. 80, Rollo) that he was withdrawing as counsel by reason of his (Calipay) desire to engage the services of another counsel for purposes of perfecting his appeal from the Labor Arbiter‘s Decision and said ―Withdrawal of Appearance‖ was duly signed by his former counsel with the petitioner‘s conformity thereto and which therefore showed that the latter had assented to such withdrawal by reason stated therein. Hence, petitioner Calipay could not blame their former counsel for the non-perfection of their appeal. And even if it were true, that there was untimely withdrawal of his counsel, the latter should not be totally blamed as the herein petitioner is duty bound to protect his interests and he should have been more vigilant and circumspect of his right in pursuing his case by observing the rule on perfection of appeal. Moreover, the Court notes private respondents‘ contention that petitioner again did not comply with procedural requirements when he failed to attach to the instant petition a verification and certificate against forum shopping as required under Section, Rule 45 of the Rules of Court. On this basis alone, the petition should be dismissed.Even if the Court were to disregard petitioner‘s violation of the above-cited procedural rules, a careful review of his contentions, as well as the records of the case, would show that on its merits, the present petition should still fail.A perusal of the assailed Decision of the CA would readily confirm that the appellate court‘s dismissal of the petition filed by herein petitioner was not based solely on procedural or technical grounds. Thus, the CA held: Be that as it may, even if We would set aside the technicalities in the interest of substantial justice as proffered by petitioner Calipay that the belated filing of his appeal should nevertheless be considered in order to completely resolve the case on its merits, We opine that the instant case would likewise fail. We agree with the Labor Arbiter‘s finding that petitioner Calipay had abandoned his work. x x x In the instant case, petitioner Calipay had failed to report for work for unknown reasons x x x His continued absences without the private respondents‘ approval constituted gross and habitual neglect which is a just cause for termination under Article 282 of the Labor Code of the Philippines.Petitioner harps on the fact that on February 1, 2002, the NLRC issued a Resolution which was in his favor. While petitioner relies heavily on the said Resolution, he, however, always fails to mention that in a subsequent Resolution dated September 24, 2002, the NLRC reversed itself and reinstated the Decision of the Labor Arbiter dismissing the complaint filed by petitioner and his former co-employees. Furthermore, petitioner insists that he is not guilty of abandoning his job and that his failure to report for work was justified by his unceremonious dismissal from employment. However, the Labor Arbiter made the following categorical findings: Complainant Ernesto Dimalanta claimed that he was dismissed on January 30, 1998. x x x Complainants Alfredo Mission and Elpidio Calipay, for their part, alleged that they were dismissed by the respondent[s] on May 25, 1998 and May 27, 1998, respectively x x x. The record, however, shows that complainants actually reported for work and were paid wages by the respondent company even after their alleged termination as evidenced by their Daily Time Records and Salary Vouchers submitted by respondents. Complainant Mission worked with the respondent until July 15, 1998, complainant Calipay up to November 2, 1998 while complainant Dimalanta until May 17, 1998. After those dates, they absented themselves from their work without any permission from the management or without filing any leave of absence. Thus, two (2) written notices were sent to each complainant and the Department of Labor and Employment by the respondent through its General Manager. Calipay and the other complainants failed to sufficiently refute these findings of the Labor Arbiter in their appeal filed with the NLRC. They simply insisted that they did not report for work, because they were already terminated. However, they did not present any evidence to prove their allegation. On the other hand, as held by the Labor Arbiter, private respondents were able to present the DTRs and Salary Vouchers of Calipay and the other complainants showing that they indeed reported for work even after their alleged termination from employment. Calipay and the other complainants also failed to present evidence to prove their allegation that they were forced to sign blank forms of their DTRs and Salary Vouchers. Indeed, if petitioner was dismissed, as he claims, on May 27, 1998, why did the DTRs and Salary Vouchers presented by private respondents show that he continued to receive wages until October 31, 1998? Moreover, why did petitioner file his complaint for illegal dismissal only on July 16, 1999, or more than one year after he claims to have been illegally dismissed? On the basis of the foregoing, the Court arrives at the conclusion that the filing of the complaint for illegal dismissal appears only as a convenient afterthought on the part of petitioner and the other complainants after they were dismissed in accordance with law.Jurisprudence has held time and again that abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal, more so if the same is accompanied by a prayer for reinstatement.23[27] In the present case, however, petitioner filed his complaint more than one year

after his alleged termination from employment. Moreover, petitioner and the other complainants‘ inconsistency in their stand is also shown by the fact that in the complaint form which they personally filled up and filed with the NLRC, they only asked for payment of separation pay and other monetary claims. They did not ask for reinstatement. It is only in their Position Paper later prepared by their counsel that they asked for reinstatement. This is an indication that petitioner and the other complainants never had the intention or desire to return to their jobs. In fact, there is no evidence to prove that petitioner and his former co-employees ever attempted to return to work after they were dismissed from employment.On the other hand, private respondents were able to present memoranda or show-cause letters served on petitioner and the other complainants at their last known address requiring them to explain their absence, with a warning that their failure would be construed as abandonment of work. Also, private respondents served on petitioner and the other complainants a notice of termination as required by law. Private respondents‘ compliance with said requirements, taken together with the other circumstances abovediscussed, only proves petitioner and the other complainants‘ abandonment of their work.Finally, it bears to point out that the Decision of the Labor Arbiter was affirmed by the NLRC and the CA. The settled rule is that the factual findings of the Labor Arbiter and the NLRC, especially when affirmed by the CA, are accorded not only great respect but also finality, and are deemed binding upon this Court so long as they are supported by substantial evidence.24[28] In the present case, the Court finds no cogent reason to depart from this rule. WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the Court of Appeals, dated August 24, 2004 and December 10, 2004, respectively, in CA-G.R. SP No. 79277, are AFFIRMED. SO ORDERED. Dismissal; abandonment. Time and again, the Supreme Court has held that abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal, more so if the same is accompanied by a prayer for reinstatement. In the present case, however, petitioner filed his complaint more than one year after his alleged termination from employment. Moreover, petitioner did not ask for reinstatement in the complaint form, which he personally filled up and filed with the NLRC. The prayer for reinstatement is made only in the Position Paper that was later prepared by his counsel. This is an indication that petitioner never had the intention or desire to return to his job. Elpidio Calipay vs. National Labor Relations Commission, et al., G.R. No. 166411, August 3, 2010.

SECOND DIVISION

ALEX GURANGO, G.R. No. 174593 Petitioner, - versus - BEST CHEMICALS AND PLASTICS Promulgated: INC. and MOON PYO HONG, Respondents. August 25, 2010 DECISION The Case This is a petition1 for review on certiorari under Rule 45 of the Rules of Court. The petition challenges the 20 July 2006 Decision2 and 11 September 2006 Resolution3 of the Court of Appeals in CA-G.R. SP No. 94004. The Court of Appeals set aside the 17 October 2005 4 and 24 January 20065 Resolutions of the National Labor Relations Commission (NLRC) in CA No. 044428-05, affirming the 6 July 2004 Decision6 of the Labor Arbiter in NLRC NCR Case No. 05-06181-03. The Facts Respondent Best Chemicals and Plastics, Inc. (BCPI) is a corporation engaged in the manufacture of biaxially oriented polypropylene and related products. Respondent Moon Pyo Hong (Hong) is the president and chief executive officer of BCPI.

Petitioner Alex R. Gurango (Gurango) and Romeo S. Albao (Albao) worked as boiler operator and security guard, respectively, in BCPI. In a memorandum7 dated 2 May 2003, BCPI prohibited its empoyees from bringing personal items to their work area. Erring employees would be suspended for six days. BCPI stated that:

Please be reminded of the following existing rules and regulations that all employees are expected to strictly observe and adhere to: Bringing in to work station/area of personal belongings other than those required in the performance of one‘s duty which disrupt/obstruct Company‘s services and operations, except those authorized by higher authorities. This offense shall include the following items [sic]: radios, walkman, discman, make-up kits, ladies‘ bags, workers‘ knapsacks and the like which must be left behind and safe kept [sic] in the employees‘ respective lockers. This being a Serious Offense, the penalty of which is six (6) days suspension from work without pay.8 Gurango and Albao presented two conflicting sets of facts as to what happened on 5 May 2003. According to Gurango, at 4 a.m., he performed his routine check-up inside the production area. He had in his pocket a camera without film. On his way out of the production area, he saw Albao standing near the bundy clock. Albao pulled him, grabbed his pocket, and tried to confiscate the camera. Gurango refused to give the camera because there was no reason to surrender it. Albao held Gurango‘s arm and punched him on the face. Gurango shouted for help. Another security guard, Rodenio I. Pablis (Pablis), arrived. Instead of pacifying Albao, Pablis joined in punching and kicking Gurango. Albao and Pablis banged Gurango‘s head against the floor and provoked him to fight back. Gurango‘s co-worker, Elvin Juanitas (Juanitas), saw what happened and asked Albao and Pablis to stop hitting Gurango. Albao and Pablis brought Gurango to the guardhouse. Officer-incharge Rommel M. Cordero (Cordero) locked the guardhouse, then ordered Albao and Pablis to continue hitting Gurango. Freddie Infuerto arrived at the guardhouse and asked the security guards to stop hitting Gurango. Gurango agreed to surrender the camera on the condition that the security guards would prepare a document acknowledging receipt of the camera. Albao, on the other hand, alleged that he was on duty at the main entrance of the production area from 7 p.m. of 4 May 2003 to 7 a.m. of 5 May 2003. At 4:20 a.m., Gurango tried to enter the production area bringing a camera. Albao told Gurango that he could not bring the camera inside the production area. Gurango got mad and tried to grab Albao‘s gun. Albao and Gurango engaged in a fistfight. Cordero, Pablis, and another security guard, Fredrick Lañada, arrived and stopped the fight. On 5 May 2003, at 8:35 a.m., Gurango went to Dr. Homer L. Aguinaldo (Dr. Aguinaldo) for examination and treatment. Dr. Aguinaldo issued a medical report9 and advised Gurango to rest for three days. In a letter10 dated 5 May 2003, BCPI asked Gurango to explain in writing why no disciplinary action should be taken against him and then placed him under preventive suspension effective 6 May 2003. On 6 May 2003, Gurango wrote a letter11 to BCPI narrating what happened. On 8 May 2003, Gurango wrote another letter 12 to BCPI stating that: I already explained my side of the story regarding the alleged fistfight between Romeo Albao and me. I would like to reiterate that I was never involved in any fistfight nor commit any violation of our Company‘s Code of Discipline. Another issue is the preventive suspension I‘m undergoing with [sic]. I would like to question the propriety of such action. Be reminded that you are putting me under indefinite preventive suspension. Under the law, an employee may be placed under preventive suspension only if his continued employment poses a serious and imminent threat to the life and property of the employer or of his co-employees. Consequently, without this kind of threat, preventive suspension is improper.13 On 9 May 2003, Juanitas wrote a letter14 to BCPI narrating what he saw. Juanitas stated that: Noong May 5 bandang alas 4:20 ng madaling araw ako po ay lumabas ng electral [sic] shop upang pumunta sa production upang mag monitor. Ng sa bandang locker room pa lang ako may nakita ako tatlong tao na nakasuot ng kulay puti na nagpaikot-ikot (sa harapan banda ng bandi [sic] clock). Medyo madilim pa kaya hindi ko nakita si Alex Gurango kasi nakasoot sya ng kulay dark blue na T-shirt. Ng medyo malapit na ako nakarinig ako ng boses na (tama na nasasaktan na ako) at may sumagot na ibigay mo na masasaktan ka lang. Ng makalapit na ako sa kanila nakita ko na iniipit na ng kanang braso ni Albao (Guard) ang leeg ni Alex. Akala ko nagbibiroan lang sila. Tinanong ko kung ano yan pero bago ako tumanong sa kanila nakita ko na nasasaktan na si Alex dahil sa pagkaipit sa kanyang leeg. Sagot ni Alex sa akin pre (ako) kinukuha nila ang kamera sa akin to eh. Sabi pa ni Alex hindi ko to ibibigay sa inyo kahit ako’y saktan nyo, hindi ako lalaban sa inyo. May pagbibigyan ako, ibibigay ko to sa management. Sabi ko ano ba yan nasasaktan na ang tao. Nagtataka naman ako sa kanila ni Pables at Lañada bakit hindi nila inaawat, nakatingin lang sila at kasamahan pa nila. Ako naman natatakot akong paghiwalayin sila kasi may baril si Albao na naka sabit sa beywang nya baka pag inawat ko baka sasabihin ni Albao na kumampi ako kay Alex dahil parehas kaming maintenance. Sinabihan ko si Albao na bitiwan mo si Alex ayusin natin to. Hindi pa rin binitiwan ni Albao ang pagkaipit sa leeg ni Alex hanggang sa naitulak ko sila papunta sa guardhouse. Ng sa loob na ng guardhouse hindi pa rin binitiwan ni Albao si Alex kaya hinahanap ko ang kanilang O.I.C. Para ayusin na. Maya maya lumabas si Cordero (O.I.C.). Sabi ko awatin niya si Albao pero hindi manlang nya inawat pati na ang kanyang mga kasama dahil nandoon pa rin sa loob ng guardhouse sina Pables, Lañada at Cordero. Lumabas ako at tinawag ko si Pong sa kanilang shop. Bumalik ako sa guardhouse kasama si Pong, ganon pa rin nakakapit pa rin ang braso ni Albao sa leeg ni Alex. Ngayon naglakas loob na lang ako na paghiwalayin sila. Nahirapan ako dahil malakas si Albao. Napaghiwalay ko sila pero muntik pa nga ako tamaan ng kamay ni Albao at ng maghiwalay na pinaupo ko si Alex sa upuan sa tabi at hinarang ko si Albao dahil gusto pa nyang lumapit kay Alex at nagsabi ako kay Pong na bantayan mo si Alex dahil tatawag ako ng Korean o supervisor para ayusin.15 On 10 May 2003, BCPI wrote a letter to Gurango finding him guilty of engaging in a fistfight and violating company policy by bringing a camera. On 14 May 2003, Gurango wrote a letter16 to BCPI stating that:

except those authorized by higher authorities.g. 2003. The NLRC’s Ruling In its 17 October 2005 Resolution. Cordero and Pablis for slight physical injury. 2003. later. I don‘t find the complainant was foolish enough to try to snatch the gun of Albao during the incident. The statement of guard Albao was made on May 28. Grave. (Table IV. and in view of the gravity of the offenses that you have committed which constitute gross misconduct. by some of the guards. 4. In the present case.22 . Attempting to inflict or inflicting bodily injury upon any Company official (e. Carmona. still. Complainant did not start nor provoke the fight. make-up kits. a camera. the Company is constrained to terminate your employment for cause effective May 20. Gurango filed with the 5th Municipal Circuit Trial Court (MCTC). 3. (Table I. He was dismissed from [sic] trying to bring an alleged prohibited item.. In a letter19 dated 19 May 2003. no solid cause exists to dismiss complainant from employment as to warrant a dismissal. The camera is undisputably owned by complainant. So why would he try to snatch a gun for a very trivial misunderstanding. Cavite. BCPI dismissed Gurango effective 20 May 2003. other than those required in the performance of one‘s duty which disrupt/obstruct Company services and operations. (Table II. Based on the foregoing. It was precipitated.e. 1 of Code of Discipline). As to the alleged fistfight between the complainant and security guard Albao. The prohibition against the bringing of personal belongings in to the work station/area is qualified by a condition that such belongings will disrupt/obstruct company‘s services and operations. Grave. Minor.. No. discman. For me to further explain. ladies‘ bag workers‘ knapsacks and the like. 10 of Code of Discipline). (Table I. The statement of Albao that complainant tried to snatch his service firearm is not only unbelievable but is also exaggerated. I am more inclined to believe and find credible complainant‘s version that he was mauled by Albao and. BCPI stated that After a thorough evaluation and intensive deliberation on the facts attendant to your case. a criminal complaint18 against Albao.20 On 26 May 2003. this however. An unloaded camera is not listed and we cannot imagine how such camera could ―disrupt or obstruct company services and operations.17 On 15 May 2003. the NLRC affirmed in toto the Labor Arbiter‘s 6 July 2004 Decision. Moreover. very credible while Albao‘s contradictory statement is the fruit of afterthought. therefore. The Labor Arbiter’s Ruling In his 6 July 2004 Decision. by guard Albao when he tried to get the complainant‘s camera for no valid reason. His letter/statement was made on May 6. (Table I. could you please be more specific what company policies are you referring to when you said that bringing of camera inside the production area and refusal to surrender the same camera constitute infractions of company policy. No. security guard who is a peacekeeping officer of the company) or employee.. The Labor Arbiter is correct and we concur in his finding that the complainant was not foolish enough to try to snatch the gun of Albao. The Labor Arbiter ordered BCPI to pay Gurango backwages and separation pay. Grave. involvement in a fist fight with a security guard last May 5. No. Bringing it inside his workplace is not a crime. not dismissal. What is clear is that the security guards over acted in the performance of their duty. or only a day after the incident. inside the Production Area but company rules did not prohibit the bringing of camera.. several days after the incident. BCPI and Hong appealed to the NLRC. and.I again would like to reiterate that I was never involved nor commit [sic] any violation of Company‘s Code of Discipline. at the close of business hours. Moreover. even if we assume that the complainant indeed violated this Inter-Office Memorandum. radios. No. 2. i. Concealing and bringing in to work station/area of personal belongings (e. 6 of Code of Discipline). this will not justify complainant‘s dismissal because the penalty provided therein is only six (6) days suspension from work without pay. Serious. I am convinced Albao lied in his statement. instead. 2003.I find that complainant‘s statement is freshly unblemished. How can an unloaded camera be said to ―disrupt/obstruct company services and operations‖? It cannot. and 5. 05 of Code of Discipline). Intentionally causing personal injury to another person (i. The Labor Arbiter held that: I find that the complainant was illegally dismissed from employment. The NLRC held that: Although fighting within company premises constitute serious misconduct. a camera). the security guard) within the Company premises. 12 of Code of Discipline). Starting or provoking a fight.e. Utter disregard for or refusal to submit to reasonable inspection connected within [sic] the Company premises by authorized Company security personnel in the conduct of their business. 2003. Gurango filed with the NLRC a complaint against BCPI and Hong for illegal dismissal. walkman.g. does not apply in this case. That is why in the enumerations the following are included. No. Management has found you to have committed the following Offenses under the Company‘s Code of Discipline: 1. the Labor Arbiter found BCPI liable for illegal dismissal.

The Court of Appeals held that ―private respondent engaged himself in a fistfight with the security guard‖ 23 and that engaging in a fistfight constituted serious misconduct. the findings of fact of the Court of Appeals conflict with the findings of fact of the NLRC and the Labor Arbiter. 171630August 8. BCPI did not present any evidence to show that Gurango engaged in a fistfight. JR. a dereliction of duty. (3) in his medical report. (9) the NLRC found Albao‘s statement unbelievable and exaggerated. are accorded not only respect but finality when supported by susbstantial evidence. Aguinaldo found that Gurango suffered physical injuries. (4) Gurango filed with the MCTC a complaint against Albao. G. It is the transgression of some established and definite rule of action.). only questions of law may be raised in petitions for certiorari under Rule 45 of the Rules of Court. Substantial evidence is that amount of relevant evidence as a reasonable mind might accept as adequate to support a conclusion. (2) nobody corroborated Albao‘s version of the facts. BCPI and Hong filed with the Court of Appeals a petition for certiorari under Rule 65 of the Rules of Court. (5) the Labor Arbiter found Gurango‘s statement credible and unblemished.‖ In Triumph International (Phils. and implies wrongful intent and not mere error in judgment. 94004 and REINSTATE the 17 October 2005 and 24 January 2006 Resolutions of the NLRC in CA No. (8) the NLRC found that Gurango did not start a fight. the Court stressed that ―[i]n order to constitute serious misconduct which will warrant the dismissal of an employee under paragraph (a) of Article 282 of the Labor Code. It is equally important and required that the act or conduct must have been performed with wrongful intent.). Inc.25 the Court enumerated exceptions to the rule. We SET ASIDE the 20 July 2006 Decision and 11 September 2006 Resolution of the Court of Appeals in CA-G. SP No. who are deemed to have acquired expertise in matters within their jurisdiction. No. In the present case. a forbidden act. As a general rule. ―I am convinced Albao lied in his statement‖. we GRANT the petition. In National Labor Relations Commission v.30 WHEREFORE. the Court held that: The Labor Code provides that an employer may terminate the services of an employee for a just cause. ―The petition shall raise only questions of law. Inc. RICARDO T. the Court finds that petitioner AMACCI miserably failed to prove by substantial evidence its charges against respondent. v. Gurango filed a motion24 for reconsideration.‖ After a thorough examination of the records of the case. Apostol. If the employer fails to discharge the burden of proof. Juanitas corroborated Gurango‘s version of the facts. valid and legal cause for the termination of employment. that the dismissal is for just cause..R.versus -VICENTE RANDY R. by substantial evidence. the burden of proof rests on the employer to show that the dismissal is for just cause. In AMA Computer College – East Rizal. the finding of the Court of Appeals that Gurango engaged in a fistfight is a conclusion without citation of specific evidence on which it is based. Ignacio. The Court of Appeals’ Ruling In its 20 July 2006 Decision. The Issue Gurango raises as issue that the Court of Appeals erred in ruling that he was legally dismissed. SO ORDERED SECOND DIVISION CENTURY CANNING CORPORATION. Also. willful in character. might conceivably opine otherwise. as required by Article 282(a) of the Labor Code. 29 (Emphasis supplied) The surrounding circumstances show that Gurango did not engage in a fistfight: (1) in his 9 May 2003 letter to BCPI. aside from Albao‘s statement. the law considers the matter a case of illegal dismissal and the burden is on the employer to prove that the termination was for a valid or authorized cause. In AMA Computer College — East Rizal v. and (10) the Court of Appeals‘ reversal of the findings of fact of the Labor Arbiter and the NLRC is baseless. equally reasonable. Hence. 044428-05. PO. And the quantum of proof which the employer must discharge is substantial evidence. Among the just causes in the Labor Code is serious misconduct. The Court’s Ruling The petition is meritorious. there is no showing that Gurango‘s actions were performed with wrongful intent. 2010 . (6) the Labor Arbiter found Albao‘s statement contradictory. the dismissal is deemed illegal. the present petition. which the NLRC denied. RAMIL.BCPI and Hong filed a motion for reconsideration. (7) the Labor Arbiter stated. When there is no showing of a clear. and AMANCIO C. the Court of Appeals set aside the 17 October 2005 and 24 January 2006 Resolutions of the NLRC. the Court held that factual findings of labor officials. Misconduct is improper or wrong conduct. Moreover. Salgarino. the employer has the burden of proving. which the Court of Appeals denied in its 11 September 2006 Resolution. The misconduct to be serious within the meaning of the Labor Code must be of such a grave and aggravated character and not merely trivial or unimportant. Among the exceptions are when the findings of fact are conflicting and when the findings are conclusions without citation of specific evidence on which they are based. it is not sufficient that the act or conduct complained of has violated some established rules or policies. In termination cases. An employee‘s dismissal due to serious misconduct must be supported by substantial evidence. however. the Court held that :In termination cases. Section 1 of Rule 45 states that.. even if other minds.R. Cordero and Pablis for slight physical injury. In Triumph International (Phils.28 In the present case. There is no showing at all that respondent‘s actions were motivated by a perverse and wrongful intent. RONQUILLO. BCPI failed to prove that he engaged in a fistfight and that there was just cause for his dismissal. Dr.

28[4] The following day. a company engaged in canned food manufacturing. It found that petitioner failed to show clear and convincing evidence that respondent was responsible for the forgery of the signature of Po in the CAPEX form. and was docketed as NLRC-NCR Case No. he received a Notice of Termination from Armando C. for the latter's signature. 1999 dismissing the complaint for lack of merit. set aside the ruling of LA Canizares. respondent transmitted it to Purchasing Officer Lorena Paz in Taguig Main Office.The antecedents are as follows: Petitioner Century Canning Corporation. March 4. He vehemently denied any participation in the alleged forgery. Tamayo. Consequently. The CAPEX form. 1999. 2003. for loss of trust and confidence. Respondent was. Jr. Prior to his dismissal on May 20. Ronquillo. as well as the coordination with the purchasing department regarding technical inquiries on needed products and services of petitioner's different departments. 2006.R. suspended on April 21. who reviewed the case. 1999. which was immediately transmitted to the Purchasing Department. and endorsed it to Marivic Villanueva. Canizares rendered a Decision30[6] dated December 6. thereafter. To respondent's surprise and dismay.29 LA Potenciano S. upholding LA Canizares' dismissal of his complaint. respondent prepared a CAPEX form for external fax modems and terminal server. Paz processed the paper and found that some details in the CAPEX form were left blank. Po. per order of Technical Operations Manager Jaime Garcia. Upon recommendation of LA Cristeta D. SP. respondent appealed to the National Labor Relations Commission (NLRC). Paz then transmitted the CAPEX form to Purchasing Manager Virgie Garcia and informed her of the questionable signature of Po. employed respondent Vicente Randy Ramil in August 1993 as technical specialist. respondent was asked to explain in writing the events surrounding the incident. She also doubted the genuineness of the signature of Po. 1999. dated December 1. respondent. However. 2002. the NLRC First Division. 2005 and February 17. Aggrieved by the LA's finding. with the form apparently signed by Po. 1999. Subsequently. did not have the complete details27[3] and some required signatures. the preparation of the purchase requisition (PR) forms and capital expenditure (CAPEX) forms.: Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to set aside the Decision25[1] and Resolution26[2] of the Court of Appeals (CA) in CA-G. On March 3. among others. the NLRC reversed itself and rendered a new Decision32[8] dated October 20. 1999. his job included. as appearing in the form. Secretary of Executive Vice-President Ricardo T. No. 00-05-05894-99. 86939.DECISION PERALTA. respondent was ordered to make another CAPEX form. non-payment of overtime pay. J. separation pay. 1999. The NLRC declared respondent's dismissal to be illegal and directed petitioner to reinstate respondent with full backwages and seniority rights and privileges. due to the urgency of purchasing badly needed equipment. Due to the foregoing. moral and exemplary damages and attorney's fees against petitioner and its officers before the Labor Arbiter (LA). respectively. the request for the equipment was put on hold due to Po's forged signature. in its Decision31[7] dated August 26. on May 24. on May 20. however. Suspecting him to have committed forgery. Petitioner filed a motion for reconsideration. Respondent filed a . filed a Complaint for illegal dismissal.

OVERLOOKING THE RULE THAT THE MERE EXISTENCE OF A BASIS FOR BELIEVING THAT SUCH EMPLOYEE HAS BREACHED THE TRUST AND CONFIDENCE OF HIS EMPLOYER SUFFICES FOR HIS DISMISSAL..34[1 As correctly found by the CA: x x x The record of the case is bereft of evidence that would clearly establish Ramil's involvement in the forgery. Petitioner's main allegation is that there are factual and legal grounds constituting substantial proof that respondent was clearly involved in the forgery of the CAPEX form. respondent has the propensity to deviate from the Standard Operating Procedure as shown by the fact that the CAPEX form. III THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT FOR LOSS OF TRUST AND CONFIDENCE TO BE A VALID GROUND FOR AN EMPLOYEE'S DISMISSAL. and to pay respondent full backwages from the time his employment was terminated on May 20. Petitioner filed a motion for reconsideration. which was denied by the NLRC. which the CA denied in a Resolution dated February 17. without exceptions one of which is when the findings of fact of the labor officials on which the conclusion was based are not supported by substantial evidence. respondent filed a petition for certiorari with the CA.33[9] In the case at bar. the NLRC's findings of fact upon which its conclusion was based are not supported by substantial evidence. in its Decision dated December 1. II THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING THAT PETITIONER CORPORATION FAILED TO SATISFY THE BURDEN OF PROVING THAT THE DISMISSAL OF PRIVATE RESPONDENT WAS FOR A VALID OR AUTHORIZED CAUSE. remanded the case to the LA for the computation of backwages of the respondent.motion for reconsideration. Finally. in February 1999. with the forged signature of Po.e. The CA. IV THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING THAT ASIDE FROM HIS INVOLVEMENT IN THE FORGERY OF THE CAPITAL EXPENDITURE (CAPEX) FORMS. respondent alleged that petitioner failed to present clear and convincing evidence to prove his participation in the charge of forgery nor any damage to the petitioner. Frustrated by this turn of events. Petitioner insists that the mere existence of a basis for believing that respondent employee has breached the trust and confidence of his employer suffices for his dismissal. 2006. i. likewise. The same holds true when it is perceived that far too much is concluded. respondent is the forger of the signature of Po. Hence. without loss of seniority rights and privileges. respondent ordered 8 units of External Fax Modem without the required CAPEX form and a PR form. he has the motive to forge the signature. the forged signature was already existing when he submitted the same for processing. inferred or deduced from bare facts adduced in evidence. the amount of relevant evidence. that is. AND MUST BE FOUNDED ON CLEARLY ESTABLISHED FACTS. petitioner faults the CA in disregarding the unanimous findings of the LA and the NLRC sustaining the legality of respondent's termination from his employment. the instant petition assigning the following errors: I THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN DISREGARDING THE UNANIMOUS FINDINGS OF THE LABOR ARBITER AND THE NATIONAL LABOR RELATIONS COMMISSION SUSTAINING THE LEGALITY OF PRIVATE RESPONDENT'S TERMINATION FROM HIS EMPLOYMENT. petitioner maintains that aside from respondent's involvement in the forgery of the CAPEX form. his past violations of company rules and regulations are more than sufficient grounds to justify his termination from employment. The rule is that high respect is accorded to the findings of fact of quasi-judicial agencies. IT MUST BE SUBSTANTIAL AND NOT ARBITRARY. is not complete in details and lacks the required signatures. which a reasonable mind might accept as adequate to justify a conclusion. also. 1999 up to the time of the finality of its decision. as he is the custodian and the one who prepared the CAPEX form. The CA. PRIVATE RESPONDENT'S PAST VIOLATIONS OR ADMITTED INFRACTIONS OF COMPANY RULES AND REGULATIONS ARE MORE THAN SUFFICIENT GROUNDS TO JUSTIFY THE TERMINATION OF HIS EMPLOYMENT WITH PETITIONER CORPORATION. They did not even submit any affidavit of witness35[11] or present any during the hearing to substantiate their claim against . The rule is not. rendered judgment in favor of respondent and reinstated the earlier decision of the NLRC. dated August 26. It ordered petitioner to reinstate respondent. however. In his Comment. more so in the case at bar where both the LA and the NLRC share the same findings. 2002. 2005. Anent the first issue raised.

Accordingly. theories. accusations. while We have previously held that employers are allowed a wider latitude of discretion in terminating the services of employees who perform functions which by their nature require the employers' full trust and confidence and the mere existence of basis for believing that the employee has breached the trust of the employer is sufficient. because to permit him to do so would be unfair to the adverse party. He could have easily forged the signature of Po on the same day that he prepared the CAPEX form and submitted it on the very same day to petitioner's main office without passing through any officer of petitioner. Villanueva or any officer of the petitioner's company could have readily noticed the lack of signature. respondent received the CAPEX form containing the signature of Po. but proof beyond reasonable doubt is not . reversed the ruling of the NLRC. it can be correctly inferred that he is not the forger. if respondent retrieved the form on March 4. therefore. 1999. Failure to discharge this evidentiary burden would necessarily mean that the dismissal was not justified and. As to the second issue. must be based on a willful breach of trust44[20] and founded on clearly established facts. such as the NLRC. if respondent was the one who forged the signature of Po in the CAPEX form. administrative agency or quasi-judicial body need not be considered by a reviewing court. as correctly found by the NLRC in its original Decision. Petitioner's belated allegations in its reply filed before this Court that Marivic Villanueva denied having seen the CAPEX form cannot be given credit. factual findings of an administrative agency. Had the CAPEX form been returned to respondent without Po's signature. there was no need for him to endorse the same to Villanueva and transmit it the next day. dated May 20. Po. x x xHowever. as correctly found by the NLRC in its original decision dated August 26.37[13] When a party deliberately adopts a certain theory and the case is decided upon that theory in the court below. In case of doubt. such cases should be resolved in favor of labor. he had the motive to commit the forgery. respondent would not be benefited by the purchase of the subject equipment. Some of your statements do not jibe with theirs.42[18] this does not mean that the said basis may be arbitrary and unfounded The right of an employer to dismiss an employee on the ground that it has lost its trust and confidence in him must not be exercised arbitrarily and without just cause. 1999. The basis for the dismissal must be clearly and convincingly established.Petitioner based respondent's dismissal on its unsubstantiated suspicions and conclusion that since respondent was the custodian and the one who prepared the CAPEX forms.Ramil.38[14] Thus. upon this. Points of law.43[19] Loss of trust and confidence. to be a valid cause for dismissal. he endorsed it to Marivic Villanueva for the signature of the Executive Vice-President Ricardo T. and conclusions of employers do not provide for legal justification for dismissing employees. However. Unsubstantiated suspicions. the law mandates that the burden of proving the validity of the termination of employment rests with the employer. and could have easily attested that the form was unsigned when it was released to respondent. With respect to the third issue.36[12] Respondent alleged in his position paper that after preparing the CAPEX form on March 3. 2002. The equipment would be for the use of petitioner company. illegal. provides that:We also conducted inquiries from persons concerned to get more information in (sic) this forgery.39[15] Contrary to petitioner’s assertion. March 4. this information which petitioner allegedly obtained from the “persons concerned” was not backed-up by any affidavit or proof. Further. therefore. Petitioner did not even bother to name these resource persons. this Court sees no error on the part of the CA when it made a new determination of the case and.40[16]The termination letter41[17] addressed to respondent. for want of substantial basis. as even decisions of administrative agencies which are declared “final” by law are not exempt from judicial review when so warranted. he will not be permitted to change the same on appeal. 1999. issues and arguments not brought to the attention of the lower court. 1999 with the signature of Po. pursuant to the social justice policy of labor laws and the Constitution. as they cannot be raised for the first time at that late stage. in fact or in law. Petitioner never controverted these allegations in the proceedings before the NLRC and the CA despite its opportunity to do so. cannot be given the stamp of finality and conclusiveness normally accorded to it. The next day.

Respondent was dismissed due to loss of trust and confidence and it would be impractical to reinstate an employee whom the employer does not trust. Thus. in view of the strained relations between petitioner and respondent. v. On the one hand. and to his other benefits or their monetary equivalent. computed from the time his compensation was withheld from him up to the time of his actual reinstatement. the same could no longer be utilized as an added justification for his dismissal.. In that case. Quezon City v. 5). computed from the date of his dismissal on May 20. As for the final issue raised. and other benefits or their monetary equivalent. x x x As the term suggests. secondly. there is neither direct evidence nor substantial documentary evidence pointing to respondent as the one liable for the forgery of the signature of Po. the payment releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust. the payment of backwages corresponding to the period from his illegal dismissal up to actual reinstatement. The grant of separation pay did not redress the injury that is . the Court finds that it would be best to award separation pay instead of reinstatement. inclusive of allowances. These twin remedies —reinstatement and payment of backwages — make the dismissed employee whole who can then look forward to continued employment. firstly. whim. the grant of separation pay was a substitute for immediate and continued re-employment with the private respondent Bank. himself admitted during the company investigation that he tampered with the company's sensitive equipment (the JTF Gravitometer No. substantial proof based on documentary evidence is sufficient to warrant their dismissal from employment. 1999 up to the finality of this decision. Reinstatement restores the employee who was unjustly dismissed to the position from which he was removed. In view of the foregoing. Besides. an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges. Respondent's illegal dismissal carries the legal consequences defined under Article 279 of the Labor Code.necessary. Thus. Under the doctrine of strained relations. Deles Jr. v. We further said that even if there is no direct evidence to prove that the employees actually committed the offense. National Labor Relations Commission47[24] is also inapplicable. To consider these offenses as justification for his dismissal would be penalizing respondent twice for the same offense. is not applicable to the present case. Tongson.46[23] cited by the petitioner. and whose task is to handle and prepare delicate documents. and separation pay in lieu of reinstatement equivalent to one month salary for every year of service. The cited case of Deles Jr. the inappropriateness or non-availability of one does not carry with it the inappropriateness or nonavailability of the other. Jr. respondent had already been sanctioned for his prior infractions. such payment liberates the employee from what could be a highly oppressive work environment.. On the other hand. The statutory intent on this matter is clearly discernible. However. caprice or suspicion. Inc. that at the very least. The two forms of relief are distinct and separate. PAL dismissed Tongson from service on the ground of corruption. respondent was involved in extorting money from PAL's passengers. and to the payment of his full backwages. that the employee becomes entitled to reinstatement to his former position without loss of seniority rights and. Hence. while the grant of backwages allows the same employee to recover from the employer that which he had lost by way of wages as a result of his dismissal. Therein dismissed employee. to his status quo ante dismissal. We upheld the validity of Tongson's dismissal because PAL's overwhelming documentary evidence reflects an unbroken chain which naturally leads to one fair and reasonable conclusion. that is. The case of Philippine Airlines. one from the other. In the case at bar. The correct rule has always been that such previous offense may be used as valid justification for dismissal from work only if the infractions are related to the subsequent offense upon which the basis of termination is decreed. the employee would eternally remain at the mercy of the employer.48[25] His previous offenses were entirely separate and distinct from his latest alleged infraction of forgery. petitioner's reliance on respondent's previous tardiness in reporting for work as a ground for his dismissal is likewise not meritorious. extortion and bribery in the processing of PAL's passengers' travel documents. otherwise. computed from the time of his engagement by petitioner on August 1993 up to the finality of the decision.‖ In the instant case. there existed sufficient basis for the finding that therein employee breached the trust and confidence of his employer. separation pay is the amount that an employee receives at the time of his severance from the service and x x x is designed to provide the employee with ―the wherewithal during the period that he is looking for another employment. that is.]The awards of separation pay and backwages are not mutually exclusive and both may be given to the respondent.45[21] It must rest on substantial grounds and not on the employer’s arbitrariness. inclusive of allowances. Serrano. In Nissan North Edsa Balintawak. Though the grant of reinstatement commonly carries with it an award of backwages. do these two remedies give meaning and substance to the constitutional right of labor to security of tenure. the payment of separation pay has been considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable.49[30] the Court held that: The normal consequences of a finding that an employee has been illegally dismissed are. respondent is entitled to the payment of full backwages.

. seeking to set aside the November 30.. it could not be an adequate substitute both for reinstatement and for backwages.51[1] under Rule 45 of the Rules of Court... computed from the time of his engagement by petitioner on August 1993 up to the finality of this decision SECOND DIVISION PHARMACIA and UPJOHN. 2005 Decision52[2] and May 5. The case is REMANDED to the Labor Arbiter for the purpose of computing respondent's full backwages.. No. SP No... and in lieu thereof.. the petition is DENIED..)50[31] The case is. ABAD.. ALEDA CHU. 00386.. and separation pay in lieu of reinstatement equivalent to one month salary for every year of service.. J. and other benefits or their monetary equivalent..... and MENDOZA. 2006 Resolution53[3] of the Court of Appeals (CA). are AFFIRMED with MODIFICATION that the order of reinstatement is deleted. therefore... separation pay... The Decision and Resolution of the Court of Appeals in CA-G. the transitional period the dismissed employee must undergo before locating a replacement job. J...: Before this Court is a petition for review on certiorari... INC. remanded to the Labor Arbiter for the purpose of computing the proper monetary award due to the respondent.. Put a little differently.R. JANE MONTILLA & FELICITO GARCIA. ALBAYDA. G. payment of backwages is a form of relief that restores the income that was lost by reason of unlawful dismissal.. is oriented towards the immediate future. 2006.. 86939.. 2005 and February 17.. JR... computed from the date of his dismissal on May 20. Respondent.R....x DECISION PERALTA. x x x The grant of separation pay was a proper substitute only for reinstatement. dated December 1.. in CA-G. -versus- Promulgated: RICARDO P.R... respectively. NACHURA.. inclusive of allowances... Chairperson. JJ.. 172724 Present: CARPIO. 2010 x.intended to be relieved by the second remedy of backwages.. in contrast. Petitioners. PERALTA.).WHEREFORE. (Emphasis supplied... August 23. SP No... .. that is. (now PFIZER PHILIPPINES. ASHLEY MORRIS... 1999 up to the finality of the decision. the loss of earnings that would have accrued to the dismissed employee during the period between dismissal and reinstatement... INC. Petitioner Century Canning Corporation is DIRECTED to pay respondent separation pay.

1999 to Felicito M. 1999. Inc. Respondent harped that his transfer would compel him to lose his free housing and his wife‘s compensation of P50. Respondent again speculated that the real reason behind his transfer was that it was petitioners‘ way of terminating his employment. a district meeting was held in Makati City wherein one of the topics discussed was the district territorial configuration for the new marketing and sales direction for the year 2000. (Upjohn) in 1978 and continued working there until 1996 when a merger between Pharmacia and Upjohn was created. Garcia (Garcia). Pharmacia‘s National Sales and External Business Manager. . respondent wrote a letter57[7] to Aleda Chu (Chu). both reprensentatives and district sales managers have been re-located in the On February 16. Respondent alleged that during one conversation.year-old daughter is studying in Bacolod City. In the said memorandum. Jr. After the merger. respondent was designated by petitioner Pharmacia and Upjohn (Pharmacia) as District Sales Manager assigned to District XI in the Western Visayas area. In a letter58[8] dated March 3.00 from her business in Bacolod City. On January 10. respondent wrote a letter55[5] dated December 27. Garcia explained that the factors used in determining assignments of managers are to maximize business opportunities and growth and development of personnel. and his two-year-old son is under his and his wife‘s direct care.000. Chu said that she did not give any assurance or commitment to respondent that he would not be transferred as long as he achieved his 100% target for 1999. 2000. Respondent added that he could not possibly accept his new assignment in Cagayan de Oro City because he will be dislocated from his family. Chu explained to respondent that they are moving him to Cagayan de Oro City. 2000. his eleven. Respondent said that he has always been assigned to the Western Visayas area and that he felt that he could not improve the sales of products if he was assigned to an unfamiliar territory. In December 1999. Garcia wrote a letter56[6] to respondent denying his request to be reassigned to the Western Visayas area. Pharmacia‘s Vice-President for Sales and Marketing. During the period of his assignment. Garcia stressed that other people past and in the year 2000 re-alignment. he would not be transferred. Sometime on August 9. reiterating his request to be reassigned to the Western Visayas area. Chu assured him that as long as he hits his sales target by 100%.The facts of the case are as follows: Respondent Ricardo P. respondent was reassigned as District Sales Manager to District XII in the Northern Mindanao area. Albayda. 2000. respondent settled in Bacolod City. respondent received a Memorandum54[4] announcing the sales force structure for the year 2000. questioning his transfer from District XI to District XII. his wife runs an established business in Bacolod City. One of the key areas covered in District XII is Cagayan de Oro City. (respondent) was an employee of Upjohn. Respondent concluded that his transfer might be a way for his managers to dismiss him from employment. In response to the memorandum.

because of their need of respondent‘s expertise to build the business there. Respondent argued that Chu failed to face and address the issues he raised regarding the loss of his family income. Montilla sent respondent a memorandum64[14] wherein his request to continue his work responsibilities in Negros Occidental or in any district in the Western Visayas area was denied as there was no vacant position in those areas. such was never done in the past and never the practice in the industry and in the Philippines. therefore. Montilla stressed that the company needed respondent in Cagayan de Oro City. Respondent. Chu expressed her disappointment on the way respondent viewed their reason for moving his place of assignment. Chu concluded that it appeared to her that respondent would not accept any reason for the movement and that nothing is acceptable to him except a Western Visayas assignment. he be given additional remuneration. Chu referred the case to the Human Resource Department for appropriate action. he can implement new ways and develop the sales force to become better and more productive. After the meeting. Respondent stated that he was already ready to take on his regular assignment as District Sales Manager in Negros Occidental or in any district in the Western Visayas area. 2000. 2000 up to the present. Respondent likened his transfer to Mindanao as a form of punishment as he alleged that even Police Chief General Panfilo Lacson transferred erring and non-performing police officers to Mindanao. the additional cost of housing and other additional expenses he will incur in Mindanao. Consequently. 2000. 2000. since respondent has been already in Bacolod and Iloilo for 22 years. when in fact. Chu added that the district performed dismally in 1999 and. Finally. In a letter62[12] dated May 17. Respondent replied through a letter59[9] dated March 16. In a letter63[13] dated May 17. was also given an option to be assigned in Metro Manila as a position in the said territory . Chu said that exposure to a different market environment and new challenges will contribute to respondent‘s development as a manager. 2000. he had already consumed all his sick leave credits for the year 2000. because of his wealth of experience. respondent acknowledged his receipt of the letters from Montilla. Montilla met with respondent to discuss his situation. In another memorandum61[11] dated May 15. 2000. 2000. Pharmacia‘s Human Resource Manager. notified respondent that since he has been on sick leave since January 5. Respondent informed Montilla that his doctors had already declared him fit for work as of May 16. Montilla informed respondent of the clinic schedule of the company appointed doctor. In a memorandum60[10] dated May 11. Jane B. talent and skills. they were confident that under respondent‘s leadership. Chu stressed that the decision to transfer respondent was purely a business decision. respondent would then be considered on indefinite sick leave without pay. Moreover. however. Montilla (Montilla). Montilla stated that per company policy. Chu was likewise disappointed with respondent‘s opinion that with the movement.

And because you had assured us that you . his services will be terminated on the basis of being absent without official leave (AWOL). Only the best field managers are given the opportunity to manage a territory in Metro Manila. Montilla stated that contrary to the opinion of respondent. In another memorandum69[19] dated June 26. respondent is entitled to Relocation Benefits and Allowance pursuant to the company‘s Benefits Manual. wherever the company needs you sees you fit. Respondent was warned that the same would be a final notice for him to report for work in Manila within 5 working days from receipt of the memo. 2000. It is the most challenging and most rewarding of all areas. 2000. Montilla gave respondent until June 2. Montilla stated that she had not heard from respondent since his June 8. 2000 to talk to his family and weigh the pros and cons of his decision on whether to accept a post in Cagayan de Oro City or in Manila. 2000. 2000. In a letter65[15] dated May 31. Montilla sent respondent another memorandum66[16] dated June 6. 2000. respondent told Montilla that he will be airing his grievance before the National Labor Relations Commission (NLRC). In a letter67[17] dated June 8. 2000. 2000. Your employment contract actually states that you are willing to be assigned anywhere else in the Philippines. respondent reiterated the concerns he raised in his previous letters. therefore.had recently opened when Joven Rodriguez was transferred as Government Accounts and Special Projects Manager. the most competitive and significant area for sales. In a memorandum68[18] dated June 15. This is why I chose Manila over Cagayan de Oro for you in my letter dated June 6. Montilla sent respondent a memorandum70[20] notifying him of their decision to terminate his services after he repeatedly refused to report for work despite due notice. otherwise. It is where the success or failure of our business lies. Montilla directed respondent to report for work in Manila within 5 working days from receipt of the memorandum. It is. the pertinent portions of which read: As I mentioned many times in our talks. 2000 letter and that he has not replied to their last memorandum dated June 15. Metro Manila is the biggest and most advanced market we have in the Philippines. stating that it is in the best interest of the company for respondent to report to the Makati office to assume his new area of assignment. On July 13. 2000. you are in a Sales position for which you had signed up.

2002. I asked you to assume your new assignment in Metro Manila before June 16. you wrote us a letter advising us that you can not accept the new assignment in Manila. 2000. the complaint against respondents in the above-entitled case is DISMISSED for lack of merit. 2000. premises considered. the Labor Arbiter (LA) rendered a Decision73[23] dismissing the case.71[21] On August 14. 2004. Pharmacia‘s President. you failed to comply.77[27] which was denied by the NLRC in a Resolution78[28] dated November 10. So we issued another memo dated June 26. SO ORDERED.76[26] Respondent filed a Motion for Reconsideration. The decision of the Labor Arbiter is AFFIRMED en toto. which shall be effective on July 19. the dispositive portion of which reads: WHEREFORE. VI. However. In a Decision75[25] dated July 26. In view of the foregoing. the company shall be constrained to terminate your employment. 2000. we advised you that the assignment in Manila is a business need and for said reason you were requested to report for work within five working days from receipt of notice. On July 12. 2004.74[24] Respondent appealed to the NLRC. Montilla and Garcia for constructive dismissal. Since mandatory conciliation failed between the parties. Regional Arbitration Branch No. . Before June 16. 2000.were fit to work. after being on sick leave for about five and a half months. 2000. respondent filed a Complaint72[22] with the NLRC. we have no alternative but to terminate your services on the basis of absence without official leave (AWOL) and insubordination pursuant to Article 282 of the Labor Code of the Philippines. SO ORDERED. the appeal of complainant is hereby DISMISSED for lack of merit. instructing you to report for work and advising you that should you continue to fail to report for work. In response. the NLRC dismissed the appeal. the dispositive portion of which reads: WHEREFORE. Also included in the complaint was Ashley Morris. Chu. both sides were directed to submit their position papers. Bacolod City against Pharmacia. premises considered.

SO ORDERED. are hereby REVERSED and SET ASIDE. (3) there is grave abuse of discretion. 06-08-10650-2000).Aggrieved. which was. The scope of our review in petitions filed under Rule 45 is limited to errors of law or jurisdiction. 2005. 2004 and the Decision dated July 26. the dispositive portion of which reads: WHEREFORE. the case is REMANDED to the National Labor Relations Commission. this Court does not entertain factual issues. V-000521-2000 (RAB Case No.82[32] This Court leaves the evaluation of facts to the trial and appellate courts which are better equipped for this task. to wit: (1) the conclusion is a finding grounded entirely on speculation. Regional Arbitration Branch No.81[31] The petition is meritorious. and its . with petitioner raising a lone assignment of error to wit: WHETHER OR NOT THE COURT OF APPEALS (CEBU CITY) CAN REVERSE OR SET ASIDE THE FACTUAL AND LEGAL FINDINGS OF THE NLRC WHICH WAS BASED ON SUBSTANTIAL EVIDENCE WHEN THERE IS NO SHOWING OF PALPABLE ERROR OR THAT THE FINDINGS OF FACTS OF THE LABOR ARBITER IS CONTRARY TO THAT OF THE NLRC. denied by the CA in a Resolution dated May 5. (2) the inference made is manifestly mistaken. 2004 of the NLRC Fourth Division in NLRC Case No. Hence. however. respondent filed a Petition for Certiorari79[29] before the CA. However. 2006. (6) the CA goes beyond the issues of the case.80[30] Petitioners filed a Motion for Reconsideration. On November 30. herein petition. Bacolod City. (4) the judgment is based on a misapprehension of facts. there are instances in which factual issues may be resolved by this Court. premises considered. As a general rule. (5) the findings of fact are conflicting. this petition is hereby given due course and the Resolution dated November 10. for the proper determination of the petitioner‘s claims. surmise and conjecture. the CA rendered a Decision ruling in favor of respondent. Accordingly. VI.

Should the employer fail to overcome this burden of proof. made in bad faith.86[36] .85[35] Both the LA and the NLRC ruled that the reassignment of respondent was a valid exercise of petitioners‘ management prerogative. privileges and other benefits. the employee's transfer shall be tantamount to constructive dismissal. this Court is prompted to evaluate the findings of the LA. and (10) the findings of fact of the CA are premised on the supposed absence of evidence and contradicted by the evidence on record. inconvenient. (7) the findings of fact of the CA are contrary to those of the trial court. (9) the facts set forth in the petition. growth and development of personnel and that the expertise of respondent was needed to build the company‘s business in Cagayan de Oro City which dismally performed in 1999. benefits. or prejudicial to the employee. Petitioners argue that the CA erred when it reversed the factual and legal findings of the NLRC which affirmed the decision of the LA. or effected as a form of punishment or demotion without sufficient cause. and the action is not motivated by discrimination. (8) said findings of fact are conclusions without citation of specific evidence on which they are based. provided there is no demotion in rank or diminution of salary. The LA shared petitioners‘ posture that the transfer of respondent was a valid exercise of a legitimate management prerogative to maximize business opportunities.84[34] To determine the validity of the transfer of employees. and the CA which are diametrically opposed.83[33] In the present case. and other privileges. On petitioners’ exercise of management prerogative Jurisprudence recognizes the exercise of management prerogative to transfer or assign employees from one office or area of operation to another. Petitioners contend that it is well established that factual findings of administrative agencies and quasi-judicial bodies are accorded great respect and finality and are not to be disturbed on appeal unless patently erroneous. nor does it involve a demotion in rank or a diminution of his salaries. are not disputed by the respondent. the NLRC. this Court sustains the findings of the LA and the NLRC which are more in accord with the facts and law of the case.findings are contrary to the admissions of both appellant and appellees. After a judicious examination of the records herein. as well as in the petitioner‘s main and reply briefs. the employer must show that the transfer is not unreasonable.

affirming those of the LA.88[38] The rule in our jurisdiction is that findings of fact of the NLRC. expressly recognized complainant‘s expertise and capabilities as a top sales man and manager for which reason the respondent company needs his services and skills to energize the low-performing areas in order to maximize business opportunities and to afford complainant an opportunity for further growth and development. Inc:91[41] x x x Factual findings of the NLRC affirming those of the Labor Arbiter. should not be taken in consideration of his transfer. the LA ruled: The allegation of complainant that his income will be affected because his wife who is doing business in Bacolod City and earns P50. even if complainant may accept his new assignment in Cagayan de Oro or in Metro Manila.89[39] Substantial evidence is an amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. Such misinterpretation or misguided supposition by complainant is belied by the fact that respondent‘s officers had in several communications officially sent to complainant. Complainant persistently refused instead of taking this opportunity as a challenge after all.87[37] Lastly. are entitled to great weight and will not be disturbed if they are supported by substantial evidence. The NLRC affirmed in toto the findings of the LA. are accorded respect if not finality. the LA pointed out that in respondent‘s contract of employment. the LA mentioned that respondent was entitled to Relocation Benefits and Allowance in accordance with petitioners‘ Benefits Manual. What is contemplated here is the diminution of the salary of the complainant but not his wife. Coca-Cola Bottlers Phils. his wife may still continue to do her business in Bacolod City. The NLRC ruled that petitioners‘ restructuring move was a valid exercise of its management prerogative and authorized under the employment contract of respondent. thus: xxxx You agree. when sufficiently supported by evidence on record. He totally forgot the terms and conditions in his employment contract. during the period of employment. if true. he agreed to be assigned to any work or workplace as may be determined by the company whenever the operations require such assignment. both bodies being deemed to have acquired expertise in matters within their jurisdictions. to be assigned to any work or workplace for such period as may be determined by the company and whenever the operations thereof require such assignment. Anyway. and are considered binding on this Court.00. the nature of employment of a sales man or sales manager is that it is mobile or ambulant being always seeking for possible areas to market goods and services.000. stated in part. to wit: We do not see in the records any evidence to prove that the restructuring move of respondent company was done with ill motives or with malice and bad faith purposely to constructively terminate complainant‘s employment. As long as their decisions are devoid of any unfairness . Besides.In addition. the LA explained that the reassignment of respondent was not a demotion as he will also be assigned as a District Sales Manager in Mindanao or in Metro Manila and that the notice of his transfer did not indicate that his emoluments will be reduced. On respondent‘s allegation that his family stands to lose income from his wife‘s business. Moreover.90[40] As explained in Ignacio v.. Bacolod City and Manila is just one (1) hour travel by plane.

one can even make a case and say that the transfer of respondent is also for his professional growth. improving and developing a new market may even be more profitable than having respondent stay and serve his old market. While it would be profitable to keep respondent in an area where he has established contacts and therefore the probability of him reaching and even surpassing his sales quota is high. while the CA‘s observations may be acceptable to some quarters. one can also make a case that since respondent is one of petitioners‘ best district managers.93[43] In the absence of arbitrariness. It is the employer‘s prerogative. In another territory. Considering the quality of his performance in his territory.or arbitrariness in the process of their deduction from the evidence proffered by the parties. the private respondents cannot therefore reason out that they are merely exercising their management prerogative for it would be unreasonable since petitioner has not been amiss in his responsibilities. Thus. to wit: Discussing the issues jointly. After all.92[42] Based on the foregoing. one can even argue that for purposes of future promotions.94[44] As a matter of fact. In addition. thus. Since respondent has been already assigned in the Western Visayas area for 22 years. In addition. the CA should have deferred to such specialized agencies which are considered experts in matters within their jurisdictions. this Court rules that the CA had overstepped its legal mandate by reversing the findings of fact of the LA and the NLRC as it appears that both decisions were based on substantial evidence. it would undeniably cause undue inconvenience to herein petitioner who would have to relocate. it is nevertheless not universal so as to foreclose another view on what may be a better business decision. there will be new and more challenges for respondent to face. Moreover. and competence. There is no proof of arbitrariness or abuse of discretion in the process by which each body arrived at its own conclusions. it would be better to promote a district manager who has experience in different markets. based on its assessment and perception of its employee‘s qualifications. in effect. disrupting his family‘s peaceful living. to move them around in the various areas of its business operations in order to ascertain where they will function with maximum benefit to the company. Public respondent had overlooked the fact that the reassignment of petitioner was arbitrary and unreasonable as the same was in contrast to the purposes espoused by private respondents. the CA should not have looked into the wisdom of a management prerogative. petitioner is a complete alien to the territory and as no established contacts therein. it may mean that his market knowledge is very limited. a perusal of the records shows that there was no overwhelming evidence to prove that petitioner was terminated for a just and valid cause. an area which in the past had been dismally performing. what is objectionable with the CA decision is that in finding that the reassignment of respondent was arbitrary and unreasonable it had. he is the right person to turn around and improve the sales numbers in Cagayan de Oro City. aptitudes. he cannot be effective nor can he maximize profits. Furthermore. It cannot also contribute to his professional growth and development considering that he had already made a mark on his territory by virtue of his twenty-two (22) long years of valuable service. imposed on petitioners its own opinion or judgment on what should have been a purely business decision. . Undoubtedly. on the one hand. all that is left is for the Court to stamp its affirmation and declare its finality. and with no additional monthly remuneration.

to be assigned to any work or workplace for such period as may be determined by the company and whenever the operations thereof require such assignment. National Labor Relations Commission. Absent a definite finding that such exercise of prerogative was tainted with arbitrariness and unreasonableness. it must also protect the right of an employer to exercise what are clearly management prerogatives. And it is precisely because of respondent‘s good performance that petitioners want him to be reassigned to Cagayan de Oro City so that he could improve their business there. Bobadilla had no valid reason to disobey the order of transfer.100[50] which involved a complaint filed by a medical representative against his employer drug company for illegal dismissal for allegedly terminating his employment when he refused to accept his reassignment to a new area. The ruling of the Court therein. Even as the law is solicitous of the welfare of employees. in respondent‘s Contract of Employment.The foregoing illustrates why it is dangerous for this Court and even the CA to look into the wisdom of a management prerogative.96[46] he checked the box which asks. In respondent‘s Employment Application. In Abbott Laboratories (Phils. it bears to stress that respondent signed two documents signifying his assent to be assigned anywhere in the Philippines. also finds application in the instant case: Therefore. On this point. As long as the company's exercise of the same is in good faith to advance its interest and not for the purpose of defeating or circumventing the rights of employees under the laws or valid agreements. Inc. one can argue for or against the pros and cons of transferring respondent to another territory.99[49] Even if respondent has been performing his duties well it does not mean that petitioners‘ hands are tied up that they can no longer reassign respondent to another territory. such exercise will be upheld. a drug salesman or medical representative is expected to travel. the CA should have left the same to petitioners‘ better judgment. By the very nature of his employment. He should anticipate reassignment according to the demands of their business. What the CA failed to recognize is that the very nature of a sales man is that it is mobile and ambulant.). Certainly.98[48] item (8) reads: You agree. this Court cannot agree with the findings of the CA that the transfer of respondent was unreasonable. It would be a poor drug corporation which cannot . considering he had not been remiss in his responsibilities. The rule is well settled that labor laws discourage interference with an employer's judgment in the conduct of his business. He had tacitly given his consent thereto when he acceded to the petitioners‘ policy of hiring sales staff who are willing to be assigned anywhere in the Philippines which is demanded by petitioners‘ business. quoted hereunder.95[45] In addition. ―Are you willing to be relocated anywhere in the Philippines?‖97[47] In addition. during the period of your employment. the Court upheld the right of the drug company to transfer or reassign its employee in accordance with its operational demands and requirements. v.

even assign its representatives or detail men to new markets calling for opening or expansion or to areas where the need for pushing its products is great. respondent Montilla gave complainant a period of five (5) days from receipt thereof to report to Manila. is guilty of insubordination. 2000 that he is refusing his transfer gave complainant until June 16. Montilla. Clearly. 2000. x x x103[53] Based on the foregoing. complainant. Montilla. Notwithstanding his adamant refusal to resume working to his new assignment in Metro Manila. The series of chances given complainant to report for work. for its part. This is a strong indication that complainant really does not want to accept his new assignment either in Cagayan de Oro or in Metro Manila. has deliberately ignored and defied lawful orders of his employer. By way of reply. The refusal of complainant to accept his transfer of assignment is a clear willful disobedience of the lawful order of his employer and a ground to terminate his services under Article 282. More so if such reassignments are part of the employment contract. Ms. In a letter dated June 5. 2000. Finally. in his letter dated May 31. complainant was still given by respondent Montilla another chance to think it over up to June 2. 2000. 2000. coupled by his adamant refusal to report to his new assignment. An employee who refuses to be transferred. when the services of complainant was terminated by respondent company through its Human Resource Manager on the ground of absence without leave and insubordination pursuant to Article 282 of the Labor Code. Hence. xxxx In his letter dated May 17. by his unjustified acts of refusing to be transferred either to Mindanao or Manila for personal reasons. as amended. The long period of absence of complainant without official leave from April to July 19. this Court rules that the findings of the LA and the NLRC are supported by substantial evidence. absent any bad faith or malice on the part of respondents. 1999. Montilla sent complainant a final notice dated June 26. The NLRC. 2000 to reconsider his position. (a) of the Labor Code. 2000. . the NLRC also ruled that respondent was guilty of insubordination. 2000. with a warning that his failure to do so. par. The LA clearly outlined the steps taken by petitioners and the manner by which respondent was eventually dismissed. he clearly expressed his disagreement to his transfer and would rather seek justice elsewhere in another forum. 2000 up to May 11. is was only on July 19. starting April 2000 he was already on indefinite leave without pay. complainant already signified his refusal to accept his new assignment in Cagayan de Oro. complainant. for about four (4) months and he already consumed his leave credits up to March 2000. which is clearly a defiance of the lawful order of his employer. but still complainant did not comply.102[52] In addition. and a ground to terminate his services pursuant to Article 282 of the Labor Code. 2000 for him to report to Manila within five (5) working days from receipt of the same. notwithstanding the position taken by complainant in his letter dated May 31. to wit: As early as in December 27. is a conclusive indication of willful disobedience of the lawful orders of his employer. addressed to respondent Jane B. the complainant had abandoned his work by reason of his being on AWOL as a consequence of vigorous objection to his transfer to either Cagayan de Oro or Metro Manila. when such transfer is valid. But still the respondent company. 2000 is more than sufficient ground to dismiss him.101[51] On the existence of grounds to dismiss respondent from the service Because of respondent‘s adamant refusal to be reassigned. the company would be constraint to terminate his services for being absent without official leave. Complainant was on sick leave since January 5. the LA ruled that petitioners had valid grounds to terminate his employment. and he was ready to assume to his regular assignment as District Sales Manager of Negros Occidental. complainant informed her that his doctors have already declared him fit for work as of May 16. 2000 to Ms. thus: Apparently.

leaving his family behind. his dismissal was for just cause in accordance with Article 282(a)105[55] of the Labor Code. is inclined to believe the statement of Chu in her May 17. Furthermore. be attributed to both agencies. in view of the fact that it was an error for it to substitute its own judgment and interfere with management prerogatives. This Court. in view of the terms of the contract of employment and the general right of the parties. I am disappointed that with the movement. records reveal that respondent has been harping on the fact that no additional remuneration would be given to him with the transfer. For insubordination to exist. If respondent feels that what he was given is less than what is given to all other district managers who were likewise reassigned. sufficiently known to the employee and in connection to his duties. The CA. and the CA was certainly outside its mandate in reversing such findings.104[54] Such being the case. This Court has long stated that the objection to the transfer being grounded solely upon the personal inconvenience or hardship that will be caused to the employee by reason of the transfer is not a valid reason to disobey an order of transfer. No abuse of discretion can. the records show that petitioner was not guilty of such offense. No iota of evidence was presented that the reassignment of respondent was a demotion as he would still be a District Sales Manager in Cagayan de Oro City or in Metro Manila. On the observance of due process The CA ruled that respondent was denied due process in the manner he was dismissed by petitioners. this Court agrees with the NLRC when it observed that such inconvenience is considered an ―employment‖ or ―professional‖ hazard which forms part of the concessions an employee is deemed to have offered or sacrificed in the view of his acceptance of a position in sales. the onus is on him to prove such fact.106[56] This Court cannot agree with the findings of the CA. you expect to be paid additional remuneration when in fact. 2000 letter to respondent that additional remuneration is never given to people who are reassigned. ruled that respondent was not guilty of insubordination. to wit: x x x Likewise. a refusal to obey does not constitute a just cause for the employee‘s discharge. therefore. this has never been done in the past and never a practice within the industry and the Philippines.107[57] Lastly. respondent cannot adamantly refuse to abide by the order of transfer without exposing himself to the risk of being dismissed. Furthermore. he would be given relocation benefits in accordance with the Benefits Manual. the order must be reasonable and lawful. again. however. However. to wit: .explained why respondent was guilty of insubordination. or that such was the practice in the company. to wit: As to the findings of insubordination. respondent did not present any evidence that additional remuneration were being given to other district managers who were reassigned to different locations. can be considered unreasonable and petitioner‘s actuation cannot be considered insubordination. Hence. Where an order or rule is not reasonable. therefore. and with no clear additional remuneration. It is undeniable that the order given by the company to petitioner to transfer to a place where he has no connections. while it is understandable that respondent does not want to relocate his family.

Yet. they should have requested for an extension of time. to wit: [W]ell-settled is the dictum that the twin requirements of notice and hearing constitute the essential elements of due process in the dismissal of employees. the same is not fatal as only an ―ample opportunity to be heard‖ is what is required in order to satisfy the requirements of due process. The employee is then given ample opportunity to be heard and to defend himself. this Court finds that petitioners had complied with the requirements of law in effecting the dismissal of respondent. is given. the requirement of due process had been met since they were accorded a chance to explain their side of the controversy112[62] In the case at bar. After receiving the memorandum. appraising him of his right to counsel if he desires. Even if no hearing was conducted. neither of them complied. otherwise. is complied with as long as there was an opportunity to be heard. Failure of the employer to comply with such requirements renders its judgment of dismissal void and inexistent. Petitioners sent respondent a first notice in the form of a memorandum113[63] dated June 26. They were also required to submit their written explanation within 12 hours from receipt of the reports. respondent could have requested for a conference with the assistance of . this Court is guided by Solid Development Corporation Workers Association v. This is an elementary rule in labor law that due process in dismissal cases contemplates the twin requisites of notice and hearing. and (2) the second informs the employee of the employer‘s decision to dismiss him. citing there reasons therefore. Had they found the 12-hour period too short. Lastly. The above procedure was not followed in the instant case and the series of communications and meetings cannot take the place and is therefore not sufficient to take the place of notice and hearing. procedural due process consists of the twin requirements of notice and hearing. where the validity of the dismissal of two employees was upheld notwithstanding that no hearing was conducted. In fine. the finding that petitioner was afforded due process is bereft of any legal basis. his services would be terminated on the basis of AWOL.109[59] While no actual hearing was conducted before petitioners dismissed respondent. The requirement of a hearing is complied with as long as there was an opportunity to be heard.Furthermore. notices of termination were also sent to them informing them of the basis of their dismissal. a written notice informing the employee of the decision of the employer. petitioners were both apprised of the particular acts or omissions constituting the charges against them. warning him that the same would serve as a final notice for him to report to work in Manila within 5 working days from receipt thereof. In separate infraction reports. A written notice from the employer containing the causes for the dismissal must be given. It is a cardinal rule in our jurisdiction that the employer must furnish the employee with two written notices before the termination of employment can be effected: (1) the first apprises the employee of the particular acts or omissions for which his dismissal is sought. The employer must furnish the employee with two written notices before the termination of employment can be effected: (1) the first apprises the employee of the particular acts or omissions for which his dismissal is sought. and not necessarily that an actual hearing was conducted. An employee must be given notice and an ample opportunity.108[58] In termination proceedings of employees. The requirement of a hearing. and not necessarily that an actual hearing was conducted. These procedural requirements have been mandatorily imposed to the employer to accord its employees the right to be heard.110[60] Accordingly. on the other hand. and (2) the second informs the employee of the employer‘s decision to dismiss him. Further. Solid Development Corporation111[61] (Solid). 2000. petitioners were given due process before they were dismissed. prior to dismissal to adequately prepare for his defense.

habitual intoxication or an offense involving moral turpitude. this Court is of the opinion that petitioners had complied with the requirements of due process as all that the law requires is an ample opportunity to be heard. v. 2000.counsel. is not unmindful of previous rulings. Like in Solid. thus: We hold 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. if he so desired. or whatever other name it is called. is equitable. On July 13. The reassignment of respondent to another territory was a valid exercise of petitioners‘ management prerogative and. being ethical rather than jural and belonging to the sphere of morals than of law. provide an exception. It is grounded on the precepts of conscience and not on any sanction of positive law. appears to this Court that respondent made no such requests. like theft or illicit sexual relations with a fellow worker. Where the reason for the valid dismissal is. on the ground of social justice.118[68] the Court laid down the guidelines in the grant of separation pay to a lawfully dismissed employee. his dismissal was for cause and in accordance with the due process requirement of law. Equity considerations. It. after he repeatedly refused to report to work despite due notice. it bears to stress that the CA should not have disturbed the factual findings of the LA and the NLRC in the absence of arbitrariness or palpable error. Equity has been defined as justice outside law. 2000. for equity finds no room for application where there is law. petitioners sent another memorandum114[64] notifying respondent that they are terminating his services effective July 19.116[66] An employee who is dismissed for cause is generally not entitled to any financial assistance. Although respondent's actions constituted a valid ground to terminate his . This Court.115[65] wherein separation pay has been granted to a validly dismissed employee after giving considerable weight to long years of employment.119[69] In the instant case. however. the employer may not be required to give the dismissed employee separation pay. Even if no actual hearing was conducted. or financial assistance. equivalent to onehalf (1/2) month‘s pay for every year of service. he should have responded to the memorandum asking for more time. however. for example. National Labor Relations Commission. had respondent found the time too short. however. consequently. this Court rules that an award to respondent of separation pay by way of financial assistance.117[67] In Philippine Long Distance Telephone Co. In conclusion.

DIOSDADO M. 2005 Decision and May 5. 00386 are REVERSED and SET ASIDE.services. SP No. In view of the above disquisitions.R. PERALTA Associate Justice WE CONCUR: ANTONIO T. SO ORDERED. WHEREFORE. the same is to this Court's mind not so reprehensible as to warrant complete disregard of his long years of service. CARPIO Associate Justice Chairperson ANTONIO EDUARDO B. While it may be expected that petitioners will argue that respondent has only been in their service for four years since the merger of Pharmacia and Upjohn took place in 1996. petitioners are ORDERED to pay respondent separation pay by way of financial assistance equivalent to one-half (1/2) month pay for every year of service. equity considerations dictate that respondent's tenure be computed from 1978. It also appears that the same is respondent's first offense. 2006 Resolution of the Court of Appeals in CA-G. the petition is PARTIALLY GRANTED. NACHURA Associate Justice ROBERTO A. premises considered. ABAD Associate Justice JOSE CATRAL MENDOZA . The November 30. the year when respondent started working for Upjohn.

Chairperson PHIMCO INDUSTRIES LABOR BRION. CORONA Chief Justice Republic of the Philippines Supreme Court Manila THIRD DIVISION PHIMCO INDUSTRIES. INC. I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court‘s Division. CARPIO Associate Justice Second Division. Article VIII of the Constitution and the Division Chairperson‘s Attestation. J..Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinio of the Court‘s Division. No. G. 170830 Present: versus CARPIO MORALES. Petitioner.. ANTONIO T.R. RENATO C. Chairperson CERTIFICATION Pursuant to Section 13. .

Promulgated: August 11. MARIO PEREA. per Special Order No. and ERLINDA VAZQUEZ. and ANGELITA BALOSA. 2010 ***** PHILIP GARCES. and RAMON FALCIS. TEOFILO MANALILI. in view of the retirement of Chief Justice Reynato S. FLORENCIO LIBONGCOGON. MAXIMO PEDRO.. ****** NEMESIO MAMONONG. Puno. JJ. NICANOR ILAGAN. 843 d . ALFONSO CLAUDIO. ALBERTO BASCONCILLO. RODOLFO MOJICO. NATHANIELA DIMACULANGAN. ALFREDO PEARSON. RICARDO SACRISTAN.ASSOCIATION (PILA). ABRAHAM CADAY. in their capacity as officers of PILA. and VILLARAMA. LEONIDA CATALAN. REYNALDO GANITANO. FRANCISCO DALISAY. ******** ******* RENATO  Designated additional Member of the Third Division. **** *** ** * BERSAMIN. DANILO BANAAG. JR. ROMEO CARAMANZA. ANGELITO DEJAN. ABAD.

. RODOLFO TOLENTINO. GERARDO FELICIANO. ALEX IBAÑEZ. PABLO SARMIENTO. RAUL MICIANO. ********** ANGELITO DE *********** GUZMAN. DANILO BALTAZAR. RODOLFO SANIDAD. ********* REYNALDO CAMARIN. J.: Before us is the petition for review on certiorari set aside the decision. MARIANO ROSALES. 2005. 2004. ROGER CABER.RAMOS. Inc. 121[2] 120[1] filed by petitioner Phimco Industries. HILARIO PEÑA. of the Court of Appeals (CA) in CA- . ANA. FELIPE VILLAREAL. BERNARDO CUADRA. JULIAN TUGUIN and AMELIA ZAMORA. as members of PILA. RAMON MACAALAY. and the resolution. SR. GONZALO MANALILI. (PHIMCO). dated December 12. x-----------------------------------------------------------------------------------------x DECISION BRION. Respondents. seeking to reverse and 122[3] dated February 10. TERESA PERMOCILLO. BENJAMIN JUAN. ************ ERNESTO RIO. RAFAEL STA. ARSENIO ZAMORA.

1995. On March 9. The 47 individually named respondents are PILA officers and members. the union conducted a strike vote. Thirty-five (35) days later. or on April 21. PILA filed with the National Conciliation and Mediation Board (NCMB) a Notice of Strike on the ground of the bargaining deadlock. PHIMCO is a corporation engaged in the production of matches. directing them to explain within twenty-four (24) hours why they should not be dismissed for the illegal acts they committed during the strike. FACTUAL BACKGROUND The facts of the case. 1995. Ana. of the National Labor Relations Commission (NLRC). The assailed CA decision dismissed PHIMCO’s petition for certiorari that challenged the resolution.R. 123[4] On the same day. . and the decision. with principal address at Phimco Compound. PILA staged a strike. Manila. and ordered all the striking employees (except those who were handed termination papers on June 26.G. 1995. On March 17. The Secretary ordered PHIMCO to accept the striking employees. When the last collective bargaining agreement was about to expire on December 31. gathered from the records. or on June 26. On June 23. under the same terms and conditions prevailing prior to the strike. 1995. 70336. or on March 16. then Acting Labor Secretary Jose S. The negotiation resulted in a deadlock on economic issues. to enjoin the strikers from preventing – through force. Three days later. The case was docketed as NLRC NCR Case No. Jr. PILA ended its strike. are briefly summarized below. 1995. On May 3. PHIMCO and PILA negotiated for its renewal. 1995. PILA filed a complaint for unfair labor practice and illegal dismissal (illegal dismissal case) with the NLRC. dated December 29. Respondent Phimco Industries Labor Association (PILA) is the duly authorized bargaining representative of PHIMCO’s dailypaid workers. On May 15. Espiritu. the assailed CA resolution denied PHIMCO’s subsequent motion for reconsideration. the NLRC issued an ex-parte TRO. SP No. 1995. and raffled to Labor Arbiter (LA) Pablo C. 1995. On July 6. PHIMCO sent a letter to thirty-six (36) union members. 1995) to return to work within twenty-four (24) hours from receipt of the order. Felix Manalo St. PILA filed the strike vote results with the NCMB. Sta. On July 7. effective for a period of twenty (20) days. 1994. Seven (7) days later. 00-07-04705-95. 1998. mainly due to disagreements on salary increases and benefits. dated February 20. 1995. Brillantes assumed jurisdiction over the labor dispute. the thirty-six (36) union members were informed of their dismissal. PHIMCO filed with the NLRC a petition for preliminary injunction and temporary restraining order (TRO). 2002. or until June 5. intimidation and coercion – the ingress and egress of non-striking employees into and from the company premises.. 1995. 1995. a majority of the union members voted for a strike as its response to the bargaining impasse.

2002. and raffled to LA Jovencio Ll. and denied PHIMCO’s motion for reconsideration in the illegal strike case. 1995. and relied instead on the respondents’ evidence showing that the union conducted a peaceful moving picket. without incident. the NLRC rendered its Decision in the consolidated cases. The NLRC acted favorably on the motion and consolidated the two (2) cases in its Order dated August 5. On March 5. 1998. 127[8] It dismissed the appeal of the illegal dismissal case. 1998. PHIMCO claimed that the strikers prevented ingress to and egress from the PHIMCO compound. thereby paralyzing PHIMCO’s operations. 1999. 1999. 125[6] The NLRC did not give weight to PHIMCO’s evidence. Pending the resolution of PHIMCO’s motion for reconsideration in the illegal strike case and the appeal of the illegal dismissal case. 126[7] In a parallel development. they put up no barricade. 1998. PHIMCO filed a motion for reconsideration in the illegal strike case. He ruled the respondents’ dismissal as illegal. PHIMCO appealed LA Espiritu’s decision to the NLRC. 1996. and set aside LA Mayor’s decision. PHIMCO filed a Petition to Declare the Strike Illegal (illegal strike case) with the NLRC. PHIMCO moved for the consolidation of the two (2) cases. PILA and its officers and members appealed LA Mayor’s decision to the NLRC. and ordered their reinstatement with payment of backwages. Thus. 1999. have lost their employment status.124[5] and found the strike illegal. LA Mayor declared that the respondent employees.On August 28. ruling totally in the union’s favor. The NLRC found that the picket conducted by the striking employees was not an illegal blockade and did not obstruct the points of entry to and exit from the . On February 20. since the strikers should allow the free passage to the entrance and exit points of the company premises. THE NLRC RULING The NLRC decided the appeal on December 29. 00-0806031-95. PILA officers and members. The case was docketed as NLRC NCR Case No. in an orderly and lawful manner. On March 14. the respondents committed prohibited acts during the strike by blocking the ingress to and egress from PHIMCO’s premises and preventing the non-striking employees from reporting for work. with a prayer for the dismissal of PILA officers and members who knowingly participated in the illegal strike. They countered that they complied with all the legal requirements for the staging of the strike. the respondents filed their Position Paper in the illegal strike case. He observed that it was not enough that the picket of the strikers was a moving picket. LA Espiritu decided the union’s illegal dismissal case on March 2. and conducted their strike peacefully. On January 28. LA Mayor decided the case on February 4. Mayor.

With respect to the illegal dismissal charge. were supported by substantial evidence. On April 26. On March 14. 1995 letter. the company has not shown any such compelling reason as the picket was peaceful and uneventful. as established by the evidence on record. plus separation pay at one (1) month salary per year of service in lieu of reinstatement. the pictures submitted by the respondents revealed that the picket was moving. unless compelling reasons exist. 2002. 2002. the CA dismissed PHIMCO’s petition for certiorari. PHIMCO came to us through the present petition after the CA denied 130[11] PHIMCO’s motion for reconsideration. The CA noted that the NLRC findings. PHIMCO filed a motion for reconsideration of the consolidated decision. threat. Thus. on the other hand. the NLRC affirmed the Decision of LA Espiritu with respect to the payment of backwages until the promulgation of the decision. THE CASE FOR THE RESPONDENTS The respondents. THE ISSUE . not stationary. and 10% of the monetary award as attorney’s fees. that the picket was peaceful and that PHIMCO’s evidence failed to show that the picket constituted an illegal blockade or that it obstructed the points of entry to and exit from the company premises. coercion. It ruled out reinstatement because of the damages sustained by the company brought about by the strike. PHIMCO elevated its case to the CA through a petition for certiorari under Rule 65 of the Rules of Court. 2004. such as blocking the ingress and egress of the company premises. without waiting for the result of its motion for reconsideration. 128[9] THE CA RULING In a Decision 129[10] promulgated on February 10. submit that the issues raised in this case are factual in nature that we cannot generally touch in a petition for review. 131[12] THE PETITION The petitioner argues that the strike was illegal because the respondents committed the prohibited acts under Article 264(e) of the Labor Code. and intimidation. the NLRC observed that the striking employees were not given ample opportunity to explain their side after receipt of the June 23.company’s premises. and no human barricade blocked the company premises.

we have to examine the CA decision from the prism of whether it correctly determined the presence or absence of grave abuse of discretion in the NLRC decision before it. the core issue in the present case is whether the CA correctly ruled that the NLRC did not act with grave abuse of discretion in ruling that the union’s strike was legal. it is a weapon that can either breathe life to or destroy the union and its members. free from emotionalism. Requisites of a valid strike A strike is the most powerful weapon of workers in their struggle with management in the course of setting their terms and conditions of employment. the employer. not on the basis of whether the NLRC decision on the merits of the case was correct. not a review on appeal. In other words. Furthermore. 134[15] . To be legitimate. we have to view the CA decision in the same context that the petition for certiorari it ruled upon was presented to it. in contrast with the review for jurisdictional error that we undertake under Rule 65. the question to ask is: Did the CA correctly determine whether the NLRC committed grave abuse of discretion in ruling on the case? In this light.In Montoya v. Because it is premised on the concept of economic war between labor and management. we consider the correctness of the assailed CA decision. of the NLRC decision challenged before it. The right to strike as a means of attaining social justice is never meant to oppress or destroy anyone. Transmed Manila Corporation. decisions in labor cases. the decision to declare a strike must be exercised responsibly and must always rest on rational basis. it must focus on legitimate union interests. and one that must also necessarily affect management and its members. In ruling for legal correctness. and unswayed by the tempers and tantrums of hot heads. least of all. thus: 132[13] we laid down the basic approach that should be followed in the review of CA In a Rule 45 review. we have to be keenly aware that the CA undertook a Rule 65 review. a strike should not be antithetical to public welfare. OUR RULING We find the petition partly meritorious. 133[14] In light of these effects. In question form. Rule 45 limits us to the review of questions of law raised against the assailed CA decision. and must be pursued within legal bounds. This is the approach that should be basic in a Rule 45 review of a CA ruling in a labor case.

1995. notification of the strike vote was filed with the DOLE on March 17. and the actual strike was launched only on April 25. a strike vote was reached on March 16. a strike may still be held illegal where the means employed are illegal. for a strike to be valid. both factual and legal. while the seven-day strike ban is intended to give the DOLE an opportunity to verify whether the projected strike really carries the imprimatur of the majority of the union members. Procedurally. Labor Code which provides: 138[19] The means become illegal when they come within the prohibitions under Article 264(e) of the No person engaged in picketing shall commit any act of violence. and the union’s failure to comply renders the strike illegal. and (c) a notice be given to the DOLE of the results of the voting at least seven days before the intended strike. or 15 days in case of unfair labor practice. Based on our examination of the evidence which the LA viewed differently from the NLRC and the CA. coercion or intimidation or obstruct the free ingress to or egress from the employer's premises for lawful purposes. thus preventing non-striking employees and company vehicles from entering the PHIMCO compound. 136[17] The 15 to 30-day cooling-off period is designed to afford the parties the opportunity to amicably resolve the dispute with the assistance of the NCMB conciliator/mediator. Strike may be illegal for commission of prohibited acts Despite the validity of the purpose of a strike and compliance with the procedural requirements. 1995. 1995. a strike notice was filed on March 9. In this manner. we find the PILA strike illegal. These requirements are mandatory. the picketing that respondent PILA officers and members undertook as part of their strike activities effectively blocked the free ingress to and egress from PHIMCO’s premises. the law has provided limitations on the right to strike. it must comply with Article 263 135[16] of the Labor Code. the picketers violated Article 264(e) of the Labor Code. the respondents fully satisfied the legal procedural requirements. obtained by secret ballot in a meeting called for that purpose. While the strike undisputably had not been marred by actual violence and patent intimidation. or obstruct public thoroughfares. . which requires that: (a) a notice of strike be filed with the Department of Labor and Employment (DOLE) 30 days before the intended date thereof. leading them to inordinately incorrect conclusions. 137[18] In the present case. 1995.Since strikes affect not only the relationship between labor and management but also the general peace and progress of the community. (b) a strike vote be approved by a majority of the total union membership in the bargaining unit concerned. We intervene and rule even on the evidentiary and factual issues of this case as both the NLRC and the CA grossly misread the evidence.

Nemesio Mamonong. Julian Tuguin. Ramon Macaalay. Leonida Catalan. showing the respondents denying free ingress to and egress from the company premises. Reynaldo Ganitano. Teresa Permocillo. Affidavit of Cinco identifying other members of PILA. Gerardo Feliciano. Benjamin Juan. Alberto Basconcillo. 1995.. Folder 3. Ricardo Sacristan. Maximo Pedro.144[25] 6. together with non-striking PHIMCO employees. Nathaniela Dimaculangan. Alberto Basconcillo.145[26] 7. Angelito Dejan. Reynaldo Ganitano. Dimaculangan. Roger Caber. Renato Ramos. and Ramon Falcis as PILA officers. showing Cinco.141[22] 3. Maximo Pedro. Rodolfo Sanidad. Amelia Zamora.139[20] For the Company 1. Arsenio Zamora. Folder 2. Affidavit of Cinco. Angelito de Guzman.146[27] . Nicanor Ilagan. Ernesto Rio.The Evidence We gather from the case record the following pieces of relevant evidence adduced in the compulsory arbitration proceedings. Nathaniela R. and Francisco Dalisay as the persons preventing Cinco and his group from entering the company premises. 1995.143[24] Folder 1. stating that he was one of the employees prevented by the strikers from entering the PHIMCO premises.140[21] 2. Sr. Rodolfo Mojico. 5. reporting for work but being refused entry by strikers Teofilo Manalili. Mariano Rosales. identifying Erlinda Vazquez. Abraham Caday. Angelito Balosa and Philip Garces who blocked the company gate. Bernando Cuadra. containing pictures taken during the strike identifying and showing Leonida Catalan. company premises. Romeo Caramanza. Pictures taken during the strike.142[23] 4. with pictures taken on May 30. showing that the respondents prevented free ingress to and egress from the Affidavit of PHIMCO Human Resources Manager Francis Ferdinand Cinco. with pictures taken on May 30.

152[33] 3. showing that the respondents blocked ingress to and egress from the company premises.147[28] 9.149[30] 11.8. Leonida Catalan. and the strike/picket was conducted peacefully with no incident of any illegality. stating that the strike/picket was conducted peacefully. showing non-striking employees being refused entry by the respondents. Aguilar and Cinco.151[32] 2. Affidavit of Joaquin Aguilar stating that the pictures presented by Cinco were taken during the strike.148[29] Pictures taken by Aguilar during the strike. showing that non-striking employees failed to enter the company premises as a result of the respondents’ refusal to let them in. with pictures taken during the strike. 12. as well as those of PILA officers Maximo Pedro and For the Respondents 1. Affidavit of Leonida Catalan. Affidavit of Maximo Pedro. Santa Ana.154[35] 5. Folder 4. 10. identifying the pictures they took during the strike. the picket was always moving with no acts of illegality having been committed during the strike. Father Erick Adeviso of Dambanang Bayan Parish Church that the strike was peaceful and without any untoward incident.153[34] 4. Certification of Priest-In-Charge Angelito Fausto of the Philippine Independent Church in Punta. stating that the PILA strike complied with all the legal requirements.155[36] . Joint affidavit of Orlando Marfil and Rodolfo Digo. that the strike complied with all the requirements for a lawful strike. Certification of Rev. Testimonies of PHIMCO employees Rodolfo Eva.150[31] and. and the strikers conducted themselves in a peaceful manner. Certification of Police Station Commander Bienvenido de los Reyes that during the strike there was no report of any untoward incident.

picketing focuses on publicizing the labor dispute and its incidents to inform the public of what is happening in the company struck against.156[37] and. Testimonies at the compulsory arbitration proceedings. dela Rosa and Barangay Secretary Pascual Gesmundo.157[38] the NLRC declared that “the string of proofs” the company presented was “overwhelmingly counterbalanced by the numerous pieces of evidence adduced by respondents x x x all depicting a common story that respondents put up a peaceful moving picket. that the strike from April 21 to July 7.6.162[43] these rights are by no means absolute. 1995 was conducted in an orderly manner with no complaints filed. contrary to what the NLRC said it was. usually accompanied by the display of placards and other signs making known the facts involved in a labor dispute. While a strike focuses on stoppage of work.159[40] The work stoppage may be accompanied by picketing by the striking employees outside of the company compound. under the evidence presented.160[41] It is a strike activity separate and different from the actual stoppage of work. In its resolution of December 29. 7. . and did not commit any illegal acts x x x specifically obstructing the ingress to and egress from the company premises*.163[44] That the picket was moving. Jr.+”158[39] We disagree with this finding as the purported “peaceful moving picket” upon which the NLRC resolution was anchored was not an innocuous picket. was peaceful and was not attended by actual violence may not free it from taints of illegality if the picket effectively blocked entry to and exit from the company premises. 1998. While the right of employees to publicize their dispute falls within the protection of freedom of expression161[42] and the right to peaceably assemble to air grievances. Clearance issued by Punong Barangay Mario O. did effectively obstruct the entry and exit points of the company premises on various occasions. the picket. A picket simply means to march to and from the employer’s premises. Protected picketing does not extend to blocking ingress to and egress from the company premises. To strike is to withhold or to stop work by the concerted action of employees as a result of an industrial or labor dispute.

164[45] x x xx Q: Despite this TRO. 166[47] x x x x ARBITER MAYOR: Reform the question. which was issued by the NLRC. 1995. PHIMCO employees Rodolfo Eva and Joaquin Aguilar. and because of that moving picket conducted by the strikers. 1995. REYES: this incident on May 22. I remember on May 7.In this regard. were you allowed entry by the strikers? A: We made several attempts to enter the compound. moving picket. joining hands. there was a moving picket at the gate that is why the bus was not able to enter. Why was this (sic) it refused entry? WITNESS: Because at that time. sir. 1995. were there any other instances wherein you were not allowed entry at PHIMCO compound? A: On May 29. I recall I was riding with our Production Manager with the Pick-up. and the company’s Human Resources Manager Francis Ferdinand Cinco testified during the compulsory arbitration hearings: ATTY. we tried to enter the PHIMCO compound but we were not allowed entry. We tried to enter but we were not allowed by the strikers. Q: Aside from May 27. when a coaster or bus attempted to enter PHIMCO compound. 165[46] x x x x ARBITER MAYOR: How did the strikers block the ingress of the company? A: They hold around. you mentioned that it was refused entry. no employees or vehicles can come in or go out of the premises? A: None. 167[48] .

CHUA: In short. witness. CHUA: Can you tell us if these (sic) group of managers headed by Francis Cinco entered the compound of PHIMCO on that day. CHUA: Madam witness. PEDRO: No. sir. According to these union officers: ATTY. MR. CHUA: the managers and the employees were not able to enter the premises? . sir. with several of the monthly paid employees who tried to enter the PHIMCO compound during the strike? MR. you and your co-employees did not give way? MS. do you recall an incident when a group of managers of PHIMCO. and instead proceeded with your moving picket? MR. 168[49] x x x x ATTY. 169[50] x x x x ATTY. CHUA: Despite having been escorted by police Delos Reyes. They were not able to enter. ATTY. these people were not able to enter the premises of PHIMCO. even if Major Delos Reyes instructed you to give way so as to allow the employees and managers to enter the premises. CHUA: Mr. you still did not give way. PEDRO: Yes. ATTY. CATALAN: No sir. Yes or No. PEDRO: Yes. sir. sir. when they tried to enter? MR. ATTY. PEDRO: Yes.These accounts were confirmed by the admissions of respondent PILA officers Maximo Pedro and Leonida Catalan that the strikers prevented non-striking employees from entering the company premises.

as described by Aguilar. company vehicles likewise could not enter and get out of the factory because of the picket and the physical obstructions the respondents installed. While the picket was moving.176[57] This. by itself. it was maintained so close to the company gates that it virtually constituted an obstruction. Pickets may not aggressively interfere with the right of peaceful ingress to and egress from the employer’s shop or obstruct public thoroughfares. 170[51] The NLRC resolution itself noted the above testimonial evidence. as an obstruction to the company’s points of ingress and egress. especially when the strikers joined hands.” it stood. blocked the free ingress to and egress from the company premises. the testimonies adduced were validated by the photographs taken of the strike area.+”171[52] yet it ignored the clear import of the testimonies as to the true nature of the picket.172[53] The obstructive nature of the picket was aggravated by the placement of benches. “all building up a scenario that the moving picket put up by [the] respondents obstructed the ingress to and egress from the company premises*. it could be seen that the respondents were conducting the picket right at the company gates.174[55] it was pure conjecture on the part of the NLRC to say that “*t+he non-strikers and their vehicles were x x x free to get in and out of the company compound undisturbed by the picket line. as shown by photographs. in fact.173[54] With a virtual human blockade and real physical obstructions (benches and makeshift structures both outside and inside the gates). that. aside from non-strikers who wished to report for work. clearly obstructing the entry and exit points of the company compound. The blockade went to the point of causing the build up of traffic in the immediate vicinity of the strike area. Contrary to the NLRC characterization that it was a “peaceful moving picket. on closer examination. for all intents and purposes. directly in front of the open wing of the company gates.177[58] . picketing is not peaceful where the sidewalk or entrance to a place of business is obstructed by picketers parading around in a circle or lying on the sidewalk.”175[56] Notably. with strikers standing on top. In fact. sir. Significantly. as shown by the photographs. or were moving in circles.MS. capturing the strike in its various stages and showing how the strikers actually conducted the picket. renders the picket a prohibited activity. hand-to-shoulder. CATALAN: Yes.

even with police intervention.”178[59] The “peaceful moving picket” that the NLRC noted. Those who dared cross the picket line were stopped. informing the public concerning the dispute. Supported by actual blocking benches and obstructions. tried to enter the company premises on May 27. 1995 with police escort. while the picket was moving.181[62] According to American jurisprudence.”179[60] As we have stated.What the records reveal belies the NLRC observation that “the evidence x x x tends to show that what respondents actually did was walking or patrolling to and fro within the company vicinity and by word of mouth. together with several monthly-paid employees. Fr. There may be unlawful intimidation without direct threats or overt acts of violence. a PILA officer. business or property are equivalent to threats.183[64] The manner in which the respondent union officers and members conducted the picket in the present case had created such an intimidating atmosphere that non-striking employees and even company vehicles did not dare cross the picket line. coercion or intimidation is unlawful. testified. very close to the gates. banner or placard. what constitutes unlawful intimidation depends on the totality of the circumstances. on July 30. as the NLRC itself recognized when it ruled out the reinstatement of the dismissed strikers. The compulsory arbitration hearings bear this out. not solely by the work stoppage of the participating workers. Fausto and Barangay Secretary Gesmundo presented in evidence by the respondents. Maximo Pedro. but the obstruction of the entry and exit points of the company premises caused by the respondents’ picket was by no means a “petty blocking act” or an “insignificant obstructive act. Words or acts which are calculated and intended to cause an ordinary person to fear an injury to his person. No doubt. the picketers did not allow . 1997. even then. influenced apparently by the certifications (Mayor delos Reyes.182[63] Force threatened is the equivalent of force exercised. what the union demonstrated was a very persuasive and quietly intimidating strategy whose chief aim was to paralyze the operations of the company. with the strikers in a handto-shoulder formation without a break in their ranks. was “peaceful” only because of the absence of violence during the strike. but by excluding the company officials and non-striking employees from access to and exit from the company premises. Fr. the movement was in circles. the strike caused the company operations considerable damage. that a group of PHIMCO managers led by Cinco. thus preventing non-striking workers and vehicles from coming in and getting out. Adeviso.180[61] Intimidation Article 264(e) of the Labor Code tells us that picketing carried on with violence.

when the NLRC TRO was in force. Needless to say. who were prevented from gaining entry into the company premises. while the law protects the rights of the laborer. no employee or vehicle could come in and go out of the premises.188[69] The evidence adduced in the present case cannot be ignored. a company coaster or bus attempted to enter the PHIMCO compound but it was refused entry by the “moving picket. right in front of the gates. the CA committed its own reversible error. testified that she and the other picketers did not give way despite the instruction of Police Major de los Reyes to the picketers to allow the group to enter the company premises. Cinco was with the PHIMCO production manager in a pick-up and they tried to enter the company compound but. prohibited acts in a strike. Liabilities of union . it. because of the moving picket. moving picket” and.189[70] For grossly ignoring the evidence before it.187[68] Another employee. constituted a human blockade.them to enter. 1995. are on record. it authorizes neither the oppression nor the destruction of the employer. on May 29. while moving. and confirmed no less by two officers of the union. On balance. the NLRC committed grave abuse of discretion. they were not allowed by the strikers.) Further. in fact. joining hands. reinforced by benches planted directly in front of the company gates. also on record. also testified that on May 27. but they were not allowed entry. but we note this intervention solely as indicators of how far the union and its members have gone to block ingress to and egress from the company premises. replied that the strikers “hold around. company vehicles were unable to enter the company compound. 1995. the company personnel manager. The testimonies of non-striking employees. the NLRC looked the other way and chose not to see the unmistakable violations of the law on strikes by the union and its respondent officers and members. without any break in their ranks or closely bunched together. he and other employees tried to enter the PHIMCO compound. depict the true character of the picket. when asked how the strikers blocked the ingress of the company. it supports the company’s submission that the respondent PILA officers and members committed acts during the strike prohibited under Article 264(e) of the Labor Code.”186[67] Cinco. obstructing free ingress to and egress from the company premises. The photographs do not lie – these photographs clearly show that the picketers were going in circles. and were backed up several meters into the street leading to the company gates. The photographs of the strike scene. PHIMCO employee Rodolfo Eva testified that on May 22. another union officer. for supporting these gross NLRC errors. 1995. Thus. Despite all these clear pieces of evidence of illegal obstruction.185[66] (To be sure.184[65]Leonida Catalan. Joaquin Aguilar. as a rule. police intervention and participation are. again.

193[74] PHIMCO was able to individually identify the participating union members thru the affidavits of PHIMCO employees Martimer Panis 194[75] and Rodrigo A. . We explained in Samahang Manggagawa sa Sulpicio Lines. Prohibited activities. but also if he knowingly participates in an illegal strike. available under the attendant circumstances. the striker must be identified. pursuant to Article 264(a). 191[72] In all cases.-NAFLU v. outlined in Article 264 of the Labor Code. Leonida Catalan. 195[76] and Personnel Manager Francis Ferdinand Cinco. and Ramon Falcis stand to be dismissed as participating union officers. 196[77] and the photographs 197[78] of Joaquin Aguilar. the applicable provision is Article 264(a) of the Labor Code: Art. on the other hand. not only when he actually commits an illegal act during a strike. may be terminated. The services of an ordinary striking worker cannot be terminated for mere participation in an illegal strike. Reynaldo Ganitano. 192[73] In the present case. 264. The services of a participating union officer.” The law grants the employer the option of declaring a union officer who participated in an illegal strike as having lost his employment. make a distinction between participating workers and union officers. suffices to justify the imposition of the penalty of dismissal on participating workers and union officers as above described. of the Labor Code. That mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment. This provision imposes the penalty of dismissal on “any union officer who knowingly participates in an illegal strike. substantial evidence. Ortiz. even if a replacement had been hired by the employer during such lawful strike. respondents Erlinda Vazquez. Sulpicio Lines. Rodolfo Mojico. Inc. Ricardo Sacristan. Alberto Basconcillo. Nathaniela Dimaculangan. paragraph 3.officers and members In the determination of the liabilities of the individual respondents. 190[71] that the effects of illegal strikes. – (a) x x x x x x x Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status: Provided. Romeo Caramanza. Inc. proof must be adduced showing that he or she committed illegal acts during the strike. Maximo Pedro. But proof beyond reasonable doubt is not required.

. Alfredo Pearson. that PHIMCO violated the requirements of due process of the Labor Code when it dismissed the respondents. generally directing them to explain within twenty-four (24) hours why they should not be dismissed for the illegal acts they committed during the strike. or on June 26. Pablo Sarmiento. Rafael Sta. 1995. Teofilo Manalili. Rodolfo Sanidad. Arsenio Zamora. PHIMCO sent a letter. 200[81] In the present case. Benjamin Juan. Danilo Banaag. Bernardo Cuadra. Alfonso Claudio. in relation to Article 264(a) and (e) of the Labor Code recognizes the right to due process of all workers. the employer must send the employee. 1995. Mario Perea. Teresa Permocillo. Danilo Baltazar. Reynaldo Camarin. Nemesio Mamonong. to thirty-six (36) union members. who is about to be terminated. Abraham Caday. Alex Ibañez. Ernesto Rio. Angelito de Guzman. For participating in illegally blocking ingress to and egress from company premises. Rodolfo Tolentino. a written notice stating the cause/s for termination and must give the employee the opportunity to be heard and to defend himself. Philip Garces. upon due consideration of all circumstances. on June 23. Hilario Peña. Under Article 277(b) 198[79] of the Labor Code.Identified were respondents Angelita Balosa. Nicanor Ilagan. Renato Ramos. Francisco Dalisay. three days later. We explained in Suico v. Sr. however. Raul Miciano. the thirty-six (36) union members were informed of their dismissal from employment. Julian Tuguin and Amelia Zamora as the union members who actively participated in the strike by blocking the ingress to and egress from the company premises and preventing the passage of non-striking employees. Felipe Villareal. Florencio Libongcogon. even if the cause was their supposed involvement in strike-related violence prohibited under Article 264(a) and (e) of the Labor Code. 199[80] that Article 277(b). an employer must furnish him or her with two (2) written notices: (1) a written notice specifying the grounds for termination and giving the employee a reasonable opportunity to explain his side and (2) another written notice indicating that. grounds have been established to justify the employer's decision to dismiss the employee. these union members stand to be dismissed for their illegal acts in the conduct of the union’s strike. Ramon Macaalay. Mariano Rosales.. without distinction as to the cause of their termination. PHIMCO failed to observe due process We find. Roger Caber. Gerardo Feliciano. Angelito Dejan. Gonzalo Manalili. To meet the requirements of due process in the dismissal of an employee. Ana. National Labor Relations Commission.

Francisco Dalisay. Maximo Pedro.a perfunctory and superficial attempt to comply with the notice requirement under the Labor Code. Rodolfo Sanidad. only three (3) days from the first notice . Gerardo Feliciano. Rodolfo Tolentino. Alberto Basconcillo. Nemesio Mamonong. Reynaldo Ganitano. As to the union members. BRION Associate Justice . in light of all the foregoing. Without the specifications they had to respond to. Mariano Rosales. Ricardo Sacristan. Bernardo Cuadra. Prevailing jurisprudence sets the amount of nominal damages at P30. Danilo Banaag. 2004 and the resolution dated December 12. The short interval of time between the first and second notice speaks for itself under the circumstances of this case. Angelita Balosa. Felipe Villareal. the notice of termination came on June 26. Nicanor Ilagan. 2005 of the Court of Appeals in CA-G. Mario Perea. 70336. but they were not given an ample opportunity to be heard and to defend themselves. Ramon Falcis. without any meaningful resort to the guarantees accorded them by law. Hilario Peña. Angelito Dejan. Pablo Sarmiento. 202[83] WHEREFORE. where evidence sufficient to justify the penalty of dismissal has been adduced but the workers concerned were not accorded their essential due process rights.000. the employer. mere token recognition of the due process requirements was made. Arsenio Zamora. and Amelia Zamora are each awarded nominal damages in the amount of P30. upholding the rulings of the National Labor Relations Commission. Benjamin Juan. which same amount we find sufficient and appropriate in the present case. Renato Ramos. our ruling in Agabon v. No pronouncement as to costs. Reynaldo Camarin. It does not appear from the evidence that the union officers were specifically informed of the charges against them and given the chance to explain and present their side. Mayor should prevail and is REINSTATED with the MODIFICATION that Erlinda Vazquez. Romeo Caramanza. Angelito de Guzman. ARTURO D.We do not find this company procedure to be sufficient compliance with the due process requirements that the law guards zealously. Under the circumstances. The Decision. must pay the dismissed workers nominal damages as indemnity for the violation of the workers’ right to statutory due process. 1998. Leonida Catalan.. they were arbitrarily separated from work in total disregard of their rights to due process and security of tenure. Julian Tuguin. Ramon Macaalay. 1995. Ernesto Rio. Danilo Baltazar. only thirty-six (36) of the thirty-seven (37) union members included in this case were notified of the charges against them thru the letters dated June 23. Alfredo Pearson. Philip Garces. Alfonso Claudio. Nathaniela Dimaculangan.000. 1995. we hereby REVERSE and SET ASIDE the decision dated February 10. Rafael Sta.R. Rodolfo Mojico. Raul Miciano. SP No. of Labor Arbiter Jovencio Ll. Teofilo Manalili.00. Alex Ibañez. Gonzalo Manalili. Roger Caber. Ana. Abraham Caday.00. Teresa Permocillo. despite the just cause for dismissal. dated February 4. indicating the company’s intent to dismiss the union members involved. Sr. Florencio Libongcogon. SO ORDERED. NLRC 201[82] finds full application.

ABAD Associate Justice MARTIN S. VILLARAMA. Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. BERSAMIN Associate Justice ROBERTO A. . JR.WE CONCUR: CONCHITA CARPIO MORALES Associate Justice LUCAS P.

Article VIII of the Constitution. 185122 Present: CARPIO. RENATO C. NACHURA.R. it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. CORONA Chief Justice SECOND DIVISION WENSHA SPA CENTER. No. G. Chairperson. Petitioners. and the Division Chairperson’s Attestation. INC. ..CONCHITA CARPIO MORALES Associate Justice Chairperson CERTIFICATION Pursuant to Section 13. J. and/or XU ZHI JIE. PERALTA.

Ltd.. . and/or Xu Zhi Jie. 2010 X -------------------------------------------------------------------------------------.versus - ABAD. Wensha Spa Center. the petitioners assail the May 28.a. THE FACTS: Wensha Spa Center. Inc. (Wensha) in Quezon City is in the business of sauna bath and massage services. 2008 Decision203[1] and October 23. SP No. Respondent. JJ.R. (Manmen) where Xu was a client. Loreta resigned from Manmen and transferred to Wensha. In this action.: This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by an employer who was charged before the National Labor Relations Commission (NLRC) for dismissing an employee upon the advice of a Feng Shui master. J. YUNG. Xu was apparently impressed by Loreta‘s performance. Loreta was initially reluctant to accept Xu‘s offer because her job at Manmen was stable and she had been with Manmen for seven years.00. She started working on April 21. and MENDOZA. 98855 entitled Loreta T. But Xu was persistent and offered her a higher pay.. In her position paper.X DECISION MENDOZA. he convinced Loreta to transfer and work at Wensha. Yung v.205[3] respondent Loreta T. 2008 Resolution204[2] of the Court of Appeals (CA) in CA-G. Pobby Co (Xu) is its president. Xu Zhi Jie a. National Labor Relations Commission. Enticed. Inc. Promulgated: LORETA T. After he established Wensha.206[4] Loreta stated that she used to be employed by Manmen Services Co. 2004 as Xu‘s personal assistant and interpreter at a monthly salary of P12. August 16. Yung (Loreta) was its administrative manager at the time of her termination from employment.000.k.

Upon her return. her aura did not match that of Xu. 2004. but she declined because she had already filed a case. she was asked to leave her office because Xu and a Feng Shui master were exploring the premises. He found it more probable that Loreta was dismissed from her employment due to Wensha‘s loss of trust and confidence in her. Xu and his wife asked her to resign from Wensha because. this office finds it more probable that the complainant was dismissed due to loss of trust and confidence. 2004. She did so and returned on September 10. 2004. 2004. That same afternoon. . The LA‘s decision209[7] partly reads: However. Based on the results of the investigation. It would be against human experience and contrary to business acumen to let go of someone. The complainant herself alleged in her position paper that she has done several improvements in respondents’ business such as uplifting the morale and efficiency of its employees and increasing respondents’ clientele. The NLRC added that this finding was bolstered by Wensha‘s September 10. 2004 letter to Loreta asking her to come back to personally clarify some matters. Loreta went to the NLRC and filed a case for illegal dismissal against Xu and Wensha.210[8] This ruling was affirmed by the NLRC in its December 29. Absent any proof submitted by the complainant. This pleased Xu so that on May 18. according to the Feng Shui master. Wensha and Xu denied illegally terminating Loreta‘s employment.207[5] Loreta recounted that on August 10.211[9] citing its observation that Wensha was still considering the proper action to take on the day Loreta left Wensha and filed her complaint. she was promoted to the position of Administrative Manager. They claimed that two months after Loreta was hired.208[6] The Labor Arbiter (LA) Francisco Robles dismissed Loreta‘s complaint for lack of merit. 2004 for loss of trust and confidence. 2006 Resolution. Later that day. Xu asked Loreta to go on leave with pay for one month.Loreta introduced positive changes to Wensha which resulted in increased business. this office has found it dubious and hard to believe the contentions made by the complainant that she was dismissed by the respondents on the sole ground that she is a “mismatch” in respondents' business as advised by an alleged Feng Shui Master. they advised her to take a leave of absence for one month while they conducted an investigation on the matter. who was an asset and has done so much for the company merely on the ground that she is a “mismatch” to the business. they received various complaints against her from the employees so that on August 10. Loreta refused but was informed that she could no longer continue working at Wensha. they terminated Loreta‘s employment on August 31. and that respondent Co was very much pleased with the improvements made by the complainant that she was offered twice a promotion but she nevertheless declined.

it does not state anyone’s name. Finally. which supposedly prove her habitual tardiness. on the affidavits of their witnesses. specify the alleged infractions that Yung committed.000. x x x [Emphases appear in the original] x x x x. 2004 up to the finality of this decision. the said pieces of evidence do not. and damages in the amounts of fifty thousand pesos (Php50. however. Yung her full backwages. it must be noted that the same were mere photocopies. the presumption naturally arise[s] that the better evidence is withheld for fraudulent purposes which its production would expose and defeat. which allegedly prove that Yung had been charging her food and drinks to Wensha. Inc. thus. Loreta then went to the CA on a petition for certiorari. on the sales report and order slips. however. she did not.212[10] [Emphasis supplied] Hence. may have been duly executed under oath. Hence. The rule is that an affiant must sign the document in the presence of and take his oath before a notary public as evidence that the affidavit was properly made. on Yung as the author in charging such expenses to Wensha on the basis of hearsay evidence. Notably. and Xu Zhi Jie are ORDERED to. except that of Wensha.000. much later than its date of filing. bear Yung’s name thereon or even her signature. No costs. Nevertheless. were mere photocopies that are not even signed by Wensha’s authorized representative. 2004 cannot be retracted. 2004.00) as attorney’s fees. delos Reyes. SO ORDERED. They cannot use the mistake of their counsel as an excuse considering that the position paper was verified by their Operations Manager. Third. The CA reversed the ruling of the NLRC on the ground that it gravely abused its discretion in appreciating the factual bases that led to Loreta‘s dismissal. other privileges. the Private Respondents’ admission of Yung’s termination on August 31. who attested to the truth of the contents therein. or impute. thus suspect. incompetent evidence. therefore. If at all. they alleged mistake on the part of their former counsel in stating that Yung was dismissed on August 31. It was held that [T]he purpose of the rule in requiring the production of the best evidence is the prevention of fraud. the said rejoinder was dated October 4. The CA stated the following: We.000. pay Loreta T.00) as moral damages. they subsequently moved for the admission of their rejoinder. corresponding to the period of her dismissal from September 1. The irregularities are simply too glaring to be ignored. 2004. earlier than the date when their position paper was filed. the affidavits cannot be assigned any weighty probative value and are mere scraps of paper the contents of which are hearsay. or their monetary equivalent. twenty five thousand pesos (Php25. Finally. after the Private Respondents filed their position paper. and benefits. while the affidavit of Wensha’s Operations Manager. the daily time records (DTRs) of Yung. if not violative of the best evidence rule and. and twenty thousand pesos (Php20. because if a party is in possession of such evidence and withholds it. Wensha Spa Center.00) as exemplary damages.Loreta moved for a reconsideration of the NLRC‘s ruling but her motion was denied. In fact.213[11] Wensha and Xu now assail this ruling of the CA in this petition presenting the following: V. 2004. 2004. it would simply be capricious to pinpoint. delos Reyes only made general statements on the alleged complaints against Yung that were not even substantiated by any other piece of evidence. and seeks to substitute inferior evidence in its place. Thus. The CA noted that there were irregularities and inconsistencies in Wensha‘s position. however. Moreover. Princess delos Reyes (delos Reyes). jointly and severally. Guided by these principles. Second. peruse the affidavits and documentary evidence of the Private Respondents and find the following: First. GROUNDS FOR THE ALLOWANCE OF THE PETITION . the fallo of the CA decision reads: WHEREFORE. It is also puzzling that their position paper was dated November 25. the instant petition is GRANTED. which was on November 3. the affidavits were not executed under oath.

Along that line. and that she is guilty of serious infractions that warranted her termination. to wit: 5.1 The Honorable COURT OF APPEALS gravely erred in reversing that factual findings of the Honorable Labor Arbiter and the Honorable NLRC (Third Division) notwithstanding recognized and established rule in our jurisdiction that findings of facts of quasi-judicial agencies who have gained expertise on their respective subject matters are given respect and finality.1. the factual findings of the court below are conclusive on Us in a petition for review on certiorari where We review only errors of law. grave and irreparable damage will be done to him.215[13] In the process. assuming that respondent was illegally dismissed.214[12] THE COURT’S RULING: Loreta‘s security of tenure is guaranteed by the Constitution and the Labor Code. a worker can only be terminated from his employment for cause and after due process. the employer bears the burden of proving that the dismissal of an employee was for a valid cause. For a valid termination by the employer: (1) the dismissal must be for a valid cause as provided in Article 282.4 5. in lieu of reinstatement. and before the employee can be dismissed. is an exception because the CA‘s factual findings are not congruent with those of the NLRC and the LA. Under the security of tenure guarantee.1. . 5. he must be given notice and an adequate opportunity to be heard. The Honorable COURT OF APPEALS grave[ly] erred when it ordered herein petitioner to pay herein respondent her separation pay.5. and (2) the employee must be afforded an opportunity to be heard and to defend himself.2 The Honorable COURT OF APPEALS committed grave abuse of discretion and serious errors when it ruled that findings of facts of the Honorable Labor Arbiter and the Honorable NLRC are not supported by substantial evidence despite the fact that the records clearly show that petitioner therein was not dismissed but is under investigation. as well as damages and attorney’s fees.1. Its failure to discharge this burden renders the dismissal unjustified and. which justify the appeal by certiorari under Rule 45 of the 1997 Revised Rules of Civil Procedure. Article II that the State shall protect the rights of workers and promote their welfare. however. to this Honorable SUPREME COURT of the assailed Decision and Resolution.1. A just and valid cause for an employee‘s dismissal must be supported by substantial evidence. The Honorable COURT OF APPEALS committed grave abuse of discretion and serious errors when it held that petitioner XU ZHI JIE to be solidarily liable with WENSHA. which are purely questions of law and some questions of facts.216[14] As a rule. illegal. Section 3. therefore. or for any of the authorized causes under Articles 283 and 284 of the Labor Code. and full backwages. 5. as amended.2 The same need to be corrected as they would work injustice to the herein petitioner.1 The following are the reasons and arguments. This case. Article XIII also provides that all workers shall be entitled to security of tenure. and would pose dangerous precedent.3 5. Article 3 of the Labor Code mandates that the State shall assure the rights of workers to security of tenure. The 1987 Philippine Constitution provides in Section 18.

223[21] It is the employer who bears the burden of proving that its dismissal of the employee is for a valid or authorized cause supported by substantial evidence. however. tardiness. this office finds it more probable that the complainant was dismissed due to loss of trust and confidence.220[18] As correctly found by the CA. Wensha asserted that her dismissal was a valid exercise of an employer‘s right to terminate a managerial employee for loss of trust and confidence. the cause of Loreta‘s dismissal is questionable. It was the reason she was asked to take a leave of absence with pay for one month starting August 10. She.‖222[20] to be utterly erroneous as it is contrary to the applicable rules and pertinent jurisprudence. 224[22] . It even sent her a notice requesting her to report back to work. ―[a]bsent any proof submitted by the complainant.218[16] Wensha also alleged that Loreta was ―sowing intrigues in the company‖ which was inimical to Wensha. declined because she had already filed her complaint. She was also accused of dishonesty. not on the employee. Wensha changed its position claiming that it did not terminate Loreta‘s employment on August 31.217[15] it dismissed Loreta on August 31. 2004.221[19] The Court finds the LA ruling that states. 2004. The onus of proving a valid dismissal rests on the employer. and abuse of authority. It claimed that she caused the resignation of an employee because of gossips initiated by her.According to Wensha in its position paper.219[17] In its Rejoinder. 2004 after investigating the complaints against her. Loss of trust and confidence to be a valid ground for dismissal must have basis and must be founded on clearly established facts. serious breach of trust reposed in her.

the former frankly told complainant that she has to resign allegedly she is a mismatch to respondent Xu according to the Feng Shui master and therefore she does not fit to work (sic) with the respondents. however. in the morning. it was Jiang Xue Qin a. After several hours of waiting. xxx Complainant waited for respondent Xu in the dining area. that complainant should not enter the administrative office for a month while an altar was to be placed on the left side where complainant has her table to allegedly correct the “mismatch” and that it is necessary that offerings and prayers have to be made and said for about a month to correct the alleged “jinx. It is also noteworthy that Wensha‘s position paper related that because of the gossips perpetrated by Loreta.‖225[23] This information was taken from the affidavit226[24] of Princess Delos Reyes (Delos Reyes) which was dated March 21. who arrived and after a short conversation between them. the reason for her termination was her aura did not match that of Xu and the work environment at Wensha. respondent Xu then told complainant that according to the Feng Shui master her Chinese Zodiac sign is a “mismatch” with that of the respondents. the Chinese wife of respondent Xu. Because of the incident. 2004 indicating that they were not yet executed when the complaints against Loreta were supposedly being investigated in August 2004. she punched-in her time card and signed in the logbook of the security guard. She was ordered not to seek employment elsewhere and was told to come back on the 10th of September 2004. According to Loreta. Gonzalo. ―[p]erusal of the entire records show that complainant left the respondents‘ premises when she was confronted with the infractions imputed against her.k. some of its employees immediately contacted respondent Xu. The affidavits227[25] of employees attached to Delos Reyes‘ affidavit were all dated November 19. complainant demanded of Jiang Xue Qin to issue a letter of termination if it were the reason therefor. Instead. Loreta narrated: On August 10. complainant reported to the office of respondents. She returned to work on September 10. After waiting for about two (2) hours. 2004. . whose father was a policeman. not in Wensha‘s earlier position paper or pleadings submitted to the LA. a certain Oliva Gonzalo (Gonzalo) resigned from Wensha. 2005.a Annie Co. Loreta was advised to take a paid leave of absence for one month while Wensha conducted an investigation.229[27] Although she was a little confused. Respondent Xu then contacted complainant thru her mobile phone and told her to leave the administrative office immediately and instead to wait for him in the dining area. respondent Xu was nowhere.” Respondent Xu instructed complainant not to report to the office for a month with assurance of continued and regular salary.‖228[26] As a result. ―reportedly got angry with complainant and of the management telling her friends at respondent company that she would retaliate thus creating fear among those concerned.According to the NLRC. When she entered the administrative office. As usual. Loreta did as she was instructed and did not report for work for a month. 2004. 2004 however. complainant was called by respondent Xu and told her to wait at the lounge area while the latter and a Feng Shui Master were doing some analysis of the office. This is how Loreta recounted the events of that day: On September 10. Surprised and shocked.

the act or acts constituting breach of trust must have been done intentionally. complainant left the office and went straight to this Office and filed the present case on September 10. Wensha‘s pleadings and evidence. LORIE TSE YUNG.]231[29] The Court finds Loreta‘s complaint credible. September 10. 2004.Instead of a termination letter issued. There is consistency in her pleadings and evidence. . Loreta did not receive any of those required notices. The CA decision is supported by evidence and logically flows from a review of the records. Jian Xue Qin shouted invectives at her and told to leave the office immediately. 2004. xxx230[28] Loreta also alleged that in the afternoon of that day. and purposely. Respondent Xu did not show up but talked to the complainant over the mobile phone and convinced her likewise to resign from the company since there is no way to retain her because her aura unbalanced the area of employment according to the Feng Shui.232[30] This is a requirement of due process and clearly. a notice was posted on the Wensha bulletin board that reads: TO ALL EMPLOYEES OF WENSHA SPA CENTER WE WOULD LIKE TO INFORM YOU THAT MS. taken as a whole. the Chinese spiritual art of placement. then it should have informed her of those charges and required her to explain her side. knowingly. Jiang Xue Qin insisted for the complainant's resignation. Her claims are more credible than the affidavits which were clearly prepared as an afterthought. to the Court‘s mind. ANY TRANSACTION MADE BY HER IS NO LONGER A LIABILITY OF THE COMPANY. Hearing this from no lees than respondent Xu. FORMER ADMINISTRATIVE OFFICER OF WENSHA SPA CENTER IS NO LONGER CONNECTED TO THIS COMPANY STARTING TODAY SEPTEMBER 10. But when complainant stood her ground. Moreover. are not sufficient to support Wensha‘s alleged loss of trust and confidence. suffer from inconsistency. the records are bereft of evidence that Loreta was duly informed of the charges against her and that she was given the opportunity to respond to those charges prior to her dismissal. Wensha should also have kept records of the investigation conducted while Loreta was on leave. 2004. and they must be founded on clearly established facts. The law requires that two notices be given to an employee prior to a valid termination: the first notice is to inform the employee of the charges against her with a warning that she may be terminated from her employment and giving her reasonable opportunity within which to explain her side. (SGD. Loreta‘s narration of the events surrounding her termination from employment was simple and straightforward. In contrast. she is being terminated from her employment. To be a valid cause for termination of employment. More importantly. the affidavits of the employees only pertain to petty matters that.) THE MANAGEMENT [Italics were in red letters. If there were indeed charges against Loreta that Wensha had to investigate. and the second notice is the notice to the employee that upon due consideration of all the circumstances.

On the other.backwages and reinstatement. an illegally dismissed employee is entitled to two reliefs . Reinstatement. If reinstatement would only exacerbate the tension and further ruin the relations of the employer and the employee. Nevertheless. which are separate and distinct. it means breach of a known duty through some motive or interest or ill will. corporate directors and officers may be held solidarily liable with the corporation for the termination of employment only if done with malice or in bad faith.233[31] In the case of Golden Ace Builders v. ―Mere ownership by a single stockholder or by another corporation of all or nearly all of the capital stock of a corporation is not of itself sufficient ground for disregarding the separate corporate personality. particularly where the illegally dismissed employee held a managerial or key position in the company. On the one hand. or if their relationship has been unduly strained due to irreconcilable differences. she should be paid separation pay equivalent to one (1) month salary for every year of service. failed to decree such award in the dispositive portion. such payment liberates the employee from what could be a highly oppressive work environment. Talde.‖236[34] In labor cases. Elementary is the rule that a corporation is invested by law with a personality separate and distinct from those of the persons composing it and from that of any other legal entity to which it may be related. the CA. it imports a dishonest purpose or some moral obliquity and conscious doing of wrong. Under the law and jurisprudence. upon its own assessment. would no longer be practical as it would not be in the interest of both parties. it partakes of the nature of fraud.235[33] The CA. In the case at bench. the payment releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust. the payment of separation pay has been considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable.237[35] Bad faith does not connote bad judgment or negligence. it would be prudent to order payment of separation pay instead of reinstatement. however. pronounced that the relations between petitioners and the respondent have become strained because of her dismissal anchored on dubious charges. under the circumstances. This should be rectified.238[36] .We are in accord with the pronouncement of the CA that the reinstatement of Loreta to her former position is no longer feasible in the light of the strained relations between the parties. The respondent has not contested the finding.234[32] We wrote: Under the doctrine of strained relations. As she is not insisting on being reinstated. the Court finds merit in the argument of petitioner Xu that the CA erred in ruling that he is solidarily liable with Wensha.

therefore. Yung her full backwages.000.000.00) Pesos. September 1. in CA-G. the CA concluded that petitioner Xu and Wensha are jointly and severally liable to Loreta. there should be an evidence on record that an officer or director acted maliciously or in bad faith in terminating the services of an employee.00) Pesos. To sustain such a finding. and Twenty Thousand (P20.000. the finding or indication that the dismissal was effected with malice or bad faith should be stated in the decision itself. other privileges. Wensha Spa Center. Inc.241[39] WHEREFORE.In the subject decision. There is. no justification for such a ruling. and benefits. up to the finality of this decision. The Appeals. SP No. as moral damages. is hereby ordered to pay Loreta T. 2004. the petition is GRANTED. Twenty Five Thousand (P25. 98855. SO ORDERED. JOSE CATRAL MENDOZA Associate Justice WE CONCUR: . plus damages in the amounts of Fifty Thousand (P50. as attorney‘s fees. the petition is PARTIALLY GRANTED. No costs.R.240[38] Moreover. 2008 Decision of the Court of WHEREFORE. or their monetary equivalent.239[37] We have read the decision in its entirety but simply failed to come across any finding of bad faith or malice on the part of Xu. is hereby MODIFIED to read as follows: decretal portion of the May 28.00) Pesos as exemplary damages. and separation pay reckoned from the date of her dismissal.

188271 Present: CORONA. G. Respondents. SP No. 2009 resolution of the Court of Appeals (CA) in CA-G.J. Chairperson. CARPIO Associate Justice Chairperson FIRST DIVISION JESUS E.. 2009 resolution denying his petition242[1] wherein he assailed the February 16. Petitioner. JR. Dycoco. 105126.ANTONIO T. VELASCO. JJ. . seeks reconsideration of the August 26.R.J. C.: Petitioner Jesus E. 2010 x--------------------------------------------------x RESOLUTION CORONA. EQUITABLE PCI BANK (NOW BANCO DE ORO). DYCOCO.. 2009 decision and May 12.. JR. DEL CASTILLO and PEREZ.R. Jr. . RENE BUENAVENTURA AND SILES SAMALEA. C. No.versus LEONARDO-DE CASTRO. Promulgated: August 16.

Service Officer Irene Tabuzo. Villegas. In reversing the labor arbiter. The NLRC. petitioner became Branch Head and in September 2003. In February 1997. petitioner was hired by respondent bank as Assistant Manager and/or OIC Branch Head of its Legazpi City Branch. v. several clients of the Legazpi branch filed complaints for alleged unauthorized abstractions of various trust funds. Revocable Trust Agreements. On the Abstraction of Trust Placement of Client. Rene Buenaventura and Siles Samalea. as follows: A.The CA affirmed the decision and resolution of the National Labor Relations Commission (NLRC) in Jesus Dycoco.04. Equitable PCI Bank / Rene Buenaventura. Trust Compensation Agreement) on the PLI account opened on 01. You did not enroll in your Sales Portal the PLI account of Ms. treasury placements and deposits. Villegas to sign on the LOIContribution for P7.04 by Ms.5M of Ms. Legazpi City. Villegas: i. former Service Officer respondent Siles Samalea. Ma.5M (as initial contribution) to acknowledge the validity and correctness of contribution made. Pursuant thereto. He was guilty of serious misconduct. despite . Investment Guidelines. 2005 “show cause” letter243[2] addressed to petitioner stated the results of the investigation. Investment Clerk Carlo Quirong and the petitioner as the PBM..04 upon your approval. Carolina V. b. Villegas to accomplish/submit the account opening requirements such as Revocable Trust Agreement. Respondent bank promptly commenced an investigation. “show cause” letters were issued to the officers of the Legazpi branch. 09-00407-06 which held that petitioner was illegally dismissed by respondents Equitable PCI Bank (now Banco de Oro). The November 14. in RAB-V Case No. reversed and set aside the July 24. Ma. docketed as LAC No. Jr. Region V (Legazpi branch). V. You did not require Ms. the NLRC ruled that petitioner’s dismissal was for just cause. c. You did not require Ms. In June 2005.5M on 01. ii. Villegas a.30. petitioner became the Personal Banking Manager (PBM) of the Legazpi branch. including Branch Center Head Glena Orogo. respondent bank underwent an internal reorganization. Carolina V. In 2000. despite your notation ―signature to follow‖ on the cited LOI. 2007 decision of the labor arbiter of the Regional Arbitration Branch No. willful disobedience and gross negligence for not performing his duty to complete the documentary requirements in the opening of accounts pursuant to the bank’s internal procedures. Consequently. This directly resulted in the unauthorized abstraction of bank funds. on the other hand. Operations Officers Imelda Espiritu and Maria Fe Gianan.30. On 01. Investment Guidelines and Trust Compensation Agreement. Villegas opened with an initial placement of P7. et al. You did not secure the required account opening documents (i. 01-000390-08.e.30. when you approved the opening of PLI account for P7. The pertinent facts are as follows.

you did not require Fr. Instead. Celio Sabareza (PLI No. The BCH could have immediately placed under preventive suspension Carlo B. moral and exemplary damages and attorney‘s fees. Quirong/CSA to pay via ―miscellaneous payout‖ the LOI-Withdrawal for P100K instead of the teller.620. Celio Sabareza (Trustor/client) or credit memo (CM) for client‘s account as mode of payment of said PLI withdrawal as required by policy. 13th month pay. client on the alleged withdrawal for P810K by Carlo B. Roberto Crisol et al.09. Fr. Quirong to make inquiry/investigation about the Villegas case.29. you did not require Fr. Roberto Crisol on the spurious LOI-Withdrawal for P100K against the specimen signatures on file. xxx As a result. E. V alleging constructive dismissal and illegal suspension.43 on 12. BCH upon your knowledge of the incident on 06.05. ii. Although you did not verify the signatures of Fr. d. iii.05.15. You did not report the Cesario Israel/Josephine Bandong (Abstraction of CTF placement for P2. C.03. outstanding with the branch as of 01. Trajano/AO–Personal Trust and Agencies Division on 5. you approved the validation of cited withdrawal as ―miscellaneous payout‖. e-mail follow ups by Ms. F. Roberto Crisol or Benita Crisol to sign on the LOI-Contribution for P285K to acknowledge the validity and correctness of contribution made. on October 10.371. you prevented the BCH and her branch personnel from going to the residence of Carlo B. On September 22. IV (D) (Class D) (1) and IV (E) (Class C) (13) of the bank‘s Code of Conduct. Quirong on 06. you co-approved the payment of spurious withdrawal for P100K from the PLI account of Fr. Ma. Roberto Crisol or Anna Lea Borromeo to sign on the LOI-Contribution for P235K to acknowledge the validity and correctness of contribution made.29. Nelisa M. Roberto Crisol or Maria Celio Sabareza: i. On 10.04.23. On 10. Sales Assistant to his superior officer. Petitioner was preventively suspended from September 20. 2006. On 7. Allowing Carlo B.31. he filed a complaint in the NLRC Regional Arbitration Branch No. 117-78829-5) a. Quirong do the signature verification.05.31. Based on statements of branch personnel. the fraudulent withdrawal was not detected/prevented exposing the Bank to financial loss of P100K. thereby preventing the complaint of Mayor Dick Galicia.03 by Carlo Quirong) incident to Internal Audit Division (IAD) within two working days from the date of your knowledge of the incident on 06. Roberto Crisol or Anna Lea Borromeo (PLI No. You did not enroll in your Sales Portal the five PLI accounts of Fr. Roberto Crisol or Ma. and demanding reinstatement/separation pay and payment of incentives. Roberto Crisol on the LOIWithdrawal for P100K were forged. 117-78825-2) a.06. despite your notation ―signature to follow‖ on the cited LOI. 117-78828-7) a. On the Abstraction of Trust Placement of Clients. On the Abstraction of Trust Placement of Clients. you allowed Carlo B. You did not immediately notify or report the fraudulent act of Carlo B. Roberto Crisol or Ma. Quirong.16. On the Abstraction of Trust Placements of Sps. while petitioner was under preventive suspension. Perfecto) to prepare Manager‘s Check under the name of Fr. Without requiring the PLI processor (Ailene C. Roberto Crisol or Benita Crisol (PLI No. 2006. and . 2006. Despite the signatures of Fr. iv.15. Cesario Israel/Josephine Bandong a.04 and 02. Fr.B. D. 2006 to October 20. respondent bank rendered a decision245[4] with respect to the first ―show cause‖ letter finding petitioner guilty of violating Articles IV (F) (Class C) (1). despite your notation ―signature to follow‖ on the cited LOI. In August 2006. Fr.15. Quirong effective 06. However.05.05. On the Abstraction of Trust Placement of Clients. respondent bank issued a second ―show cause‖ letter244[3] to petitioner charging him with involvement in alleged dollar-trading activities.13. b. Instead.03. bonuses.

We already rejected his position but petitioner seeks reconsideration. The motion for reconsideration is denied.Article 282 (b) of the Labor Code. Jurisprudence247[6] has repeatedly outlined how diligence in the banking industry should be observed: By its very nature. Petitioner violated his duties and responsibilities as PBM when he signed and approved the subject transactions without the necessary signatures of the concerned clients.216. the NLRC reversed the labor arbiter‘s decision. no effort must be spared by banks and their officers and employees to ensure and preserve the trust and confidence of the general public and its customers/clients as well as the integrity of its records and the safety and well-being of its customers/clients while in its premises. As PBM. Petitioner insists that he was illegally dismissed. The banking business will thrive only as long as it maintains the trust and confidence of its customers/clients. the labor arbiter held that petitioner was illegally dismissed. all bank personnel are burdened with a high level of responsibility insofar as care and diligence in the custody and management of funds are concerned. 13th month pay and attorney‘s fees in the total amount of P1. Indeed. 2007.147.246[5] On appeal. He ordered respondent bank to pay separation pay. bonuses. the degree of responsibility. exonerated from the charge of dollar-tradingas specified in the second ―show cause‖ letter. incentives. The CA subsequently affirmed the NLRC. On July 24. Banks handle transactions involving millions of pesos and properties worth considerable sums of money. the business of the petitioner bank is so impressed with public trust. Hence. backwages.‖248[7] . Petitioner was. Petitioner miserably failed to discharge this burden. however. The penalty of dismissal was imposed on him. it was his obligation to ensure ―that all documentary requirements (were) complied with by clients being handled and that the bank‘s interest (was) at all times protected.‖ It was incumbent on him to enforce ―strict compliance with bank policies and internal control procedures while maintaining the highest level of service quality. by the very nature of their work.00. As the banking industry is impressed with public interest. care and trustworthiness expected of officials and employees of the bank is far greater than those of ordinar y officers and employees in the other business firms. banks are mandated to exercise a higher degree of diligence in the handling of its affairs than that expected of an ordinary business enterprise.

was able to filch millions of pesos from respondent bank by manipulating clients‘ accounts.250[9] Petitioner‘s breach of respondent bank‘s policies intended to safeguard the bank and its clients‘ funds was clearly inimical to the interests of his employer. Loss of confidence applies to situations where the employee is routinely charged with the care and custody of employer‘s money or property. approved and facilitated the subject transactions relating to the various abstractions committed by a bank employee. Carlo Quirong. His repeated failure to carefully observe his duties as PBM clearly showed utter want of care.It is significant that petitioner did not even deny that it was he who signed. supervisors. managers. As a PBM. After committing gross negligence. Petitioner‘s assertion that neither Quirong nor any of the bank operations personnel was under his supervision and that the day-today operations of his branch were the responsibility of the Banking Center Head does not exonerate him from liability. respondent bank‘s Customer Sales Assistant.‖252[11] . Because of this gross negligence.251[10] ―If the employees are cashiers. salesmen or other personnel occupying positions of responsibility. the employer‘s loss of trust and confidence in said employees may justify termination of their employment. Petitioner‘s failure on three separate occasions to require clients to sign the requisite documents (a vital and standard procedure in all banking transactions) was a clear manifestation of serial negligence. Loss of confidence and dismissal from employment were therefore justified. Gross negligence connotes ―want of care in the performance of one‘s duties. He was duty-bound to make certain that such documentary requirements were complied with in accordance with respondent bank‘s rules.‖249[8] Petitioner‘s failure to observe basic procedure constituted gross negligence. It was an implied admission that he was the one who opened the door for the commission of the unlawful abstractions by failing to ensure that all requirements for the opening of accounts were complied with. Nothing can compel an employer to continue availing of the services of an employee guilty of acts inimical to its interests as this is a ground for loss of confidence. petitioner should have exercised much care in performing his functions. This constituted gross negligence. petitioner surprisingly still expects respondent bank to retain him.

CORONA Chief Justice Chairperson WE CONCUR: PRESBITERO J. LEONARDO-DE CASTRO Associate Justice MARIANO C. Let entry of judgment be made in due course. Costs against petitioner. JR. the motion for reconsideration is DENIED with FINALITY. Associate Justice TERESITA J.The CA was thus correct in upholding the dismissal of petitioner. VELASCO. SO ORDERED. No further pleadings or motions shall be entertained. DEL CASTILLO Associate Justice JOSE PORTUGAL PEREZ Associate Justice CERTIFICATION . RENATO C. WHEREFORE.

RENATO C. LIBERTY BROADCASTING NETWORK. JR..Pursuant to Section 13. BRION. I certify that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. 165153 Present: versus CARPIO MORALES.R. *ABAD. CORONA Chief Justice Republic of the Philippines Supreme Court Manila SPECIAL SECOND DIVISION CARLOS DE CASTRO. Petitioner. INC. 2010 x----------------------------------------------------------------------------------------x RESOLUTION . G.. JJ. and EDGARDO QUIOGUE. Promulgated: August 25. and PEREZ. J. Article VIII of the Constitution. No. Acting Chairperson. VELASCO. Respondents.

LBNI dismissed de Castro on the grounds of serious misconduct. Theft of company property involving the unauthorized removal of one gallon of Delo oil from the company storage room. to suspend the court proceedings in view of the Stay Order issued on August 19. Soliciting and/or receiving money for his own benefit from suppliers/dealers/traders [Cristino Samarita and Jose Aying+. (LBNI). Disorderly behavior.BRION. Costs against the respondents. in relation to the corporate rehabilitation proceedings that LBNI initiated. Diversion of company funds by soliciting and receiving on different occasions a total of P14. 5. Branch 138. 2005 by the Regional Trial Court (RTC) of Makati.254[2] The facts. filed the present Motion for Reconsideration with Motion to Suspend Proceedings. 1996. Allegedly. asking us. 2002. and REINSTATE in all respects the Resolution of the National Labor Relations Commission dated September 20. for using offensive language against [Vicente Niguidula. Carlos C. thereby creating a disturbance that interrupted the normal flow of activities in the company. we hereby GRANT the petition. premises considered. 3. to set aside our Decision253[1] and. are summarized below: The petitioner. de Castro committed the following acts: 1. Disrespect/discourtesy towards a company’s supply manager+. Inc. 2004 and August 30. and willful breach of the trust reposed in him as a managerial employee.: The respondent. second. respectively. On May 31. as recited in our Decision. de Castro. The dispositive part of our Decision reads: WHEREFORE. reconditioning and replacement of parts of the airconditioning units at the company’s Antipolo Station. Accordingly. co-employee. as well as the installation of fire exits at the *LBNI’s+ Technology Centre.000. for challenging Niguidula to a fight during working hours within the company premises.00 in “commissions” from Aying for a job contract in the company’s Antipolo Station. first. the 2. . SO ORDERED. we REVERSE and SET ASIDE the Decision and Resolution of the CA promulgated on May 25. 4. 2004. Liberty Broadcasting Network. representing “commissions” for job contracts involving the repair. J. fraud. worked as a chief building administrator at LBNI.

5% of the price of the contracts awarded to suppliers.255[3] 7. the NLRC reversed the Labor Arbiter’s decision but on de Castro’s motion for reconsideration. 8. and (3) Jose Aying. payment of backwages. and attorney’s fees. recanted his earlier affidavit. the accusations were belatedly filed as the imputed acts happened in 1995. He explained that the one gallon of Delo oil he allegedly took was actually found in Gil Balais’ room.6. into soliciting money in *de Castro’s+ behalf from suppliers/contractors. who personally asked for money. whom he claimed verbally assaulted him and challenged him to a fight. the Labor Arbiter rendered a decision261[9] in de Castro’s favor. noting that (1) witnesses Niguidula and Balais had altercations with de Castro prior to the execution of their respective affidavits. de Castro filed a complaint for illegal dismissal against LBNI with the National Labor Relations Commission (NLRC) Arbitration Branch. Initially.256[4] He maintained that he could not have solicited commissions from suppliers considering that he was new in the company. the NLRC reinstated the Labor Arbiter’s decision. but Balais. Abuse of authority.264[12] It ruled that the charges against de Castro “were .258[6] He denied threatening Vicente Niguidula. an incident which he reported to respondent Edgardo Quiogue. and for requiring Raul Pacaldo (Pacaldo) to exact 2% .263[11] LBNI appealed the Labor Arbiter’s ruling to the NLRC. 1999.260[8] On April 30. and to the Makati police. one of the suppliers from whom de Castro allegedly asked for commissions.262[10] The Labor Arbiter found the affidavits of LBNI’s witnesses to be devoid of merit. Threat and coercion. a subordinate. Niguidula and Balais had serious clashes with him. for threatening to inflict bodily harm on the person of Niguidula and for coercing [Gil Balais]. for instructing Balais to collect commissions from Aying and Samarita. damages.259[7] De Castro alleged that prior to executing affidavits against him. and Slander.257[5] Moreover. another supplier. (2) the affidavit of Cristino Samarita. National Capital Region. for uttering libelous statements against Niguidula. Aggrieved. holding LBNI liable for illegal dismissal. LBNI’s executive vice president. stated that it was not de Castro. praying for reinstatement.

269[17] Thus. if only to ensure that they are regularized.266[14] In our September 23. he recanted his statement and exonerated de Castro. earlier executed an affidavit stating that de Castro asked him for commission. 2008 Decision. since new employees have a natural motivation to make a positive first impression on the employer. at best.never really substantiated other than by ‘bare allegations’ in the witnesses’ affidavits who were the company’s employees and who had altercations with De Castro prior to the execution of their affidavits. a contractor. doubts reasonably arising from the evidence or interpretation of agreements and writing should be resolved in the former’s favor. Niguidula and Balais. but in his second affidavit. These doubts should be interpreted in de Castro’s favor. were LBNI employees who resented de Castro. On May 25. pursuant to Article 4 of the Labor Code. We found this situation contrary to common experience.267[15] The other witnesses. It ruled too that the NLRC gravely abused its discretion when it disregarded the affidavits of all of LBNI’s witnesses. we ruled that the grounds that LBNI invoked for de Castro’s dismissal were. based on the evidence presented. we found that de Castro’s dismissal was based on unsubstantiated charges.271[19] The Motion for Reconsideration . the CA reversed the NLRC’s decision and held that de Castro’s dismissal was based on valid grounds.”265[13] LBNI again appealed the NLRC’s adverse decision to the Court of Appeals (CA). 2004.270[18] Between a laborer and his employer.268[16] We noted that de Castro had not stayed long in the company and had not even passed his probationary period when the acts charged allegedly took place. doubtful. Aying.

the proper venue to file the motion is with the Office of the Labor Arbiter. 2008 Decision LBNI’s motion for reconsideration merely reiterates its earlier arguments. The issue of illegal dismissal has already been resolved in the Court’s September 23. 2005. hence. M-6126).277[25] THE COURT’S RULING Except for the prayer to suspend the execution of our September 23.274[22] LBNI points out that it filed. we suspend the execution of our Decision in deference to the Stay Order issued by the rehabilitation court.P. 2008 Decision. for lack of merit. with the RTC of Makati. LBNI has failed to offer any substantive argument that would convince us to reverse our earlier ruling. whether for money or otherwise and whether such enforcement is by Court action or otherwise x x x be forthwith stayed. He avers that despite the RTC’s Stay Order. Proc. and on August 19. .275[23] Comment on the Motion for Reconsideration In his comment. 276[24] De Castro further posits that LBNI should have informed this Court of the status of its Petition for Corporate Rehabilitation.272[20] (2) the affidavits of LBNI’s witnesses should not have been totally disregarded. Liberty Broadcasting and Skyphone.273[21] and (3) LBNI is currently under rehabilitation.LBNI now moves for a reconsideration of our September 23. we do not find LBNI’s Motion for Reconsideration meritorious. de Castro contends that LBNI’s motion for reconsideration contains a rehash of LBNI’s earlier arguments. Although we reject. it is premature for this Court to suspend the proceedings. 2008 Decision. LBNI’s arguments regarding the legality of de Castro’s dismissal. which we have already addressed in our September 23. the RTC issued a Stay Order directing. among others. If a suspension of the proceedings is necessary. that the – enforcement of all claims against Liberty Telecoms. the proceedings in this case must be suspended. Case No. a petition for Corporate Rehabilitation with Prayer for Suspension of Payments (docketed as S. 2008 Decision based on the following arguments: (1) LBNI had valid legal grounds to terminate de Castro’s employment for loss of trust and confidence.

x x x it is ordered that enforcement of all claims against [LBNI] whether for money or otherwise and whether such enforcement is by Court action or otherwise.282[30] Thereafter.P. de Castro was entitled to security of tenure and his illegal dismissal from LBNI justified the awards of separation pay. its guarantors and sureties not solidarily liable with the petitioner. Branch 138. he was already a regular employee by operation of law. 2005. but merely suspends the execution of the September 23. Article 281 of the Labor Code provides that “*p+robationary employment shall not exceed six (6) months from the date the employee started working. be forthwith stayed. Case No.LBNI argues that there is no logic for it to illegally dismiss de Castro because being on probationary employment – a fact which this Court had stated in its decision – all that the company had to do was not to re-hire him. as de Castro then had yet to file his reply to LBNI’s comment on the petition. 2006. 2008 Decision On October 18. we found that the acts charged against de Castro took place when he was still under probationary employment – a finding completely different from LBNI’s claim that de Castro was dismissed during his probationary employment. LBNI filed a motion to suspend the proceedings. 2005 for being premature.280[28] The Stay Order read: FOR THE REASONS GIVEN and applying Section 6 of the Interim Rules of Procedure on Corporate Rehabilitation. dated August 19. while de Castro’s petition was still pending before the Court. and damages.278[26] By this claim.283[31] . M-6126.” As a regular employee. Branch 138 in S. x x x [a]n employee who is allowed to work after a probationary period shall be considered a regular employee. de Castro was dismissed on the ninth month of his employment with LBNI. dated May 4. The September 23. issued by the RTC of Makati. The pendency of the rehabilitation proceedings does not affect the Court’s jurisdiction to resolve the case. LBNI has misread the import of our ruling. and by then. x x x x SO ORDERED.”279[27] Properly read. nothing was heard from LBNI regarding the Stay Order or the rehabilitation proceedings it instituted before the RTC of Makati. citing the Stay Order. that LBNI filed with the Court contained no reference to the rehabilitation proceedings. On the contrary. backwages. Even the memorandum. 2008 Decision declared that de Castro “had not stayed long in the company and had not even passed his probationary period when the acts charged allegedly took place.281[29] LBNI’s motion was denied in our Resolution of December 12. 2005.

The filing of a memorandum before the Court is not an empty requirement. in fact. “The Court does not take judicial notice of proceedings in the various courts of justice in the Philippines. Nor may they take notice of matters except those expressly provided as subjects of mandatory judicial notice.M. in relation to Section 27. The suspension shall last up to the termination of the rehabilitation proceedings. Under Section 11. the memoranda alone may be considered by the Court in deciding or resolving the petition. Atienza. Courts. Rule 4 of the Interim Rules of Procedure on Corporate Rehabilitation (Interim Rules). x x x x The party asking the court to take judicial notice is obligated to supply the court with the full text of the rules the party desires it to have notice of. Being a summation of the parties’ previous pleadings. devoid of legal significance. In A. 2008 Decision. as the matter had not been properly brought to our attention. no such extension was alleged in this case. courts can only consider facts and issues pleaded by the parties. Rule 4 of the Interim Rules – . a petition for rehabilitation shall be dismissed if no rehabilitation plan is approved by the court upon the lapse of 180 days from the date of initial hearing.”284[32] At the time we decided the present case. as provided in Section 11. the Court had sufficient grounds to suppose that the rehabilitation petition had been dismissed by the time the case was submitted for decision. a stay order simply suspends all actions for claims against a corporation undergoing rehabilitation. the Court declared that issues raised in previous pleadings but not included in the memorandum shall be deemed waived or abandoned. only the issues raised in the parties’ memoranda – principally.286[34] Our ruling on the principal issue of the case – that de Castro had been illegally dismissed from his employment with LBNI – thus stands. They can only act on the facts and issues presented before them in appropriate pleadings. 2005).285[33] we said that: In resolving controversies. In Social Justice Society v. as we earlier pointed out. even those pending before the Court – could not have affected the Court’s action on the present case. 99-2-04-SC. the existence of the Stay Order – which would generally authorize the suspension of judicial proceedings. no mention at all was made in LBNI’s memorandum of the rehabilitation proceedings. it does not work to oust a court of its jurisdiction over a case properly filed before it. with LBNI’s manifestation that it is still undergoing rehabilitation. Thus. LBNI’s memorandum was filed on May 4. While the Interim Rules grant extension beyond the 180-day period. Notably. we were thus not bound to take note of and consider the pendency of the rehabilitation proceedings. No. 2005 (as set in the Stay Order of August 19. as well as magistrates presiding over them are not omniscient. the validity of de Castro’s dismissal from LBNI – were considered by the Court in resolving the case. on account of LBNI’s omission. Nevertheless. Given these circumstances. the Court resolves to suspend the execution of our September 23. With the failure of LBNI to raise rehabilitation proceedings in its memorandum. They may not even substitute their own personal knowledge for evidence. more than 180 days from the date of the initial hearing on October 5. At any rate. 2006.

Period of the Stay Order. our Decision dated September 23. BRION Associate Justice WE CONCUR: . Inc. or the failure of the rehabilitation of the debtor because of failure to achieve the desired targets or goals as set forth therein. terminate the proceedings. conditions. The petition shall be dismissed if no rehabilitation plan is approved by the court upon the lapse of one hundred eighty (180) days from the date of the initial hearing. accordingly.Sec. or assumptions. subject to the penalty of contempt in case of noncompliance. – In case of the failure of the debtor to submit the rehabilitation plan. The proceedings shall also terminate upon the successful implementation of the rehabilitation plan. 27. SO ORDERED. WHEREFORE. however. motu proprio. we DENY the Motion for Reconsideration. is hereby directed to submit quarterly reports to the National Labor Relations Commission on the status of its rehabilitation. Respondent Liberty Broadcasting Network. the court shall upon motion. 2008 is hereby AFFIRMED. or the failure of the said debtor to perform its obligations under the said plan. however. The court may grant an extension beyond this period only if it appears by convincing and compelling evidence that the debtor may successfully be rehabilitated. restrictions. 11. The National Labor Relations Commission is. x x x x Sec. Termination of Proceedings. or a determination that the rehabilitation plan may no longer be implemented in accordance with its terms. 2008 Decision until the Stay Order is lifted or the corporate rehabilitation proceedings are terminated.The stay order shall be effective from the date of its issuance until the dismissal of the petition or the termination of the rehabilitation proceedings. . directed to SUSPEND the execution of our September 23. or upon the recommendation of the Rehabilitation Receiver. or the disapproval thereof by the court. shall the period for approving or disapproving a rehabilitation plan exceed eighteen (18) months from the date of filing of the petition. In no instance. ARTURO D.

VELASCO. CONCHITA CARPIO MORALES Associate Justice Acting Chairperson .CONCHITA CARPIO MORALES Associate Justice PRESBITERO J. Associate Justice ROBERTO A. JR. ABAD Associate Justice JOSE PORTUGAL PEREZ Associate Justice ATTESTATION I attest that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

G. PERALTA. 169170 Present: versus - CARPIO.. No.M. Chairperson. Respondents. Promulgated: August 8. Article VIII of the Constitution. and MENDOZA. JJ. CORONA Chief Justice Republic of the Philippines Supreme Court Manila SECOND DIVISION D.R. RENATO C.. CONSUNJI. GODOFREDO PARAGSA. J. it is hereby certified that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. 2010 x---------------------------------------------------------------------------------------x DECISION . MAGELLAN DALISAY. ABAD. Petitioner. INC.CERTIFICATION Pursuant to Section 13. ANTONIO GOBRES. EMILIO ALETA and GENEROSO MELO. NACHURA. and the Division Acting Chairperson’s Attestation.

. which was later superseded by Department Order No.288[2] superseded by Department Order No. Citing the employment record of each respondent. 1998. Respondents‘ notices of termination were filed with the DOLE. On October 14. are covered by Policy Instruction No.PERALTA. Godofredo Paragsa.M. in compliance with Policy Instruction No. Consuji maintained the same positions they had against the case of Melo‘s co-complainants. Consunji for illegal dismissal. dated March 9. where they started working on September 1. 19. 20. Inc.291[5] .R. Inc. series of 1993. respondents saw their names included in the Notice of Termination posted on the bulletin board at the project premises. Respondents were employed per project undertaken by petitioner company and within varying estimated periods indicated in their respective project employment contracts. petitioner and David M.19.289[3] With respect to respondent Generoso G. th Petitioner D. a construction company. as superseded by Department Order No. The facts are as follows: Respondents Antonio Gobres. series of 1993 with respect to their separation or dismissal. dated August 2. 2005. 20. Makati. Consunji. 1998. Consunji countered that respondents. and non-payment of 13 month pay. Consunji. on several occasions and/or at various times. five (5) days service incentive leave pay. in accordance with Policy Instruction No. 19. series of 1993. Inc. Emilio Aleta and Generoso Melo worked as carpenters in the construction projects of petitioner D. J. Ayala. 2005. damages and attorney’s fees.: This is a petition for review on certiorari287[1] of the Decision of the Court of Appeals in CA-G. being project employees. 20. Consuji averred that respondents‘ services were terminated when their phases of work for which their services were engaged were completed or when the projects themselves were completed. 70708. SP No. and David M. Respondents‘ last assignment was at Quad 4Project in Glorietta.M.M.290[4] Petitioner contended that since respondents were terminated by reason of the completion of their respective phases of work in the construction project. Respondents filed a Complaint with the Arbitration Branch of the National Labor Relations Commission (NLRC) against petitioner D. Magellan Dalisay. their termination was warranted and legal. Melo. and David M. Their termination from employment for each project was reported to the Department of Labor and Employment (DOLE). Consunji. and its Resolution. petitioner and David M. denying petitioner‘s motion for reconsideration.

Respondents appealed the Labor Arbiter‘s Decision to the NLRC In a Resolution295[9] dated July 31. Ayala.Moreover. and that they be ordered reinstated to their former position with full backwages until actual reinstatement.M. Respondents filed a petition for certiorari with the Court of Appeals. They had no prior notice of their termination. Inc. and that petitioner D. as evidenced by bank remittances. the dispositive portion of which reads: . Consunji reported their termination of services to the DOLE in accordance with the requirements of law. granting that they were project employees. they were still illegally dismissed for non-observance of procedural due process. 2002. the Labor Arbiter rendered a Decision294[8] dismissing respondents‘ complaint. Consunji. and David M. seeking the annulment of the NLRC Resolution dated July 31. Makati City was estimated to take two years to finish. Hence. Respondents‘ motion for reconsideration was denied by the NLRC for lack of merit in its Order296[10] dated February 21. the NLRC affirmed the decision of the Labor Arbiter. petitioner claimed that respondents have been duly paid their service incentive leave pay and 13 th month pay through their respective bank accounts. but they were dismissed within the two-year period. 2002. exemplary and nominal damages. 1999. 2001 and Order dated February 21. the Court of Appeals rendered a Decision. Respondents prayed that their dismissal be declared as illegal.293[7] On October 4. and dismissed the appeal for lack of merit. and awarded moral. 2001. The Labor Arbiter found that respondents were project employees. On March 9. that they were dismissed from the last project they were assigned to when their respective phases of work were completed. 2005.292[6] Respondents replied that the Quad 4-Project at Glorietta.

It cited Agabon v.WHEREFORE. they would not have reported for work on October 14. makes them project employees. the Court ruled that even if the dismissal is legal. or render it illegal. the Court of Appeals denied the partial motion for reconsideration.297[11] The Court of Appeals sustained the findings of the NLRC that respondents are project employees.000. Consunji to pay respondents P20. the nature of employment of petitioners. the Court of Appeals ordered petitioner and David M. the employer should still indemnify the employee for the violation of his statutory rights. which is fixed for [a] specific project and the completion of which has been determined at the time that their services were engaged. Petitioner and David M. and that Agabon is not applicable here. the lack of statutory due process should not nullify the dismissal. The appellate court stated that in Agabon.00 as nominal damages for non-compliance with the statutory due process. even if they were validly terminated for having completed the phases of work for which they were hired. NLRC is the one controlling and in point.298[12] The CA stated that although respondents were project employees. employers of project employees are required to report their termination to DOLE upon completion of the project for which they were engaged.00 each as nominal damages for lack of advance notice of their termination. It held: The Labor Arbiter and [the] NLRC correctly applied Article 280 of the Labor Code when it ruled that petitioners‘ employment. because the termination in Agabon was for cause. 19. there is no provision requiring administrative hearing/investigation before a project employee may be terminated on account of completion of phase of work or the project itself. 19.299[13] which held that where the dismissal is for a just cause. 20 and Department Order No. It added that no distinction was made in Agabon whether the employee is engaged in a construction project or not. 2005. they were entitled to know the reason for their dismissal and to be heard on whatever claims they might have. series of 1993. In a Resolution300[14] dated August 2. It pointed out that under Department Order No. As could be gleaned from the last portion of Article 280 of the Labor Code. Hence. while herein respondents were terminated due to the completion of the phases of work for which their services were engaged. Consunji filed a partial motion for reconsideration and prayed that the Decision of the Court of Appeals be partially reconsidered by deleting the award of nominal damages to each respondent. series of 1993. Petitioner also argued that prior notice of termination is not required in this case. It held that respondents‘ right to statutory due process was violated for lack of advance notice of their termination. 1998. This is the reason why under Policy Instruction No. It held that the case of Agabon v. Costs against petitioners. but the employer should indemnify the employee for the violation of his statutory rights by paying nominal damages. NLRC. which is the construction industry‘s governing law. is excepted therefrom. which is fixed for a specific project and the completion of which has been determined when they were hired.000. the Decision and Resolution of the NLRC in finding petitioners‘ dismissal as valid are AFFIRMED with MODIFICATION that private respondents are ordered to pay each of the petitioners the sum of P20. The appellate court stated that had respondents been given prior notice. or ineffectual. .

00 to each respondent is unwarranted under Section 2 (III).000. the employer is. the NLRC and the Court of Appeals. . Their unanimous finding that respondents are project employees is binding on the Court.00 AS NOMINAL DAMAGES FOR ―ALLEGED‖ NON-COMPLIANCE WITH THE STATUTORY DUE PROCESS. filed this petition raising this question of law: WHETHER OR NOT THERE IS BASIS FOR THE COURT OF APPEALS IN ORDERING HEREIN PETITIONER TO PAY RESPONDENTS EACH THE SUM OF P20. NLRC is not applicable to this case. Respondents were found to be project employees by the Labor Arbiter.‖302[16] Petitioner also contends that Agabon v. which states. It must also be pointed out that respondents have not appealed from such finding by the Court of Appeals. C. Consunji. The main issue is whether or not respondents. Rule XXIII. petitioner cited Cioco. This is because completion of the work or project automatically terminates the employment. It is only the petitioner that appealed from the decision of the Court of Appeals. Book V of the Omnibus Rules Implementing the Labor Code. Section 2 (III). Book V of the Omnibus Rules Implementing the Labor Code provides that no prior notice of termination is required if the termination is brought about by completion of the contract or phase thereof for which the worker has been engaged.Petitioner D. only obliged to render a report to the DOLE on the termination of the employment.000.E. Inc. in which case. ―If the termination is brought about by the completion of the contract or phase thereof. are entitled to nominal damages for lack of advance notice of their dismissal. no prior notice is required. while in this case.304[18] The petition is meritorious. under the law.M. respondents were terminated due to the completion of the phases of work.303[17] which held: x x x More importantly. v. In support of its argument. Rule XXIII. The termination therein was for just cause due to abandonment of work. Jr. as project employees.301[15] Petitioner contends that the award of nominal damages in the amount of P20. Construction Corporation.

the Court ordered the employer to pay the employees involved nominal damages in the amount of P30. Section 1 (c). respondents‘ termination is governed by Section 1 (c) and Section 2 (III). respondents. which is a just cause for dismissal under Article 282 of the Labor Code.306[20] Although the dismissal was for a cause. The appellate court cited the case of Agabon v. Rule XXIII (Termination of Employment). Dismissal based on just causes contemplate acts or omissions attributable to the employee. because it involved the dismissal of regular employees for abandonment of work. the Labor Arbiter. Book V of the Omnibus Rules Implementing the Labor Code. . the Court of Appeals held that respondents were entitled to nominal damages. NLRC is not applicable to this case.00 for failure to observe procedural due process.‖305[19] In this case. and subject to the requirements of due process. As project employees.000. Book V of the Omnibus Rules Implementing the Labor Code states: Section 1. However. because petitioner failed to give them advance notice of their termination.A project employee is defined under Article 280 of the Labor Code as one whose ―employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. Book VI307[21] of the Omnibus Rules Implementing the Labor Code. in this case. the employer shall not terminate the services of an employee except for just or authorized causes as provided by law. which procedural due process requirements are enumerated in Section 2. as project employees. NLRC as basis for the award of nominal damages. Security of tenure. Rule 1. Unlike in Agabon. respondents were terminated due to the completion of the phases of work for which their services were engaged.309[23] Instead.308[22] Since the employer therein failed to comply with the twin requirements of notice and hearing. were not terminated for just cause under Article 282 of the Labor Code. were validly terminated due to the completion of the phases of work for which their services were engaged. — (a) In cases of regular employment. Rule XXIII. the NLRC and the Court of Appeals all found that respondents. The Court holds that Agabon v. the employer therein was required to observe the standard of due process for termination of employment based on just causes under Article 282 of the Labor Code.

no prior notice is required. only obliged to render a report to the DOLE on the termination of the employment. III. and due to the completion of the phases of work respondents were engaged for. Jr. . is given opportunity to respond to the charge. Rule XXIII. under the law. v. it shall be sufficient that a written notice is served the employee within a reasonable time from the effective date of termination.E. C. 1. specifying the ground or grounds for termination. the foregoing notices shall be served on the employee‘s last known address. unless the dismissal is for just or authorized cause subject to the requirements of due process or prior notice. the requirements of due process shall be deemed complied with upon service of a written notice to the employee and the appropriate Regional Office of the Department at least thirty (30) days before the effectivity of the termination. Further. Construction Corporation312[26] explained that this is because completion of the work or project automatically terminates the employment. (b) A hearing or conference during which the employee concerned. and giving to said employee reasonable opportunity within which to explain his side. the Labor Arbiter. Book V of the Omnibus Rules Implementing the Labor Code provides: Section 2. — In all cases of termination of employment. no prior notice is required. For termination of employment as based on authorized causes defined in Article 283 of the Code. If the termination is brought about by the failure of an employee to meet the standards of the employer in the case of probationary employment. grounds have been established to justify his termination. or is brought about by the completion of the phase of the project or contract for which the employee was engaged. Section 2 (III).” Cioco. II. ―If the termination is brought about by the completion of the contract or phase thereof. For termination of employment based on just causes as defined in Article 282 of the Code: (a) A written notice served on the employee specifying the ground or grounds for termination. and (c) A written notice [of] termination served on the employee indicating that upon due consideration of all the circumstance. or prior to the expiration of the contract between the principal and contractor. no employee shall be dismissed prior to the completion of the project or phase thereof for which the employee was engaged. the NLRC and the Court of Appeals all found that respondents were validly terminated due to the completion of the phases of work for which respondents‘ services were engaged.311[25] In this case. Hence.xxxx (c) In cases of project employment or employment covered by legitimate contracting or sub-contracting arrangements.310[24] Records show that respondents were dismissed after the expiration of their respective project employment contracts. the cited provision‘s requirements of due process or prior notice when an employee is dismissed for just or authorized cause (under Articles 282 and 283 of the Labor Code) prior to the completion of the project or phase thereof for which the employee was engaged do not apply to this case. the employer is. the following standards of due process shall be substantially observed. with the assistance of counsel if the employee so desires. If the termination is brought about by the completion of the contract or phase thereof. present his evidence or rebut the evidence presented against him. In case of termination. Standard of due process: requirements of notice. The above rule clearly states. in which case.

therefore. 70708. absent the requirement of prior notice of termination when the termination is brought about by the completion of the contract or phase thereof for which the worker was hired. 2005. 2005. No costs. thus. is SET ASIDE. did not violate any requirement of procedural due process by failing to give respondents advance notice of their termination. respondents are not entitled to nominal damages for lack of advance notice of their termination. PERALTA Associate Justice WE CONCUR: ANTONIO T. SP No. Petitioner. WHEREFORE. NACHURA Associate Justice ROBERTO A. SO ORDERED. dated March 9.Hence. but the award of nominal damages to respondents is DELETED. DIOSDADO M. The Decision of the Court of Appeals in CA-G. CARPIO Associate Justice Chairperson ANTONIO EDUARDO B. the petition is GRANTED. there is no basis for the payment of nominal damages. prior or advance notice of termination is not part of procedural due process if the termination is brought about by the completion of the contract or phase thereof for which the employee was engaged. dated August 2. insofar as it upholds the validity of the dismissal of respondents is AFFIRMED. The Resolution of the Court of Appeals. In sum.R. ABAD Associate Justice JOSE CATRAL MENDOZA Associate Justice .

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of th opinion of the Court’s Division.

ANTONIO T. CARPIO Associate Justice Second Division, Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONA Chief Justice

Republic of the Philippines Supreme Court Manila

FIRST DIVISION

NAGKAKAISANG LAKAS NG MANGGAGAWA SA KEIHIN (NLMK-OLALIA-KMU) and HELEN VALENZUELA, Petitioners,

G.R. No. 171115

Present: CORONA, C. J., Chairperson, LEONARDO-DE CASTRO,

- versus -

BERSAMIN, DEL CASTILLO, and PEREZ, JJ. Promulgated: August 9, 2010

KEIHIN PHILIPPINES CORPORATION, Respondent.

x----------------------- --------------------------------------------x

DECISION

DEL CASTILLO, J.:

This Petition for Review on Certiorari313[1] assails the November 2, 2005 Resolution314[2] of the Court of Appeals (CA) in CA-G.R. SP No. 91718 dismissing outright the petition for certiorari filed by the petitioners, as well as its January 6, 2006 Resolution315[3] denying petitioners‘ Motion for Reconsideration.

Factual Antecedents

Petitioner Helen Valenzuela (Helen) was a production associate in respondent Keihin Philippines Corporation (Keihin), a company engaged in the production of intake manifold and throttle body used in motor vehicles manufactured by Honda.

It is a standard operating procedure of Keihin to subject all its employees to reasonable search before they leave the company premises.316[4] On September 5, 2003, while Helen was about to leave the company premises, she saw a packing tape near her work area and placed it inside her bag because it would be useful in her transfer of residence. When the lady guard on duty inspected Helen‘s bag, she found the packing tape inside her bag. The guard confiscated it and submitted an incident report317[5] dated September 5, 2003 to the Guard-in-Charge, who, in turn, submitted a memorandum318[6] regarding the incident to the Human Resources and Administration Department on the same date.

The following day, or on September 6, 2003, respondent company issued a show cause notice319[7] to Helen accusing her of violating F.2 of the company‘s Code of Conduct, which says, ―Any act constituting theft or robbery, or any attempt to commit theft or robbery, of any company property or other associate‘s property. Penalty: D (dismissal).‖320[8] Paul Cupon, Helen‘s supervisor, called her to his office and directed her to explain in writing why no disciplinary action should be taken against her.

Helen, in her explanation,321[9] admitted the offense and even manifested that she would accept whatever penalty would be imposed upon her. She, however, did not reckon that respondent company would terminate her services for her admitted offense.322[10]

On September 26, 2003, Helen received a notice323[11] of disciplinary action informing her that Keihin has decided to terminate her services.

On October 15, 2003, petitioners filed a complaint324[12] against respondent for illegal dismissal, non-payment of 13th month pay, with a prayer for reinstatement and payment of full backwages, as well as moral and exemplary damages. Petitioners alleged that Helen‘s act of taking the packing tape did not constitute serious misconduct, because the same was done with no malicious intent.325[13] They believed that the tape was not of great value and of no further use to respondent company since it was already half used. Although Helen admitted that she took the packing tape, petitioners claimed that her punishment was disproportionate to her infraction.

Keihin, on the other hand, maintained that Helen was guilty of serious misconduct because there was a deliberate act of stealing from the company. Respondent company also claimed that motive and value of the thing stolen are irrelevant in this case.

Ruling of the Labor Arbiter

On July 30, 2004, the Labor Arbiter326[14] rendered his Decision327[15] dismissing the complaint of illegal dismissal. He brushed aside petitioners‘ argument that the penalty imposed on Helen was disproportionate to the offense committed,328[16] and held that she indeed committed a serious violation of the company‘s policies amounting to serious misconduct,329[17] a just cause for terminating an employee under Article 282 of the Labor Code. The Labor Arbiter likewise upheld the right of the company to terminate Helen on the ground of loss of confidence or breach of trust.330[18]

The Labor Arbiter further held that Keihin observed the requirements of procedural due process in implementing the dismissal of Helen.331[19] He ruled that the following circumstances showed that the company observed the requirements of procedural due process: a) there was a show cause letter informing Helen of the charge of theft and requiring her to submit an explanation; b) there was an administrative hearing giving her an opportunity to be heard; and c) the respondent company furnished her with notice of termination stating the facts of her dismissal, the offense for which she was found guilty, and the grounds for her dismissal.332[20]

Ruling of the National Labor Relations Commission (NLRC)

On appeal, the NLRC dismissed the appeal of the petitioners and affirmed in toto the Decision of the Labor Arbiter. It held that petitioners admitted in their Position Paper that Helen took the packing tape strewn on the floor near her production line within the company premises.333[21] By the strength of petitioners‘ admission, the NLRC held that theft is a valid reason for Helen‘s dismissal.334[22]

As to the issue of due process, the pertinent portion of the Decision335[23] of the NLRC reads:

Complainant‘s dismissal too, was with due process. Procedural due process only requires employers to furnish their errant employees written notices stating the particular acts or omissions constituting the grounds for their dismissal and to hear their side of the story (Mendoza vs. NLRC, 310 SCRA 846 [1999]). Complainant‘s claim that the show-cause letter did not pass the stringent requirement of the law is belied by her admission in her position paper that Mr. Cupon furnished her a ―form,‖ simultaneously asking her why she did such an act and x x x that Mr. Cupon directed her to submit a written explanation on the matter, which she complied with. By Complainant‘s own admission then, it is clear that she was furnished a written notice informing her of the particular act constituting the ground for her dismissal and that x x x her side of the story [was heard]. Evidently then, Complainant was afforded due process prior to her dismissal.

The dispositive portion of the Decision of the NLRC reads:

WHEREFORE, premises considered, Complainant‘s appeal is DISMISSED for lack of merit. The Labor Arbiter‘s assailed Decision in the above-entitled case is hereby AFFIRMED in toto. SO ORDERED.336[24]

Ruling of the Court of Appeals

After having their Motion for Reconsideration337[25] denied338[26] by the NLRC, the petitioner union, the Nagkakaisang Lakas ng Manggagawa sa Keihin, filed a Petition for Certiorari with the CA praying that the Decision of the NLRC be set aside. However, in a Resolution339[27] dated November 2, 2005, the CA dismissed the petition outright for not having been filed by an indispensable party in interest under Section 2, Rule 3 of the Rules of Court.

SEC 2. Parties in interest. – A real party in interest is the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise authorized by law or these Rules, every action must be prosecuted or defended in the name of the real party in interest.

Petitioners filed a Motion for Reconsideration340[28] but it was denied by the CA in its Resolution341[29] of January 6, 2006.

Hence, petitioners filed the present petition for review on certiorari under Rule 45, asking the Court to reverse the Resolutions of the CA and enter a new one declaring Helen‘s dismissal unjustified. They anchor their petition on the following grounds:

I. THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN HOLDING THAT THE PETITION FOR CERTIORARI FILED BY THE UNION AND MS. HELEN VALENZUELA WAS NOT FILED BY AN INDISPENSABLE PARTY. II. THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN FAILING TO DECIDE THE CASE ON THE MERITS DESPITE SHOWING THAT THE PETITION FOR CERTIORARI WAS VERIFIED BY THE UNION PRESIDENT AND MS. HELEN VALENZUELA. III. THE COURT OF APPEALS ERRED IN FAILING TO APPRECIATE THAT SERIOUS MISCONDUCT UNDER EXISTING LAW AND JURISPRUDENCE CANNOT BE ATTRIBUTED TO HEREIN PETITIONER HELEN VALENZUELA BECAUSE THE DECISION OF THE NLRC IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.342[30]

Our Ruling

We affirm the ruling of the CA.

It is clear that petitioners failed to include the name of the dismissed employee Helen Valenzuela in the caption of their petition for certiorari filed with the CA as well as in the body of the said petition. Instead, they only indicated the name of the labor union Nagkakaisang Lakas ng Manggagawa sa Keihin (NLMK-OLALIA) as the party acting on behalf of Helen. As a result, the CA rightly dismissed the petition based on a formal defect.

Under Section 7, Rule 3 of the Rules of Court, ―parties in interest without whom no final determination can be had of an action shall be joined as plaintiffs or defendants.‖ If there is a failure to implead an indispensable party, any judgment rendered would have no effectiveness.343[31] It is ―precisely ‗when an indispensable party is not before the court (that) an action should be dismissed.‘ The absence of an indispensable party renders all subsequent actions of the court null and void for want of authority to act, not only as to the absent parties but even to those present.‖344[32] The purpose of the rules on joinder of indispensable parties is a complete determination of all issues not only between the parties themselves, but also as regards other persons who may be affected by the judgment. A decision valid on its face cannot attain real finality where there is want of indispensable parties.

At any rate, we are aware that it is the policy of courts to encourage full adjudication of the merits of an appeal. Dismissal of appeals purely on technical grounds, especially an appeal by a worker who was terminated and whose livelihood depends on the speedy disposition of her case, is frowned upon. Thus, while we affirm the CA‘s dismissal of the petition for certiorari, we shall still discuss the substantive aspect of the case and go into the merits.

Petitioners claim that the mental attitude of Helen negates depravity. (d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative. it was a mere error of judgment on the part of Helen. Termination by employer. Thus. during the routine inspection and even before the guard opened Helen‘s bag.The petitioners argue that serious misconduct under existing law and jurisprudence could not be attributed to Helen because she was not motivated by malicious intent. – An employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work. respondent company issued two memoranda implementing an intensive . there had been several cases of theft and vandalism involving both respondent company‘s property and personal belongings of other employees. (b) must relate to the performance of the employee‘s duties. it was Helen‘s honest belief that the tape she took was of no use or value and that she did not hide the same. It provides: ARTICLE 282.‖347[35] In other words. she cannot be held guilty of serious misconduct. and implies wrongful intent and not mere error in judgment. ―Kumuha po ako ng isang packing tape na gagamitin ko sa paglilipat ng gamit ko sa bago kong lilipatang bahay. (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative. When Helen was asked to explain in writing why she took the tape. and (c) must show that the employee has become unfit to continue working for the employer.‖346[34] In the case at bar. in taking the packing tape for her own personal use. and (e) Other causes analogous to the foregoing. (b) Gross and habitual neglect by the employee of his duties. a forbidden act. she readily admitted that the bag contained a packing tape. which is a just cause for her dismissal from service. willful in character. thus. the issue boils down to whether.‖345[33] For serious misconduct to justify dismissal under the law. there was intent on her part to benefit herself when she attempted to bring home the packing tape in question. In order to address this issue of losses. Helen took the packing tape with the thought that she could use it for her own personal purposes. Article 282 of the Labor Code enumerates the just causes for termination. Helen committed serious misconduct. a dereliction of duty. willful or wrongful intent and. by her own admission. she stated. Misconduct is defined as ―the transgression of some established and definite rule of action. It is noteworthy that prior to this incident. According to petitioners. ―(a) it must be serious. Furthermore. Rather.

we held that: There is no gainsaying that theft committed by an employee constitutes a valid reason for his dismissal by the employer. According to the petitioners. Helen was not even on her second year of service with Keihin when the incident of theft occurred. we are convinced that the case of Caltex is different from the case at hand. On the other hand. The petitioners also argue that the penalty of dismissal is too harsh and disproportionate to the offense committed since the value of the thing taken is very minimal. Petitioners cite the case of Caltex Refinery Employees Association v. Despite these reminders.‖351[39] After a closer study of both cases. Lariosa348[36] involving an employee who was caught by the security guards of the company during a routine inspection with possession of company property. acts of dishonesty in the handling of company property are a different matter. And what further distinguishes the instant case from Caltex is that respondent company was dealing with several cases of theft. All these circumstances point to the conclusion that it was not just an error of judgment on the part of Helen. National Labor Relations Commission350[38] where Arnelio M. the former had a clean record of eight years with his employer. we refrained from imposing the supreme penalty of dismissal since the employee had no violations ―in his eight years of service and the value of the lighter fluid x x x is very minimal compared to his salary x x x. The show-cause notice states: . In the case of Firestone Tire and Rubber Company of the Philippines v. Regarding the requirement of procedural due process in dismissal of employees. but a deliberate act of theft of company property. vandalism. Although as a rule this Court leans over backwards to help workers and employees continue with their employment or to mitigate the penalties imposed on them. and loss of company and employees‘ property when the incident involving Helen transpired. Although both Clarete and Helen had no prior violations. In said case.inspection procedure and reminding all employees that those who will be caught stealing and performing acts of vandalism will be dealt with in accordance with the company‘s Code of Conduct. Helen took the packing tape and was caught during the routine inspection.349[37] We hold that Helen is guilty of serious misconduct in her act of taking the packing tape. petitioners argue that the first notice failed to explain the charge being leveled against Helen. the notice was vague and lacked sufficient definitiveness. Clarete (Clarete) was found to have willfully breached the trust and confidence reposed in him by taking a bottle of lighter fluid.

‖353[41] In this case. SO ORDERED. and not that an actual hearing should always and indispensably be held.355[43] we held that. ―Any act constituting theft or robbery.2 of the company‘s Code of Conduct which says. The Resolutions dated November 2. or any attempt to commit theft or robbery. 2005 and January 6. why you have committed an offense against company property specifically F.‖ WHEREFORE.‖ Similarly in Philippine Pasay Chung Hua Academy v. MARIANO C. DEL CASTILLO Associate Justice . of any company property or other associate‘s property. SP No. In Metropolitan Bank and Trust Company v. ―[e]ven if no hearing or conference was conducted.2 of the company‘s Code of Conduct: ―Any act constituting theft or robbery. The employer must furnish the employee with two written notices before termination of employment can be legally effected: (a) a notice apprising the employee of the particular acts or omissions for which his dismissal is sought. it has been consistently held that the twin requirements of notice and hearing are essential elements of due process. ―In the dismissal of employees.‖352[40] We reject petitioners‘ claim that respondent company failed to observe the requirements of procedural due process.‖354[42] We find that such notice sufficiently informed Helen of the charge of theft of company property against her.356[44] we held that.Please explain in writing within 48 hours upon receipt hereof. Edpan. respondent company furnished Helen a show-cause notice dated September 6. and (b) a subsequent notice informing the employee of the employer‘s decision to dismiss him. Such opportunity was afforded the petitioner when she was asked to explain her side of the story. the Petition is DENIED. With regard to the requirement of a hearing. the essence of due process lies in an opportunity to be heard.R. We are convinced that such notice satisfies the due process requirement to apprise the employee of the particular acts or omissions for which dismissal is sought. or any attempt to commit theft or robbery. ―the essence of due process lies simply in an opportunity to be heard. 2003 accusing her of violating F. 91718 are AFFIRMED. Barrientos. 2006 of the Court of Appeals in CA-G. of any company property or other associate‘s property. the requirement of due process had been met since he was accorded a chance to explain his side of the controversy.

WE CONCUR: RENATO C. BERSAMIN Associate Justice ssociate Justice JOSE PORTUGAL PEREZ Associate Justice epublic of the Philippines Supreme Court Manila SECOND DIVISION . LEONARDO-DE CASTRO LUCAS P. CORONA Chief Justice Chairperson ERESITA J.

G.. BALGOA. 2003 of the Court of Appeals in CA-G. DUERO. ALICANTE. CLEMENTINO C. SUZON ALLAN J. Promulgated: August 9. JAIME N. DANILO Y. Chairperson. POPERA. MARTINIANO A. CAMPOS. MAGAYON. JR.: This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the reversal of the Decision357[1] dated July 25. SP No. MANUEL M. ALBARAN. TATO. 2002360[4] of the National Labor Relations Commission in NLRC CA No. GEREMIAS S. JERRY ROMEO T.PICOP RESOURCES. M-006309-2001 and reinstating the Decision361[5] dated March 16. LUISITO R. J. CHARLITO D. ILAN. TAÑECA. MOISES M. MANUEL G. JOSEPH B. and NAMAPRI-SPFL. CANON. J. JJ.R. RAUL P. LORENZO D. REMBERT B. 71760. 2001 of the Labor Arbiter.R. SILOT. . ROBERTO Q. QUIMAN.. AVILA. NACHURA. setting aside the Resolutions dated October 8. SINDAY. PERALTA ABAD. 2003 and Resolution358[2] dated October 23. No. 2010 x----------------------------------------------------------------------------------------x DECISION PERALTA. ABUCAY. MATURAN. and MENDOZA. Respondents. Petitioner. MARGARITO G. 160828 Present: versus – ANACLETO L. CARPIO. TRIMIDAL. 2001359[3] and April 29. INCORPORATED (PRI).

Inc. Romero Boniel (in his capacity as PRI's Manager of Legal/Labor). 6. 6. Loreto Uriarte. which is the collective bargaining agent for the rank-and-file employees of petitioner PRI.The facts. shall give notice of termination of services of any employee who shall fail to fulfill the condition provided in Section 6.362[6] (in his capacity as National President of SPFL). Jr. Manuel Abucay and fourteen (14) others filed a Complaint for unfair labor practice. Separation under the Section is understood to be for cause.2 Any employee who may hereinafter be employed to occupy a position covered by the bargaining unit shall be advised by the COMPANY that they are required to file an application for membership with the UNION within thirty (30) days from the date his appointment shall have been made regular.1 All employees within the appropriate bargaining unit who are members of the UNION at the time of the signing of this AGREEMENT shall. . are as follows: On February 13. Proculo Fuentes.2 of this Article. Pascasio Trugillo (in his capacity as Local President of Nagkahiusang Mamumuo sa PICOP Resources. as culled from the records. 2001. Maintenance of membership. Fuentes (in his capacity as Secretary General of SPFL). Geremias Tato. but it assumes no obligation to discharge any employee if it has reasonable grounds to believe either that membership in the UNION was not available to the employee on the same terms and conditions generally applicable to other members. Wilbur T. PRI has a collective bargaining agreement (CBA) with NAMAPRI-SPFL for a period of five (5) years from May 22. Atty.. Joseph Balgoa. 6. Martiniano Magayon. or that membership was denied or terminated for reasons other than voluntary resignation or non-payment of regular union dues. maintain their membership in the UNION in good standing during the effectivity of this AGREEMENT.SPFL [NAMAPRI-SPFL]) and Atty.1 and 6. Wilfredo Fuentes (in his capacity as PRI's Vice President/Resident Manager).Union Security and Check-Off Section 6. upon the written request of the UNION and after compliance with the requirements of the New Labor Code. Atty. The CBA contained the following union security provisions: Article II. as a condition of continued employment by the COMPANY. illegal dismissal and money claims against petitioner PICOP Resources. Respondents were regular rank-and-file employees of PRI and bona fide members of Nagkahiusang Mamumuo sa PRI Southern Philippines Federation of Labor (NAMAPRI-SPFL). 2000. 1995 until May 22. respondents Anacleto Tañeca. Southern Philippines Federation of Labor (SPFL).3 The COMPANY. Incorporated (PRI). Jaime Campos.

NAMAPRI-SPFL. while Atty. (c). Boniel endorsed the explanation letters of the employees to Atty. Caraga Region. Respondents then accused PRI of Unfair Labor Practice punishable under Article 248 (a). Fuentes for evaluation and final disposition in accordance with the CBA. 2000. Boniel issued a memorandum addressed to the concerned employees to explain in writing within 72 hours why their employment should not be terminated due to acts of disloyalty as alleged by their Union. Acting on the May 16 and May 23. After evaluation. in a letter dated July 12. Fuentes and Wilbur T. Atty. but only of 46 member-employees. 2000 letters of the NAMAPRI-SPFL.2 on Union Security Clause. 2000. Atty. specifically Article II. Pascasio Trugillo requested the management of PRI to investigate those union members who signed the Petition for Certification Election of FFW during the existence of their CBA. 2000.1 and 6. 2000. a number of employees who were served “explanation memorandum” submitted their explanation. Proculo P. Romero A. 2000 was also served on the Department of Labor and Employment Office (DOLE). furnished PRI with machine copy of the authorization letters dated March 19. Fuentes advised the management of PRI that the Union found the member's explanations to be unsatisfactory. PRI served notices of termination for causes to the 31 out of the 46 employees whom NAMAPRIL-SPFL sought to be terminated on the ground of “acts of disloyalty” committed against it when respondents allegedly supported and signed the Petition for Certification Election of FFW before the “freedom period” during the effectivity of the CBA. while some did not. including respondents. NAMAPRI-SPFL considered said act of campaigning for and signing the petition for certification election of FFW as an act of disloyalty and a valid basis for termination for a cause in accordance with its Constitution and ByLaws. A Notice dated October 21.consequently. Fuentes and Pascasio Trujillo were accused of violating Article 248 (a) and (b) of the Labor Code. 2000. likewise. In a letter dated June 2.”363[7] On May 16. 20 and 21. the dismissed employee is not entitled to separation benefits provided under the New Labor Code and in this AGREEMENT. 2000. Atty. Within the period from May 26 to June 2. which contained the names and signatures of employees. Fuentes) sent a letter to the management of PRI demanding the termination of employees who allegedly campaigned for. supported and signed the Petition for Certification Election of the Federation of Free Workers Union (FFW) during the effectivity of the CBA. Atty. . 2000. (d) and (e) of the Labor Code. Fuentes (Atty. Sections 6. On October 16. In a letter dated May 23. He reiterated the demand for termination. Mr. and the terms and conditions of the CBA. (b).

judgment is hereby entered: 1. Respondents stressed that NAMAPRI-SPFL merely requested PRI to investigate union members who supported the Petition for Certification Election of FFW. restraint or coercion of respondents’ exercise of their right to self-organization. Respondents. respondents contended that there was lack of procedural due process. They pointed out that a patent manifestation of one’s disloyalty would have been the explicit resignation or withdrawal of membership from the Union accompanied by an advice to management to discontinue union dues and check-off deductions. Hence. In a Decision364[8] dated March 16. and . The dispositive portion of which reads: WHEREFORE. Respondents claimed that they should have been summoned individually. and not to cause the downfall of NAMAPRI-SPFL. 2000 of Atty. Boniel in giving in to the wishes of the Union in discharging them on the ground of disloyalty to the Union amounted to interference with.Respondents alleged that none of them ever withdrew their membership from NAMAPRI-SPFL or submitted to PRI any union dues and check-off disauthorizations against NAMAPRI-SPFL. 2000. or 58 days after the start of the freedom period. Atty. the Labor Arbiter declared the respondents’ dismissal to be illegal and ordered PRI to reinstate respondents to their former or equivalent positions without loss of seniority rights and to jointly and solidarily pay their backwages. it was no longer the bargaining representative of the rank-and-file workers of PRI. confronted with the accusation and investigated accordingly and from where the Union may base its findings of disloyalty and. thereafter. They insisted that mere affixation of signature on such authorization to file a petition for certification election was not per se an act of disloyalty. Respondents asserted that the act of PRI. the petition of FFW was only filed with the DOLE on May 18. They claimed that they continue to remain on record as bona fide members of NAMAPRI-SPFL. because the CBA had already expired on May 22. recommend to management the termination for causes. premises considered. Both the letter dated May 16. 2000. 2000 of Trujillo addressed to PRI did not mention their names. likewise. Declaring complainants’ dismissal illegal. Wilfredo Fuentes and Atty. there could be no justification in PRI’s act of dismissing respondents due to acts of disloyalty. The act indirectly required petitioners to support and maintain their membership with NAMAPRI-SPFL as a condition for their continued employment. They claimed that while it may be true that they signed the said authorization before the start of the freedom period. 2001. Fuentes and the follow-up letter dated May 23. The acts of NAMAPRI-SPFL. Furthermore. Fuentes and Trujillo amounted to actual restraint and coercion of the petitioners in the exercise of their rights to self-organization and constituted acts of unfair labor practice. Respondents maintained that their acts of signing the authorization signifying support to the filing of a Petition for Certification Election of FFW was merely prompted by their desire to have a certification election among the rank-and-file employees of PRI with hopes of a CBA negotiation in due time. argued that at the time NAMAPRI-SPFL demanded their termination.

declaring the dismissal of respondents from employment as legal. 2001 of the Labor Arbiter. 2003.000. thus. the Court of Appeals reversed and set aside the assailed Resolutions of the NLRC and reinstated the Decision dated March 16. Thus. which reversed the decision of the Labor Arbiter.00 each. Ordering respondents Picop Resources Inc. 2001 which reversed the Decision dated March 16.339. 2002. raised the following issues: I WHETHER AN EXISTING COLLECTIVELY (sic) BARGAINING AGREEMENT (CBA) CAN BE GIVEN ITS FULL FORCE AND EFFECT IN ALL ITS TERMS AND CONDITION INCLUDING ITS UNION SECURITY CLAUSE.00 and attorney’s fees equivalent to 10% of the total monetary award. or a total of P210. 2001 for lack of merit. Respondents filed a motion for reconsideration.000. as petitioner. SO ORDERED. PRI. 2001 of Labor Arbiter and the Resolution dated April 29.365[9] PRI and NAMAPRI-SPFL appealed to the National Labor Relations Commission (NLRC). REVISED RULES OF COURT. which denied respondent’s motion for reconsideration. II WHETHER OR NOT AN HONEST ERROR IN THE INTERPRETATION AND/OR CONCLUSION OF LAW FALL WITHIN THE AMBIT OF THE EXTRAORDINARY REMEDY OF CERTIORARI UNDER RULE 65.366[10] . before this Court. (PRI) and NAMAPRI-SPFL to reinstate complainants to their former or equivalent positions without loss of seniority rights and to jointly and solidarily pay their backwages in the total amount of P420. respondents filed a petition for certiorari under Rule 65 before the Court of Appeals and sought the nullification of the Resolution of the NLRC dated October 8. EVEN BEYOND THE 5-YEAR PERIOD WHEN NO NEW CBA HAS YET BEEN ENTERED INTO. but it was denied on April 29.30 as shown in the said Annex “A” plus damages in the amount of P10.2. Unsatisfied. On July 25.

129 as amended. Petitioner's argument is untenable. and that this action should be filed in the Court of Appeals in strict observance of the doctrine of the hierarchy of courts. 369[13] We now come to the main issue of whether there was just cause to terminate the employment of respondents. known as the Judiciary Reorganization Act of 1980). amending for the purpose of Section Nine of Batas Pambansa Blg.We will first delve on the technical issue raised. as amended by Republic Act No. Petitioner is mistaken. It claimed to have acted in good faith at the instance of the incumbent union pursuant to the Union Security Clause of the CBA. it is already settled that under Section 9 of Batas Pambansa Blg. is not tantamount to abuse of discretion falling within the ambit of Rule 65. . PRI argued that the dismissal of the respondents was valid and legal. 7902[10] (An Act Expanding the Jurisdiction of the Court of Appeals. the Court of Appeals – pursuant to the exercise of its original jurisdiction over Petitions for Certiorari – is specifically given the power to pass upon the evidence. if and when necessary. 129. they are enjoined to keep the status quo and continue in full force and effect the terms and conditions of the existing CBA during the 60-day period and/or until a new agreement is reached by the parties. its error.368[12] Moreover. PRI perceived a patent error in the mode of appeal elected by respondents for the purpose of assailing the decision of the NLRC. The power of the Court of Appeals to review NLRC decisions via Rule 65 or Petition for Certiorari has been settled as early as in our decision in St.367[11] This Court held that the proper vehicle for such review was a Special Civil Action for Certiorari under Rule 65 of the Rules of Court. Citing Article 253 of the Labor Code. It claimed that assuming that the NLRC erred in its judgment on the legal issues. National Labor Relations Commission. to resolve factual issues. Martin Funeral Home v. if any.370[14] PRI contends that as parties to the CBA.

2000. in their letters dated May 16 and 23.371[15] However. it is likewise undisputed that NAMAPRI-SPFL. Following the same provision. in two (2) occasions demanded from PRI. 20 and 21. for the duration of the agreement.372[16] As to the first requisite. There is maintenance of membership shop when employees. remains a member in good standing of a union entirely comprised of or of which the employees in interest are a part. We are unconvinced." or any other form of agreement which imposes upon employees the obligation to acquire or retain union membership as a condition affecting employment. It contends that the acts of respondents are a violation of the Union Security Clause." "maintenance of membership. a maintenance of membership as stipulated in Sections 6 of Article II." “union shop. (2) the union is requesting for the enforcement of the union security provision in the CBA. and. may be defined as an enterprise in which. we find that there is no sufficient evidence to support the decision of PRI to terminate the employment of the respondents. to terminate the employment of respondents due to their acts of disloyalty to the Union. who are union members as of the effective date of the agreement. must maintain union membership as a condition for continued employment until they are promoted or transferred out of the bargaining unit.” is not sufficient ground to terminate the employment of respondents inasmuch as the petition itself was actually filed during the freedom period. These requisites constitute just cause for terminating an employee based on the union security provision of the CBA. as to the third requisite. Nothing in the records would show that respondents failed to maintain their membership in good standing in the Union. in terminating the employment of an employee by enforcing the union security clause. . no person may be employed in any or certain agreed departments of the enterprise unless he or she is. as provided in their Collective Bargaining Agreement. However. there is no question that the CBA between PRI and respondents included a union security clause. Respondents continued to pay their union dues and never joined the FFW.“Union security" is a generic term. which is applied to and comprehends "closed shop. There is union shop when all new regular employees are required to join the union within a certain period as a condition for their continued employment. the employer needs to determine and prove that: (1) the union security clause is applicable. and (3) there is sufficient evidence to support the decision of the union to expel the employee from the union. We are in consonance with the Court of Appeals when it held that the mere signing of the authorization in support of the Petition for Certification Election of FFW on March 19. upon written request from the Union. Union Security and Check-Off. or who thereafter become members. specifically. Secondly. can indeed terminate the employment of the employee who failed to maintain its good standing as a union member. on the other hand. Respondents did not resign or withdraw their membership from the Union to which they belong. PRI alleged that respondents were terminated from employment based on the alleged acts of disloyalty they committed when they signed an authorization for the Federation of Free Workers (FFW) to file a Petition for Certification Election among all rank-and-file employees of PRI. or the agreement is terminated. or before the “freedom period. A closed shop. PRI. becomes. by agreement between the employer and his employees or their representatives.

with a pending petition for certification. any such agreement entered into by management with a labor organization is fraught with the risk that such a labor union may not be chosen thereafter as the collective bargaining representative.376[20] The provision for status quo is conditioned on the fact that no certification election was filed during the freedom . it was clear that the actual Petition for Certification Election of FFW was filed only on May 18. at least a majority of all eligible voters in the unit must have cast their votes. as per records. the signing of the authorization to file a certification election was merely preparatory to the filing of the petition for certification election. It reads: Article 256. 2000.374[18] This is not the situation in this case.” Likewise. 2000 until May 21. Representation issue in organized establishments. it was within the ambit of the freedom period which commenced from March 21. what is prohibited is the filing of a petition for certification election outside the 60-day freedom period. the employer shall continue to recognize the majority status of the incumbent bargaining agent where no petition for certification election is filed. However. Petitioner's reliance on Article 253 is misplaced. When an election which provides for three or more choices results in no choice receiving a majority of the valid votes cast. it can be said that while it is incumbent for the employer to continue to recognize the majority status of the incumbent bargaining agent even after the expiration of the freedom period. Strictly speaking.In organized establishments.373[17] Thus. we are constrained to believe that an “authorization letter to file a petition for certification election” is different from an actual “Petition for Certification Election. To have a valid election. The labor union receiving the majority of the valid votes cast shall be certified as the exclusive bargaining agent of all the workers in the unit.Significantly. petitioner's act of dismissing respondents stemmed from the latter's act of signing an authorization letter to file a petition for certification election as they signed it outside the freedom period. or an exercise of respondents’ right to self-organization. The provision of Article 256 of the Labor Code is particularly enlightening. That the total number of votes for all contending unions is at least fifty per cent (50%) of the number of votes cast. Moreover. hence. the need to terminate the employment of respondents. a run-off election shall be conducted between the labor unions receiving the two highest number of votes: Provided. . when a verified petition questioning the majority status of the incumbent bargaining agent is filed before the Department of Labor and Employment within the sixty-day period before the expiration of a collective bargaining agreement.” It claimed that they are still bound by the Union Security Clause of the CBA even after the expiration of the CBA. PRI anchored their decision to terminate respondents‘ employment on Article 253 of the Labor Code which states that ―it shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties. they could only do so when no petition for certification election was filed. The reason is. the Med-Arbiter shall automatically order an election by secret ballot when the verified petition is supported by the written consent of at least twenty-five percent (25%) of all the employees in the bargaining unit to ascertain the will of the employees in the appropriate bargaining unit.375[19] Applying the same provision. 2000. At the expiration of the freedom period. If at all.

computed from the time their actual compensation was withheld from them up to the time of their actual reinstatement. Otherwise. the status quo provision in so far as the need to await the creation of a new agreement will not apply. This. but all of them should have the right to do so. Any other view would render nugatory the clear statutory policy to favor certification election as the means of ascertaining the true expression of the will of the workers as to which labor organization would represent them. In fact. therefore. Employers should. however.period. 6715. But if reinstatement is no longer . the last sentence of Article 253 which provides for automatic renewal pertains only to the economic provisions of the CBA. inclusive of allowances and other benefits. support another union when filing a petition for certification election. employees who are illegally dismissed are entitled to full backwages. The holding of a certification election is a statutory policy that should not be circumvented. The employer is bound to exercise caution in terminating the services of his employees especially so when it is made upon the request of a labor union pursuant to the Collective Bargaining Agreement.380[24] We will emphasize anew that the power to dismiss is a normal prerogative of the employer. or their monetary equivalent. there will always be an issue of disloyalty whenever the employees exercise their right to self-organization. PRI's obligation to recognize NAMAPRI-SPFL as the incumbent bargaining agent does not hold true when petitions for certification election were filed. Under Republic Act No.377[21] In the instant case. a petition for certification election was already ordered by the Med-Arbiter of DOLE Caraga Region on August 23. Dismissals must not be arbitrary and capricious.381[25] An employee who is illegally dismissed is entitled to the twin reliefs of full backwages and reinstatement. If reinstatement is not viable. In awarding separation pay to an illegally dismissed employee. it will create an absurd situation where the union members will be forced to maintain membership by virtue of the union security clause existing under the CBA and. because it affects not only his position but also his means of livelihood. Their freedom to choose who should be their bargaining representative is of paramount importance. in lieu of reinstatement. Time and again. An existing CBA cannot constitute a bar to a filing of a petition for certification election.379[23] or compromised.378[22] Therefore. The fact that there already exists a bargaining representative in the unit concerned is of no moment as long as the petition for certification election was filed within the freedom period. Due process must be observed in dismissing an employee. 2000. respect and protect the rights of their employees. which include the right to labor. the amount to be awarded shall be equivalent to one month salary for every year of service. we have ruled that we adhere to the policy of enhancing the welfare of the workers. Moreover. If we apply it. thereafter. following Article 256. Not only some. at the expiration of the freedom period. separation pay is awarded to the employee. What is imperative is that by such a petition for certification election the employees are given the opportunity to make known of who shall have the right to represent them thereafter. When there is a representational issue. 2000. What is equally important is that everyone be given a democratic space in the bargaining unit concerned. four (4) petitions were filed as early as May 12. is not without limitations. as in this case. and does not include representational aspect of the CBA.

the petition is DENIED. without qualifications and diminutions. the backwages shall be computed from the time of their illegal termination up to the finality of the decision. Let this case be remanded to th e Labor Arbiter for proper computation of the full backwages due respondents. DIOSDADO M.382[26] WHEREFORE. computed from the time they were illegally dismissed up to the time they are actually reinstated. M-006309-2001. Moreover. The Decision dated July 25.R.possible. CARPIO Associate Justice Chairperson ANTONIO EDUARDO B. respondents. 2003 of the Court of Appeals in CA-G. NACHURA Associate Justice ROBERTO A. 2001 and April 29. which set aside the Resolutions dated October 8. having been compelled to litigate in order to seek redress for their illegal dismissal. as expeditiously as possible. ABAD Associate Justice . PERALTA Associate Justice WE CONCUR: ANTONIO T. 71760. 2002 of the National Labor Relations Commission in NLRC CA No. in accordance with Article 279 of the Labor Code. SO ORDERED. Respondents are hereby awarded full backwages and other allowances. 2003 and the Resolution dated October 23. SP No. are AFFIRMED accordingly. are entitled to the award of attorney‘s fees equivalent to 10% of the total monetary award.

JOSE CATRAL MENDOZA Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. RENATO C. I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court‘s Division. ANTONIO T. CARPIO Associate Justice Second Division. CORONA Chief Justice . Article VIII of the Constitution and the Division Chairperson‘s Attestation. Chairperson CERTIFICATION Pursuant to Section 13.

No. In its 19 April 2006 Resolution. .. 172589 Present: CARPIO. ABAD. G. J. x--------------------------------------------------x DECISION CARPIO. The Facts On 15 June 1995. Respondent. 01065. . Inc.R. (Sulpicio Lines) hired Nacague as ―hepe de viaje‖ or the representative of Sulpicio Lines on board its vessel M/V Princess of the World (the ship). Petitioner. the Court of Appeals denied Nacague‘s motion for reconsideration. PERALTA. the Court of Appeals dismissed the petition for certiorari filed by petitioner Jeffrey Nacague (Nacague) and affirmed the 21 March 2005 Decision and 31 May 2005 Resolution of the National Labor Relations Commission (NLRC) in NLRC Case No. 2010 SULPICIO LINES. NACHURA.R. respondent Sulpicio Lines. and MENDOZA. J. Chairperson. CEB SP No.SECOND DIVISION JEFFREY NACAGUE. V-00048104.: The Case This is a petition for review of the 23 January 2006 Decision and 19 April 2006 Resolution of the Court of Appeals in CA-G. In its 23 January 2006 Decision.JJ. INC.versus - Promulgated: August 8..

were subjected to a random drug test. The dispositive portion of the Labor Arbiter‘s 12 . Sulpicio Lines subjected Nacague to a formal investigation. On 15 February 2003.On 25 January 2003. together with Nacague. The memorandum reads: After a careful consideration of your case with the evidence available. They were taken to S. Feeling aggrieved. including your explanation. Lazo Clinic) and were required to submit urine samples. Sulpicio Lines received an anonymous letter reporting the use of illegal drugs on board the ship. Sulpicio Lines sent a memorandum to Nacague terminating him from the service. Sulpicio Lines sent a notice of investigation to Nacague informing him of the charges against him for use of illegal drugs and threatening a co-employee. Chico. and with the positive drug test result. Nacague filed a complaint for illegal suspension. The result of the random drug test revealed that Nacague was positive for methamphetamine hydrochloride or shabu. management finds you culpable of grave misconduct and loss of trust and confidence. some crew members of the ship. On 14 February 2003. Labor Arbiter Ernesto F. illegal dismissal and for reinstatement with backwages. March 7. On 23 February 2003. On 12 November 2003. Nacague went to Chong Hua Hospital in Cebu City to undergo a voluntary drug test. The drug test with Chong Hua Hospital yielded a negative result. Nacague submitted this test result to Sulpicio Lines. Nacague denied using illegal drugs. Carreon rendered a decision in favor of Nacague and declared that Sulpicio Lines illegally dismissed Nacague. submitted a report regarding the drug paraphernalia found inside the Mopalla Suite Room and the threat on his life made by Nacague and Chief Mate Reynaldo Doroon after he found the drug paraphernalia. On 20 February 2003. Ceasar T. a housekeeper on the ship. 2003. However. on 7 March 2003. In view thereof. the company is constrained to terminate your employment effective today. Lazo Medical Clinic (S. When the ship docked in the port of Manila on 18 February 2003.M.M.

According to the NLRC. was found positive for using illegal drugs. Lazo Clinic is an accredited drug testing center and that it was incumbent upon Nacague to show otherwise. he was guilty of serious misconduct and loss of trust and confidence.00 P153. the NLRC reversed the Labor Arbiter‘s decision and dismissed Nacague‘s complaint for lack of merit. The Labor Arbiter gave more weight to the drug test performed by Chong Hua Hospital because it was accredited by the Dangerous Drug Board. awarded separation pay to Nacague. Inc.00 P77.015. The Labor Arbiter said that doubts must be resolved in favor of the employee. The NLRC also said that there is a presumption that S. the NLRC denied Nacague‘s motion. Lazo Clinic was questionable because the clinic is not accredited by the Dangerous Drug Board and not under its supervision. judgment is hereby rendered ordering the respondent Sulpicio Lines.November 2003 Decision reads: WHEREFORE. Nacague alleged that the NLRC gravely abused its discretion when it declared that Sulpicio Lines validly terminated his employment. The Labor Arbiter agreed with Nacague that the drug test result from S. since Nacague. The Labor Arbiter also ruled that reinstatement is no longer viable due to the strained relations between Nacague and Sulpicio Lines and. premises considered.415. In its 21 March 2005 Decision. In its 31 May 2005 Resolution. SO ORDERED. to pay complainant Jeffrey Nacague the following: Separation pay Backwages Total P75. According to the Labor Arbiter. Nacague filed a motion for reconsideration.00 The other claims are dismissed for lack of merit. The NLRC added that Sulpicio Lines‘ Code of Conduct specified that the penalty for the use and illegal possession of prohibited drugs is dismissal. Sulpicio Lines appealed to the NLRC. the termination of employment of employees found positive for using illegal drugs should not be exercised indiscriminately and thoughtlessly. Dissatisfied with the Labor Arbiter‘s Decision.M. who was performing a task involving trust and confidence.M.600. thus. Nacague filed a petition for certiorari with the Court of Appeals. The Ruling of the Court of Appeals .

M. Lazo Clinic did not ask Nacague if he was taking any medication that might alter the results of the drug test. Nacague maintains that. Nacague argues that Sulpicio Lines failed to discharge its burden of proving that the termination of his employment was legal. The Court of Appeals said that the positive result of the S. The Court of Appeals agreed with the NLRC that Nacague failed to prove his allegation that S. . Nacague filed a motion for reconsideration. Lazo Clinic is an authorized drug testing center. Lazo Clinic drug test was not credible because Sulpicio Lines failed to show that S. the Court of Appeals denied the motion. Nacague adds that Republic Act No.M.According to the Court of Appeals. since only a screening test was conducted. Sulpicio Lines complied with both the procedural and substantive requirements of the law when it terminated the employment of Nacague. this petition. Nacague maintains that the S. 53-03 (Department Order No. The Ruling of the Court The petition is meritorious. No. In its 19 April 2006 Resolution. The Court of Appeals declared that the evidence presented by Sulpicio Lines was sufficient to justify the conclusion that Nacague committed serious misconduct and a breach of trust and confidence warranting his dismissal from employment. The Issue Nacague raises the sole issue of whether the Court of Appeals erred in ruling that his termination from employment was valid. Lazo Clinic lacks accreditation.A.M. 53-03) require two drug tests — a screening test and a confirmatory test. Hence.M. he was illegally dismissed based on an incomplete drug test. Nacague also alleges that the urine samples were gathered carelessly without proper labels to identify their owners and that S. On the procedural requirements. the Court of Appeals found that Sulpicio Lines complied with the twin-notice requirements and conducted a formal hearing. 9165) and the Department of Labor and Employment Order No. 9165 (R. Lazo Clinic drug test was the main basis of Sulpicio Lines in terminating Nacague‘s employment.M.

Nacague was already questioning the credibility of S. Authorized drug testing shall be done by any government forensic laboratories or by any of the drug testing laboratories accredited and monitored by the DOH to safeguard the quality of test results. We agree with the Labor Arbiter that the lack of accreditation of S. 53-03 further provides: Drug Testing Program for Officers and Employees  Drug testing shall conform with the procedures as prescribed by the Department of Health (DOH) (www. two requisites must concur: (1) the dismissal must be for a just or authorized cause. Thus. 9165 provides that drug tests shall be performed only by authorized drug testing centers. No. and (2) the employee must be afforded an opportunity to be heard and to defend himself. Under Article 279 of the Labor Code. a written notice stating the causes for termination and must give the employee the opportunity to be heard and to defend himself. 36. Furthermore. The NLRC and the Court of Appeals ruled that Sulpicio Lines validly terminated Nacague‘s employment because he was found guilty of using illegal drugs which constitutes serious misconduct and loss of trust and confidence.M. the Labor Arbiter declared that the S. Sulpicio Lines insists that the most accurate drug test is the random drug test conducted by S. Section 36 of R. to constitute valid dismissal from employment. No.On the other hand. Nacague underwent another drug test with the Chong Hua Hospital. The DOH shall take steps in setting the price of the drug test with DOH accredited drug testing centers to further reduce the cost of such drug test. Moreover. Lazo Clinic and that the test with Chong Hua Hospital was a ―planned‖ test. the screening test which will determine the positive result as well as the type of drug used and the confirmatory test which will confirm a positive screening test.doh. Lazo Clinic made its drug test results doubtful. x x x (Emphasis supplied) Department Order No. the employer must send the employee who is about to be terminated. Lazo Clinic. Sulpicio Lines also argues that since Nacague knew that the residue of the drug would no longer be detectable in his body after five days. two (2) testing methods. Contrary to Sulpicio Lines‘ allegation. 9165 reads: SEC. In fact. Only drug testing centers . Lazo Clinic drug test result was doubtful since it is not under the supervision of the Dangerous Drug Board.gov. However. Lazo Clinic as early as the proceedings before the Labor Arbiter.ph). an employer may terminate the services of an employee for just causes or for authorized causes.M. The drug testing shall employ.M.A. among others. Sulpicio Lines questions the belated attempt of Nacague to question the credibility of S.M.A. under Article 277(b) of the Labor Code. we find that Sulpicio Lines failed to clearly show that Nacague was guilty of using illegal drugs. Authorized Drug Testing.M. Section 36 also prescribes that drug testing shall consist of both the screening test and the confirmatory test. Section 36 of R.

SO ORDERED. We agree with the Labor Arbiter that Nacague‘s reinstatement is no longer feasible due to strained relations between Nacague and Sulpicio Lines and that Nacague should instead be granted separation pay. the latter to be carried out should the screening test turn positive.accredited by the DOH shall be utilized.dole.M. only a screening test was conducted to determine if Nacague was guilty of using illegal drugs. In this case. We SET ASIDE the April 2006 Resolution of the Court 23 January 2006 Decision and the 19 12 of Appeals in CA-G. But the more important consideration lies in the fact that the tests shall be conducted by trained professionals in access-controlled laboratories monitored by the Department of Health (DOH) to safeguard against results tampering and to ensure an accurate chain of custody. doubtless to ensure as much as possible the trustworthiness of the results. Sulpicio Lines failed to prove that S. the law specifies that the procedure shall employ two testing methods. the screening test and the confirmatory test.  Drug testing shall consist of both the screening test and the confirmatory test. When the alleged valid cause for the termination of employment is not clearly proven. Sulpicio Lines failed to clearly show that it had a valid and legal cause for terminating Nacague‘s employment. i. we explained: As to the mechanics of the test. Dangerous Drugs Board. as in this case. The law is clear that drug tests shall be performed only by authorized drug testing centers. (Emphasis supplied) In Social Justice Society v.ph).R. The employee concerned must be informed of the test results whether positive or negative. CARPIO Associate Justice WE CONCUR: . Also. CEB SP No. Sulpicio Lines did not confirm the positive result of the screening test with a confirmatory test.oshc.M. WHEREFORE.. we GRANT the petition. ANTONIO T. We REINSTATE the November 2003 Decision of the Labor Arbiter. Sulpicio Lines did not even deny Nacague‘s allegation that S. Sulpicio Lines failed to indubitably prove that Nacague was guilty of using illegal drugs amounting to serious misconduct and loss of trust and confidence. the law considers the matter a case of illegal dismissal. A list of accredited centers may be accessed through the OSHC website (www. 01065. Lazo Clinic was not accredited.e.gov. Lazo Clinic is an accredited drug testing center.

MENDOZA Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court‘s Division. NACHURA Associate Justice DIOSDADO M.ANTONIO EDUARDO B. ANTONIO T. PERALTA Associate Justice ROBERTO A. CARPIO . ABAD Associate Justice JOSE C.

and the Division Chairperson‘s Attestation. JOSEPH C. ABAD. J. JJ.. SIAZAR and THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION. and MENDOZA. 2010 Promulgated: . RODRIGUEZ. Present: CARPIO.versus NACHURA. Chairperson. I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court‘s Division. . 177970 SUPPLIES CORPORATION. Article VIII of the Constitution. INC.. RENATO C. No. August 25. DAILY HARVEST MERCANTILE. Petitioners. SIA HETIONG and REYNALDO M. PERALTA.Associate Justice Chairperson CERTIFICATION Pursuant to Section 13. CORONA Chief Justice SECOND DIVISION AGRICULTURAL AND INDUSTRIAL G.R. JUEBER P. Respondents.

too. The Facts and the Case On July 3.x DECISION ABAD.387[5] .386[4] the other said that he was to report after two days on June 19. 1997. Rodriguez at his office in Binondo. Siazar discovered that his company was not remitting much of his SSS premiums although the computations appeared on his pay slips.385[3] On Siazar’s arrival at work on June 17.384[2] In early 1997. Inc. (DHMI) on April 12. the company guard refused him entry and handed him two notes from the management: one said that he was not to report for work. J.: This case dwells on circumstances that spell dismissal from work although the company insists that such circumstances indicate abandonment of work. 1997 respondent Jueber P. mold maker.000.00. When he told his co-employees about it. and CNC programmer with a monthly salary of P25. 1997 to Atty.x --------------------------------------------------------------------------------------. they made their own inquiries. 1993 but was transferred after three years in June 1996 to AISC383[1] as product designer. Siazar claimed that he first worked for the Daily Harvest Mercantile. Siazar (Siazar) filed a complaint for illegal dismissal and unfair labor practice against petitioner Agricultural and Industrial Supplies Corporation (AISC) and others before the National Labor Relations Commission (NLRC) in NLRC-NCR Case 00-07-04689-97.

Atty.391[9] Atty. It claimed the company thought of closing down Siazar’s department where he worked solo since it was no longer making money.390[8] Since all attempts at negotiation proved futile. The latter told Siazar that the company had decided to abolish his department because of redundancy and he could no longer work. however that the company was already dismissing Siazar.392[10] The latter simply decided on his own to drop out of work after learning of the company’s plan regarding his department. 1997.393[11] . Rodriguez again at his office on June 19. This lawyer went with him back to Atty. Siazar filed his complaint. being a mere support unit of the company. given the non-remittance of the correct amounts of their SSS contributions.389[7] When Siazar and his wife saw Atty. 1997. This surprised Siazar because his department did not generate income on its own. Thus.Too anxious over the matter. they thought that the company removed him from work because of fear that he would agitate them into forming a union. he consulted a lawyer on that same day. Rodriguez asked Siazar to make a computation of what amount he expected from the company and return to the lawyer with such computation on the following day and the company would immediately pay him. they wrote him the two notes on June 17. 1997.388[6] When Siazar told his co-employees about this development. AISC had a different version. Because of the lawyer’s insistence. As Siazar was unsure of his situation. Siazar finally gave him a computation of his claims against the company on June 23. however. the latter insisted on getting Siazar to do the computation he asked. Siazar did not wait for June 19 and went straightaway to see Atty. Rodriguez did not say. Rodriguez. Rodriguez who confirmed that Siazar had indeed been dismissed because his department was no longer earning money.

399[17] The NLRC sustained the award of separation pay. the time Siazar worked for AISC. It was all a misunderstanding. 1998 the Labor Arbiter found that the company did not yet dismiss Siazar from work395[13] since they were still negotiating for a financial package for him. the company gave Siazar no letter of dismissal or retrenchment. the Labor Arbiter dismissed the complaint but ordered the company to give Siazar separation pay. to be reckoned from June 1996 to June 1997. and a proportionate 13 month pay for 1997. however. 2005403[21] the latter court affirmed the NLRC decision. misunderstanding its action.400[18] Siazar asked for reconsideration but the NLRC denied it. 1999 to uphold the Labor Arbiter’s finding that the company did not dismiss him from work and that. In response.What Atty.394[12] On December 14. Siazar went up to the Court of Appeals (CA)402[20] but on December 21.401[19] th Not dissuaded.396[14] Consequently.397[15] th Siazar appealed to the NLRC. Siazar even submitted a proposal that the company found excessive. the CA rendered an Amended . which ruled398[16] on June 3. Indeed. The NLRC also affirmed the grant to him of his unpaid salary and proportionate 13 month pay. he ceased to report for work. said the NLRC. On motion for reconsideration. and each party must bear his own loss to place them on equal footing. his unpaid salary. Rodriguez and Siazar discussed was how the latter might be compensated if the company’s plan went through. He rather stopped reporting for work of his own accord after learning of the plan to retrench him.

whether or not his dismissal was valid.406[24] hence the present petition for review on certiorari. Here. reexamine the facts of the case. finding sufficient evidence that the company indeed illegally dismissed Siazar from work. on petition for review on certiorari.405[23] The company filed a motion for reconsideration. however. Issues Presented Two issues are presented: 1. the Court will not. (d) Rodriguez asked Siazar to compute what he expected was to be his separation pay. Whether or not the company dismissed Siazar from work. and (f) it showed no valid or just cause for the dismissal. since the CA overturned its earlier ruling and . and 2. 2007.Decision404[22] on December 13. Court’s Ruling The company insists that the Court should reinstate the original CA decision. given the findings of the Labor Arbiter and the NLRC that it had not dismissed Siazar. The CA thus ordered the company to reinstate Siazar and pay him full backwages. (c) it wanted to close his department and retrench him from work. (b) the company did not allow Siazar to enter its premises. inclusive of allowances and other benefits or their monetary equivalent computed from the time of his dismissal up to the time of his actual reinstatement.407[25] Ordinarily. 2006. In the affirmative. The CA based its finding on the following: (a) Rodriguez told Siazar that he had been terminated. (e) the company neither gave Siazar notice nor informed him of the reason for his dismissal. but the CA denied the same on May 22.

411[29] The Court cannot consider allegations that have not been proved.its factual findings now differ from those of the Labor Arbiter and the NLRC. That Siazar lost no time in filing a complaint for illegal dismissal negates the notion that he voluntarily left or abandoned his job. On company’s orders. The company even gave him notice not to report for work and instead told him to see the company’s external counsel after two days. the Court has ascertained that the evidence supports the CA’s finding that the company dismissed Siazar from work. an employer would not stand by when an employee just stops coming to work as this would affect its business. Barring him from work simply meant that the company had taken away his right to continue working for it.408[26] From an examination of the record.00 a month when. the guard prevented Siazar from entering its premises to work. This is evident from the following: One. it had not yet decided to carry out its plan and fire him. Despite Siazar’s failure to show up for work. the company did not summon him back or ask him to explain his long absence. Further.409[27] it had no reason to require him to stay away from work in the meantime. Four.000.410[28] An employee who files a suit to claim his job back raises serious doubts that he even entertained the idea of leaving it in the first place. the Court is making an exception. It is simply preposterous for Siazar or any employee like him to just give up a job that paid P25. Three. the company failed to substantiate its claim that it reported Siazar’s irregular behavior to the Department of Labor and Employment. Normally.412[30] . That the company just sat by when Siazar did not come to work strengthens his contention that it had dismissed him. If the company had not yet decided to close down Siazar’s department and wanted merely to explore that possibility with him. according to the company. Two.

But given that the company dismissed Siazar and that such dismissal had remained unexplained. the continued relationship between the employer and the employee is no longer viable due to strained relations between them414[32] and reinstatement appears no longer practical due to the length of time that had since passed.413[31] The Court has held that. under Article 279 of the Labor Code. the company did not adduce any evidence to prove that Siazar’s dismissal had been for a just or authorized cause as in fact it had been its consistent stand that it did not terminate him and that he quit on his own.415[33] In awarding separation pay to an illegally dismissed employee.All these show that the company indeed terminated the services of Siazar.419[37] .417[35] Payment of separation pay is in addition to payment of backwages. there can be no other conclusion but that his dismissal was illegal. separation pay may be awarded to an illegally dismissed employee in lieu of reinstatement when continued employment is no longer possible where. The question now is this: was his termination valid? Here.418[36] And if separation pay is awarded instead of reinstatement. backwages shall be computed from the time of illegal termination up to the finality of the decision. as in this case. the amount to be awarded shall be equivalent to one month salary for every year of service416[34] reckoned from the first day of employment until the finality of the decision. in lieu of reinstatement.

1997 up to the finality of the decision. the latter shall pay Siazar (a) separation pay in the amount equivalent to one month pay for every year of service computed from June 1996 up to the finality of this decision.The separation pay in this case shall be reckoned from the time Siazar worked for AISC. and (b) full backwages computed from the date of his illegal dismissal on June 17. or protect a fraud. SO ORDERED. the Court AFFIRMS the Court of Appeals’ Amended Decision dated December 13. from June 1996 until the finality of this decision. The Court could not hold AISC liable for his work with DHMI for lack of evidence that the latter was simply an alter ego of AISC and had been established to evade an existing obligation. 2007 in CA-G. justify a wrong.420[38] WHEREFORE.R. Let the records of this case be REMANDED to the Labor Arbiter for the proper computation of the awards. CARPIO Associate Justice . Siazar’s illegal dismissal shall be the sole liability of petitioner Agricultural and Industrial Supplies Corporation and that. SP 56228 subject to the MODIFICATION that the liability for respondent Jueber P. 2006 and Resolution dated May 22. ROBERTO A. in lieu of reinstatement with backwages. ABAD Associate Justice WE CONCUR: ANTONIO T.

CARPIO Associate Justice Chairperson. I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. PERALTA Associate Justice Associate Justice JOSE CATRAL MENDOZA Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. Second Division CERTIFICATION Pursuant to Section 13. NACHURA DIOSDADO M. . Article VIII of the Constitution and the Division Chairperson’s Attestation.ANTONIO EDUARDO B. ANTONIO T.

CORONA Chief Justice Republic of the Philippines Supreme Court Manila EN BANC .RENATO C.

WINSTON F. GARCIA, in his capacity as President and General Manager of GSIS, Petitioner,

G.R. No. 157383

- versus -

MARIO I. MOLINA and ALBERT M. VELASCO, Respondents.

x--------------------------------------------------x

WINSTON F. GARCIA, in his capacity as President and General Manager of the Government Service Insurance System, Petitioner, G.R. No. 174137

Present:

CORONA, C.J., CARPIO, CARPIO MORALES, VELASCO, JR., - versus NACHURA, LEONARDO-DE CASTRO, BRION, PERALTA, BERSAMIN, DEL CASTILLO, ABAD, VILLARAMA, JR.,

MARIO I. MOLINA and ALBERT M. VELASCO, Respondents.

PEREZ, and MENDOZA, JJ.

Promulgated:

August 10, 2010

x------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

Before the Court are two consolidated petitions filed by Winston F. Garcia (petitioner) in his capacity as President and General Manager of the Government Service Insurance System, or GSIS, against respondents Mario I. Molina (Molina) and Albert M. Velasco (Velasco). In G.R. No. 157383, petitioner assails the Court of Appeals (CA)

Decision421[1] dated January 2, 2003 and Resolution422[2] dated March 5, 2003 in CA-G.R. SP No. 73170. In G.R. No. 174137, petitioner assails the CA Decision423[3] dated December 7, 2005 and Resolution424[4] dated August 10, 2006 in CA-G.R. SP No. 75973.

The factual and procedural antecedents of the case are as follows:

Respondents Molina and Velasco, both Attorney V of the GSIS, received two separate Memoranda425[5] dated May 23, 2002 from petitioner charging them with grave misconduct. Specifically, Molina was charged for allegedly committing the following acts: 1) directly and continuously helping some alleged disgruntled employees to conduct concerted protest actions and/or illegal assemblies against the management and the GSIS President and General Manager; 2) leading the concerted protest activities held in the morning of May 22, 2002 during office hours within the GSIS compound; and 3) continuously performing said activities despite warning from his immediate superiors. 426[6] In addition to the charge for grave misconduct for performing the same acts as Molina, Velasco was accused of performing acts in violation of the Rules on Office Decorum for leaving his office without informing his supervisor of his whereabouts; and gross insubordination for persistently disregarding petitioner’s instructions that Velasco should report to the petitioner’s office.427[7] These acts, according to petitioner, were committed in open betrayal of the confidential nature of their positions and in outright defiance of the Rules and Regulations on Public Sector Unionism. In the same Memoranda, petitioner required respondents to submit their verified answer within seventy two (72) hours. Considering the gravity of the charges against them, petitioner ordered the preventive suspension of respondents for ninety (90) days without pay, effective immediately.428[8] The following day, a committee was constituted to investigate the charges against respondents.

In their Answer429[9] dated May 27, 2002, respondents denied the charges against them. Instead, they averred that petitioner was motivated by vindictiveness and bad faith in charging them falsely. They likewise opposed their preventive suspension for lack of factual and legal basis. They strongly expressed their opposition to petitioner acting as complainant, prosecutor and judge.

On May 28, 2002, respondents filed with the Civil Service Commission (CSC) an Urgent Petition to Lift Preventive Suspension Order.430[10] They contended that the acts they allegedly committed were arbitrarily characterized as grave misconduct. Consistent with their stand that petitioner could not act as the complainant, prosecutor and judge at the same time, respondents filed with the CSC a Petition to Transfer Investigation to This Commission.431[11]

Meanwhile, the GSIS hearing officer directed petitioners to submit to the jurisdiction of the investigating committee and required them to appear at the scheduled hearing.432[12]

Despite their urgent motions, the CSC failed to resolve respondents’ motions to lift preventive suspension order and to transfer the case from the GSIS to the CSC.

On October 10, 2002, respondents filed with the CA a special civil action for certiotari and prohibition with prayer for Temporary Restraining Order (TRO).433[13] The case was docketed as CA-G.R. SP No. 73170. Respondents sought the annulment and setting aside of petitioner’s order directing the former to submit to the jurisdiction of the committee created to hear and investigate the administrative case filed against them. They likewise prayed that petitioner (and the committee) be prohibited from conducting the scheduled hearing and from taking any action on the aforesaid administrative case against respondents.

On January 2, 2003, the CA rendered a decision434[14] in favor of respondents, the dispositive portion of which reads:

ACCORDINGLY, the petition is hereby GRANTED. Public respondents are hereby PERPETUALLY RESTRAINED from hearing and investigating the administrative case against petitioners, without prejudice to pursuing the same with the Civil Service Commission or any other agency of government as may be allowed for (sic) by law.

SO ORDERED.435[15]

The CA treated the petition as one raising an issue of gnawing fear, and thus agreed with respondents that the investigation be made not by the GSIS but by the CSC to ensure that the hearing is conducted before an impartial and disinterested tribunal.

Aggrieved, petitioner comes before the Court in this petition for review on certiorari under Rule 45 of the Rules of Court, raising the following issues:

I. WHETHER OR NOT THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT THE PETITIONERS ABUSED THEIR AUTHORITY AND HAVE BEEN PARTIAL IN REGARD TO THE ADMINISTRATIVE CASES AGAINST THE RESPONDENTS; AND IN PERPETUALLY RESTRAINING THE PETITIONERS FROM HEARING AND INVESTIGATING THE ADMINISTRATIVE CASES FILED AGAINST THE RESPONDENTS – SOLELY ON THE BASIS OF THE TOTALLY UNFOUNDED ALLEGATIONS OF THE RESPONDENTS THAT THE PETITIONERS ARE PARTIAL AGAINST THEM.

II. WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FAILING TO APPRECIATE AND APPLY THE PRINCIPLE OF EXHAUSTION OF ADMINISTRATIVE REMEDIES AND THE RULE ON NON FORUM SHOPPING IN PERPETUALLY RESTRAINING THE PETITIONERS FROM HEARING AND INVESTIGATING THE ADMINISTRATIVE CASES AGAINST THE RESPONDENTS.

III. WHETHER OR NOT THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN RENDERING A DECISION WHICH IS CONTRARY TO AND COMPLETELY DISREGARDS APPLICABLE JURISPRUDENCE

AND WHICH, IN VIOLATION OF THE RULES OF COURT, DOES NOT CLEARLY STATE THE FACTS AND THE LAW ON WHICH IT IS BASED.436[16]

In the meantime, on February 27, 2003, the CSC resolved respondents’ Petition to Lift Order of Preventive Suspension and Petition to Transfer Investigation to the Commission through Resolution No. 03-0278,437[17] the dispositive portion of which reads:

WHEREFORE, the Commission hereby rules that:

1.

The Urgent Petition to Lift the Order of Preventive Suspension is hereby DENIED for having become moot and academic. The Petition to Transfer Investigation to the Commission is likewise DENIED for lack of merit. Accordingly, GSIS President and General Manager Winston F. Garcia is directed to continue the conduct of the formal investigation of the charges against respondents-petitioners Albert Velasco and Mario I. Molina.438[18]

2.

As to the lifting of the order of preventive suspension, the CSC considered the issue moot and academic considering that the period had lapsed and respondents had been allowed to resume their specific functions. This notwithstanding, the CSC opted to discuss the matter by way of obiter dictum. Without making a definitive conclusion as to the effect thereof in the case against respondents, the CSC declared that a preliminary investigation is a pre-requisite condition to the issuance of a formal charge.439[19]

On the requested transfer of the investigation from the GSIS to the CSC, the latter denied the same for lack of merit. The Commission concluded that the fact that the GSIS acted as the complainant and prosecutor and eventually the judge does not mean that impartiality in the resolution of the case will no longer be served.440[20]

Consequently.R. the CA disagreed with the CSC that the question on the propriety of the preventive suspension order had become moot and academic. No pronouncement as to costs. Hence. and necessarily.Aggrieved. SO ORDERED. the present petition raising the following issues: I.443[23] The CA declared null and void respondents’ formal charges for lack of the requisite preliminary investigation. On December 7. 2005. 75973. it concluded that the same is likewise void having emanated from the void formal charges. the order of preventive suspension emanating therefrom. respondents appealed to the CA through a Petition for Review under Rule 43 of the Rules of Court. the CA found that respondents were entitled to back salaries during the time of their illegal preventive suspension. the dispositive portion of which reads: PREMISES CONSIDERED. . Rather. SP NO. are declared NULL AND VOID. WHETHER THE RESPONDENTS WERE FULLY ACCORDED THE REQUISITE OPPORTUNITY TO BE HEARD.441[21] The case was docketed as CA-G. The formal charges filed by the President and General Manager of the GSIS against petitioners. WERE IN FACT HEARD AND BEING HEARD. In view thereof. the CA rendered a Decision442[22] in favor of respondents. The GSIS is hereby directed to pay petitioners’ back salaries pertaining to the period during which they were unlawfully suspended. the petition is hereby GRANTED. AND WHETHER THE CONDUCT OF PRELIMINARY INVESTIGATION IN ADMINISTRATIVE PROCEEDINGS IS AN ESSENTIAL REQUISITE TO THE CONDUCT OF ADJUDICATION.

II. IV. WHETHER THE RESPONDENTS WAIVED THEIR RIGHT TO PRELIMINARY INVESTIGATION. X. AS HERE. MAY NOT BE IMPOSED WITHOUT BEING PRECEDED BY A HEARING. VII. UNDER THE PRINCIPLE OF EXHAUSTION OF ADMINISTRATIVE REMEDIES. WHETHER THE MISAPPREHENSIONS OF THE RESPONDENTS AS REGARDS THE PARTIALITY OF THE GSIS COMMITTEE INVESTIGATING THE CHARGES AGAINST THEM IS BLATANTLY WITHOUT FACTUAL BASIS. III. TO THE EXCLUSION OF ALL OTHERS. THUS. BEFORE THE CIVIL SERVICE COMMISSION. WHETHER PRELIMINARY INVESTIGATION IS REQUIRED IN INDICTMENTS IN FLAGRANTI. VI. IX. WHETHER THE RESPONDENTS ARE ENTITLED TO PAYMENT OF BACK SALARIES PERTAINING TO THE PERIOD OF THEIR PREVENTIVE SUSPENSION. WHETHER THE HONORABLE COURT OF APPEALS LACKED JURISDICTION. WHETHER THE INSTITUTION OF THE RESPONDENTS’ PETITION BEFORE THE CIVIL SERVICE COMMISSION WAS ENTIRELY PREMATURE. AS THE ALLEGED LACK OF PRELIMNARY INVESTIGATION SHOULD HAVE BEEN RAISED BEFORE THE GSIS AND. WHETHER THE ALLEGED LACK OF PRELIMINARY INVESTIGATION IS A NON-ISSUE. THE GSIS HAVING ACQUIRED JURISDICTION OVER THE PERSONS OF THE RESPONDENTS. . WHETHER PREVENTIVE SUSPENSION IS A PENALTY AND. V. THEREAFTER. WELL-FOUNDED AND DULY RECOGNIZED BY LAW. XI. WHETHER THE PREVENTIVE SUSPENSION ORDERS ISSUED AGAINST RESPONDENTS MOLINA AND VELASCO ARE VALID. VIII.

in accordance with existing Civil Service rules and regulations. suspend or otherwise discipline GSIS personnel for cause. despite the authority conferred on him by law. By this legal provision. execute and administer the policies and resolutions approved by the Board and direct and supervise the administration and operations of the GSIS.446[26] However. to wit: . The Uniform Rules on Administrative Cases in the Civil Service lays down the procedure to be observed in issuing a formal charge against an erring employee. Section 45. As such. Republic Act (R.WHETHER RESPONDENTS’ OBVIOUS ACT OF FORUM SHOPPING SHOULD BE COUNTENANCED BY THIS HONORABLE COURT. subject to the approval of the Board. provinces. and prescribe their duties and qualifications to the end that only competent persons may be employed. 807 or the Civil Service Decree of the Philippines also gives the heads of departments.) 8291 otherwise known as the GSIS Act of 1997. suspend or otherwise discipline them for cause. Section 37 (b) of Presidential Decree No. including government-owned or controlled corporations (GOCCs) with original charters. like the GSIS. is vested the authority and responsibility to remove. The President and General Manager of the GSIS shall among others.445[25] The CSC has jurisdiction to hear and decide disciplinary cases against erring employees.A. viz: SECTION 45. or those created by special law. The civil service encompasses all branches and agencies of the Government. Powers and Duties of the President and General Manager. the employees are part of the civil service system and are subject to the law and to the circulars. specifies its disciplining authority. rules and regulations issued by the CSC on discipline. cities and municipalities the authority to investigate and decide matters involving disciplinary action against officers and employees under their jurisdiction. agencies and instrumentalities.444[24] The petitions are without merit. The President and General Manager. shall appoint the personnel of the GSIS. attendance and general terms and conditions of employment. As for the GSIS. as President and General Manager of GSIS. In addition. petitioner. remove. such power is not without limitations for it must be exercised in accordance with Civil Service rules.

an advice that they had the right to a formal investigation and a notice that they are entitled to be assisted by a counsel of their choice. cities. the Counter-Affidavit/Comment. In the absence of a prima facie case. the investigating officer shall submit the investigation report and the complete records of the case to the disciplining authority.449[29] Third.First. an administrative complaint may be filed at anytime with the Commission. Upon receipt of a complaint which is sufficient in form and substance. Formal Charge. Failure of the person complained of to submit his counter-affidavit shall be considered as a waiver thereof. the disciplining authority shall require the person complained of to submit Counter-Affidavit/Comment under oath within three days from receipt. Within five (5) days from the termination of the preliminary investigation.448[28] Second. in cases initiated by the proper disciplining authority. Investigation Report. the complaint shall be dismissed.453[33] . provinces. During said investigation. agencies. These formal charges contained brief statements of material or relevant facts. a directive to answer the charges within seventy two (72) hours from receipt thereof. If a prima facie case is established during the investigation. municipalities and other instrumentalities. the complaint need not be under oath. as well as documents readily available from other government offices. However. a formal charge shall be issued by the disciplining authority. A Preliminary investigation involves the ex parte examination of records and documents submitted by the complainant and the person complained of. A complaint against a civil service official or employee shall not be given due course unless it is in writing and subscribed and sworn to by the complainant.452[32] It is undisputed that the Memoranda separately issued to respondents were the formal charges against them. the parties are given the opportunity to submit affidavits and counteraffidavits.447[27] Except when otherwise provided for by law. A formal investigation shall follow.450[30] Fourth. the complaint.451[31] Fifth. Preliminary Investigation. proper heads of departments.

conclude that respondents were denied due process of law.454[34] The filing by petitioner of formal charges against the respondents without complying with the mandated preliminary investigation or at least give the respondents the . It appears. upon receipt of a complaint which is sufficient in form and substance. We disagree. this is done prior to the issuance of the formal charge and the comment required therein is different from the answer that may later be filed by respondents. the disciplining authority shall require the person complained of to submit a CounterAffidavit/Comment under oath within three days from receipt. Indeed. Petitioner explained that no such investigation was conducted because the CSC rules did not specifically provide that it is a pre-requisite to the issuance of a formal charge. therefore. that the formal charges were issued after the sole determination by the petitioner as the disciplining authority that there was a prima facie case against respondents. This is true even if the complainant is the disciplining authority himself. To condone this would give the disciplining authority an unrestricted power to judge by himself the nature of the act complained of as well as the gravity of the charges. no exception is provided for in the CSC Rules. He likewise claimed that preliminary investigation was not required in indictments in flagranti as in this case. as in the present case. With respondents’ comments.It is likewise undisputed that the formal charges were issued without preliminary or fact-finding investigation. Not even an indictment in flagranti as claimed by petitioner. petitioner would have properly evaluated both sides of the controversy before making a conclusion that there was a prima facie case against respondents. The use of the word “shall” quite obviously indicates that it is mandatory for the disciplining authority to conduct a preliminary investigation or at least respondent should be given the opportunity to comment and explain his side. To comply with such requirement. therefore. the CSC Rules does not specifically provide that a formal charge without the requisite preliminary investigation is null and void. leading to the issuance of the questioned formal charges. as clearly outlined above. It is noteworthy that the very acts subject of the administrative cases stemmed from an event that took place the day before the formal charges were issued. Contrary to petitioner’s claim. As can be gleaned from the procedure set forth above. However. he could have issued a memorandum requiring respondents to explain why no disciplinary action should be taken against them instead of immediately issuing formal charges. Not even the fact that the charges against them are serious and evidence of their guilt is – in the opinion of their superior – strong can compensate for the procedural shortcut undertaken by petitioner which is evident in the record of this case. We.

458[38] Petitioner contends that respondents waived their right to preliminary investigation as they failed to raise it before the GSIS.455[35] The cardinal precept is that where there is a violation of basic constitutional rights. Hence. or property without due process is unqualified by the type of proceedings (whether judicial or administrative) where he stands to lose the same. The violation of a party's right to due process raises a serious jurisdictional issue which cannot be glossed over or disregarded at will. (3) a tribunal vested with competent jurisdiction and so constituted as to afford a person charged administratively a reasonable guarantee of honesty as well as impartiality. and to defend one's rights. (2) a real opportunity to be heard personally or with the assistance of counsel. . This rule is equally true in quasi-judicial and administrative proceedings. and (4) a finding by said tribunal which is supported by substantial evidence submitted for consideration during the hearing or contained in the records or made known to the parties affected. liberty.opportunity to comment violated the latter's right to due process. due process in administrative proceedings has been recognized to include the following: (1) the right to actual or constructive notice to the institution of proceedings which may affect a respondent's legal rights. courts are ousted from their jurisdiction. administrative proceedings are not exempt from basic and fundamental procedural principles. a decision rendered in disregard of that right is void for lack of jurisdiction. for the constitutional guarantee that no man shall be deprived of life. we do not agree.456[36] Although administrative procedural rules are less stringent and often applied more liberally. the formal charges are void ab initio and may be assailed directly or indirectly at anytime. Again.457[37] In particular. to present witnesses and evidence in one's favor. such as the right to due process in investigations and hearings. Where the denial of the fundamental right to due process is apparent.

463[43] The principle of “no work. then their preventive suspension is likewise null and void.It is well-settled that a decision rendered without due process is void ab initio and may be attacked at anytime directly or collaterally by means of a separate action. the CA committed no reversible error in ordering the payment of back salaries during the period of respondents’ preventive suspension. As the administrative proceedings involved in this case are void.464[44] In view of the foregoing disquisition. In the procedure adopted by petitioner. thus. . Lastly. records show that in their Urgent Motion to Resolve (their Motion to Lift Preventive Suspension Order) filed with the CSC.462[42] In granting their back salaries. we are simply repairing the damage that was unduly caused respondents. respondents were preventively suspended in the same formal charges issued by the former without the latter knowing that there were pending administrative cases against them. no waiver to speak of. no delinquency or misconduct may be imputed to respondents and the preventive suspension meted them is baseless.459[39] Moreover. respondents should be awarded their salaries during the period of their unjustified suspension. considering that respondents were preventively suspended in the same formal charges that we now declare null and void.461[41] However. no pay” does not apply where the employee himself was unlawfully forced out of job. we find no necessity to discuss the other issues raised by petitioner. and unless we can turn back the hands of time. respondents questioned the validity of their preventive suspension and the formal charges against them for lack of preliminary investigation. It is true that prior notice and hearing are not required in the issuance of a preventive suspension order. we can do so only by restoring to them that which is physically feasible to do under the circumstances. while respondents failed to raise before the GSIS the lack of preliminary investigation. Consequently. or by resisting such decision in any action or proceeding where it is invoked.460[40] There is.

R. NACHURA Associate Justice WE CONCUR: RENATO C. No. for lack of merit. G. J.R.. BERSAMIN. 174137 is DISMISSED. Petitioner. CORONA Chief Justice ANTONIO T. C. the petition in G. CARPIO Associate Justice FIRST DIVISION SCA HYGIENE PRODUCTS CORPORATION EMPLOYEES ASSOCIATION-FFW.WHEREFORE. SO ORDERED.* . . 182877 Present: CORONA.versus LEONARDO-DE CASTRO. No. 157383 is DENIED while the petition in G. premises considered. Chairperson. ANTONIO EDUARDO B. No.R.

sale and distribution of industrial paper. JJ.** SCA HYGIENE PRODUCTS CORPORATION. . Case No. 100308. Bello in V. 2010 x --------------------------------------------------x DECISION PEREZ. which reversed the Resolution467[3] dated 2 August 2007 of Voluntary Arbitrator Renato Q. The undisputed facts are as follows: Respondent SCA Hygiene Products Corporation is a domestic corporation engaged in the manufacture. It has existing Collective Bargaining Agreements (CBAs) with SCA Hygiene Products Corporation Monthly Employees Union-FSM (Monthly Employees Union) and petitioner SCA Hygiene Products Corporation Employees Association-FFW (Daily Employees Union). and MENDOZA. Promulgated: August 9. SP No.PEREZ. Respondent. which represent the monthly and daily paid rank-and-file employees.: For review on certiorari are the Decision465[1] dated 19 February 2008 and the Resolution466[2] dated 5 May 2008 of the Court of Appeals in CA-G. 013-06. J. tissue and allied products.A.R. respectively.

xxxx ARTICLE VIII JOB EVALUATION SECTION 1. The Management (COMPANY) will conduct Job Evaluation when deemed necessary. respondent conducted a company-wide job evaluation through an independent consultant. A third party consultant may be tasked to conduct the program. The COMPANY agrees to maintain the practice of involving the incumbent employee member of the UNION in writing the Job Description which serves as input in the Job Evaluation Program. respondent conducted an orientation on the job evaluation process.Both CBAs of the Monthly Employees Union and the Daily Employees Union contain provisions on Job Evaluation which state that: ARTICLE VIII JOB EVALUATION SECTION 1. informed respondent of the result of the job evaluation which led respondent to adopt eight new job grade levels:469[5] Job Grade Level Employee*s’+ Category 8 Executive 7 Executive . Inc. The COMPANY agrees to advise the individual members of the UNION of the result of the JE concerning their respective positions and shall furnish the employee a copy of his/her job description. The COMPANY and the UNION agrees to abide by the result of the Job Evaluation (JE) conducted by the COMPANY’s third party consultants. As provided for in the CBAs.468[4] Sometime in 2003. SECTION 2. The UNION may participate in this activity in the form of consultations and suggestions. The third party consultant will conduct an orientation to both Union and Management of the Job Evaluation Process. Mercer Human Resource Consulting. All covered employees executed written job descriptions which were used in the job evaluation of their respective positions. In February 2004. Mercer Human Resource Consulting. Inc.

both unions submitted their grievances for mediation. The unions claimed that the 22 daily paid rank-and-file employees were entitled to conversion increase since Job Grade Level 2 positions are meant for monthly paid rank-and-file employees and along with the conversion. They were also entitled to promotion increase since such is the company practice everytime an employee’s rank is converted to a higher job grade level. promotion increase as well as retroactive salary increase from the time the job evaluation was completed on the ground that their positions had been converted into a higher job grade level which amounted to a promotion. status and privileges of a monthly paid rank-and-file employee.6 Department Manager 5 Unit Manager 4 Unit Manager 3 Management Team Member 2 Rank-and-File 1 Rank-and-File In a Letter dated 24 February 2004. they submitted the case for voluntary arbitration. said employees were given additional job descriptions. Likewise. The company countered that the job evaluation was merely a process of determining the relative contribution and value of the positions in its operations and does not provide for any adjustment in the salaries of . the Monthly Employees Union demanded that the 22 daily paid rank-and-file employees be given conversion increase.470[6] respondent informed 22 daily paid rank-and-file employees that their positions had been classified as Job Grade Level 2. the Daily Employees Union asked for the adjustment of said employees’ compensation since the conversion warranted their entitlement to the benefits. As a result. When the parties failed to reach an amicable settlement. The unions added that the company violated their CBAs by refusing to implement the result of the job evaluation considering that those converted from Job Grade Level 2 positions to Job Grade Level 3 positions were granted the benefits concomitant to their new positions. As respondent failed to respond.

Sabinada Danilo T. Legario Arnel T. Julius M. On the other hand. 8. 5. . this Voluntary Arbitrator promulgates the following: 1. 4. In so ruling. 9. Jr. Miel Leonilo T. They are not entitled to any promotion increase since they were never promoted to a higher position as a Job Grade Level 2 position does not involve any increase in their duties and responsibilities. Bejosano 14. those holding Job Grade Level 2 positions remained rank-and-file employees. Concepcion Rolando C. 3. retroactive from 24 February 2006 up to the time that full payment thereof is made by the Company: Names 1. Voluntary Arbitrator Renato Q. The dispositive portion of the resolution provides: WHEREFORE. Nelio E. Bello ruled in favor of the unions and awarded conversion increase and attorney’s fees to the 22 daily paid rank-and-file employees. Roberto dela Cruz 11. 7. The company added that those employees converted to Job Grade Level 3 positions are entitled to salary and benefits increase since they are classified as managerial employees. The subject employees cannot be converted to monthly paid rank-and-file employees and given a conversion increase since they continue to occupy the same positions that they were occupying prior to the job evaluation. 2. in view of the foregoing. 6. Acosta Luisito P. Elaido V. Charlie M. On 2 August 2007. he noted that said employees were performing the duties and responsibilities of a monthly paid rank-and-file employee. Declaring that the following employees are now deemed monthly paid rankand-file employees and thus are entitled to conversion increase equivalent to ten per cent (10%) of their current basic salary as daily paid rank-and-file employees.the covered employees. Maningas Rulen A. Agbayani 12. Limbaring Arlon Sison Positions Shift Mechanical Technician Shift Mechanical Technician Electro Mechanical Technician Electrical Technician Back Tender Back Tender Back Tender Back Tender Back Tender Preventive Mechanical Technician Preventive Mechanical Technician Mechanical Technician Warehouse Custodian Mechanical Technician 10. Diaz Reynaldo M. Manaois 13. Florada. Inventor V. The only difference was that there was no clear classification of their positions.

Samuel F. The CBAs merely provided the procedure for the implementation of the job evaluation. Gemar de Leola 21. Denying the Union’s claim for retroactive payment of promotional increase for lack of merit. the appellate court did not give credence to the unions’ claim that the grant of conversion/promotion increase was respondent’s long-standing practice. It was not designed to provide any conversion or adjustment to the salaries of the employees. there was no evidence that respondent agreed to continue giving the benefits knowing fully well that its employees are not covered by the law requiring payment thereof. In this case. and 3. Julius Cellona 22. Paulo B. It did not specifically state that the covered employees are entitled to any salary adjustment after the job evaluation. Wenceslao B. the Court of Appeals ruled in favor of respondent. Second. First. Hence. Marian F. Codizal Electrical Production Operator Boiler Tender Boiler Tender Boiler Tender Electro Mechanical Technician Electro Mechanical Technician Instrumentation Technician 2. For this purpose. The same could not be said with regard to those holding Job Grade Level 2 positions since they remained rank-and-file employees. Dennis A. Renante Anding 20.15. Ligue 17. it held that the job evaluation was conducted as a reorganization process to standardize the company’s organizational set-up. Perolino 19.471[7] On appeal. the management of the Company and the duly authorized officers of the Unions are enjoined to sit down and discuss the mechanics of the actual implementation of this judgment award. the appellate court noted that those employees converted to Job Grade Level 3 positions were given salary and benefits increase since they became managerial employees after the job evaluation. To be considered a regular practice. The decretal portion of the decision provides: . Third. Villosimo 18. the grant of such increase should have been done over a long period of time and must be shown to be consistent and deliberate. Romero 16. Dismissing the Unions’ claim for damages also for lack of merit and awarding ten per cent (10%) attorney’s fees to the Unions based on the total computed conversion increase due the twenty two (22) employees. any conversion much less promotion is left entirely to respondent’s sound discretion. in the absence of any law or agreement between the parties.

473[9] Briefly. the key issues in this petition are: (1) Were the 22 daily paid rank-and-file employees promoted after their positions have been converted from Job Grade Level 1 to Job Grade Level 2?. the petition for review is GRANTED and the Resolution dated August 2. Petitioner adds that said employees are entitled to conversion increase since such has been the company practice everytime an employee’s rank is converted to a higher job grade level.WHEREFORE. THE HONORABLE COURT OF APPEALS GROSSLY ERRED WHEN IT DECIDED THE CASE IN UTTER DISREGARD OF THE SUBSTANTIATED FACTS THAT A PROMOTION TOOK PLACE WHEN THE TWENTY-TWO (22) DAILY PAID EMPLOYEES. and (2) if so. they have been performing the duties and responsibilities of a monthly paid rank-and-file employee occupying a Job Grade Level 2 position even before the job evaluation. THE HONORABLE COURT OF APPEALS GROSSLY ERRED WHEN IT DECIDED THE CASE IN UTTER DISREGARD OF THE SUBSTANTIATED FACTS AND THE EVIDENCE ADDUCED TO THE EFFECT THAT THERE WAS A LONG-STANDING [COMPANY PRACTICE] THAT EVERYTIME THERE IS A CHANGE IN THE JOB LEVEL POSITION OF AN EMPLOYEE. the instant petition raising the following issues: I.472[8] Hence. are they entitled to conversion increase equivalent to 10% of their current basic salary? Petitioner contends that the 22 daily paid rank-and-file employees were promoted after the job evaluation. 2007 of the voluntary arbitrator is NULLIFIED and SET ASIDE. In fact. 2004. Respondent counters that the job evaluation was merely a process of determining the relative contribution and value of the positions in its operations and does not provide for any adjustment in the salaries of the covered employees. WERE SUBSEQUENTLY CONVERTED INTO OR PROMOTED TO JOB LEVEL 2 POSITIONS AFTER THE RESULT OF THE JOB EVALUATION ON FEBRUARY 24. BASED ON THE EMPLOYEE’S CURRENT BASIC SALARY. They also perform the same functions and have the same responsibilities. It adds that the 22 daily paid rank-and-file employees were not promoted since they continue to occupy the same positions that they were occupying prior to the job evaluation. THE COMPANY GRANTS A CORRESPONDING CONVERSION INCREASE OF TEN *PERCENT+ (10%). . WHO WERE PREVIOUSLY OCCUPYING JOB LEVEL I POSITIONS. II.

petitioner has miserably failed to convince this Court that respondent acted in bad faith in implementing the job evaluation program. Moreover. demotion. The job evaluation program was undertaken to streamline respondent’s operations and to place its employees in their proper positions or groupings. it merely provided the procedure for the implementation of the job evaluation and did not guarantee any adjustment in the salaries of the employees. or in general principles of fair play and justice. The Labor Code and its implementing rules do not vest managerial authority in the labor arbiters or in the different divisions of the National Labor Relations Commission or in the courts. The hiring. as correctly ruled by the Court of Appeals. Job Grade Levels 1 and 2 positions are both categorized as rank-and-file employees. and promotion of employees have been traditionally identified as a management prerogative subject to limitations found in the law. It is a well-settled rule that labor laws do not authorize interference with the employer's judgment in the conduct of its business. firing. Said employees continued to occupy the same positions they were occupying prior to the job evaluation. morals or public policy. a collective bargaining agreement. their job titles remained the same and they were not given additional duties and responsibilities. Of primordial consideration is not the nomenclature or title given to the employee. . There is no showing that it was intended to circumvent the law and deprive the 22 daily paid rank-and-file employees of the benefits they are supposed to receive. Accordingly. This is a function associated with the employer's inherent right to control and manage effectively its enterprise. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied. it must also protect the right of an employer to exercise what are clearly management prerogatives.The petition has no merit.474[10] In the case at bar. Even as the law is solicitous of the welfare of employees. A perusal of the CBAs of the parties showed that. this Court has recognized and affirmed the prerogative of management to implement a job evaluation program or a re-organization for as long as it is not contrary to law. transfer. We are not prepared to grant any conversion or promotion increase to the 22 daily paid rank-and-file employees since what transpired was only a promotion in nomenclature.475[11] Based on the eight new job grade levels which respondent adopted after the job evaluation. but the nature of his functions.

The pronouncement of Voluntary Arbitrator Renato Q. The same cannot be said of the twenty-two (22) daily paid rank-and-file employees involved in the case at bar. JOSE PORTUGAL PEREZ Associate Justice WE CONCUR: . of course. The job titles and positions held by such employees have changed following the fact that they have assumed additional duties and responsibilities. and not merely rank-and-file employees.filer a monthly paid one with a concomitant conversion and promotion increase. Finally. The Decision dated 19 February 2008 and the Resolution dated 5 May 2008 of the Court of Appeals in CA-G. thereby. SO ORDERED.There is also no evidence to show that Job Grade Levels 1 and 2 positions are confined only to daily and monthly paid rank-and-file employees. a mere conversion from Job Grade Level 1 position to Job Grade Level 2 position does not. Petitioner also failed to substantiate its allegation that it has been a long-standing company practice to grant a conversion or promotion increase everytime an employee’s rank is converted to a higher job grade level. Those who were elevated to Job Grade Level 3 positions were rightfully given the additional benefits since they have become managerial employees. we see why petitioners cannot make common cause with those whose positions were converted from Job Grade Level 2 to Job Grade Level 3 and were. a promotion automatically ensues. Bello that Job Grade Level 2 positions are mostly occupied by monthly paid rank-and-file employees implies that some daily paid rank-and-file employees also occupy that position. respectively.R.476[12] Thus. such that when a conversion from Job Grade Level 1 to Job Grade Level 2 takes place. WHEREFORE. given the benefits concomitant to the higher level. SP No. The instances which petitioner cited showed clear intent on respondent’s part to promote the employees concerned. 100308 are AFFIRMED. specifically Management Team Members. the petition is DENIED. make a daily paid rank-and.

Article VIII of the Constitution. LEONARDO-DE CASTRO LUCAS P. . CORONA Chief Justice Chairperson TERESITA J.RENATO C. BERSAMIN Associate Justice Associate Justice JOSE CATRAL MENDOZA Associate Justice CERTIFICATION Pursuant to Section 13. I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

Respondents. and EDGARDO QUIOGUE. and PEREZ. No. Petitioner.RENATO C. CORONA Chief Justice Republic of the Philippines Supreme Court Manila SPECIAL SECOND DIVISION CARLOS DE CASTRO.. JR. 165153 Present: versus CARPIO MORALES. 2010 x----------------------------------------------------------------------------------------x RESOLUTION . JJ. LIBERTY BROADCASTING NETWORK.R. VELASCO. J.. Promulgated: August 25. Acting Chairperson. INC. G. *ABAD. BRION.

478[2] The facts. 2. Costs against the respondents. Carlos C. to suspend the court proceedings in view of the Stay Order issued on August 19. as well as the installation of fire exits at the *LBNI’s+ Technology Centre. reconditioning and replacement of parts of the airconditioning units at the company’s Antipolo Station. J. asking us. first. 2002. 2005 by the Regional Trial Court (RTC) of Makati. SO ORDERED. as recited in our Decision. Liberty Broadcasting Network. we hereby GRANT the petition. 2004. de Castro committed the following acts: 1. . premises considered. in relation to the corporate rehabilitation proceedings that LBNI initiated. Branch 138. On May 31. are summarized below: The petitioner. Accordingly. Inc. de Castro. second. Soliciting and/or receiving money for his own benefit from suppliers/dealers/traders *Cristino Samarita and Jose Aying+. representing “commissions” for job contracts involving the repair. (LBNI).000. and REINSTATE in all respects the Resolution of the National Labor Relations Commission dated September 20. 1996.BRION.: The respondent. Theft of company property involving the unauthorized removal of one gallon of Delo oil from the company storage room. we REVERSE and SET ASIDE the Decision and Resolution of the CA promulgated on May 25. 3. 2004 and August 30. Allegedly. The dispositive part of our Decision reads: WHEREFORE. filed the present Motion for Reconsideration with Motion to Suspend Proceedings. worked as a chief building administrator at LBNI. and willful breach of the trust reposed in him as a managerial employee. LBNI dismissed de Castro on the grounds of serious misconduct. Diversion of company funds by soliciting and receiving on different occasions a total of P14. respectively.00 in “commissions” from Aying for a job contract in the company’s Antipolo Station. to set aside our Decision477[1] and. fraud.

thereby creating a disturbance that interrupted the normal flow of activities in the company. National Capital Region.486[10] The Labor Arbiter found the affidavits of LBNI’s witnesses to be devoid of merit. noting .4. for using offensive language against *Vicente Niguidula. into soliciting money in *de Castro’s+ behalf from suppliers/contractors. holding LBNI liable for illegal dismissal. Disrespect/discourtesy towards a co-employee.483[7] De Castro alleged that prior to executing affidavits against him.484[8] On April 30. and Slander. the company’s supply manager+. for challenging Niguidula to a fight during working hours within the company premises. and attorney’s fees. damages. the accusations were belatedly filed as the imputed acts happened in 1995. Niguidula and Balais had serious clashes with him. for uttering libelous statements against Niguidula. praying for reinstatement. an incident which he reported to respondent Edgardo Quiogue. Aggrieved. the Labor Arbiter rendered a decision485[9] in de Castro’s favor.482[6] He denied threatening Vicente Niguidula. de Castro filed a complaint for illegal dismissal against LBNI with the National Labor Relations Commission (NLRC) Arbitration Branch. and to the Makati police. LBNI’s executive vice president. for instructing Balais to collect commissions from Aying and Samarita. He explained that the one gallon of Delo oil he allegedly took was actually found in Gil Balais’ room. 8. Disorderly behavior. and for requiring Raul Pacaldo (Pacaldo) to exact 2% . whom he claimed verbally assaulted him and challenged him to a fight. Abuse of authority. payment of backwages. 1999. for threatening to inflict bodily harm on the person of Niguidula and for coercing *Gil Balais+. 6.481[5] Moreover. Threat and coercion. 7.479[3] 5.5% of the price of the contracts awarded to suppliers. a subordinate.480[4] He maintained that he could not have solicited commissions from suppliers considering that he was new in the company.

490[14] In our September 23. but Balais. but in his second affidavit. he recanted his statement and exonerated de Castro. 2004. were LBNI employees who resented de Castro. and (3) Jose Aying.487[11] LBNI appealed the Labor Arbiter’s ruling to the NLRC. a contractor.”489[13] LBNI again appealed the NLRC’s adverse decision to the Court of Appeals (CA). recanted his earlier affidavit. since new employees have a natural motivation to make a positive first impression on the employer. the NLRC reinstated the Labor Arbiter’s decision. the CA reversed the NLRC’s decision and held that de Castro’s dismissal was based on valid grounds.488[12] It ruled that the charges against de Castro “were never really substantiated other than by ‘bare allegations’ in the witnesses’ affidavits who were the company’s employees and who had altercations with De Castro prior to the execution of their affidavits. if only to ensure that they are regularized. On May 25. stated that it was not de Castro. we found that de Castro’s dismissal was based on unsubstantiated charges.492[16] We noted that de Castro had not stayed long in the company and had not even passed his probationary period when the acts charged allegedly took place. It ruled too that the NLRC gravely abused its discretion when it disregarded the affidavits of all of LBNI’s witnesses. who personally asked for money. another supplier. earlier executed an affidavit stating that de Castro asked him for commission. the NLRC reversed the Labor Arbiter’s decision but on de Castro’s motion for reconsideration. Initially. one of the suppliers from whom de Castro allegedly asked for commissions. (2) the affidavit of Cristino Samarita.493[17] . 2008 Decision. We found this situation contrary to common experience. Niguidula and Balais. Aying.491[15] The other witnesses.that (1) witnesses Niguidula and Balais had altercations with de Castro prior to the execution of their respective affidavits.

Proc. doubtful. among others. Liberty Broadcasting and Skyphone.498[22] LBNI points out that it filed.495[19] The Motion for Reconsideration LBNI now moves for a reconsideration of our September 23.499[23] Comment on the Motion for Reconsideration In his comment. doubts reasonably arising from the evidence or interpretation of agreements and writing should be resolved in the former’s favor.P. it is premature for this Court to suspend the . He avers that despite the RTC’s Stay Order. These doubts should be interpreted in de Castro’s favor. pursuant to Article 4 of the Labor Code.497[21] and (3) LBNI is currently under rehabilitation. 2008 Decision based on the following arguments: (1) LBNI had valid legal grounds to terminate de Castro’s employment for loss of trust and confidence.494[18] Between a laborer and his employer. hence.496[20] (2) the affidavits of LBNI’s witnesses should not have been totally disregarded. the RTC issued a Stay Order directing. a petition for Corporate Rehabilitation with Prayer for Suspension of Payments (docketed as S. M-6126). the proceedings in this case must be suspended. based on the evidence presented. de Castro contends that LBNI’s motion for reconsideration contains a rehash of LBNI’s earlier arguments. at best. we ruled that the grounds that LBNI invoked for de Castro’s dismissal were. that the – enforcement of all claims against Liberty Telecoms. whether for money or otherwise and whether such enforcement is by Court action or otherwise x x x be forthwith stayed. Case No. with the RTC of Makati.Thus. and on August 19. 2005.

we suspend the execution of our Decision in deference to the Stay Order issued by the rehabilitation court. LBNI’s arguments regarding the legality of de Castro’s dismissal. backwages. Although we reject. 2008 Decision declared that de Castro “had not stayed long in the company and had not even passed his probationary period when the acts charged allegedly took place. 2008 Decision LBNI’s motion for reconsideration merely reiterates its earlier arguments. the proper venue to file the motion is with the Office of the Labor Arbiter. we do not find LBNI’s Motion for Reconsideration meritorious. he was already a regular employee by operation of law.501[25] THE COURT’S RULING Except for the prayer to suspend the execution of our September 23. for lack of merit. de Castro was dismissed on the ninth month of his employment with LBNI. 2008 Decision. 2008 Decision. we found that the acts charged against de Castro took place when he was still under probationary employment – a finding completely different from LBNI’s claim that de Castro was dismissed during his probationary employment.proceedings. The issue of illegal dismissal has already been resolved in the Court’s September 23. The September 23.”503[27] Properly read. LBNI has misread the import of our ruling. de Castro was entitled to security of tenure and his illegal dismissal from LBNI justified the awards of separation pay. LBNI argues that there is no logic for it to illegally dismiss de Castro because being on probationary employment – a fact which this Court had stated in its decision – all that the company had to do was not to re-hire him.502[26] By this claim. On the contrary. and damages. 500[24] De Castro further posits that LBNI should have informed this Court of the status of its Petition for Corporate Rehabilitation. . x x x [a]n employee who is allowed to work after a probationary period shall be considered a regular employee. and by then. Article 281 of the Labor Code provides that “*p+robationary employment shall not exceed six (6) months from the date the employee started working. If a suspension of the proceedings is necessary.” As a regular employee. LBNI has failed to offer any substantive argument that would convince us to reverse our earlier ruling. which we have already addressed in our September 23.

x x x it is ordered that enforcement of all claims against [LBNI] whether for money or otherwise and whether such enforcement is by Court action or otherwise. 2005 for being premature. . dated May 4. issued by the RTC of Makati. 2006. the validity of de Castro’s dismissal from LBNI – were considered by the Court in resolving the case. the memoranda alone may be considered by the Court in deciding or resolving the petition.P. nothing was heard from LBNI regarding the Stay Order or the rehabilitation proceedings it instituted before the RTC of Makati. M-6126. 2005. Branch 138. Thus. be forthwith stayed. as de Castro then had yet to file his reply to LBNI’s comment on the petition. only the issues raised in the parties’ memoranda – principally. 2008 Decision On October 18. but merely suspends the execution of the September 23. while de Castro’s petition was still pending before the Court. Being a summation of the parties’ previous pleadings.505[29] LBNI’s motion was denied in our Resolution of December 12. Case No. 2005. that LBNI filed with the Court contained no reference to the rehabilitation proceedings. Even the memorandum. citing the Stay Order. LBNI filed a motion to suspend the proceedings.The pendency of the rehabilitation proceedings does not affect the Court’s jurisdiction to resolve the case.M. devoid of legal significance. No. the Court declared that issues raised in previous pleadings but not included in the memorandum shall be deemed waived or abandoned. 99-2-04-SC. its guarantors and sureties not solidarily liable with the petitioner. Branch 138 in S. In A.504[28] The Stay Order read: FOR THE REASONS GIVEN and applying Section 6 of the Interim Rules of Procedure on Corporate Rehabilitation. dated August 19.506[30] Thereafter.507[31] The filing of a memorandum before the Court is not an empty requirement. on account of LBNI’s omission. x x x x SO ORDERED.

as we earlier pointed out. in fact. even those pending before the Court – could not have affected the Court’s action on the present case. Nor may they take notice of matters except those expressly provided as subjects of mandatory judicial notice. x x x x The party asking the court to take judicial notice is obligated to supply the court with the full text of the rules the party desires it to have notice of. Courts. a petition for rehabilitation shall be dismissed if no rehabilitation plan is approved by the court upon the lapse of 180 days from the date of initial hearing. 2008 Decision. Nevertheless. no mention at all was made in LBNI’s memorandum of the rehabilitation proceedings. The suspension shall last up to the termination of the rehabilitation proceedings. At any rate. 2005 (as set in the Stay Order of August 19. the Court had sufficient grounds to suppose that the rehabilitation petition had been dismissed by the time the case was submitted for decision. They may not even substitute their own personal knowledge for evidence. Notably. as well as magistrates presiding over them are not omniscient. Atienza. as the matter had not been properly brought to our attention. While the Interim Rules grant extension beyond the 180-day period. with LBNI’s manifestation that it is still undergoing rehabilitation.”508[32] At the time we decided the present case. it does not work to oust a court of its jurisdiction over a case properly filed before it. the Court resolves to suspend the execution of our September 23. Under Section 11.509[33] we said that: In resolving controversies. With the failure of LBNI to raise rehabilitation proceedings in its memorandum. Rule 4 of the Interim Rules – . courts can only consider facts and issues pleaded by the parties. 2006. LBNI’s memorandum was filed on May 4. Given these circumstances. more than 180 days from the date of the initial hearing on October 5.“The Court does not take judicial notice of proceedings in the various courts of justice in the Philippines. They can only act on the facts and issues presented before them in appropriate pleadings. Rule 4 of the Interim Rules of Procedure on Corporate Rehabilitation (Interim Rules). as provided in Section 11. In Social Justice Society v.510[34] Our ruling on the principal issue of the case – that de Castro had been illegally dismissed from his employment with LBNI – thus stands. no such extension was alleged in this case. 2005). we were thus not bound to take note of and consider the pendency of the rehabilitation proceedings. a stay order simply suspends all actions for claims against a corporation undergoing rehabilitation. the existence of the Stay Order – which would generally authorize the suspension of judicial proceedings. in relation to Section 27.

or the failure of the rehabilitation of the debtor because of failure to achieve the desired targets or goals as set forth therein. – In case of the failure of the debtor to submit the rehabilitation plan. The court may grant an extension beyond this period only if it appears by convincing and compelling evidence that the debtor may successfully be rehabilitated. conditions.Sec.The stay order shall be effective from the date of its issuance until the dismissal of the petition or the termination of the rehabilitation proceedings. restrictions. 27. 2008 Decision until the Stay Order is lifted or the corporate rehabilitation proceedings are terminated. however. The National Labor Relations Commission is. the court shall upon motion. terminate the proceedings. Period of the Stay Order. ARTURO D. 11. The proceedings shall also terminate upon the successful implementation of the rehabilitation plan. 2008 is hereby AFFIRMED. WHEREFORE. we DENY the Motion for Reconsideration. x x x x Sec. motu proprio. however. or upon the recommendation of the Rehabilitation Receiver. Respondent Liberty Broadcasting Network. shall the period for approving or disapproving a rehabilitation plan exceed eighteen (18) months from the date of filing of the petition. Inc. directed to SUSPEND the execution of our September 23. BRION Associate Justice WE CONCUR: . our Decision dated September 23. or assumptions. Termination of Proceedings. The petition shall be dismissed if no rehabilitation plan is approved by the court upon the lapse of one hundred eighty (180) days from the date of the initial hearing. or the failure of the said debtor to perform its obligations under the said plan. or a determination that the rehabilitation plan may no longer be implemented in accordance with its terms. accordingly. is hereby directed to submit quarterly reports to the National Labor Relations Commission on the status of its rehabilitation. . subject to the penalty of contempt in case of noncompliance. SO ORDERED. In no instance. or the disapproval thereof by the court.

CONCHITA CARPIO MORALES Associate Justice .CONCHITA CARPIO MORALES Associate Justice PRESBITERO J. Associate Justice ROBERTO A. JR. VELASCO. ABAD Associate Justice JOSE PORTUGAL PEREZ Associate Justice ATTESTATION I attest that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

174084 Present: - versus - . G. CORONA Chief Justice Republic of the Philippines Supreme Court Manila THIRD DIVISION SPIC N’ SPAN SERVICES CORPORATION. No.Acting Chairperson CERTIFICATION Pursuant to Section 13. Petitioner.R. it is hereby certified that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. Article VIII of the Constitution. RENATO C. and the Division Acting Chairperson’s Attestation.

JULIET DINGAL.. Inc. Estrella Zapata. J. Lolita Gomez. VILLARAMA. Gloria Sumang. JJ. Bernardo v. J. BERNANDO. 2004 Decision512[2] and the August 2. SNS’s business is to supply manpower services to its clients for a fee. National Labor Relations Commission. and SERENO. Inc. SP No. Juliet Dingal. BERSAMIN. Promulgated: August 25. GLORIA SUMANG. GLORIA PAJE.: Before the Court is the petition for review on certiorari511[1] filed by Spic N’ Span Services Corporation (SNS) to seek the reversal of the October 25.R. Myra Amante and Fe S. JR.CARPIO MORALES. Spic N Span Service Corporation and Swift Foods. Respondents. 2006 Resolution513[3] of the Court of Appeals (CA) in CA-G. MYRA AMANTE. entitled "Gloria Paje. BRION. Swift and SNS have a contract to promote Swift products. (Swift) is a subsidiary of RFM Corporation that manufactures and processes meat products and other food products. Chairperson.. Miriam Catacutan. ESTRELLA ZAPATA.” BACKGROUND FACTS Swift Foods. and FE S. 83215. . 2010 x----------------------------------------------------------------------------------------x DECISION BRION. LOLITA GOMEZ. MIRIAM CATACUTAN.

He also denied all other claims for lack of factual basis. Peralta who was not a lawyer and who claimed to be the complainants’ representative.637. the claims of the other complainants because they failed to verify their position paper. Swift filed its position paper. In their position papers. Lolita Gomez. thus.50 and Inocencio Fernandez P192. Thelma Guardian.514[4] The complainants’ position papers were signed by Florencio P. moved to dismiss the complaints on the ground that it entered into an independent labor contract with SNS for the promotion of its products. and their services were terminated without cause and without due process. 1998. and Estrella Zapata (complainants) worked as Deli/Promo Girls of Swift products in various supermarkets in Tarlac and Pampanga. Fe S. although he never showed any proof of his authority to represent them. they were denied the procedural due process requirements of notice and hearing prior to their termination of employment. Myra Amante. SNS did not. David. it alleged that the complainants were the employees of SNS. After two unsuccessful conciliation hearings. Swift filed a memorandum of appeal. Catacutan. San Fernando. Paje.515[5] Swift. docketed as Case Nos. Miriam S.Inocencio Fernandez. the Labor Arbiter ordered the parties to submit their position papers. without prejudice. in its position paper.519[9] . Edelisa F. These cases were subsequently consolidated.197.518[8] Both Swift and the complainants appealed to the NLRC. not of Swift. the complainants alleged that they were employees of Swift and SNS. representing their retirement pay and service incentive leave pay. Gloria O. while the complainants filed a partial memorandum of appeal. Dingal. Pampanga. Gloria O. Sumang. The termination came on the day they received their notices. He dismissed. Bernardo. and ordered SNS and Swift to jointly and severally pay Edelisa David P115. Juliet C. 03-9131-98 and 07-9295-98.516[6] The Labor Arbiter517[7] found SNS to be the agent of Swift.50. They were all dismissed from their employment on February 28. They filed two complaints for illegal dismissal against SNS and Swift before the National Labor Relations Commission (NLRC) Regional Arbitration Branch III.

” II.620. and Fe S. Bernardo (respondents). separation pay. Gloria Paje. Lolita Gomez. and their cases were thus closed.521[11] The complainants whose claims were dismissed.912. and ordered SNS to pay Edelisa David a total of P256. SNS is now before us on a petition for review on certiorari. 2004. they were represented by the Public Attorney’s Office. separation pay.522[12] The respondents then sought relief with the CA through a petition for certiorari. and service incentive leave pay. Estrella Zapata. SNS and Swift filed their motions for reconsideration which the CA denied. the latter should not be exempt from liability. It ordered the remand of the case to the Labor Arbiter for the computation of the respondents’ backwages.63. namely. and submits the following – I. SAID FACT IS “SUFFICIENT JUSTIFICATION FOR THE PETITIONERS’ FAILURE TO COMPLY WITH THE REQUIREMENTS OF LAW. Juliet Dingal. moved for the reconsideration of the NLRC’s ruling. It dismissed all other claims for lack of merit.13. and ruled that the respondents’ failure to sign the verification in their position paper was a formal defect that was not fatal to their case.520[10] It dismissed the complaint against Swift. Edelisa David and Inocencio Fernandez agreed to a settlement.” . in its assailed decision of October 25. Myra Amante. thus. WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR WHEN IT RULED THAT THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN DISMISSING THE CLAIMS OF HEREIN RESPONDENTS “ON THE GROUND OF NON-SIGNING OF THE POSITION PAPER. Gloria Sumang. The CA found the petition meritorious. The NLRC denied their motion. representing backwages. based on the alleged grave abuse of discretion committed by the NLRC. and Inocencio Fernandez a total of P280. Thereafter. Miriam Catacutan. and service incentive leave pay. It concluded that SNS was merely an agent of Swift. This time. WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR IN HOLDING THAT ALTHOUGH THE RESPONDENTS WERE NOT REPRESENTED BY A LAWYER BUT BY ONE WHO IS NOT A MEMBER OF THE BAR.The NLRC denied the complainants’ appeal for lack of merit.

are true and correct.527[17] . SNS stressed the importance of a signature in a pleading.526[16] The primary reason for requiring a verification is simply to ensure that the allegations in the pleading are done in good faith. and are not speculative. AND 3) SERVICE INCENTIVE LEAVE. and are not mere speculations. As we previously explained in Torres v. AND COURT OF APPEALS IS IT STATED THAT HEREIN RESPONDENTS WERE ILLEGALLY DISMISSED. TO WIT: 1) BACKWAGES. not a jurisdictional defect. and harped on the respondents’ failure to sign their position paper. The lack of a verification in a pleading is only a formal defect. We do not agree with SNS.”523[13] THE COURT’S RULING We find the petition unmeritorious. and is not necessarily fatal to a case.III. 524[14] This. is fatal to the respondents’ case. are true and correct. Specialized Packaging Development Corporation. SNS submits that since respondents did not sign the verification in their position paper. THE NATIONAL LABOR RELATIONS COMMISSION. WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR IN “REMANDING THE CASE TO THE LABOR ARBITER FOR THE COMPUTATION OF THE MONEY CLAIMS OF THE RESPONDENTS.525[15] where only two of the 25 real parties-in-interest signed the verification. the CA erred when it ruled that the NLRC committed grave abuse of discretion in dismissing the respondents’ complaints. the verification by the two could be sufficient assurance that the allegations in the petition were made in good faith. to SNS. 2) SEPARATION PAY.” DESPITE THE FACT THAT NOWHERE IN THE DECISIONS OF THE LABOR ARBITER.

too. on the other hand. Thus. The Constitution. This was explained by Justice Bernando P. dismissal of appeals purely on technical grounds is frowned upon where the policy of the court is to encourage hearings of appeals on their merits and the rules of procedure ought not to be applied in a very rigid.532[22] Article 4 of the Labor Code provides that all doubts in the implementation and interpretation of its provisions (including its implementing rules and regulations) shall be resolved in favor of labor. and a living wage. free from the unacceptable plea of technicalities.530[20] when he said – Litigations must be decided on their merits and not on technicality. giving a false impression of speedy disposal of cases while actually resulting in more delay.531[21] We should remember. The State is bound to “protect the rights of workers and promote their welfare. rules of procedure are used only to help secure. characterizes labor as a primary social economic force. Pardo. technical sense. rules of procedure can be disregarded in order to serve the ends of justice. NLRC528[18] to emphasize that in labor cases. in Aguam v. Court of Appeals. . Every party litigant must be afforded the amplest opportunity for the proper and just determination of his cause. in its assailed decision. the State is bound to protect labor and assure the rights of workers to security of tenure. that certain labor rights assume preferred positions in our legal hierarchy. humane conditions of work. without regard to technicalities of law and procedure.The CA. Under the Constitution and the Labor Code. if not a miscarriage of justice.”534[24] Under these fundamental guidelines. cited Philippine Telegraph and Telephone Corporation v.529[19] In the hierarchy observed in the dispensation of justice.”533[23] and the workers are “entitled to security of tenure. not override substantial justice. the deciding authority should use every reasonable means to speedily and objectively ascertain the facts. It is a far better and more prudent course of action for the court to excuse a technical lapse and afford the parties a review of the case on appeal to attain the ends of justice rather than dispose of the case on technicality and cause a grave injustice to the parties. Technical rules of evidence are not strictly binding in labor cases.

1. if he had indeed been engaged in the unauthorized practice of law. and CA was there any finding that respondents had been illegally dismissed. for computation of the respondents’ backwages.537[27] Thus. 2. We find this to be the first argument of its kind from SNS. SNS concludes that the respondents’ representative had no personality to appear before the Labor Arbiter or the NLRC. and. without prejudice to whatever action may be taken against the representative. To recall. The cited technical infirmity cannot defeat the respondents’ preferred right to security of tenure which has primacy over technical requirements.535[25] Our Labor Code allows a non-lawyer to represent a party before the Labor Arbiter and the Commission. separation pay and service incentive leave pay despite the fact that nowhere in the decisions of the Labor Arbiter. we affirm the CA’s ruling on this point. SNS also claims serious error on the part of the CA in remanding the case to the Labor Arbiter. Our approach to these arguments is simple as the problem boils down to a balance between a technical rule and protected constitutional interests.respondents’ right to security of tenure is a preferred constitutional right that technical infirmities in labor pleadings cannot defeat.536[26] but provides limitations: Non-lawyers may appear before the Commission or any Labor Arbiter only: (1) If they represent themselves. SNS argues that this ruling excuses the employment of a non-lawyer and places the acts of the latter on the same level as those of a member of the Bar. is the first ever submission from SNS before it filed a motion for reconsideration with the CA. the NLRC. and his representation for the respondents should produce no legal effect. Thus. or (2) If they represent their organization or members thereof. SNS did not file its position paper before the . SNS submits that the CA committed a serious error in ruling that the respondents’ representative’s non-membership in the bar is sufficient justification for their failure to comply with the requirements of the law. in fact.

The test is whether the independent contractor has contracted to do the work according to his own methods and without being subject to the principal’s control except only as to . merchandisers and other promotional personnel to handle all promotional aspects and merchandising strategy of Swift. At this point. although Swift averred that under the contract. nor did it file its appeal before the NLRC. only Swift and the complainants did.labor arbiter. although the fact of termination was never disputed. 3. that a petition for certiorari under Rule 65 of the Rules of Court is not the proper remedy to correct the NLRC’s alleged grave abuse of discretion. the principal agrees to put out or farm out with a contractor or subcontractor the performance or completion of a specific job. that the respondents’ termination from employment was illegal since neither SNS nor Swift.542[32] Every case is unique and has to be assessed on the basis of its facts and of the features of the relationship in question. as employers.540[30] Significantly. SNS did not raise the question of the CA’s failure to state that the respondents had been illegally dismissed. for lack of proof to the contrary. It then claimed that the CA erred in ruling that the NLRC committed grave abuse of discretion when it dismissed respondents’ claim. work or service within a definite or predetermined period.538[28] It was only Swift. The contract was not presented before the Labor Arbiter. although SNS filed a motion for reconsideration of the CA decision. the employer has the burden of proof that the dismissal was valid. it is too late for SNS to raise the issue. and that the respondents were bound by the mistakes of their non-lawyer representative. In order that a labor relationship can be categorized as legitimate/permissible job contracting or as prohibited labor-only contracting.541[31] We can assume. Swift denied liability on the basis of its contract with SNS. the totality of the facts and the surrounding circumstances of the relationship ought to be considered. absent this proof. work or service is to be performed or completed within or outside the premises of the principal.539[29] The records do not show if SNS filed its memorandum before the CA. that filed its comment to the herein respondents’ petition for certiorari. the termination from employment is deemed illegal. regardless of whether such job. In permissible job contracting. Upon proof of termination of employment. Nothing on record indicates the reason for the respondents’ termination from employment. as alleged by the dismissed employees. too. SNS would supply promo girls. presented any proof that their termination from employment was legal.

Neither did they attach a copy of the financial statement of SNS. and explained its ruling as follows544[34] – To be legitimate. Second. Lastly. Lastly. in finding that SNS is an independent contractor gave the following reasons: First. work or service on its own account and under its own responsibility. 324 SCRA 469). Rather. there . on the other hand. it cannot be said that SNS has substantial capital. in finding that SNS was merely a labor-only contractor. Swift and SNS have distinct and separate juridical personality from each other. as found by the Labor Arbiter. free exercise of the right to self-organization. and free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof. and social and welfare benefits. The Labor Arbiter. contracting or subcontracting must satisfy the following requirements: 1) The contractor or subcontractor carries on a distinct and independent business and undertakes to perform the job. the uniform and identification cards used by the petitioners were subject to the approval of Swift. Third. according to its own manners and methods. the duties of the petitioners were directly related. by law. cited the following reasons: First. security of tenure. 2) the contractor or subcontractor has substantial capital or investment. there is no evidence that Swift exercised the power of control over the petitioners. it is SNS who exercised direct control and supervision over the nature and performance of the works of herein petitioners. and he has assured the contractual employees entitlement to all labor and occupational safety and health standards. the agreement between SNS and Swift shows that the latter exercised control over the promo girls and/or merchandisers through the services of coordinators. he has substantial capital. The parties failed to attach a copy of the agreement entered into between SNS and Swift. there was no evidence that SNS has substantial capital or investment. and social and welfare benefit (Vinoya v.543[33] The CA found SNS to be Swift’s agent. Thus. Second. The NLRC. The decision of the NLRC is bereft of explanation as to the existence of circumstances that would make SNS an independent contractor as would exempt the “principal” from liabilities to the employees.the results. necessary and vital to the day-to-day operations of Swift. Nowhere in the decision of both the Labor Arbiter and the NLRC shows that SNS had full control of the means and methods of the performance of their work. Moreover. we are constrained to rule on the issue involved on the basis of the findings of both the Labor Arbiter and the NLRC. security of tenure. NLRC. free exercise of right to self-organization. and 3) the agreement between the principal and contractor or subcontractor assures the contractual employees’ entitlement to all labor and occupational safety and health standards.

is a case of illegal dismissal perpetrated by a principal and its illegal contractor-agent. We fully agree with this ruling. free exercise of right to self-organization. 2) Separation Pay. 83215. with the modification that nominal damages in the amount of P30. on the other. WHEREFORE. 2004 Decision and August 2. 2003 are SET ASIDE in so far as the dismissal of the petitioners’ case is concerned and in so far as Swift is found not liable for the payment of the petitioners’ money claims.00 should additionally be paid to each of the respondents.00 for each of the respondents. NLRC. SO ORDERED. SP No. we hereby AFFIRM the Court of Appeals’ October 25.was no finding by the Labor Arbiter nor the NLRC that the agreement between the principal (Swift) and contractor (SNS) assures the contractual employees’ entitlement to all labor and occupational safety and health standards. premises considered. We note that the present decision does not affect the settlement entered into between Edeliza David and Inocencio Fernandez. and social and welfare benefit. 2006 Resolution in CA-G. WHEREFORE. The present case is hereby REMANDED to the Labor Arbiter for the computation of the money claims of the petitioners. pursuant to our ruling in Agabon v.R. we affirm the ruling of the CA with the modification that the respondents are also entitled to nominal damages.545[35] We peg this amount at P30. their complaints are considered closed and terminated. Hence. The Resolutions of the NLRC dated January 11. to wit: 1) Backwages. therefore. premises considered. security of tenure. As held by the NLRC. and 3) Service Incentive Leave Pay. SNS is considered merely an agent of Swift which does not exempt the latter from liability. we conclude that the requisites above-mentioned are not obtaining in the present case. . for violation of their due process rights to notice and hearing.000. on the one hand and SNS. for violation of their procedural due process rights. What we have before us. Costs against the petitioner. In view of the foregoing.000. Thus. the instant petition is hereby GRANTED. 2002 and December 23. The settlement of the claims of David and Fernandez is not affected by this decision.

Associate Justice MARIA LOURDES P. BERSAMIN Associate Justice MARTIN S. BRION Associate Justice WE CONCUR: CONCHITA CARPIO MORALES Associate Justice LUCAS P.A.ARTURO D. SERENO Associate Justice ATTESTATION . JR. VILLARAMA.

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. CORONA Chief Justice Republic of the Philippines Supreme Court Manila SECOND DIVISION . it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. CONCHITA CARPIO MORALES Associate Justice Chairperson CERTIFICATION Pursuant to Section 13. and the Division Chairperson’s Attestation. Article VIII of the Constitution. RENATO C.

August 23. After the merger.... J...R...546[1] under Rule 45 of the Rules of Court. JR. PERALTA.. Albayda... ALEDA CHU.. 2006 Resolution548[3] of the Court of Appeals (CA). Respondent... ALBAYDA. in CA-G. . (Upjohn) in 1978 and continued working there until 1996 when a merger between Pharmacia and Upjohn was created.... (now PFIZER PHILIPPINES. -versus- Promulgated: RICARDO P...... 00386.R.. No. JANE MONTILLA & FELICITO GARCIA. seeking to set aside the November 30........ and MENDOZA. INC.... 2005 Decision547[2] and May 5.. ASHLEY MORRIS....x DECISION PERALTA.. The facts of the case are as follows: Respondent Ricardo P.. (respondent) was an employee of Upjohn. 172724 Present: CARPIO. Chairperson... NACHURA. Inc... 2010 x.. ABAD. SP No..)..: Before this Court is a petition for review on certiorari.PHARMACIA and UPJOHN. G... Jr.. JJ. J. Petitioners.... INC.

Respondent alleged that during one conversation. Garcia stressed that other people both reprensentatives and district sales managers alignment. In December 1999. a district meeting was held in Makati City wherein one of the topics discussed was the district territorial configuration for the new marketing and sales direction for the year 2000. and his twoyear-old son is under his and his wife‘s direct care. respondent received a Memorandum549[4] announcing the sales force structure for the year 2000. Pharmacia‘s National Sales and External Business Manager. he would not be transferred. Chu assured him that as long as he hits his sales target by 100%.00 from her business in Bacolod City. Garcia explained that the factors used in determining assignments of managers are to maximize business opportunities and growth and development of personnel. reiterating his request to be reassigned to the Western Visayas area. respondent wrote a letter550[5] dated December 27.year-old daughter is studying in Bacolod City. During the period of his assignment. Respondent again speculated that the real reason behind his transfer was that it was petitioners‘ way of terminating his employment. 2000. Respondent added that he could not possibly accept his new assignment in Cagayan de Oro City because he will be dislocated from his family. On January 10. respondent settled in Bacolod City.1999 to Felicito M. Respondent concluded that his transfer might be a way for his managers to dismiss him from employment. One of the key areas covered in District XII is Cagayan de Oro City. Respondent harped that his transfer would compel him to lose his free housing and his wife‘s compensation of P50. Respondent said that he has always been assigned to the Western Visayas area and that he felt that he could not improve the sales of products if he was assigned to an unfamiliar territory. respondent was reassigned as District Sales Manager to District XII in the Northern Mindanao area. his wife runs an established business in Bacolod City. Garcia (Garcia).000. his eleven. Sometime on August 9. respondent wrote a letter552[7] to Aleda Chu (Chu). 2000. In response to the memorandum. questioning his transfer from District XI to District XII.respondent was designated by petitioner Pharmacia and Upjohn (Pharmacia) as District Sales Manager assigned to District XI in the Western Visayas area. 1999. In the said memorandum. Garcia wrote a letter551[6] to respondent denying his request to be reassigned to the Western Visayas area. . Pharmacia‘s Vice-President for Sales and Marketing. have been re-located in the past and in the year 2000 re- On February 16.

notified respondent that since he has been on sick leave since January 5. Respondent argued that Chu failed to face and address the issues he raised regarding the loss of his family income. the additional cost of housing and other additional expenses he will incur in Mindanao. Finally. In another memorandum556[11] dated May 15. In a letter558[13] dated May 17. Montilla informed respondent of the clinic schedule of the company appointed doctor. Respondent stated that he was already ready to take on his regular assignment as District Sales Manager in Negros Occidental or in any district in the Western Visayas area. he can implement new ways and develop the sales force to become better and more productive.In a letter553[8] dated March 3. 2000. Chu added that the district performed dismally in 1999 and. Respondent likened his transfer to Mindanao as a form of punishment as he alleged that even Police Chief General Panfilo Lacson transferred erring and non-performing police officers to Mindanao. Montilla stated that per company policy. 2000. 2000. Pharmacia‘s Human Resource Manager. Chu explained to respondent that they are moving him to Cagayan de Oro City. because of their need of respondent‘s expertise to build the business there. In a letter557[12] dated May 17. Montilla (Montilla). Chu was likewise disappointed with respondent‘s opinion that with . Jane B. Chu stressed that the decision to transfer respondent was purely a business decision. Chu said that she did not give any assurance or commitment to respondent that he would not be transferred as long as he achieved his 100% target for 1999. respondent acknowledged his receipt of the letters from Montilla. 2000 up to the present. 2000. therefore. 2000. In a memorandum555[10] dated May 11. Respondent informed Montilla that his doctors had already declared him fit for work as of May 16. since respondent has been already in Bacolod and Iloilo for 22 years. 2000. respondent would then be considered on indefinite sick leave without pay. Moreover. Chu said that exposure to a different market environment and new challenges will contribute to respondent‘s development as a manager. 2000. Respondent replied through a letter554[9] dated March 16. Chu expressed her disappointment on the way respondent viewed their reason for moving his place of assignment. they were confident that under respondent‘s leadership. he had already consumed all his sick leave credits for the year 2000.

such was never done in the past and never the practice in the industry and in the Philippines. . 2000. In a memorandum563[18] dated June 15. In a letter562[17] dated June 8. Montilla directed respondent to report for work in Manila within 5 working days from receipt of the memorandum. Chu referred the case to the Human Resource Department for appropriate action. Montilla sent respondent another memorandum561[16] dated June 6. Montilla stated that contrary to the opinion of respondent. however. In a letter560[15] dated May 31. because of his wealth of experience. when in fact. 2000. Montilla met with respondent to discuss his situation. he be given additional remuneration. After the meeting. Montilla stressed that the company needed respondent in Cagayan de Oro City. respondent told Montilla that he will be airing his grievance before the National Labor Relations Commission (NLRC). Consequently. 2000 to talk to his family and weigh the pros and cons of his decision on whether to accept a post in Cagayan de Oro City or in Manila. stating that it is in the best interest of the company for respondent to report to the Makati office to assume his new area of assignment. Montilla gave respondent until June 2. 2000. 2000. respondent is entitled to Relocation Benefits and Allowance pursuant to the company‘s Benefits Manual. Chu concluded that it appeared to her that respondent would not accept any reason for the movement and that nothing is acceptable to him except a Western Visayas assignment. talent and skills. Respondent. Montilla sent respondent a memorandum559[14] wherein his request to continue his work responsibilities in Negros Occidental or in any district in the Western Visayas area was denied as there was no vacant position in those areas. respondent reiterated the concerns he raised in his previous letters. was also given an option to be assigned in Metro Manila as a position in the said territory had recently opened when Joven Rodriguez was transferred as Government Accounts and Special Projects Manager.the movement.

This is why I chose Manila over Cagayan de Oro for you in my letter dated June 6. So we issued another memo dated June 26. Montilla and Garcia for constructive dismissal. On July 12.566[21] On August 14. which shall be effective on July 19. 2000. It is where the success or failure of our business lies. we have no alternative but to terminate your services on the basis of absence without official leave (AWOL) and insubordination pursuant to Article 282 of the Labor Code of the Philippines. 2000. Before June 16. the most competitive and significant area for sales. 2000. Metro Manila is the biggest and most advanced market we have in the Philippines. I asked you to assume your new assignment in Metro Manila before June 16. In response. we advised you that the assignment in Manila is a business need and for said reason you were requested to report for work within five working days from receipt of notice. instructing you to report for work and advising you that should you continue to fail to report for work. Respondent was warned that the same would be a final notice for him to report for work in Manila within 5 working days from receipt of the memo. Pharmacia‘s President. Chu. VI. therefore. In view of the foregoing. 2000 letter and that he has not replied to their last memorandum dated June 15. On July 13. the company shall be constrained to terminate your employment. It is the most challenging and most rewarding of all areas. Montilla stated that she had not heard from respondent since his June 8. Bacolod City against Pharmacia. 2000. wherever the company needs you sees you fit. Regional Arbitration Branch No. Your employment contract actually states that you are willing to be assigned anywhere else in the Philippines. Only the best field managers are given the opportunity to manage a territory in Metro Manila. 2002. you wrote us a letter advising us that you can not accept the new assignment in Manila. the dispositive portion of which reads: . respondent filed a Complaint567[22] with the NLRC. 2000. you are in a Sales position for which you had signed up. the Labor Arbiter (LA) rendered a Decision568[23] dismissing the case. And because you had assured us that you were fit to work. after being on sick leave for about five and a half months. It is. 2000. both sides were directed to submit their position papers. 2000. Since mandatory conciliation failed between the parties. you failed to comply. 2000. Also included in the complaint was Ashley Morris. However. otherwise. 2000. his services will be terminated on the basis of being absent without official leave (AWOL). Montilla sent respondent a memorandum565[20] notifying him of their decision to terminate his services after he repeatedly refused to report for work despite due notice. the pertinent portions of which read: As I mentioned many times in our talks.In another memorandum564[19] dated June 26.

the dispositive portion of which reads: WHEREFORE. the appeal of complainant is hereby DISMISSED for lack of merit. 06-08-10650-2000). 2004. 2005.WHEREFORE. the dispositive portion of which reads: WHEREFORE. the complaint against respondents in the aboveentitled case is DISMISSED for lack of merit. 2004. V-000521-2000 (RAB Case No.572[27] which was denied by the NLRC in a Resolution573[28] dated November 10. Aggrieved. premises considered. The decision of the Labor Arbiter is AFFIRMED en toto. this petition is hereby given due course and the Resolution dated November 10. the case is REMANDED to the National Labor .571[26] Respondent filed a Motion for Reconsideration. 2004 and the Decision dated July 26.569[24] Respondent appealed to the NLRC. respondent filed a Petition for Certiorari574[29] before the CA. 2004 of the NLRC Fourth Division in NLRC Case No. premises considered. SO ORDERED. In a Decision570[25] dated July 26. premises considered. the CA rendered a Decision ruling in favor of respondent. On November 30. the NLRC dismissed the appeal. SO ORDERED. Accordingly. are hereby REVERSED and SET ASIDE.

Bacolod City. Regional Arbitration Branch No. the NLRC. and the CA which are diametrically opposed. (4) the judgment is based on a misapprehension of facts. VI. . are not disputed by the respondent. (5) the findings of fact are conflicting. and its findings are contrary to the admissions of both appellant and appellees. denied by the CA in a Resolution dated May 5.Relations Commission. The scope of our review in petitions filed under Rule 45 is limited to errors of law or jurisdiction. surmise and conjecture. (9) the facts set forth in the petition. for the proper determination of the petitioner‘s claims. 2006. there are instances in which factual issues may be resolved by this Court.578[33] In the present case. However. (7) the findings of fact of the CA are contrary to those of the trial court. to wit: (1) the conclusion is a finding grounded entirely on speculation. As a general rule. which was. and (10) the findings of fact of the CA are premised on the supposed absence of evidence and contradicted by the evidence on record. this Court is prompted to evaluate the findings of the LA. with petitioner raising a lone assignment of error to wit: WHETHER OR NOT THE COURT OF APPEALS (CEBU CITY) CAN REVERSE OR SET ASIDE THE FACTUAL AND LEGAL FINDINGS OF THE NLRC WHICH WAS BASED ON SUBSTANTIAL EVIDENCE WHEN THERE IS NO SHOWING OF PALPABLE ERROR OR THAT THE FINDINGS OF FACTS OF THE LABOR ARBITER IS CONTRARY TO THAT OF THE NLRC. as well as in the petitioner‘s main and reply briefs. SO ORDERED. (2) the inference made is manifestly mistaken. Hence. (6) the CA goes beyond the issues of the case. herein petition. (3) there is grave abuse of discretion.576[31] The petition is meritorious.575[30] Petitioners filed a Motion for Reconsideration.577[32] This Court leaves the evaluation of facts to the trial and appellate courts which are better equipped for this task. however. this Court does not entertain factual issues. (8) said findings of fact are conclusions without citation of specific evidence on which they are based.

and the action is not motivated by discrimination. the employee's transfer shall be tantamount to constructive dismissal. privileges and other benefits. this Court sustains the findings of the LA and the NLRC which are more in accord with the facts and law of the case. Should the employer fail to overcome this burden of proof. nor does it involve a demotion in rank or a diminution of his salaries. the LA explained that the reassignment of respondent was not a demotion as he will also be assigned as a District Sales Manager in Mindanao or in Metro Manila and that the notice of his transfer did not indicate that his emoluments will be reduced. and other privileges. . provided there is no demotion in rank or diminution of salary. On petitioners’ exercise of management prerogative Jurisprudence recognizes the exercise of management prerogative to transfer or assign employees from one office or area of operation to another. The LA shared petitioners‘ posture that the transfer of respondent was a valid exercise of a legitimate management prerogative to maximize business opportunities. growth and development of personnel and that the expertise of respondent was needed to build the company‘s business in Cagayan de Oro City which dismally performed in 1999. the LA mentioned that respondent was entitled to Relocation Benefits and Allowance in accordance with petitioners‘ Benefits Manual.581[36] In addition.Petitioners argue that the CA erred when it reversed the factual and legal findings of the NLRC which affirmed the decision of the LA. or prejudicial to the employee. or effected as a form of punishment or demotion without sufficient cause. Petitioners contend that it is well established that factual findings of administrative agencies and quasi-judicial bodies are accorded great respect and finality and are not to be disturbed on appeal unless patently erroneous. Moreover. made in bad faith.579[34] To determine the validity of the transfer of employees. the employer must show that the transfer is not unreasonable.580[35] Both the LA and the NLRC ruled that the reassignment of respondent was a valid exercise of petitioners‘ management prerogative. After a judicious examination of the records herein. inconvenient. benefits.

Besides.000. Complainant persistently refused instead of taking this opportunity as a challenge after all. Bacolod City and Manila is just one (1) hour travel by plane. The NLRC affirmed in toto the findings of the LA. Inc:586[41] . even if complainant may accept his new assignment in Cagayan de Oro or in Metro Manila. the LA pointed out that in respondent‘s contract of employment. What is contemplated here is the diminution of the salary of the complainant but not his wife. affirming those of the LA. if true. to be assigned to any work or workplace for such period as may be determined by the company and whenever the operations thereof require such assignment.585[40] As explained in Ignacio v.. thus: xxxx You agree. he agreed to be assigned to any work or workplace as may be determined by the company whenever the operations require such assignment. the LA ruled: The allegation of complainant that his income will be affected because his wife who is doing business in Bacolod City and earns P50.583[38] The rule in our jurisdiction is that findings of fact of the NLRC. his wife may still continue to do her business in Bacolod City. to wit: We do not see in the records any evidence to prove that the restructuring move of respondent company was done with ill motives or with malice and bad faith purposely to constructively terminate complainant‘s employment. are entitled to great weight and will not be disturbed if they are supported by substantial evidence. during the period of employment. should not be taken in consideration of his transfer. Coca-Cola Bottlers Phils.582[37] Lastly. He totally forgot the terms and conditions in his employment contract.On respondent‘s allegation that his family stands to lose income from his wife‘s business. Anyway. Such misinterpretation or misguided supposition by complainant is belied by the fact that respondent‘s officers had in several communications officially sent to complainant.584[39] Substantial evidence is an amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. The NLRC ruled that petitioners‘ restructuring move was a valid exercise of its management prerogative and authorized under the employment contract of respondent.00. expressly recognized complainant‘s expertise and capabilities as a top sales man and manager for which reason the respondent company needs his services and skills to energize the low-performing areas in order to maximize business opportunities and to afford complainant an opportunity for further growth and development. the nature of employment of a sales man or sales manager is that it is mobile or ambulant being always seeking for possible areas to market goods and services. stated in part.

Thus. It is the employer‘s prerogative. thus.587[42] Based on the foregoing. Undoubtedly. Considering the quality of his performance in his territory. based on its assessment and perception of its employee‘s qualifications. Public respondent had overlooked the fact that the reassignment of petitioner was arbitrary and unreasonable as the same was in contrast to the purposes espoused by private respondents. the CA should not have looked into the wisdom of a management prerogative. aptitudes. While it would be profitable to . disrupting his family‘s peaceful living.x x x Factual findings of the NLRC affirming those of the Labor Arbiter. petitioner is a complete alien to the territory and as no established contacts therein. all that is left is for the Court to stamp its affirmation and declare its finality. a perusal of the records shows that there was no overwhelming evidence to prove that petitioner was terminated for a just and valid cause. and are considered binding on this Court. both bodies being deemed to have acquired expertise in matters within their jurisdictions. There is no proof of arbitrariness or abuse of discretion in the process by which each body arrived at its own conclusions. he cannot be effective nor can he maximize profits. in effect. Furthermore. to wit: Discussing the issues jointly. when sufficiently supported by evidence on record. the private respondents cannot therefore reason out that they are merely exercising their management prerogative for it would be unreasonable since petitioner has not been amiss in his responsibilities. the CA should have deferred to such specialized agencies which are considered experts in matters within their jurisdictions. it is nevertheless not universal so as to foreclose another view on what may be a better business decision. and competence. what is objectionable with the CA decision is that in finding that the reassignment of respondent was arbitrary and unreasonable it had. to move them around in the various areas of its business operations in order to ascertain where they will function with maximum benefit to the company. imposed on petitioners its own opinion or judgment on what should have been a purely business decision. Moreover.589[44] As a matter of fact.588[43] In the absence of arbitrariness. it would undeniably cause undue inconvenience to herein petitioner who would have to relocate. are accorded respect if not finality. this Court rules that the CA had overstepped its legal mandate by reversing the findings of fact of the LA and the NLRC as it appears that both decisions were based on substantial evidence. As long as their decisions are devoid of any unfairness or arbitrariness in the process of their deduction from the evidence proffered by the parties. and with no additional monthly remuneration. while the CA‘s observations may be acceptable to some quarters. It cannot also contribute to his professional growth and development considering that he had already made a mark on his territory by virtue of his twenty-two (22) long years of valuable service.

there will be new and more challenges for respondent to face. Absent a definite finding that such exercise of prerogative was tainted with arbitrariness and unreasonableness. What the CA failed to recognize is that the very nature of a sales man is that it is mobile and ambulant. improving and developing a new market may even be more profitable than having respondent stay and serve his old market. considering he had not been remiss in his responsibilities. on the one hand. In respondent‘s Employment Application. one can even argue that for purposes of future promotions. Since respondent has been already assigned in the Western Visayas area for 22 years. one can argue for or against the pros and cons of transferring respondent to another territory. it bears to stress that respondent signed two documents signifying his assent to be assigned anywhere in the Philippines. one can even make a case and say that the transfer of respondent is also for his professional growth. one can also make a case that since respondent is one of petitioners‘ best district managers. In addition. The foregoing illustrates why it is dangerous for this Court and even the CA to look into the wisdom of a management prerogative. he is the right person to turn around and improve the sales numbers in Cagayan de Oro City. The rule is well settled that labor laws discourage interference with an employer's judgment in the conduct of his business. it must also protect the right of an employer to exercise what are clearly management prerogatives. ―Are you willing to be relocated anywhere in the Philippines?‖592[47] In addition. Certainly. In another territory. it may mean that his market knowledge is very limited. Even as the law is solicitous of the welfare of employees.594[49] . during the period of your employment. an area which in the past had been dismally performing. such exercise will be upheld.keep respondent in an area where he has established contacts and therefore the probability of him reaching and even surpassing his sales quota is high.590[45] In addition. in respondent‘s Contract of Employment. As long as the company's exercise of the same is in good faith to advance its interest and not for the purpose of defeating or circumventing the rights of employees under the laws or valid agreements. On this point. the CA should have left the same to petitioners‘ better judgment.591[46] he checked the box which asks. this Court cannot agree with the findings of the CA that the transfer of respondent was unreasonable. After all.593[48] item (8) reads: You agree. it would be better to promote a district manager who has experience in different markets. to be assigned to any work or workplace for such period as may be determined by the company and whenever the operations thereof require such assignment. In addition.

starting April 2000 he was already on indefinite leave without pay. he . 1999. v. By the very nature of his employment. and he was ready to assume to his regular assignment as District Sales Manager of Negros Occidental. 2000. a drug salesman or medical representative is expected to travel. Inc. complainant was still given by respondent Montilla another chance to think it over up to June 2. quoted hereunder. Bobadilla had no valid reason to disobey the order of transfer. 2000. 2000. 2000 up to May 11. Complainant was on sick leave since January 5. for about four (4) months and he already consumed his leave credits up to March 2000. the Court upheld the right of the drug company to transfer or reassign its employee in accordance with its operational demands and requirements.). More so if such reassignments are part of the employment contract. addressed to respondent Jane B. He had tacitly given his consent thereto when he acceded to the petitioners‘ policy of hiring sales staff who are willing to be assigned anywhere in the Philippines which is demanded by petitioners‘ business. It would be a poor drug corporation which cannot even assign its representatives or detail men to new markets calling for opening or expansion or to areas where the need for pushing its products is great. complainant already signified his refusal to accept his new assignment in Cagayan de Oro. And it is precisely because of respondent‘s good performance that petitioners want him to be reassigned to Cagayan de Oro City so that he could improve their business there. complainant. In Abbott Laboratories (Phils. 2000 to Ms. This is a strong indication that complainant really does not want to accept his new assignment either in Cagayan de Oro or in Metro Manila.Even if respondent has been performing his duties well it does not mean that petitioners‘ hands are tied up that they can no longer reassign respondent to another territory. and a ground to terminate his services pursuant to Article 282 of the Labor Code. By way of reply. Montilla. in his letter dated May 31. National Labor Relations Commission. complainant informed her that his doctors have already declared him fit for work as of May 16. also finds application in the instant case: Therefore. Montilla. to wit: As early as in December 27. xxxx In his letter dated May 17. Notwithstanding his adamant refusal to resume working to his new assignment in Metro Manila. The ruling of the Court therein. He should anticipate reassignment according to the demands of their business. which is clearly a defiance of the lawful order of his employer. the LA ruled that petitioners had valid grounds to terminate his employment. Hence. 2000.595[50] which involved a complaint filed by a medical representative against his employer drug company for illegal dismissal for allegedly terminating his employment when he refused to accept his reassignment to a new area.596[51] On the existence of grounds to dismiss respondent from the service Because of respondent‘s adamant refusal to be reassigned.

coupled by his adamant refusal to report to his new assignment. par. The series of chances given complainant to report for work. This Court has long stated that the objection to the transfer being grounded solely upon the personal inconvenience or hardship that will be caused to the employee by reason of the transfer is not a valid reason to disobey an order of transfer. is was only on July 19. (a) of the Labor Code. The refusal of complainant to accept his transfer of assignment is a clear willful disobedience of the lawful order of his employer and a ground to terminate his services under Article 282. x x x598[53] Based on the foregoing. this Court rules that the findings of the LA and the NLRC are supported by substantial evidence. The NLRC. the company would be constraint to terminate his services for being absent without official leave. the complainant had abandoned his work by reason of his being on AWOL as a consequence of vigorous objection to his transfer to either Cagayan de Oro or Metro Manila. 2000. The long period of absence of complainant without official leave from April to July 19. absent any bad faith or malice on the part of respondents. his dismissal was for just cause in accordance with Article 282(a)600[55] of the Labor Code. thus: Apparently. 2000 for him to report to Manila within five (5) working days from receipt of the same. when such transfer is valid. 2000 is more than sufficient ground to dismiss him. by his unjustified acts of refusing to be transferred either to Mindanao or Manila for personal reasons. but still complainant did not comply. 2000 to reconsider his position. 2000 that he is refusing his transfer gave complainant until June 16. as amended.599[54] Such being the case. the NLRC also ruled that respondent was guilty of insubordination. Clearly. Montilla sent complainant a final notice dated June 26. be attributed to both agencies. An employee who refuses to be transferred. notwithstanding the position taken by complainant in his letter dated May 31. The LA clearly outlined the steps taken by petitioners and the manner by which respondent was eventually dismissed. complainant. respondent cannot adamantly refuse to abide by the order of transfer without exposing himself to the risk of being dismissed. Ms. No abuse of discretion can. is a conclusive indication of willful disobedience of the lawful orders of his employer. therefore. respondent Montilla gave complainant a period of five (5) days from receipt thereof to report to Manila. explained why respondent was guilty of insubordination. 2000. Hence. with a warning that his failure to do so. .clearly expressed his disagreement to his transfer and would rather seek justice elsewhere in another forum. for its part. when the services of complainant was terminated by respondent company through its Human Resource Manager on the ground of absence without leave and insubordination pursuant to Article 282 of the Labor Code. In a letter dated June 5. But still the respondent company. Finally. is guilty of insubordination. has deliberately ignored and defied lawful orders of his employer.597[52] In addition. and the CA was certainly outside its mandate in reversing such findings.

No iota of evidence was presented that the reassignment of respondent was a demotion as he would still be a District Sales Manager in Cagayan de Oro City or in Metro Manila. the order must be reasonable and lawful. however. These procedural requirements have been mandatorily imposed to the employer to accord its employees the right to be heard. It is undeniable that the order given by the company to petitioner to transfer to a place where he has no connections. can be considered unreasonable and petitioner‘s actuation cannot be considered insubordination. in view of the fact that it was an error for it to substitute its own judgment and interfere with management prerogatives. I am disappointed that with the movement. 2000 letter to respondent that additional remuneration is never given to people who are reassigned. and with no clear additional remuneration. Furthermore. On the observance of due process The CA ruled that respondent was denied due process in the manner he was dismissed by petitioners. again. However.601[56] This Court cannot agree with the findings of the CA. An employee must be given notice and an ample opportunity. records reveal that respondent has been harping on the fact that no additional remuneration would be given to him with the transfer. If respondent feels that what he was given is less than what is given to all other district managers who were likewise reassigned. sufficiently known to the employee and in connection to his duties. ruled that respondent was not guilty of insubordination. the records show that petitioner was not guilty of such offense. For insubordination to exist. in view of the terms of the contract of employment and the general right of the parties. A written notice from the employer containing the causes for the dismissal must be given. to wit: As to the findings of insubordination. leaving his family behind. to wit: x x x Likewise. prior to dismissal to adequately prepare for his defense. while it is understandable that respondent does not want to relocate his family. this Court agrees with the NLRC when it observed that such inconvenience is considered an ―employment‖ or ―professional‖ hazard which forms part of the concessions an employee is deemed to have offered or sacrificed in the view of his acceptance of a position in sales. respondent did not present any evidence that additional remuneration were being given to other district managers who were reassigned to different locations.The CA. the finding that petitioner was afforded due process is bereft of any legal basis. The employee is then given ample opportunity to be heard and to defend . is inclined to believe the statement of Chu in her May 17. the onus is on him to prove such fact. Furthermore. he would be given relocation benefits in accordance with the Benefits Manual. this has never been done in the past and never a practice within the industry and the Philippines. to wit: Furthermore.602[57] Lastly. This Court. a refusal to obey does not constitute a just cause for the employee‘s discharge. therefore. Where an order or rule is not reasonable. or that such was the practice in the company. Failure of the employer to comply with such requirements renders its judgment of dismissal void and inexistent. This is an elementary rule in labor law that due process in dismissal cases contemplates the twin requisites of notice and hearing. you expect to be paid additional remuneration when in fact.

on the other hand. In fine. appraising him of his right to counsel if he desires. neither of them complied. Even if no hearing was conducted. the same is not fatal as only an ―ample opportunity to be heard‖ is what is required in order to satisfy the requirements of due process. The above procedure was not followed in the instant case and the series of communications and meetings cannot take the place and is therefore not sufficient to take the place of notice and hearing. citing there reasons therefore. procedural due process consists of the twin requirements of notice and hearing. The employer must furnish the employee with two written notices before the termination of employment can be effected: (1) the first apprises the employee of the particular acts or omissions for which his dismissal is sought. Yet. and (2) the second informs the employee of the employer‘s decision to dismiss him. In separate infraction reports. They were also required to submit their written explanation within 12 hours from receipt of the reports. Lastly.604[59] While no actual hearing was conducted before petitioners dismissed respondent. petitioners were given due process before they were dismissed. The requirement of a hearing is complied with as long as there was an opportunity to be heard. The requirement of a hearing. is given. It is a cardinal rule in our jurisdiction that the employer must furnish the employee with two written notices before the termination of employment can be effected: (1) the first apprises the employee of the particular acts or omissions for which his dismissal is sought.603[58] In termination proceedings of employees. the requirement of due process had been met since they were accorded a chance to explain their side of the controversy607[62] . is complied with as long as there was an opportunity to be heard. a written notice informing the employee of the decision of the employer. they should have requested for an extension of time. and not necessarily that an actual hearing was conducted. and not necessarily that an actual hearing was conducted.605[60] Accordingly.himself. to wit: [W]ell-settled is the dictum that the twin requirements of notice and hearing constitute the essential elements of due process in the dismissal of employees. Solid Development Corporation606[61] (Solid). where the validity of the dismissal of two employees was upheld notwithstanding that no hearing was conducted. petitioners were both apprised of the particular acts or omissions constituting the charges against them. notices of termination were also sent to them informing them of the basis of their dismissal. Had they found the 12-hour period too short. this Court is guided by Solid Development Corporation Workers Association v. Further. and (2) the second informs the employee of the employer‘s decision to dismiss him.

Equity has been defined as justice outside law. After receiving the memorandum. Like in Solid. warning him that the same would serve as a final notice for him to report to work in Manila within 5 working days from receipt thereof. petitioners sent another memorandum609[64] notifying respondent that they are terminating his services effective July 19. respondent could have requested for a conference with the assistance of counsel. he should have responded to the memorandum asking for more time. In conclusion. appears to this Court that respondent made no such requests. This Court. however. 2000. It is grounded on the precepts of conscience and not on any sanction of positive law. Even if no actual hearing was conducted. On July 13.In the case at bar. if he so desired. 2000. it bears to stress that the CA should not have disturbed the factual findings of the LA and the NLRC in the absence of arbitrariness or palpable error. being ethical rather than jural and belonging to the sphere of morals than of law. It. after he repeatedly refused to report to work despite due notice.611[66] An employee who is dismissed for cause is generally not entitled to any financial assistance. his dismissal was for cause and in accordance with the due process requirement of law. for equity finds no room for application where there is law.610[65] wherein separation pay has been granted to a validly dismissed employee after giving considerable weight to long years of employment. is not unmindful of previous rulings. 2000. consequently. Petitioners sent respondent a first notice in the form of a memorandum608[63] dated June 26. Equity considerations. had respondent found the time too short. however. The reassignment of respondent to another territory was a valid exercise of petitioners‘ management prerogative and. otherwise. this Court is of the opinion that petitioners had complied with the requirements of due process as all that the law requires is an ample opportunity to be heard.612[67] . provide an exception. however. his services would be terminated on the basis of AWOL. this Court finds that petitioners had complied with the requirements of law in effecting the dismissal of respondent.

or whatever other name it is called. The November 30. is equitable. In view of the above disquisitions. Where the reason for the valid dismissal is. the same is to this Court's mind not so reprehensible as to warrant complete disregard of his long years of service. petitioners are ORDERED to pay respondent separation pay by way of financial assistance equivalent to one-half (1/2) month pay for every year of service.R. premises considered. 2006 Resolution of the Court of Appeals in CA-G. DIOSDADO M. v. the petition is PARTIALLY GRANTED. It also appears that the same is respondent's first offense. National Labor Relations Commission. for example. WHEREFORE. thus: We hold 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. on the ground of social justice. habitual intoxication or an offense involving moral turpitude. 2005 Decision and May 5. equity considerations dictate that respondent's tenure be computed from 1978. 00386 are REVERSED and SET ASIDE. While it may be expected that petitioners will argue that respondent has only been in their service for four years since the merger of Pharmacia and Upjohn took place in 1996. SP No. the employer may not be required to give the dismissed employee separation pay.614[69] In the instant case. PERALTA Associate Justice . or financial assistance. like theft or illicit sexual relations with a fellow worker. SO ORDERED. the year when respondent started working for Upjohn. equivalent to one-half (1/2) month‘s pay for every year of service. this Court rules that an award to respondent of separation pay by way of financial assistance. Although respondent's actions constituted a valid ground to terminate his services.613[68] the Court laid down the guidelines in the grant of separation pay to a lawfully dismissed employee.In Philippine Long Distance Telephone Co.

WE CONCUR: ANTONIO T. Article VIII of the Constitution and the Division Chairperson‘s Attestation. I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court‘s Division. Chairperson CERTIFICATION Pursuant to Section 13. CARPIO Associate Justice Chairperson ANTONIO EDUARDO B. CARPIO Associate Justice Second Division. . ABAD Associate Justice JOSE CATRAL MENDOZA Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court‘s Division. ANTONIO T. NACHURA Associate Justice ROBERTO A.

.. Chairperson.R. J. SERRANO.. 2010 x ........... 187698 Present: CARPIO MORALES...... ... .. ABAD.. Petitioner... JR... G.... CORONA Chief Justice THIRD DIVISION RODOLFO J........* and VILLARAMA.. a bus company owned and operated by its co-respondent Severino Santos. Serrano was hired on September 28.. SEVERINO SANTOS TRANSIT and/or SEVERINO SANTOS. No.. 1992 as bus conductor by respondent Severino Santos Transit... JJ...versus BRION.. BERSAMIN... Respondents.. Promulgated: August 9.: Petitioner Rodolfo J.. J.-x DECISION CARPIO MORALES...RENATO C..

petitioner applied for optional retirement from the company whose representative advised him that he must first sign the already prepared Quitclaim before his retirement pay could be released. Vol. that the Quitclaim signed by petitioner barred his claim and. The law is explicit that ―one-half month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days service incentive leaves‖ unless the parties provide for broader inclusions. 7641. THIS IS THE MINIMUM. 2006. he was paid on commission basis.A. noting that the retirement differential pay amounted to only P1.‖ (The Labor Code with Comments and Cases. In arriving at such computation. however.P.431. five months were inadvertently not included because some index cards containing his records had been lost.‖ (under protest) after his signature. as a bus conductor. and 10% of the total monetary award as attorney‘s fees. its computation was correct since petitioner was not entitled to the 5-day SIL and pro-rated 13th month pay for. The company maintained. or particular agreement with the employee. ruled in favor of petitioner.45 as retirement pay differential. a fraction of at least six (6) months being considered as one whole year. indicating his protest to the amount of P75.After 14 years of service or on July 14. he signed the Quitclaim on which he wrote ―U. The retirement pay is equal to half-month‘s pay per year of service. or through a collective bargaining agreement.45 which he received. in any event. otherwise known as the Retirement Pay Law. Evidently. page 765. COMPUTATION OF RETIREMENT PAY A covered employee who retires pursuant to RA 7641 shall be entitled to retirement pay equivalent to at least one-half (1/12) month salary for every year of service. it was likewise decisively made clear that ―the law expanded the concept of ―one-half month salary‖ from the usual one-month salary divided by two‖. the law expanded the concept of ―one-half month salary‖ from the usual one-month salary divided by two. By Decision616[2] of February 15. But ―half-month‘s pay‖ is ―expanded‖ because it means not just the salary for 15 days but also one-twelfth of the 13th-month pay and the cash value of five-day service incentive leave. computed by the company at 15 days per year of service.15. . the Labor Arbiter ratiocinated: In the same Labor Advisory on Retirement Pay Law. Azcunea. alleging that the company erred in its computation since under Republic Act No.5 days per year of service to include the cash equivalent of the 5-day service incentive leave (SIL) and 1/12 of the 13th month pay which the company did not. 2007.277. awarding him P116. Labor Arbiter Cresencio Ramos. The retirement pay package can be improved upon by voluntary company policy. As petitioner‘s request to first go over the computation of his retirement pay was denied. II.135. C. to wit: B. Respondents. his retirement pay should have been computed at 22. Jr. Fifth Edition 2004). explained that in the computation of petitioner‘s retirement pay. Petitioner soon after filed a complaint615[1] before the Labor Arbiter.

Instead.90 – P75. inasmuch as complainant already received P75.35. while respondents question complainant‘s use of P700. he appealed to the Court of Appeals. should be respected. thus.412. he was excluded from the coverage of the laws on 13 th month pay and SIL pay. P607. . the next critical issue that needs discernment is the determination of what is a fair and rational amount of daily earning of complainant to be used in the computation of his retirement pay. however it does not help their defense that they did not present a single Conductor‘s Trip Report to contradict the claim of complainant. Thereafter. On the other haNd.5 days pay per year of service is the correct formula in arriving at the complete retirement pay of complainant and inasmuch as complainant‘s daily earning is based on commission earned in a day.30) and we divided it by twelve (12) to arrive at complainant‘s average monthly earning of P15.66 (average daily income) x 22. to arrive at his average daily income of P607. respondents adduced a handwritten summary of complainant‘s monthly income from 1993 until June 2006. Petitioner‘s motion for reconsideration having been denied by Resolution619[5] of June 27.66. the 1/12 of the 13th month pay and the 5-day SIL should not be factored in the computation of his retirement pay. the factor commonly used in determining the regular working days in a month. 2008.00 (daily income) as basis in determining the latter‘s correct retirement pay. While complainant endeavored to substantiate his claim that he earned average daily commission of P700.591. simply representative copies.277. v. just and equitable for both parties to rely on the summary of monthly income provided by respondent. hence. It must be noted also that complainant did not contest the amounts stated on the summary of his monthly income as reported by respondents. however. it merely holding that it was based on substantial evidence.618[4] the NLRC held that since petitioner was paid on purely commission basis.28.00.799.45).672. the retirement differential pay due him is P116.277. having established that 22.135.799.90 (COMPLETE RETIREMENT PAY). ordered respondents to pay retirement differential in the amount of P2.5 days = P13.45. Inc.28 is divided by twenty-six (26) days. Finally. we find it logical. Citing R & E Transport. 2009.Thus.365. Given the above considerations. which varies each day. (underscoring partly in the original and partly supplied) The National Labor Relations Commission (NLRC) to which respondents appealed reversed the Labor Arbiter‘s ruling and dismissed petitioner‘s complaint by Decision617[3] dated April 23.45 (P191. the documents he presented are not complete. By the assailed Decision620[6] of February 11. However. therefore unreliable. It. the appellate court affirmed the NLRC‘s ruling. the average monthly of P15. 2008.35 x 14 (length of service) = P191. and most importantly that complainant did not dispute the figures stated in that document. Latag. however. we added complainant‘s monthly income from June 2005 until June 2006 or the last twelve months and we arrived at P189. hence.412.

Petitioner‘s motion for reconsideration was denied. The pertinent provision of said law reads: Section 1. the present petition for review on certiorari. General Statement on Coverage. service and agricultural establishments or operations employing not more than (10) employees or workers are exempted from the coverage of this provision. the Implementing Rules of said law provide: RULE II Retirement Benefits SECTION 1. The petition is meritorious. otherwise known as the Labor Code of the Philippines. Unless the parties provide for broader inclusions. 442. SECTION 2 Exemptions. 1993. the term one-half (1/2) month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves.2 Domestic helpers and persons in the personal service of another. 7641 which took effect on January 7. As used herein. the term ―Act‖ shall refer to Republic Act No. designation or status and irrespective of the method by which their wages are paid. is hereby amended to read as follows: xxxx In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment. who has served at least five (5) years in the said establishment. — This Rule shall apply to all employees in the private sector. including Government-owned and/or controlled corporations. regardless of their position. Republic Act No. 1992 amended Article 287 of the Labor Code by providing for retirement pay to qualified private sector employees in the absence of any retirement plan in the establishment. a fraction of at least six (6) months being considered as one whole year. Retail. but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age. an employee upon reaching the age of sixty (60) years or more. Article 287 of Presidential Decree No. hence. 2. 7641 which was enacted on December 9. may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service.1 Employees of the National Government and its political subdivisions. — This Rule shall not apply to the following employees: 2. except to those specifically exempted under Section 2 hereof. x x x x (emphasis and underscoring supplied) Further. if they are covered by the Civil Service Law and its regulations. as amended. .

petitioner worked for 14 years for the bus company which did not adopt any retirement scheme. taxi drivers do not receive fixed wages. as well as on retirement. In said case. — For the purpose of determining the minimum retirement pay due an employee under this Rule. an employee who retires pursuant to the Act shall be entitled to retirement pay equivalent to at least one-half (―) month salary for every year of service. 851 or the SIL Law.D. In practice. service and agricultural establishment or operations regularly employing not more than ten (10) employees. he falls within the coverage of R. x x x x (emphasis supplied) Admittedly. hence. is erroneous. 5. piece of commission basis. whether such payments are fixed or ascertained on a time. or other method of calculating the same. however. The affirmance by the appellate court of the reliance by the NLRC on R & E Transport.2.621[7] Conductors. profit-sharing payments and other monetary benefits which are not considered as part of or integrated into the regular salary of the employees. The term does not include cost of living allowances. 5. task. lodging or other facilities customarily furnished by the employer to his employees. the exclusion from its coverage of workers who are paid on a purely commission basis is only with respect to field personnel. Even if petitioner as bus conductor was paid on commission basis then. the term “salary” includes all remunerations paid by an employer to his employees for services rendered during normal working days and hours. and includes the fair and reasonable value. As thus correctly ruled by the Labor Arbiter.1 In the absence of an applicable agreement or retirement plan.3 Employees of retail. on the other hand. are paid a certain percentage of the bus‘ earnings for the day.2 Components of One-half (―) Month Salary. of applying the law on SIL. a fraction of at least six (6) months being considered as one whole year. (b) The cash equivalent of not more than five (5) days of service incentive leave. 7641 and its implementing rules. xxxx SECTION 5 Retirement Benefits. As used in this sub-section. petitioner‘s retirement pay should include the cash equivalent of the 5-day SIL and 1/12 of the 13th month pay. the term ―one-half month salary‖ shall include all of the following: (a) Fifteen (15) days salary of the employee based on his latest salary rate. of food. For purposes. as determined by the Secretary of Labor and Employment. The more recent case of Auto Bus . (c) One-twelfth of the 13th month pay due the employee. (d) All other benefits that the employer and employee may agree upon that should be included in the computation of the employee‘s retirement pay. the Court notes that there is a difference between drivers paid under the ―boundary system‖ and conductors who are paid on commission basis. Inc. the Court held that a taxi driver paid according to the ―boundary system‖ is not entitled to the 13th month and the SIL pay. It bears emphasis that under P. As used herein.A. They retain only those sums in excess of the ―boundary‖ or fee they pay to the owners or operators of the vehicles. his retirement pay should be computed on the sole basis of his salary.

Hence. According to the Implementing Rules. ―field personnel” shall refer to nonagricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. v.Transport Systems. the petition is GRANTED. x x x x (emphasis. employees engaged on task or contract basis or paid on purely commission basis are not automatically exempted from the grant of service incentive leave. italics and underscoring supplied) WHEREFORE. they fall under the classification of field personnel. Advisory Opinion to Philippine Technical-Clerical Commercial Employees Association which states that: As a general rule. This definition is further elaborated in the Bureau of Working Conditions (BWC). CONCHITA CARPIO MORALES . Rather.” The phrase ―other employees whose performance is unsupervised by the employer‖ must not be understood as a separate classification of employees to which service incentive leave shall not be granted. 2009 and Resolution of April 28. 2007 is REINSTATED. Service Incentive Leave shall not apply to employees classified as “field personnel. The Court of Appeals Decision of February 11.‖ The same is true with respect to the phrase “those who are engaged on task or contract basis. 2009 are REVERSED and SET ASIDE and the Labor Arbiter‘s Decision dated February 15..” applying the rule on ejusdem generis that general and unlimited terms are restrained and limited by the particular terms that they follow. Bautista622[8] clarifies that an employee who is paid on purely commission basis is entitled to SIL: A careful perusal of said provisions of law will result in the conclusion that the grant of service incentive leave has been delimited by the Implementing Rules and Regulations of the Labor Code to apply only to those employees not explicitly excluded by Section 1 of Rule V. Inc. they are paid specific amount for rendering specific service or performing specific work. xxxx According to Article 82 of the Labor Code. employees including drivers cannot be said to be field personnel despite the fact that they are performing work away from the principal office of the employee. If required to be at specific places at specific times. unless.” Said phrase should be related with “field personnel. SO ORDERED. [field personnel] are those whose performance of their job/service is not supervised by the employer or his representative. it serves as an amplification of the interpretation of the definition of field personnel under the Labor Code as those ―whose actual hours of work in the field cannot be determined with reasonable certainty. purely commission basis. hence. the workplace being away from the principal office and whose hours and days of work cannot be determined with reasonable certainty.

Associate Justice .

BRION Associate Justice LUCAS P. . VILLARAMA. JR.WE CONCUR: ARTURO D. BERSAMIN Associate Justice ROBERTO A. Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court‘s Division. ABAD Associate Justice MARTIN S.

CONCHITA CARPIO MORALES Associate Justice Chairperson .

No.. and the Division Chairperson‘s Attestation. Petitioner.CERTIFICATION Pursuant to Section 13. Chairperson . Article VIII of the Constitution. I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court‘s Division.R. G.. INC. J. CORONA Chief Justice Republic of the Philippines Supreme Court Manila THIRD DIVISION PHIMCO INDUSTRIES. 170830 Present: versus CARPIO MORALES. RENATO C.

MAXIMO PEDRO. FLORENCIO LIBONGCOGON. per Special Order No. and VILLARAMA. REYNALDO GANITANO. Promulgated: August 11. NATHANIELA DIMACULANGAN. DANILO BANAAG. TEOFILO MANALILI. NICANOR ILAGAN. **** *** ** * BRION. Known as ―Francisco Dalisay. ANGELITO DEJAN. LEONIDA CATALAN. in view of the retirement of Chief Justice Reynato S. RODOLFO MOJICO. ROMEO CARAMANZA. Spelled as ―Angelito Dizon‖ in other p ** *** **** ***** .‖ in other parts of the record.PHIMCO INDUSTRIES LABOR ASSOCIATION (PILA). ****** NEMESIO MAMONONG. Spelled as ―Alberto Basconillo‖ and ―Alberto Basconilo‖ in other parts of the record. RICARDO SACRISTAN. ABAD. ALFREDO PEARSON. ABRAHAM CADAY.. Jr. JR. in their capacity as officers of PILA. MARIO PEREA. and RAMON FALCIS. ALBERTO BASCONCILLO. 843 dated May 17. 2010 ***** PHILIP GARCES. FRANCISCO DALISAY. ALFONSO CLAUDIO. Spelled as ―Angelito Balosa‖ in other parts of the record. and ANGELITA BALOSA. BERSAMIN. Puno. * Spelled as ―Nathaniel Dimaculangan‖ in other parts of the record. JJ. and ERLINDA VAZQUEZ. ******** ******* RENATO  Designated additional Member of the Third Division. 2010.

GERARDO FELICIANO. FELIPE VILLAREAL. TERESA PERMOCILLO. DANILO BALTAZAR. as members of PILA. ********* REYNALDO CAMARIN. ********** ANGELITO DE *********** GUZMAN. HILARIO PEÑA. RAMON MACAALAY. GONZALO MANALILI. SR. ALEX IBAÑEZ. RODOLFO SANIDAD. RAUL MICIANO. RAFAEL STA.RAMOS. BERNARDO CUADRA. x-----------------------------------------------------------------------------------------x DECISION BRION. JULIAN TUGUIN and AMELIA ZAMORA.. BENJAMIN JUAN.: . MARIANO ROSALES. ROGER CABER. ARSENIO ZAMORA. ANA. RODOLFO TOLENTINO. PABLO SARMIENTO. Respondents. J. ************ ERNESTO RIO.

On June 23. are briefly summarized below. and the resolution. PHIMCO filed with the NLRC a petition for preliminary injunction and temporary restraining order (TRO). Thirty-five (35) days later. or on April 21. Felix Manalo St.R. 1994. . When the last collective bargaining agreement was about to expire on December 31. Manila. the thirty-six (36) union members were informed of their dismissal. directing them to explain within twenty-four (24) hours why they should not be dismissed for the illegal acts they committed during the strike. mainly due to disagreements on salary increases and benefits. intimidation and coercion – the ingress and egress of non-striking employees into and from the company premises. 625[3] dated February 10. the union conducted a strike vote. 1995. with principal address at Phimco Compound. SP No. 1995.. or on June 26. and the decision. 1995. dated December 12. PHIMCO is a corporation engaged in the production of matches. 1995. PHIMCO and PILA negotiated for its renewal. The assailed CA decision dismissed PHIMCO’s petition for certiorari that challenged the resolution. 1995. Inc. 1998. Sta. to enjoin the strikers from preventing – through force. Seven (7) days later. 1995. or on March 16. Ana. PILA staged a strike. a majority of the union members voted for a strike as its response to the bargaining impasse. FACTUAL BACKGROUND The facts of the case. dated February 20. the assailed CA resolution denied PHIMCO’s subsequent motion for reconsideration. (PHIMCO). 1995. PILA filed the strike vote results with the NCMB. PHIMCO sent a letter to thirty-six (36) union members. 2004. 1995. Respondent Phimco Industries Labor Association (PILA) is the duly authorized bargaining representative of PHIMCO’s daily-paid workers. 2005. of the Court of Appeals (CA) in CA-G. 2002. gathered from the records. On March 9. or until June 5. of the National Labor Relations Commission (NLRC). the NLRC issued an ex-parte TRO. On May 15. dated December 29. The negotiation resulted in a deadlock on economic issues. 70336. 624[2] 623[1] filed by petitioner Phimco Industries.Before us is the petition for review on certiorari seeking to reverse and set aside the decision. The 47 individually named respondents are PILA officers and members. PILA filed with the National Conciliation and Mediation Board (NCMB) a Notice of Strike on the ground of the bargaining deadlock. Three days later. On May 3. 1995. effective for a period of twenty (20) days. On March 17.

He observed that it was not enough that the picket of the strikers was a moving picket. They countered that they complied with all the legal requirements for the staging of the strike. On August 28. they put up no barricade. and ordered all the striking employees (except those who were handed termination papers on June 26. The case was docketed as NLRC NCR Case No. 00-08-06031-95. On March 5. . PILA officers and members. with a prayer for the dismissal of PILA officers and members who knowingly participated in the illegal strike. and raffled to LA Jovencio Ll. PILA filed a complaint for unfair labor practice and illegal dismissal (illegal dismissal case) with the NLRC. and raffled to Labor Arbiter (LA) Pablo C. 00-07-04705-95. and conducted their strike peacefully. 1998. have lost their employment status. and relied instead on the respondents’ evidence showing that the union conducted a peaceful moving picket. On March 14. Jr. On July 7. 1995) to return to work within twenty-four (24) hours from receipt of the order. 628[6] The NLRC did not give weight to PHIMCO’s evidence. then Acting Labor Secretary Jose S. 626[4] On the same day. Brillantes assumed jurisdiction over the labor dispute. since the strikers should allow the free passage to the entrance and exit points of the company premises. without incident. 1998. LA Mayor decided the case on February 4. under the same terms and conditions prevailing prior to the strike. The Secretary ordered PHIMCO to accept the striking employees. PHIMCO filed a Petition to Declare the Strike Illegal (illegal strike case) with the NLRC. PHIMCO claimed that the strikers prevented ingress to and egress from the PHIMCO compound. THE NLRC RULING The NLRC decided the appeal on December 29. LA Mayor declared that the respondent employees.627[5] and found the strike illegal. Thus. 1998.On July 6. PILA and its officers and members appealed LA Mayor’s decision to the NLRC. The case was docketed as NLRC NCR Case No. 1995. 1995. Mayor. 1995. and set aside LA Mayor’s decision. thereby paralyzing PHIMCO’s operations. the respondents filed their Position Paper in the illegal strike case. Espiritu. the respondents committed prohibited acts during the strike by blocking the ingress to and egress from PHIMCO’s premises and preventing the non-striking employees from reporting for work. in an orderly and lawful manner. 1996. PILA ended its strike.

and 10% of the monetary award as attorney’s fees. LA Espiritu decided the union’s illegal dismissal case on March 2. PHIMCO appealed LA Espiritu’s decision to the NLRC. plus separation pay at one (1) month salary per year of service in lieu of reinstatement. the CA dismissed PHIMCO’s petition for certiorari. not stationary. the NLRC observed that the striking employees were not given ample opportunity to explain their side after receipt of the June 23. 1999. On March 14. 2002. PHIMCO elevated its case to the CA through a petition for certiorari under Rule 65 of the Rules of Court. 1999. 631[9] THE CA RULING In a Decision 632[10] promulgated on February 10. that the picket was peaceful and that PHIMCO’s evidence failed to show that . 2002. With respect to the illegal dismissal charge. The NLRC acted favorably on the motion and consolidated the two (2) cases in its Order dated August 5. the NLRC affirmed the Decision of LA Espiritu with respect to the payment of backwages until the promulgation of the decision. PHIMCO moved for the consolidation of the two (2) cases. 1999. The NLRC found that the picket conducted by the striking employees was not an illegal blockade and did not obstruct the points of entry to and exit from the company’s premises. The CA noted that the NLRC findings. 629[7] In a parallel development. PHIMCO filed a motion for reconsideration in the illegal strike case. It ruled out reinstatement because of the damages sustained by the company brought about by the strike. 630[8] It dismissed the appeal of the illegal dismissal case. 1995 letter. without waiting for the result of its motion for reconsideration. the pictures submitted by the respondents revealed that the picket was moving. 2002. On February 20. 2004. the NLRC rendered its Decision in the consolidated cases. Pending the resolution of PHIMCO’s motion for reconsideration in the illegal strike case and the appeal of the illegal dismissal case.On January 28. PHIMCO filed a motion for reconsideration of the consolidated decision. and denied PHIMCO’s motion for reconsideration in the illegal strike case. He ruled the respondents’ dismissal as illegal. ruling totally in the union’s favor. and ordered their reinstatement with payment of backwages. On April 26. Thus.

the company has not shown any such compelling reason as the picket was peaceful and uneventful.the picket constituted an illegal blockade or that it obstructed the points of entry to and exit from the company premises. were supported by substantial evidence. coercion. such as blocking the ingress and egress of the company premises. submit that the issues raised in this case are factual in nature that we cannot generally touch in a petition for review. In ruling for legal correctness. unless compelling reasons exist. in contrast with the review for jurisdictional error that we undertake under Rule 65. PHIMCO came to us through the present petition after the CA denied reconsideration. we have to view the CA decision in the same context that the petition for certiorari it ruled upon was presented to it. we consider the correctness of the assailed CA decision. Furthermore. Transmed Manila Corporation. threat. 634[12] 633[11] PHIMCO’s motion for THE PETITION The petitioner argues that the strike was illegal because the respondents committed the prohibited acts under Article 264(e) of the Labor Code. THE CASE FOR THE RESPONDENTS The respondents. Rule 45 limits us to the review of questions of law raised against the assailed CA decision. we have to examine the CA decision from the prism of whether it correctly determined the presence or absence of grave abuse of discretion in the NLRC decision . THE ISSUE In Montoya v. and intimidation. as established by the evidence on record. thus: In a Rule 45 review. and no human barricade blocked the company premises. on the other hand. 635[13] we laid down the basic approach that should be followed in the review of CA decisions in labor cases.

which requires that: (a) a notice of strike be filed with the Department of Labor and Employment (DOLE) 30 days before the intended date thereof. or 15 days in case of unfair labor practice. least of all. it must focus on legitimate union interests. This is the approach that should be basic in a Rule 45 review of a CA ruling in a labor case.before it. a strike should not be antithetical to public welfare. of the NLRC decision challenged before it. In question form. the law has provided limitations on the right to strike. and must be pursued within legal bounds. Procedurally. The right to strike as a means of attaining social justice is never meant to oppress or destroy anyone. the employer. 636[14] In light of these effects. we have to be keenly aware that the CA undertook a Rule 65 review. In other words. and (c) a notice be given to the DOLE of the results of the voting at least seven days before the intended strike. Because it is premised on the concept of economic war between labor and management. obtained by secret ballot in a meeting called for that purpose. and one that must also necessarily affect management and its members. 637[15] Since strikes affect not only the relationship between labor and management but also the general peace and progress of the community. . it must comply with Article 263 638[16] of the Labor Code. the decision to declare a strike must be exercised responsibly and must always rest on rational basis. the core issue in the present case is whether the CA correctly ruled that the NLRC did not act with grave abuse of discretion in ruling that the union’s strike was legal. the question to ask is: Did the CA correctly determine whether the NLRC committed grave abuse of discretion in ruling on the case? In this light. not on the basis of whether the NLRC decision on the merits of the case was correct. Requisites of a valid strike A strike is the most powerful weapon of workers in their struggle with management in the course of setting their terms and conditions of employment. for a strike to be valid. and unswayed by the tempers and tantrums of hot heads. OUR RULING We find the petition partly meritorious. it is a weapon that can either breathe life to or destroy the union and its members. To be legitimate. (b) a strike vote be approved by a majority of the total union membership in the bargaining unit concerned. free from emotionalism. not a review on appeal.

Strike may be illegal for commission of prohibited acts Despite the validity of the purpose of a strike and compliance with the procedural requirements. . leading them to inordinately incorrect conclusions. While the strike undisputably had not been marred by actual violence and patent intimidation. 640[18] In the present case. 639[17] The 15 to 30-day cooling-off period is designed to afford the parties the opportunity to amicably resolve the dispute with the assistance of the NCMB conciliator/mediator. 1995. while the seven-day strike ban is intended to give the DOLE an opportunity to verify whether the projected strike really carries the imprimatur of the majority of the union members. a strike may still be held illegal where the means employed are illegal. Based on our examination of the evidence which the LA viewed differently from the NLRC and the CA. we find the PILA strike illegal. a strike notice was filed on March 9. the picketers violated Article 264(e) of the Labor Code. a strike vote was reached on March 16. the respondents fully satisfied the legal procedural requirements. or obstruct public thoroughfares. 1995. both factual and legal.These requirements are mandatory. and the union’s failure to comply renders the strike illegal. 1995. 1995. In this manner. notification of the strike vote was filed with the DOLE on March 17. thus preventing non-striking employees and company vehicles from entering the PHIMCO compound. coercion or intimidation or obstruct the free ingress to or egress from the employer's premises for lawful purposes. We intervene and rule even on the evidentiary and factual issues of this case as both the NLRC and the CA grossly misread the evidence. and the actual strike was launched only on April 25. 641[19] The means become illegal when they come within the prohibitions under Article 264(e) of the Labor Code which provides: No person engaged in picketing shall commit any act of violence. the picketing that respondent PILA officers and members undertook as part of their strike activities effectively blocked the free ingress to and egress from PHIMCO’s premises.

identifying Erlinda Vazquez. Romeo Caramanza. 5. together with non-striking PHIMCO employees. Teresa Permocillo. Arsenio Zamora. Nathaniela R. Ramon Macaalay. Nemesio Mamonong. Folder 2. Maximo Pedro. Rodolfo Mojico.643[21] 2. Alberto Basconcillo. . stating that he was one of the employees prevented by the strikers from entering the PHIMCO premises. and Ramon Falcis as PILA officers. reporting for work but being refused entry by strikers Teofilo Manalili. with pictures taken on May 30. Rodolfo Sanidad. Angelito Dejan. Abraham Caday. Reynaldo Ganitano.647[25] 6. Renato Ramos. Ricardo Sacristan. Julian Tuguin.645[23] 4. Bernando Cuadra. Amelia Zamora. containing pictures taken during the strike identifying and showing Leonida Catalan. Sr. and Francisco Dalisay as the persons preventing Cinco and his group from entering the company premises. showing Cinco. Alberto Basconcillo. showing that the respondents prevented free ingress to and egress from the company premises.The Evidence We gather from the case record the following pieces of relevant evidence adduced in the compulsory arbitration proceedings. Pictures taken during the strike. Affidavit of Cinco identifying other members of PILA. Maximo Pedro.. Affidavit of PHIMCO Human Resources Manager Francis Ferdinand Cinco. Reynaldo Ganitano. Leonida Catalan.644[22] 3. Dimaculangan. Nathaniela Dimaculangan.642[20] For the Company 1. Affidavit of Cinco. 1995.646[24] Folder 1. Benjamin Juan. Gerardo Feliciano. Nicanor Ilagan. Ernesto Rio.

Aguilar and Cinco.Mariano Rosales. Pictures taken by Aguilar during the strike. Joint affidavit of Orlando Marfil and Rodolfo Digo. with pictures taken on May 30. showing that the respondents blocked ingress to and egress from the company premises. as well as those of PILA officers Maximo Pedro and Leonida Catalan. Angelito Balosa and Philip Garces who blocked the company gate. Folder 3.655[33] . showing the respondents denying free ingress to and egress from the company premises. Angelito de Guzman.652[30] 11. 12. Affidavit of Leonida Catalan. Folder 4. identifying the pictures they took during the strike.649[27] 8. stating that the strike/picket was conducted peacefully. Testimonies of PHIMCO employees Rodolfo Eva. with pictures taken during the strike. and the strike/picket was conducted peacefully with no incident of any illegality.653[31] and.651[29] 10.648[26] 7. showing that non-striking employees failed to enter the company premises as a result of the respondents’ refusal to let them in. 1995. strike. the picket was always moving with no acts of illegality having been committed during the strike. Affidavit of Maximo Pedro. stating that the PILA strike complied with all the legal requirements.654[32] 2. For the Respondents 1.650[28] 9. Roger Caber. showing non-striking employees being refused entry Affidavit of Joaquin Aguilar stating that the pictures presented by Cinco were taken during the by the respondents.

and the strikers conducted themselves in a peaceful manner. Jr.660[38] the NLRC declared that “the string of proofs” the company presented was “overwhelmingly counterbalanced by the numerous pieces of evidence adduced by respondents x x x all depicting a common story that respondents put up a peaceful moving picket. Clearance issued by Punong Barangay Mario O.659[37] and. picketing focuses on publicizing the labor dispute and its incidents to inform the public of what is happening in the company struck against. and did not commit any illegal acts x x x specifically obstructing the ingress to and egress from the company premises*. A picket simply . 1995 was conducted in an orderly manner with no complaints filed. that the strike complied with all the requirements for a lawful strike.657[35] 5.+”661[39] We disagree with this finding as the purported “peaceful moving picket” upon which the NLRC resolution was anchored was not an innocuous picket. dela Rosa and Barangay Secretary Pascual Gesmundo. Certification of Rev. In its resolution of December 29. Testimonies at the compulsory arbitration proceedings. Certification of Priest-In-Charge Angelito Fausto of the Philippine Independent Church in Punta. While a strike focuses on stoppage of work. Father Erick Adeviso of Dambanang Bayan Parish Church that the strike was peaceful and without any untoward incident. Certification of Police Station Commander Bienvenido de los Reyes that during the strike there was no report of any untoward incident. 7. that the strike from April 21 to July 7. did effectively obstruct the entry and exit points of the company premises on various occasions.3.656[34] 4. To strike is to withhold or to stop work by the concerted action of employees as a result of an industrial or labor dispute. under the evidence presented.658[36] 6. contrary to what the NLRC said it was.662[40] The work stoppage may be accompanied by picketing by the striking employees outside of the company compound. the picket. 1998. Santa Ana.

PHIMCO employees Rodolfo Eva and Joaquin Aguilar. you mentioned that it was refused entry. 1995. were you allowed entry by the strikers? A: We made several attempts to enter the compound. Protected picketing does not extend to blocking ingress to and egress from the company premises. 1995. we tried to enter the PHIMCO compound but we were not allowed entry.663[41] It is a strike activity separate and different from the actual stoppage of work. Why was this (sic) it refused entry? WITNESS: Because at that time. usually accompanied by the display of placards and other signs making known the facts involved in a labor dispute. In this regard.665[43] these rights are by no means absolute. there was a moving picket at the gate that is why the bus was not able to enter. While the right of employees to publicize their dispute falls within the protection of freedom of expression664[42] and the right to peaceably assemble to air grievances.means to march to and from the employer’s premises.666[44] That the picket was moving. I remember on May 7. which was issued by the NLRC. 667[45] x x xx Q: Despite this TRO. when a coaster or bus attempted to enter PHIMCO compound. REYES: this incident on May 22. and the company’s Human Resources Manager Francis Ferdinand Cinco testified during the compulsory arbitration hearings: ATTY. . was peaceful and was not attended by actual violence may not free it from taints of illegality if the picket effectively blocked entry to and exit from the company premises.

CHUA: Mr. with several of the monthly paid employees who tried to enter the PHIMCO compound during the strike? MR. We tried to enter but we were not allowed by the strikers.Q: Aside from May 27. sir. 668[46] x x x x ARBITER MAYOR: How did the strikers block the ingress of the company? A: They hold around. 1995. and because of that moving picket conducted by the strikers. witness. no employees or vehicles can come in or go out of the premises? A: None. 670[48] These accounts were confirmed by the admissions of respondent PILA officers Maximo Pedro and Leonida Catalan that the strikers prevented non-striking employees from entering the company premises. joining hands. . sir. According to these union officers: ATTY. I recall I was riding with our Production Manager with the Pick-up. were there any other instances wherein you were not allowed entry at PHIMCO compound? A: On May 29. PEDRO: Yes. do you recall an incident when a group of managers of PHIMCO. 669[47] x x x x ARBITER MAYOR: Reform the question. moving picket.

CHUA: the managers and the employees were not able to enter the premises? MS.ATTY. 672[50] x x x x ATTY. CATALAN: Yes. and instead proceeded with your moving picket? MR. you still did not give way. PEDRO: No. Yes or No. CHUA: In short. these people were not able to enter the premises of PHIMCO. PEDRO: Yes. CHUA: Can you tell us if these (sic) group of managers headed by Francis Cinco entered the compound of PHIMCO on that day. 671[49] x x x x ATTY. ATTY. even if Major Delos Reyes instructed you to give way so as to allow the employees and managers to enter the premises. sir. sir. MR. PEDRO: Yes. They were not able to enter. CHUA: Despite having been escorted by police Delos Reyes. sir. ATTY. sir. CHUA: Madam witness. when they tried to enter? MR. CATALAN: No sir. 673[51] . you and your co-employees did not give way? MS.

in fact. “all building up a scenario that the moving picket put up by [the] respondents obstructed the ingress to and egress from the company premises*. or were moving in circles. as described by Aguilar.676[54] With a virtual human blockade and real physical obstructions (benches and makeshift structures both outside and inside the gates).The NLRC resolution itself noted the above testimonial evidence.680[58] . as shown by photographs. for all intents and purposes.679[57] This. on closer examination. as an obstruction to the company’s points of ingress and egress. as shown by the photographs. aside from non-strikers who wished to report for work. it was maintained so close to the company gates that it virtually constituted an obstruction. by itself. it could be seen that the respondents were conducting the picket right at the company gates. picketing is not peaceful where the sidewalk or entrance to a place of business is obstructed by picketers parading around in a circle or lying on the sidewalk. especially when the strikers joined hands. The blockade went to the point of causing the build up of traffic in the immediate vicinity of the strike area. While the picket was moving. In fact.”678[56] Notably. Pickets may not aggressively interfere with the right of peaceful ingress to and egress from the employer’s shop or obstruct public thoroughfares.677[55] it was pure conjecture on the part of the NLRC to say that “*t+he non-strikers and their vehicles were x x x free to get in and out of the company compound undisturbed by the picket line. Contrary to the NLRC characterization that it was a “peaceful moving picket. directly in front of the open wing of the company gates. blocked the free ingress to and egress from the company premises. capturing the strike in its various stages and showing how the strikers actually conducted the picket. hand-to-shoulder. the testimonies adduced were validated by the photographs taken of the strike area.” it stood.+”674[52] yet it ignored the clear import of the testimonies as to the true nature of the picket. that. with strikers standing on top. renders the picket a prohibited activity. company vehicles likewise could not enter and get out of the factory because of the picket and the physical obstructions the respondents installed. clearly obstructing the entry and exit points of the company compound. Significantly.675[53] The obstructive nature of the picket was aggravated by the placement of benches.

684[62] According to American jurisprudence. very close to the gates.686[64] . but the obstruction of the entry and exit points of the company premises caused by the respondents’ picket was by no means a “petty blocking act” or an “insignificant obstructive act.”682[60] As we have stated.683[61] Intimidation Article 264(e) of the Labor Code tells us that picketing carried on with violence. but by excluding the company officials and non-striking employees from access to and exit from the company premises.685[63] Force threatened is the equivalent of force exercised. the movement was in circles. banner or placard. No doubt. informing the public concerning the dispute. Words or acts which are calculated and intended to cause an ordinary person to fear an injury to his person. Fausto and Barangay Secretary Gesmundo presented in evidence by the respondents. as the NLRC itself recognized when it ruled out the reinstatement of the dismissed strikers.What the records reveal belies the NLRC observation that “the evidence x x x tends to show that what respondents actually did was walking or patrolling to and fro within the company vicinity and by word of mouth. what constitutes unlawful intimidation depends on the totality of the circumstances. Fr. coercion or intimidation is unlawful. thus preventing non-striking workers and vehicles from coming in and getting out. was “peaceful” only because of the absence of violence during the strike. what the union demonstrated was a very persuasive and quietly intimidating strategy whose chief aim was to paralyze the operations of the company. the strike caused the company operations considerable damage.”681[59] The “peaceful moving picket” that the NLRC noted. business or property are equivalent to threats. There may be unlawful intimidation without direct threats or overt acts of violence. influenced apparently by the certifications (Mayor delos Reyes. Fr. Adeviso. while the picket was moving. not solely by the work stoppage of the participating workers. Supported by actual blocking benches and obstructions. with the strikers in a hand-to-shoulder formation without a break in their ranks.

testified that she and the other picketers did not give way despite the instruction of Police Major de los Reyes to the picketers to allow the group to enter the company premises. The compulsory arbitration hearings bear this out. The photographs of the strike scene. even then. 1995. prohibited acts in a strike. depict the true character of the picket. when asked how the strikers blocked the ingress of the company. also on record. because of the moving picket. in fact. constituted a human blockade. On balance.691[69] The evidence adduced in the present case cannot be ignored. obstructing free ingress to and egress from the company premises. Those who dared cross the picket line were stopped. moving picket” and. also testified that on May 27. the picketers did not allow them to enter. as a rule. Maximo Pedro. tried to enter the company premises on May 27.) Further. are on record. it supports the company’s submission that the respondent PILA officers and members committed acts during the strike prohibited under Article 264(e) of the Labor Code. on July 30. joining hands. a company coaster or bus attempted to enter the PHIMCO compound but it was refused entry by the “moving picket. a PILA officer. 1995 with police escort. 1995. The photographs do not lie – these . on May 29. it. when the NLRC TRO was in force. Cinco was with the PHIMCO production manager in a pick-up and they tried to enter the company compound but. even with police intervention. that a group of PHIMCO managers led by Cinco. police intervention and participation are. but they were not allowed entry.”689[67] Cinco. he and other employees tried to enter the PHIMCO compound. testified. the company personnel manager. and confirmed no less by two officers of the union. who were prevented from gaining entry into the company premises.The manner in which the respondent union officers and members conducted the picket in the present case had created such an intimidating atmosphere that non-striking employees and even company vehicles did not dare cross the picket line. together with several monthly-paid employees. they were not allowed by the strikers. again. no employee or vehicle could come in and go out of the premises. Joaquin Aguilar.690[68] Another employee. 1995.688[66] (To be sure. replied that the strikers “hold around. another union officer. The testimonies of non-striking employees. 1997. PHIMCO employee Rodolfo Eva testified that on May 22.687[65]Leonida Catalan. reinforced by benches planted directly in front of the company gates. but we note this intervention solely as indicators of how far the union and its members have gone to block ingress to and egress from the company premises. while moving.

without any break in their ranks or closely bunched together. Needless to say. proof must be adduced showing that he or she committed illegal acts during the strike. the NLRC looked the other way and chose not to see the unmistakable violations of the law on strikes by the union and its respondent officers and members.photographs clearly show that the picketers were going in circles. make a distinction between participating workers and union officers. right in front of the gates.692[70] For grossly ignoring the evidence before it. Sulpicio Lines. the CA committed its own reversible error. 264. the applicable provision is Article 264(a) of the Labor Code: Art. Inc. That mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment. the NLRC committed grave abuse of discretion. company vehicles were unable to enter the company compound. it authorizes neither the oppression nor the destruction of the employer. while the law protects the rights of the laborer. 693[71] that the effects of illegal strikes. but also if he knowingly participates in an illegal strike. Inc. not only when he actually commits an illegal act during a strike. outlined in Article 264 of the Labor Code. The services of an ordinary striking worker cannot be terminated for mere participation in an illegal strike. We explained in Samahang Manggagawa sa Sulpicio Lines. Thus. may be terminated.-NAFLU v. The services of a participating union officer. and were backed up several meters into the street leading to the company gates. Prohibited activities. for supporting these gross NLRC errors. – (a) x x x x x x x Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status: Provided. Liabilities of union officers and members In the determination of the liabilities of the individual respondents. 694[72] . Despite all these clear pieces of evidence of illegal obstruction. on the other hand. even if a replacement had been hired by the employer during such lawful strike.

Ricardo Sacristan. This provision imposes the penalty of dismissal on “any union officer who knowingly participates in an illegal strike. Mario Perea. Rafael Sta. respondents Erlinda Vazquez. Ramon Macaalay. Angelito Dejan. Alex Ibañez. and Ramon Falcis stand to be dismissed as participating union officers. Reynaldo Ganitano. Florencio Libongcogon. Sr. Rodolfo Mojico. Teofilo Manalili. Maximo Pedro. Angelito de Guzman. Ana. of the Labor Code. paragraph 3. Felipe Villareal. Renato Ramos. Philip Garces. But proof beyond reasonable doubt is not required. Danilo Baltazar. Raul Miciano. Alfredo Pearson. Arsenio Zamora. Danilo Banaag. Gonzalo Manalili. 698[76] and Personnel Manager Francis Ferdinand Cinco. Mariano Rosales. Leonida Catalan. PHIMCO failed to observe due process . pursuant to Article 264(a). Benjamin Juan. Teresa Permocillo. For participating in illegally blocking ingress to and egress from company premises. Abraham Caday. Roger Caber. Rodolfo Tolentino. suffices to justify the imposition of the penalty of dismissal on participating workers and union officers as above described. substantial evidence. 699[77] of Joaquin Aguilar. Bernardo Cuadra. Nathaniela Dimaculangan.In all cases. Julian Tuguin and Amelia Zamora as the union members who actively participated in the strike by blocking the ingress to and egress from the company premises and preventing the passage of non-striking employees. Romeo Caramanza. Gerardo Feliciano. 695[73] In the present case. the striker must be identified. 696[74] PHIMCO was able to individually identify the participating union members thru the affidavits of PHIMCO employees Martimer Panis and the photographs 700[78] 697[75] and Rodrigo A. Alberto Basconcillo. Hilario Peña. Identified were respondents Angelita Balosa. Ortiz. these union members stand to be dismissed for their illegal acts in the conduct of the union’s strike. Nicanor Ilagan.” The law grants the employer the option of declaring a union officer who participated in an illegal strike as having lost his employment. Pablo Sarmiento. Nemesio Mamonong. Alfonso Claudio. Francisco Dalisay.. Reynaldo Camarin. Ernesto Rio. available under the attendant circumstances. Rodolfo Sanidad.

to thirty-six (36) union members. To meet the requirements of due process in the dismissal of an employee. or on June 26. National Labor Relations Commission. 702[80] that Article 277(b). As to the union members. PHIMCO sent a letter. grounds have been established to justify the employer's decision to dismiss the employee. Under Article 277(b) 701[79] of the Labor Code. 703[81] In the present case. but they were not given an ample opportunity to be heard and to defend themselves. the employer must send the employee. a written notice stating the cause/s for termination and must give the employee the opportunity to be heard and to defend himself. an employer must furnish him or her with two (2) written notices: (1) a written notice specifying the grounds for termination and giving the employee a reasonable opportunity to explain his side and (2) another written notice indicating that. generally directing them to explain within twenty-four (24) hours why they should not be dismissed for the illegal acts they committed during the strike. We explained in Suico v. three days later. on June 23. only three (3) days from the first notice . mere token recognition of the due process requirements was made. who is about to be terminated. however. indicating the .We find. even if the cause was their supposed involvement in strike-related violence prohibited under Article 264(a) and (e) of the Labor Code. 1995. 1995. that PHIMCO violated the requirements of due process of the Labor Code when it dismissed the respondents. 1995. the notice of termination came on June 26. without distinction as to the cause of their termination. only thirty-six (36) of the thirty-seven (37) union members included in this case were notified of the charges against them thru the letters dated June 23. We do not find this company procedure to be sufficient compliance with the due process requirements that the law guards zealously. 1995. the thirty-six (36) union members were informed of their dismissal from employment.a perfunctory and superficial attempt to comply with the notice requirement under the Labor Code. The short interval of time between the first and second notice speaks for itself under the circumstances of this case. Without the specifications they had to respond to. It does not appear from the evidence that the union officers were specifically informed of the charges against them and given the chance to explain and present their side. they were arbitrarily separated from work in total disregard of their rights to due process and security of tenure. upon due consideration of all circumstances. in relation to Article 264(a) and (e) of the Labor Code recognizes the right to due process of all workers.

1998. 705[83] WHEREFORE. Alfonso Claudio. Philip Garces. Danilo Banaag. our ruling in Agabon v.00. Ana. Alfredo Pearson. of Labor Arbiter Jovencio Ll. Mariano Rosales.000.R. 2004 and the resolution dated December 12. and Amelia Zamora are each awarded nominal damages in the amount of P30. 70336. Angelito de Guzman. Roger Caber. Nathaniela Dimaculangan. Romeo Caramanza. we hereby REVERSE and SET ASIDE the decision dated February 10. Teresa Permocillo. ARTURO D. upholding the rulings of the National Labor Relations Commission. Abraham Caday.000. Reynaldo Ganitano. Angelita Balosa. Francisco Dalisay. Pablo Sarmiento. Mayor should prevail and is REINSTATED with the MODIFICATION that Erlinda Vazquez. Alberto Basconcillo. where evidence sufficient to justify the penalty of dismissal has been adduced but the workers concerned were not accorded their essential due process rights. Angelito Dejan. Gonzalo Manalili. Rafael Sta. Renato Ramos.. Nicanor Ilagan. Alex Ibañez. Ernesto Rio. SP No. Ramon Macaalay. Rodolfo Tolentino. Raul Miciano. BRION Associate Justice WE CONCUR: . Under the circumstances.company’s intent to dismiss the union members involved. without any meaningful resort to the guarantees accorded them by law. Ricardo Sacristan. Mario Perea. Maximo Pedro.00. Prevailing jurisprudence sets the amount of nominal damages at P30. Benjamin Juan. despite the just cause for dismissal. Reynaldo Camarin. in light of all the foregoing. must pay the dismissed workers nominal damages as indemnity for the violation of the workers’ right to statutory due process. The Decision. Rodolfo Sanidad. dated February 4. Danilo Baltazar. Sr. Rodolfo Mojico. Felipe Villareal. Florencio Libongcogon. Arsenio Zamora. Bernardo Cuadra. Teofilo Manalili. No pronouncement as to costs. Hilario Peña. Leonida Catalan. 2005 of the Court of Appeals in CA-G. which same amount we find sufficient and appropriate in the present case. NLRC 704[82] finds full application. Nemesio Mamonong. Gerardo Feliciano. Julian Tuguin. the employer. SO ORDERED. Ramon Falcis.

JR. BERSAMIN Associate Justice ROBERTO A. ABAD Associate Justice MARTIN S. VILLARAMA.CONCHITA CARPIO MORALES Associate Justice LUCAS P. . Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

No. 162025 Present: CARPIO MORALES. RENATO C. NG G.R. Petitioner.versus - . J. and the Division Chairperson’s Attestation. Article VIII of the Constitution. it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.. . CORONA Chief Justice THIRD DIVISION TUNAY NA PAGKAKAISA MANGGAGAWA SA ASIA BREWERY.CONCHITA CARPIO MORALES Associate Justice Chairperson CERTIFICATION Pursuant to Section 13.

. 2002 and Resolution707[2] dated January 28... J... JJ. The facts are: Respondent Asia Brewery.. INC. (ABI) is engaged in the manufacture. 2000. BERSAMIN.. sale and distribution of beer.. Promulgated: August 3. 55578... Respondent.. granting the petition of respondent company and reversing the Voluntary Arbitrator‘s Decision708[3] dated October 14... Inc....... ABAD... ABI entered into a Collective Bargaining Agreement (CBA).. assailing the Decision706[1] dated November 22... On October 3.. the exclusive bargaining representative of ABI‘s rank-and-file employees. BRION..... and VILLARAMA....... with Bisig at Lakas ng mga Manggagawa sa Asia-Independent (BLMA-INDEPENDENT). SP No.... JR.. 2004 rendered by the Court of Appeals (CA) in CA-G.... 2002. 2000 to 31 July 2003.709[4] effective for five (5) years from August 1. 1999..R. 1997 to July 31.. as amended.-x DECISION VILLARAMA.710[5] . shandy.... JR. bottled water and glass products..: For resolution is an appeal by certiorari filed by petitioner under Rule 45 of the 1997 Rules of Civil Procedure. ABI and BLMA-INDEPENDENT signed a renegotiated CBA effective from August 1.. 2010 x. ASIA BREWERY.Chairperson....

Twenty (20) checkers are assigned at the Materials Department of the Administration Division. The parties eventually agreed to submit the case for arbitration to resolve the issue of ―[w]hether or not there is restraint to employees in the exercise of their right to self-organization. 3.‖713[8] In his Decision. the subject employees were declared eligible for inclusion within the bargaining unit represented by BLMA-INDEPENDENT. BLMAINDEPENDENT lodged a complaint before the National Conciliation and Mediation Board (NCMB). 4. he ruled that ABI failed to establish with sufficient clarity their basic functions as to consider them Quality Control Staff who were excluded from the coverage of the CBA. Accordingly. 8. Full Goods Department of the Brewery Division and Packaging Division. 11. the following jobs/positions as herein defined shall be excluded from the bargaining unit. With respect to QA Sampling Inspectors/Inspectresses and Machine Gauge Technician. as evident from the duties and responsibilities assigned to them.714[9] . Recognition.] Subsequently. 7.712[7] BLMA-INDEPENDENT claimed that ABI‘s actions restrained the employees‘ right to self-organization and brought the matter to the grievance machinery. Managers Assistant Managers Section Heads Supervisors Superintendents Confidential and Executive Secretaries Personnel. 12. 10. Accounting and Marketing Staff Communications Personnel Probationary Employees Security and Fire Brigade Personnel Monthly Employees Purchasing and Quality Control Staff711[6] [EMPHASIS SUPPLIED. Section 2. a dispute arose when ABI‘s management stopped deducting union dues from eighty-one (81) employees. He noted that the positions occupied by the checkers and secretaries/clerks in the different divisions are not managerial or supervisory. The rest are secretaries/clerks directly under their respective division managers. 6. as follows: Section 1. to wit: 1.Article I of the CBA defined the scope of the bargaining unit. 9. 2. Voluntary Arbitrator Bienvenido Devera sustained the BLMA-INDEPENDENT after finding that the records submitted by ABI showed that the positions of the subject employees qualify under the rankand-file category because their functions are merely routinary and clerical. The bargaining unit shall be comprised of all regular rankand-file daily-paid employees of the COMPANY. As the parties failed to amicably settle the controversy. believing that their membership in BLMA-INDEPENDENT violated the CBA. hours of work and other terms and conditions of employment. However. Bargaining Unit. 5. The COMPANY recognizes the UNION as the sole and exclusive bargaining representative of all the regular rank-and-file daily paid employees within the scope of the appropriate bargaining unit with respect to rates of pay. Eighteen (18) of these affected employees are QA Sampling Inspectors/Inspectresses and Machine Gauge Technician who formed part of the Quality Control Staff. The UNION shall not represent or accept for membership employees outside the scope of the bargaining unit herein defined.

petitioner filed with the CA an omnibus motion for reconsideration of the decision and intervention. and c) petitioner has not committed any act that restrained or tended to restrain its employees in the exercise of their right to self-organization. jurisprudence has extended this prohibition to confidential employees or .715[10] BLMA-INDEPENDENT filed a motion for reconsideration. (3) THE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT PETITIONER (NOW PRIVATE RESPONDENT) HAS NOT COMMITTED ANY ACT THAT RESTRAINED OR TENDED TO RESTRAIN ITS EMPLOYEES IN THE EXERCISE OF THEIR RIGHT TO SELF-ORGANIZATION. form and assist any labor organization to managerial employees. a certification election was held on August 10. SO ORDERED. In the meantime. and A NEW ONE ENTERED DECLARING THAT: a) the 81 employees are excluded from and are not eligible for inclusion in the bargaining unit as defined in Section 2. ruling that: WHEREFORE. b) the 81 employees cannot validly become members of respondent and/or if already members. foregoing premises considered.718[13] Although Article 245 of the Labor Code limits the ineligibility to join. the CA reversed the Voluntary Arbitrator.On appeal. NO COSTS. 2002 wherein petitioner Tunay na Pagkakaisa ng Manggagawa sa Asia (TPMA) won. THAT THEIR MEMBERSHIP IS VIOLATIVE OF THE CBA AND THAT THEY SHOULD DISAFFILIATE FROM RESPONDENT. Article I of the CBA. ARTICLE 1 OF THE CBA[.] (2) THE COURT OF APPEALS ERRED IN HOLDING THAT THE 81 EMPLOYEES CANNOT VALIDLY BECOME UNION MEMBERS.716[11] Both motions were denied by the CA. the questioned decision of the Honorable Voluntary Arbitrator Bienvenido De Vera is hereby REVERSED and SET ASIDE.717[12] The petition is anchored on the following grounds: (1) THE COURT OF APPEALS ERRED IN RULING THAT THE 81 EMPLOYEES ARE EXCLUDED FROM AND ARE NOT ELIGIBLE FOR INCLUSION IN THE BARGAINING UNIT AS DEFINED IN SECTION 2. that their membership is violative of the CBA and that they should disaffiliate from respondent. with attached petition signed by the union officers. As the incumbent bargaining representative of ABI‘s rank-and-file employees claiming interest in the outcome of the case.

the CBA expressly excluded ―Confidential and Executive Secretaries‖ from the rankand-file bargaining unit.those who by reason of their positions or nature of work are required to assist or act in a fiduciary manner to managerial employees and hence. Human Resources Manager. the latter might not be assured of their loyalty in view of evident conflict of interests and the Union can also become company-denominated with the presence of managerial employees in the Union membership. Finance Director.722[17] this Court held that petitioner‘s ―division secretaries. Management System Manager. NLRC. among others.724[19] we declared that legal secretaries who are tasked with. The rationale for their separate category and disqualification to join any labor organization is similar to the inhibition for managerial employees because if allowed to be affiliated with a Union. Personnel and Industrial Relations Department.719[14] Confidential employees are thus excluded from the rank-and-file bargaining unit. Inc. v. all Staff of General Management. v. Roldan-Confesor. Marketing Director.726[21] In the present case. EDP and Financial Systems‖ are confidential employees not included within the rank-and-file bargaining unit. Said employees may act as a spy or spies of either party to a collective bargaining agreement. Petitioner. Secretaries of Audit. Materials Manager and Production Manager. memoranda and correspondence. for which reason ABI seeks their disaffiliation from petitioner. in Pier 8 Arrastre & Stevedoring Services.720[15] Having access to confidential information. the keeping of records and files. the typing of legal documents. are likewise privy to sensitive and highly confidential records.723[18] Earlier. fall under the category of confidential employees and hence excluded from the bargaining unit composed of rank-and-file employees. and such other duties as required by the legal personnel of the corporation. however.725[20] Also considered having access to ―vital labor information‖ are the executive secretaries of the General Manager and the executive secretaries of the Quality Assurance Manager.721[16] In Philips Industrial Development. Product Development Manager. the giving of and receiving notices. Evelyn Mabilangan and Lennie Saguan who had been promoted to monthly . Inc. Engineering Manager. confidential employees may also become the source of undue advantage. maintains that except for Daisy Laloon.

Fameronag. Carina P. 3. Rebecca S. Jorge Villarosa Mr. Edna R. Andres G. Carmelito A. Luningning L. Ma. Marylou F. 3. Susan Bella Mr. Rivera. Brewhouse Bottling Production Bottling Production Bottling Production Bottling Production Bottling Maintenance Bottling Maintenance Bottled Water Bottled Water Bottled Water Bottled Water Full Goods Full Goods Full Goods Full Goods Full Goods Full Goods Tank Farm/ Cella Services 1. Julius Palmares Mr. Barraquio. Co Mr. Cabalo. Faustino Tetonche Mr. Bordamonte. Diongco. Sherley Y. Shirley P. Melito K. Mapola. Aviso. Ma. Co Mr. Andres G. 4. Transportation Transportation Transportation Transportation Materials Materials Materials Materials Materials Materials Materials Materials Materials Materials Mr. Tan Mr. Melito K. Andres G. Co Mr. 1. Tsoi Wah Tung Mr. 2. Punongbayan. 1. Aida S. Tan Mr. Cervantes. Ma. Corazon C. Esraliza T. Marcelo G. Menil. Andres G. Elvira C. Co Mr. Ma. Co Mr. Myrna F. the following secretaries/clerks are deemed included among the rank-and-file employees of ABI:727[22] NAME DEPARTMENT IMMEDIATE SUPERIOR C1 ADMIN DIVISION 1. 1. Adelaida D. 5. Giron. Anoñuevo. Cañiza. Rosita S. Melito K. Ernesto Ang Mr. Tan Mr. 2. Daisy S. 4. Chen Tsai Tyan Mr. 3. 2. Tan Mr. 2. Simeon A. Nancy G. Ruel A. Bustillo. Aurora M. Algire. 4. Laloon. Julius Palmares Mr. 6. Noel Fernandez . Briones. Julius Palmares Mr. Ma. GP Administration GP Technical GP Engineering Ms. Alma A. Catalina P. Tsoi Wah Tung Mr. Melito K. 10. 2. Mane. Andres G. Andres G. Edna A. Quality Assurance Engineering Electrical Civil Works Utilities Ms. Ma. 4. Barachina. Alvarez. Andrea A. Andres G. Teresa M. Faustino Tetonche Mr. 3. Deauna. Lennie Y. Cristina C. Marivic B. Manuel Yu Liat xxxx C3 PACKAGING DIVISION 1. William Tan Mr. Faustino Tetonche Mr. Francisca A. 7. Elmido. Andres G. Nevalga. Abalos. Evelyn M. Roger Giron Mr. Rhumela D. Salandanan. Capiroso. 2. 5. Magbag. 3. Arabit. 4. Co Mr. Co xxxx C2 BREWERY DIVISION 1. 1. Caralipio. Tsoi Wah Tung Mr.paid positions. Ernesto Ang Mr. Co Mr. Andres G. Sison. Saguan. 1. 9. Regina Mirasol Mr. Andres G. Laura P. 1. Emmanuel S. Venancio Alconaba Mr. Juanita P. Cantalejo. Co Mr. Alcoran. 3. Pauline C. Tsoi Wah Tung Mr. Bernardita E. 1. Co Mr. 8. 3. Leodigario C. 2. Faustino Tetonche Mr. Catindig. Alconaba. 4. Mabilangan. Claudia B. Tsoi Wah Tung Mr. Clemente Wong Mr. Angeles. Julius Palmares Mr. Tsoi Wah Tung Mr. Velez. 2. 6. Burgos. Juvy L.

Again. under the express terms of the CBA. 6. we hold that the twenty (20) checkers may not be considered confidential employees under the category of Quality Control Staff who were expressly excluded from the CBA of the rank-and-file bargaining unit. Quite understandably. Jennifer L. and even their formulas‖ which are considered ‗trade secrets‘. it is rather curious that there would be several secretaries/clerks for just one (1) department/division performing tasks which are mostly routine and clerical. Susana C. finishing section of the Packaging Department. the job descriptions of these checkers assigned in the storeroom section of the Materials Department. Such allegations of respondent must be supported by evidence. petitioner had earlier expressed the view that the positions were just being ―reclassified‖ as these employees actually discharged routine functions. Castillo. Lamadrid.728[23] Respondent failed to indicate who among these numerous secretaries/clerks have access to confidential data relating to management policies that could give rise to potential conflict of interest with their Union membership. However. and other paper works for their respective departments while secretarial tasks such as receiving telephone calls and filing of office correspondence appear to have been commonly imposed as additional duties. . the rationale under our previous rulings for the exclusion of executive secretaries or division secretaries would have little or no significance considering the lack of or very limited access to confidential information of these secretaries/clerks.no evidence was presented by the respondent to prove that these daily-paid checkers actually form part of the company‘s Quality Control Staff who as such ―were exposed to sensitive. Mel Oña As can be gleaned from the above listing. Tsai Chen Chih Mr. Robert Bautista Mr.729[24] While it may be argued that quality control extends to post-production phase -. Clearly. Respondent insisted they fall under the ―Confidential and Executive Secretaries‖ expressly excluded by the CBA from the rank-and-file bargaining unit. Riza R.4. With respect to the Sampling Inspectors/Inspectresses and the Gauge Machine Technician.proper packaging of the finished products -. and the decorating and glass sections of the Production Department plainly showed that they perform routine and mechanical tasks preparatory to the delivery of the finished products. their defects.730[25] Consequently. fall under a distinct category. We thus hold that the secretaries/clerks. Mendoza. vital and confidential information about [company‘s] products‖ or ―have knowledge of mixtures of the products. are rank-and-file employees and not confidential employees. GP Production GP Production GP Technical Mr. Ma. 5. there seems no dispute that they form part of the Quality Control Staff who. numbering about forty (40). It is not even farfetched that the job category may exist only on paper since they are all daily-paid workers. perusal of the job descriptions of these secretaries/clerks reveals that their assigned duties and responsibilities involve routine activities of recording and monitoring. But we disagree with respondent‘s contention that the twenty (20) checkers are similarly confidential employees being ―quality control staff‖ entrusted with the handling and custody of company properties and sensitive information.

2002 and Resolution dated January 28. and the supervisor must handle the prescribed responsibilities relating to labor relations. WHEREFORE. No costs. MARTIN S. Associate Justice WE CONCUR: . respondent cannot be said to have committed unfair labor practice that restrained its employees in the exercise of their right to self-organization. determine.R. The two (2) criteria are cumulative. and both must be met if an employee is to be considered a confidential employee – that is. The Decision dated November 22. the confidential relationship must exist between the employee and his supervisor. it must be shown that ABI was motivated by ill will. nor have thereby demonstrated an anti-union stance. For a charge of unfair labor practice to prosper. good customs. VILLARAMA. 2004 of the Court of Appeals in CA-G. And even assuming that they had exposure to internal business operations of the company.Confidential employees are defined as those who (1) assist or act in a confidential capacity. and. this is not per se ground for their exclusion in the bargaining unit of the daily-paid rank-and-file employees. or was oppressive to labor. the petition is GRANTED. ―bad faith.732[27] Not being confidential employees. or fraud. of course. become aware of management policies relating to labor relations is a principal objective sought to be accomplished by the ―confidential employee rule. in the normal course of their duties. that social humiliation. Petitioner argues that respondent‘s act of unilaterally stopping the deduction of union dues from these employees constitutes unfair labor practice as it ―restrained‖ the workers‘ exercise of their right to self-organization. or public policy. or done in a manner contrary to morals. SP No. Considering that the herein dispute arose from a simple disagreement in the interpretation of the CBA provision on excluded employees from the bargaining unit. The checkers and secretaries/clerks of respondent company are hereby declared rank-and-file employees who are eligible to join the Union of the rank-and-file employees. (2) to persons who formulate. and effectuate management policies in the field of labor relations. SO ORDERED.‖731[26] There is no showing in this case that the secretaries/clerks and checkers assisted or acted in a confidential capacity to managerial employees and obtained confidential information relating to labor relations policies. The exclusion from bargaining units of employees who. respondent claimed. the secretaries/clerks and checkers are not disqualified from membership in the Union of respondent‘s rank-and-file employees. 55578 are hereby REVERSED and SET ASIDE. as provided in Article 248 (a) of the Labor Code. wounded feelings or grave anxiety resulted x x x‖733[28] from ABI‘s act in discontinuing the union dues deduction from those employees it believed were excluded by the CBA. JR.‖ The prohibited acts are related to the workers‘ right to self organization and to the observance of a CBA. Unfair labor practice refers to ―acts that violate the workers‘ right to organize.

I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court‘s Division. CONCHITA CARPIO MORALES Associate Justice Chairperson. RENATO C. Third Division CERTIFICATION Pursuant to Section 13. CORONA Chief Justice Republic of the Philippines Supreme Court Manila . BRION Associate Justice LUCAS P. BERSAMIN Associate Justice ROBERTO A. ABAD Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court‘s Division.CONCHITA CARPIO MORALES Associate Justice Chairperson ARTURO D. Article VIII of the 1987 Constitution and the Division Chairperson‘s Attestation.

J. 2010 x----------------------------------------------------------------------------------------x DECISION BRION. MIRIAM CATACUTAN. Respondents. 2004 Decision735[2] and the August 2. J. JR. BERSAMIN. G. JJ. 174084 Present: - versus - CARPIO MORALES.: Before the Court is the petition for review on certiorari734[1] filed by Spic N’ Span Services Corporation (SNS) to seek the reversal of the October 25. and SERENO.R. LOLITA GOMEZ. BRION. GLORIA PAJE. Chairperson. GLORIA SUMANG. No. BERNANDO. ESTRELLA ZAPATA. JULIET DINGAL.THIRD DIVISION SPIC N’ SPAN SERVICES CORPORATION. Promulgated: August 25. MYRA AMANTE.. Petitioner. and FE S. 2006 Resolution736[3] of the . VILLARAMA..

Court of Appeals (CA) in CA-G.R. SP No. 83215, entitled "Gloria Paje, Lolita Gomez, Miriam Catacutan, Estrella Zapata, Gloria Sumang, Juliet Dingal, Myra Amante and Fe S. Bernardo v. National Labor Relations Commission, Spic N Span Service Corporation and Swift Foods, Inc.” BACKGROUND FACTS

Swift Foods, Inc. (Swift) is a subsidiary of RFM Corporation that manufactures and processes meat products and other food products. SNS’s business is to supply manpower services to its clients for a fee. Swift and SNS have a contract to promote Swift products.

Inocencio Fernandez, Edelisa F. David, Thelma Guardian, Juliet C. Dingal, Fe S. Bernardo, Lolita Gomez, Myra Amante, Miriam S. Catacutan, Gloria O. Sumang, Gloria O. Paje, and Estrella Zapata (complainants) worked as Deli/Promo Girls of Swift products in various supermarkets in Tarlac and Pampanga. They were all dismissed from their employment on February 28, 1998. They filed two complaints for illegal dismissal against SNS and Swift before the National Labor Relations Commission (NLRC) Regional Arbitration Branch III, San Fernando, Pampanga, docketed as Case Nos. 03-9131-98 and 07-9295-98. These cases were subsequently consolidated.

After two unsuccessful conciliation hearings, the Labor Arbiter ordered the parties to submit their position papers. Swift filed its position paper; SNS did not.737[4] The complainants’ position papers were signed by Florencio P. Peralta who was not a lawyer and who claimed to be the complainants’ representative, although he never showed any proof of his authority to represent them.

In their position papers, the complainants alleged that they were employees of Swift and SNS, and their services were terminated without cause and without due process. The termination came on the day they received their notices; thus, they were denied the procedural due process requirements of notice and hearing prior to their termination of employment.738[5] Swift, in its position paper, moved to dismiss the complaints on the ground that it entered into an independent labor contract with SNS for the promotion of its products; it alleged that the complainants were the employees of SNS, not of Swift.739[6]

The Labor Arbiter740[7] found SNS to be the agent of Swift, and ordered SNS and Swift to jointly and severally pay Edelisa David P115,637.50 and Inocencio Fernandez P192,197.50, representing their retirement pay and service incentive leave pay. He dismissed, without prejudice, the claims of the other complainants because they failed to verify their position paper. He also denied all other claims for lack of factual basis.741[8]

Both Swift and the complainants appealed to the NLRC. Swift filed a memorandum of appeal, while the complainants filed a partial memorandum of appeal.742[9]

The NLRC denied the complainants’ appeal for lack of merit.743[10] It dismissed the complaint against Swift, and ordered SNS to pay Edelisa David a total of P256,620.13, and Inocencio Fernandez a total of P280,912.63, representing backwages, separation pay, and service incentive leave pay. It dismissed all other claims for lack of merit. Thereafter, Edelisa David and Inocencio Fernandez agreed to a settlement, and their cases were thus closed.744[11]

The complainants whose claims were dismissed, namely, Gloria Paje, Lolita Gomez, Miriam Catacutan, Estrella Zapata, Gloria Sumang, Juliet Dingal, Myra Amante, and Fe S. Bernardo (respondents), moved for the reconsideration of the NLRC’s ruling. This time, they were represented by the Public Attorney’s Office. The NLRC denied their motion.745[12]

The respondents then sought relief with the CA through a petition for certiorari, based on the alleged grave abuse of discretion committed by the NLRC. The CA found the petition meritorious, in its assailed decision of October 25, 2004, and ruled that the respondents’ failure to sign the verification in their position paper was a formal defect that was not fatal to their case. It concluded that SNS was merely an agent of Swift; thus, the latter should not be exempt from liability. It ordered the remand of the case to the Labor Arbiter for the computation of

the respondents’ backwages, separation pay, and service incentive leave pay. SNS and Swift filed their motions for reconsideration which the CA denied.

SNS is now before us on a petition for review on certiorari, and submits the following –

I. WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR WHEN IT RULED THAT THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN DISMISSING THE CLAIMS OF HEREIN RESPONDENTS “ON THE GROUND OF NON-SIGNING OF THE POSITION PAPER.”

II. WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR IN HOLDING THAT ALTHOUGH THE RESPONDENTS WERE NOT REPRESENTED BY A LAWYER BUT BY ONE WHO IS NOT A MEMBER OF THE BAR, SAID FACT IS “SUFFICIENT JUSTIFICATION FOR THE PETITIONERS’ FAILURE TO COMPLY WITH THE REQUIREMENTS OF LAW.”

III. WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR IN “REMANDING THE CASE TO THE LABOR ARBITER FOR THE COMPUTATION OF THE MONEY CLAIMS OF THE RESPONDENTS, TO WIT: 1) BACKWAGES, 2) SEPARATION PAY, AND 3) SERVICE INCENTIVE LEAVE,” DESPITE THE FACT THAT NOWHERE IN THE DECISIONS OF THE LABOR ARBITER, THE NATIONAL LABOR RELATIONS COMMISSION, AND COURT OF APPEALS IS IT STATED THAT HEREIN RESPONDENTS WERE ILLEGALLY DISMISSED.”746[13]

THE COURT’S RULING

We find the petition unmeritorious.

SNS submits that since respondents did not sign the verification in their position paper, the CA erred when it ruled that the NLRC committed grave abuse of discretion in dismissing the respondents’ complaints. SNS stressed the importance of a signature in a pleading, and harped on the respondents’ failure to sign their position paper. 747[14] This, to SNS, is fatal to the respondents’ case.

We do not agree with SNS.

As we previously explained in Torres v. Specialized Packaging Development Corporation,748[15] where only two of the 25 real parties-in-interest signed the verification, the verification by the two could be sufficient assurance that the allegations in the petition were made in good faith, are true and correct, and are not speculative. The lack of a verification in a pleading is only a formal defect, not a jurisdictional defect, and is not necessarily fatal to a case.749[16] The primary reason for requiring a verification is simply to ensure that the allegations in the pleading are done in good faith, are true and correct, and are not mere speculations.750[17]

The CA, in its assailed decision, cited Philippine Telegraph and Telephone Corporation v. NLRC751[18] to emphasize that in labor cases, the deciding authority should use every reasonable means to speedily and objectively ascertain the facts, without regard to technicalities of law and procedure. Technical rules of evidence are not strictly binding in labor cases.752[19]

In the hierarchy observed in the dispensation of justice, rules of procedure can be disregarded in order to serve the ends of justice. This was explained by Justice Bernando P. Pardo, in Aguam v. Court of Appeals,753[20] when he said –

Litigations must be decided on their merits and not on technicality. Every party litigant must be afforded the amplest opportunity for the proper and just determination of his cause, free from the unacceptable plea of technicalities. Thus, dismissal of appeals purely on technical grounds is frowned upon where the policy of the court is to encourage hearings of appeals on their merits and the rules of procedure ought not to be applied in a very rigid, technical sense; rules of procedure are used only to help secure, not override substantial justice. It is a far better and more prudent course of action for the court to excuse a technical lapse and afford the parties a review of the case on appeal to attain the ends of justice rather than dispose of the case on technicality and cause a grave injustice to the parties, giving a false impression of speedy disposal of cases while actually resulting in more delay, if not a miscarriage of justice.754[21]

We should remember, too, that certain labor rights assume preferred positions in our legal hierarchy. Under the Constitution and the Labor Code, the State is bound to protect labor and assure the rights of workers to security of tenure.755[22] Article 4 of the Labor Code provides that all doubts in the implementation and

interpretation of its provisions (including its implementing rules and regulations) shall be resolved in favor of labor. The Constitution, on the other hand, characterizes labor as a primary social economic force. The State is bound to “protect the rights of workers and promote their welfare,”756[23] and the workers are “entitled to security of tenure, humane conditions of work, and a living wage.”757[24] Under these fundamental guidelines,

respondents’ right to security of tenure is a preferred constitutional right that technical infirmities in labor pleadings cannot defeat.

1.

SNS submits that the CA committed a serious error in ruling that the respondents’

representative’s non-membership in the bar is sufficient justification for their failure to comply with the requirements of the law. SNS argues that this ruling excuses the employment of a non-lawyer and places the acts of the latter on the same level as those of a member of the Bar.758[25] Our Labor Code allows a non-lawyer to represent a party before the Labor Arbiter and the Commission,759[26] but provides limitations: Non-lawyers may appear before the Commission or any Labor Arbiter only: (1) If they represent themselves; or (2) If they represent their organization or members thereof.760[27] Thus, SNS concludes that the respondents’ representative had no personality to appear before the Labor Arbiter or the NLRC, and his representation for the respondents should produce no legal effect.

Our approach to these arguments is simple as the problem boils down to a balance between a technical rule and protected constitutional interests. The cited technical infirmity cannot defeat the respondents’ preferred right to security of tenure which has primacy over technical requirements. Thus, we affirm the CA’s ruling on this

point, without prejudice to whatever action may be taken against the representative, if he had indeed been engaged in the unauthorized practice of law.

2.

SNS also claims serious error on the part of the CA in remanding the case to the Labor Arbiter, for

computation of the respondents’ backwages, separation pay and service incentive leave pay despite the fact that nowhere in the decisions of the Labor Arbiter, the NLRC, and CA was there any finding that respondents had been illegally dismissed.

We find this to be the first argument of its kind from SNS, and, in fact, is the first ever submission from SNS before it filed a motion for reconsideration with the CA. To recall, SNS did not file its position paper before the labor arbiter, nor did it file its appeal before the NLRC; only Swift and the complainants did.761[28] It was only Swift, too, that filed its comment to the herein respondents’ petition for certiorari.762[29]

The records do not show if SNS filed its memorandum before the CA, although SNS filed a motion for reconsideration of the CA decision. It then claimed that the CA erred in ruling that the NLRC committed grave abuse of discretion when it dismissed respondents’ claim; that a petition for certiorari under Rule 65 of the Rules of Court is not the proper remedy to correct the NLRC’s alleged grave abuse of discretion; and that the respondents were bound by the mistakes of their non-lawyer representative.763[30] Significantly, SNS did not raise the question of the CA’s failure to state that the respondents had been illegally dismissed. At this point, it is too late for SNS to raise the issue.

Nothing on record indicates the reason for the respondents’ termination from employment, although the fact of termination was never disputed. Swift denied liability on the basis of its contract with SNS. The contract

was not presented before the Labor Arbiter, although Swift averred that under the contract, SNS would supply promo girls, merchandisers and other promotional personnel to handle all promotional aspects and merchandising strategy of Swift.764[31] We can assume, for lack of proof to the contrary, that the respondents’ termination from employment was illegal since neither SNS nor Swift, as employers, presented any proof that their termination from employment was legal. Upon proof of termination of employment, the employer has the burden of proof that the dismissal was valid; absent this proof, the termination from employment is deemed illegal, as alleged by the dismissed employees.

contracting or subcontracting must satisfy the following requirements: 1) The contractor or subcontractor carries on a distinct and independent business and undertakes to perform the job. the agreement between SNS and Swift shows that the latter exercised control over the promo girls and/or merchandisers through the services of coordinators. Neither did they attach a copy of the financial statement of SNS. Second. necessary and vital to the day-to-day operations of Swift. the duties of the petitioners were directly related. and explained its ruling as follows767[34] – To be legitimate. according to its own manners and methods. we are constrained to rule on the issue involved on the basis of the findings of both the Labor Arbiter and the NLRC. security of tenure. In order that a labor relationship can be categorized as legitimate/permissible job contracting or as prohibited labor-only contracting. The test is whether the independent contractor has contracted to do the work according to his own methods and without being subject to the principal’s control except only as to the results. it cannot be said that SNS has substantial capital.3. work or service within a definite or predetermined period. cited the following reasons: First. work or service on its own account and under its own responsibility. Third. and social and welfare benefit (Vinoya v.765[32] Every case is unique and has to be assessed on the basis of its facts and of the features of the relationship in question. he has substantial capital. work or service is to be performed or completed within or outside the premises of the principal. The parties failed to attach a copy of the agreement entered into between SNS and Swift. and he has assured the contractual employees entitlement to all labor and occupational safety and health standards. and social and welfare benefits. regardless of whether such job. free exercise of right to self-organization. In permissible job contracting. Thus. NLRC. the uniform and identification cards used by the petitioners were subject to the approval of Swift.766[33] The CA found SNS to be Swift’s agent. Lastly. and 3) the agreement between the principal and contractor or subcontractor assures the contractual employees’ entitlement to all labor and occupational safety and health standards. 324 SCRA 469). in finding that SNS was merely a labor-only contractor. The Labor Arbiter. the totality of the facts and the surrounding circumstances of the relationship ought to be considered. 2) the contractor or subcontractor has substantial capital or investment. security of tenure. the principal agrees to put out or farm out with a contractor or subcontractor the performance or completion of a specific job. . free exercise of the right to self-organization. and free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof.

as found by the Labor Arbiter. the instant petition is hereby GRANTED. Rather. therefore. We fully agree with this ruling. it is SNS who exercised direct control and supervision over the nature and performance of the works of herein petitioners. The decision of the NLRC is bereft of explanation as to the existence of circumstances that would make SNS an independent contractor as would exempt the “principal” from liabilities to the employees. As held by the NLRC. is a case of illegal dismissal perpetrated by a principal and its illegal contractor-agent. We note that the present decision does not affect the settlement entered into between Edeliza David and Inocencio Fernandez. by law. their complaints are considered closed and terminated. there was no evidence that SNS has substantial capital or investment. 2) Separation Pay. NLRC. Nowhere in the decision of both the Labor Arbiter and the NLRC shows that SNS had full control of the means and methods of the performance of their work. we conclude that the requisites above-mentioned are not obtaining in the present case. security of tenure. we affirm the ruling of the CA with the modification that the respondents are also entitled to nominal damages. 2002 and December 23. Swift and SNS have distinct and separate juridical personality from each other. on the one hand and SNS. premises considered. and social and welfare benefit. The settlement of the claims of David and Fernandez is not affected by this decision. WHEREFORE. The Resolutions of the NLRC dated January 11. and 3) Service Incentive Leave Pay.768[35] We peg this amount at P30. pursuant to our ruling in Agabon v. on the other hand. there is no evidence that Swift exercised the power of control over the petitioners. on the other. free exercise of right to self-organization. In view of the foregoing. to wit: 1) Backwages.The NLRC. for violation of their due process rights to notice and hearing. 2003 are SET ASIDE in so far as the dismissal of the petitioners’ case is concerned and in so far as Swift is found not liable for the payment of the petitioners’ money claims.00 for each of the respondents. . What we have before us. Thus. The present case is hereby REMANDED to the Labor Arbiter for the computation of the money claims of the petitioners.000. Second. Moreover. Hence. SNS is considered merely an agent of Swift which does not exempt the latter from liability. in finding that SNS is an independent contractor gave the following reasons: First. there was no finding by the Labor Arbiter nor the NLRC that the agreement between the principal (Swift) and contractor (SNS) assures the contractual employees’ entitlement to all labor and occupational safety and health standards. Lastly.

SP No. SO ORDERED. JR. we hereby AFFIRM the Court of Appeals’ October 25. premises considered. Costs against the petitioner.00 should additionally be paid to each of the respondents.R. Associate Justice . 83215. 2006 Resolution in CA-G. for violation of their procedural due process rights. VILLARAMA. BERSAMIN Associate Justice MARTIN S. BRION Associate Justice WE CONCUR: CONCHITA CARPIO MORALES Associate Justice LUCAS P. with the modification that nominal damages in the amount of P30. ARTURO D.WHEREFORE.000. 2004 Decision and August 2.

MARIA LOURDES P.A. SERENO Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

CONCHITA CARPIO MORALES Associate Justice Chairperson

CERTIFICATION

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

RENATO C. CORONA

Chief Justice

epublic of the Philippines Supreme Court Manila

THIRD DIVISION

BAGONG PAGKAKAISA NG MANGGAGAWA NG TRIUMPH INTERNATIONAL, represented by SABINO F. GRAGANZA, Union President, and REYVILOSA TRINIDAD, Petitioners,

G.R. No. 167401

- versus -

SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT and TRIUMPH INTERNATIONAL (PHILS.), INC., Respondents. x ---------------------------------------- x TRIUMPH INTERNATIONAL (PHILS.), INC., Petitioner,

- versus -

BAGONG PAGKAKAISA NG MANGGAGAWA NG TRIUMPH INTERNATIONAL, ELOISA FIGURA, JERRY JAICTEN, ROWELL FRIAS, MARGARITA PATINGO and ROSALINDA OLANGAR, Respondents.

G.R. No. 167407

Present:

CARPIO MORALES, J., Chairperson,

BRION, BERSAMIN, ABAD, and VILLARAMA, JR., JJ.

Promulgated:

July 5, 2010

x----------------------------------------------------------------------------------------x

DECISION

BRION, J.:

Before the Court are two separate petitions769[1] which were consolidated pursuant to our Resolution dated June 8, 2005.770[2] The first,771[3] filed by the Bagong Pagkakaisa ng Manggagawa ng Triumph

International (union), seeks to set aside the decision772[4] of the Court of Appeals (CA) in CA-G.R. SP No. 60516, and the subsequent resolution773[5] of March 10, 2005, on the parties’ motion for reconsideration. The second,774[6] filed by Triumph International (Phils.), Inc. (company), prays for the annulment of the same decision and resolution with respect to the illegal dismissal issue.

THE ANTECEDENTS

The relevant facts, clearly laid out in the challenged CA decision, are summarized below.

The union and the company had a collective bargaining agreement (CBA) that expired on July 18, 1999. The union seasonably submitted proposals to the company for its renegotiation. Among these proposals were economic demands for a wage increase of P180.00 a day, spread over three (3) years, as follows: P70.00/day from July 19, 1999; P60.00/day from July 19, 2000, and P50.00/day from July 19, 2001. The company countered with a wage increase offer, initially at P42.00 for three years, then increased it to P45.00, also for three years.

The negotiations reached a deadlock, leading to a Notice of Strike the union filed on October 15, 1999.775[7] The National Conciliation and Mediation Board (NCMB) exerted efforts but failed to resolve the deadlock.

On November 15, 1999, the company filed a Notice of Lock-out776[8] for unfair labor practice due to the union’s alleged work slowdown. The union went on strike three days later, or on November 18, 1999.

On January 27, 2000, Secretary Bienvenido E. Laguesma (Labor Secretary) of the Department of Labor and Employment (DOLE) assumed jurisdiction over the labor dispute, pursuant to Article 263(g) of the Labor Code.777[9] The Labor Secretary directed all striking workers to return to work within twenty-four (24) hours from

receipt of the assumption order, while the company was directed to accept them back to work under the same terms and conditions existing before the strike. The Labor Secretary also required the parties to submit their respective position papers.

On February 2 and 3, 2000, several employees attempted to report for work, but the striking employees prevented them from entering the company premises.

In a petition dated February 8, 2000,778[10] the company asked the Labor Secretary to issue an order directing the union to allow free ingress to and egress from the company premises; to dismantle all structures obstructing free ingress and egress; and, to deputize the Philippine National Police to assist the DOLE in the peaceful implementation of the Labor Secretary's January 27, 2000 order.

The Labor Secretary reiterated his directives in another order dated February 22, 2000,779[11] and deputized Senior Superintendent Manuel A. Cabigon, Director of the Southern Police District, “to assist in the peaceful and orderly implementation of this Order.”

At a conciliation meeting held on February 29, 2000, the company agreed to extend the implementation of the return-to-work order until March 6, 2000.780[12] The union, through a letter dated March 2, 2000,781[13] advised the NCMB Administrator of the union executive board’s decision to return to work the following day. In a letter also dated March 2, 2000,782[14] the company advised the NCMB Administrator that it was willing to accept all returning employees, without prejudice to whatever legal action it may take against those who committed illegal acts. The company also stated that all the union officers and members and the union board members would be placed under preventive suspension, pending investigation of their alleged illegal acts.

The striking employees returned to work on March 3 and 4, 2000 but twenty (20) union officers and a shop steward were not allowed entry into the company premises. The excluded union leaders were each served identical letters783[15] directing them to explain in writing why their employment should not be terminated or

why no disciplinary action should be imposed on them for defying and violating the Labor Secretary’s assumption order of January 27, 2000 and the second return-to-work order of February 22, 2000; for blocking and resisting the entry of returning employees on February 2, 3, and 8, 2000; for acts of violence committed on February 24 and 25, 2000; and for defying the company's return-to-work order of all employees on February 8, 2000.784[16]

On March 6, 2000, the twenty-one (21) union officers, by motion, asked the Labor Secretary to issue a reinstatement order and to cite the company for contempt. On March 9, 2000, the Labor Secretary directed the company to accept the union officers and the shop steward back to work, without prejudice to the continuation of the investigation.785[17]

At the conciliation meeting of March 15, 2000, the company agreed to reinstate the union officers in the payroll effective March 13, 2000786[18] and withdrew its notice of lockout.787[19]

On March 21, 2000, the union officers again received identically worded letters requiring them to explain in writing within twenty-four (24) hours why no disciplinary action, including dismissal, should be taken against them for leading, instigating, and participating in a deliberate work slowdown during the CBA negotiations.788[20]

The union officers explained, as required, through their respective affidavits,789[21] and a hearing followed on May 5, 2000. Thereafter, the union officers were each served a notice of termination of employment effective at the close of office hours on May 11, 2000.790[22]

On June 8, 2000, the union and the officers filed a petition to cite the company and its responsible officers for contempt, and moved that a reinstatement order be issued.791[23] They claimed that: (1) the company

declaring that the petition to cite the company and its responsible officers for contempt had already been rendered moot and academic. while the company moved for its own partial reconsideration. The union moved for the reconsideration794[26] of the Labor Secretary’s decision. THE LABOR SECRETARY’S DECISION The Labor Secretary resolved the bargaining deadlock792[24] and awarded a wage increase of P48. as follows:793[25] Effective July 19.00 distributed over three years. The union elevated the case to the CA. and (3) the company committed unfair labor practice and dismissed them without basis. 2000 – P16. through a petition for certiorari under Rule 65 of the Rules of Court.796[28] He also ruled that the legality of the union officers’ dismissal properly falls within the original and exclusive jurisdiction of the labor arbiter under Article 217 of the Labor Code.00/day Effective July 19.795[27] The Labor Secretary denied both motions.00/day Effective July 19. (2) the company also violated the March 9.officials violated the Labor Secretary’s return-to-work order when these officials placed them under preventive suspension and refused them entry into the company premises.00/day The union’s other economic demands and non-economic proposals were all denied.797[29] on the following grounds: . 2000 order of the Labor Secretary when they were reinstated only in the payroll.P17. 1999 – P15. 2001 .

individual settlements were reached between certain individual petitioners (Cenon N.00 for the years 1996 to 1998. Gonzales. the receipt of the P48. It posited that the P48. Tresvalles. the company moved for the dismissal of the petition. The Labor Secretary committed grave abuse of discretion when he declared that the issue of reinstatement of the officers of the union and the petition to cite the company and its responsible officers for contempt had become academic. Cancino. The company likewise argued that any question on the award had been mooted by the workers’ acceptance of the wage increase. Nila P. Vivian A. Waiver and Quitclaim after receiving their separation pay and other benefits from the company.00 wage increase award is more than reasonable. Emerita D. These petitioners executed their respective Release. While the petition was pending. on the other hand. It argued that the officers should have been reinstated in the absence of substantial evidence supporting the charges against them. The union insisted on its demanded P180. The Release. Elpidia C. It also objected the rejection of its other economic demands and noneconomic proposals. Delia N. Consolacion S.130 union members to improve the existing CBA.1. It noted that the company gave a P55. Rivera. Maniebo. Dionisio.00 award was merely an advance on their demand.00 increase for the years 1993-1995. fair and reasonable based on the company's capacity to pay and the company’s bargaining history. and Rolando O. The union also contended that the company and its responsible officers should have been held in contempt for violating the Labor Secretary’s return-to-work order. Catalina N.798[30] In light of these developments and the workers’ acceptance of the wage award (except for the union officers). Santos. Umalia. Conchita R. Leticia S. Arcos. Waiver and Quitclaim executed by the 13 officers. Creselita D. The Labor Secretary committed grave abuse of discretion amounting to lack or excess of jurisdiction when he denied the proposals of the 1. Encinas. Velasquez. contending that the workers’ acceptance of the awarded wage increase cannot be considered a waiver of their demand. and P64. Madera) and the company. 2. . Nenette N. and that the Labor Secretary properly stayed his hand on the issue of illegal dismissal as the matter was beyond his jurisdiction.799[31] The union and the remaining union officers opposed the motion.00 daily wage increase distributed over three years (1999 to 2001). Soliven. The company responded by praying for the dismissal of the petition for lack of abuse of discretion on the part of the Labor Secretary. cannot bind the officers who opted to maintain the petition. arguing that the demand is just.

2. The wage increase granted to workers employed in the industry is less than the increase proposed by the company. The increase in the wages of the employees carries with it a corresponding increase in their salary-based benefits. the CA found the Labor Secretary’s award legally in order. the CA faulted the Labor Secretary for not ruling on the dismissal of the union officers. The average daily salary of an employee of P310.00 is more than the statutory minimum wage as admitted by the union itself. two more officers – Juliana D. Interphil Laboratories. the parties had executed a new CBA for the years 2002 to 2005 where they freely agreed on a total P45. 2001. Waiver and Quitclaim. It took exception to the Labor Secretary's view that the dismissal question is within the exclusive jurisdiction of the labor arbiter pursuant to Article 217 of the Labor Code. Inc.. in the meantime. On the other hand.On December 17. Galo and Remedios C. It noted the following factors supportive of the award: 1. . The Asian financial crisis.801[33] On the wage issue and related matters. The company grants to its employees forty-two (42) other monetary and welfare benefits.800[32] THE CA DECISION The CA found the petition partly meritorious. 5. The CA also noted that.00/day wage increase distributed over three years. in turn. Barque – also executed their respective Release. 3. 4. It invoked the ruling of this Court in Interphil Laboratories Employees Union-FFW v. cited International Pharmaceuticals.802[34] which. It affirmed the Labor Secretary's wage increase award. but modified his ruling on the dismissal of the union officers.

The charges were supported by the affidavits of Ernesto P. and leading. . The six remaining officers of the union – Reyvilosa Trinidad. none of the said affidavits even hinted at the culpabilities of petitioners Eloisa Figura. Rowell Frias. the CA concluded that their employment was terminated without valid and just cause. to go through the “calvary” of a protracted litigation. and Leonardo Gomez.804[36] and (2) the company’s general notice for the return of all employees on February 8. 2000. lowly workers who had been out of work for four (4) years. Eloisa Figura. Margarita Patingo.803[35] where we held that the Labor Secretary has jurisdiction over all questions and controversies arising from an assumed dispute. instigating. they were also charged with leading. thus. a related strike ensued and charges were brought against the union officers (for defiance of the returnto-work order of the Labor Secretary. and participating in a deliberate slowdown during the CBA negotiations. Lyndon Dinglasan. The CA pointed out that while the labor dispute before the Labor Secretary initially involved a bargaining deadlock.Inc. Margarita Patingo. Rowell Frias. 2000.806[38] The CA noted that in all these affidavits. v.805[37] Later. Salvio Bayon. and participating in a deliberate work slowdown during the CBA negotiations) resulting in their dismissal from employment. avoided a remand of the illegal dismissal aspect of the case to the Labor Secretary on the ground that it would compel the remaining six officers. and Rosalinda Olangar for the alleged illegal acts imputed to them. Victoria Sanchez. Dayag. The CA. however.”807[39] For failure of the company to prove by substantial evidence the charges against the remaining officers. Teresita Nacion. Jerry Jaicten. save for Reyvilosa Trinidad. In the CA’s view. Secretary of Labor. and Rosalinda Olangar (shop steward) – all stood charged with defying (1) the Labor Secretary’s return-to-work order of January 27. Herman Vinoya. instigating. Also. “no mention was ever made of *anyone+ of the six (6) remaining individual petitioners. it was in keeping with justice and equity for it to proceed to resolve the dismissal issue itself. making their dismissal illegal. the dismissal is intertwined with the strike that was the subject of the Labor Secretary’s assumption of jurisdiction. Jerry Jaicten. including cases over which the labor arbiter has exclusive jurisdiction.

The union presents the following arguments – On the CBA Award . 167401 The petition is anchored on the following grounds – 1. the CA found Trinidad's dismissal valid. The appellate court thus affirmed the May 31.811[43] Hence. The CA erred in sustaining the Labor Secretary's wage increase award of P48. 2000809[41] order of the Labor Secretary and modified the resolution dated July 14. 2.R. 2000.00/day spread over three years.810[42] The CA denied the motions for reconsideration that the union and its officers. and the company filed. THE PETITIONS G. the present petitions. the CA found that her presence in the picket line and participation in an illegal act – obstructing the ingress to and egress from the company's premises – were duly established by the affidavit of Bayon. The CA erred in finding the dismissal of Trinidad valid.With respect to Trinidad.808[40] For this reason. No.

and attorney's fees. 167407 For its part.00/day to P27. and number 46 in revenues with gross revenues of P1. On the Dismissal of Reyvilosa Trinidad The union seeks a reversal of the dismissal of Trinidad. In resolving the issue. the company seeks to annul the CA rulings on the dismissal issue. the company’s leading status in the industry in terms of wages should not be used in the determination of the award.5M and stockholders’ equity of P232. the company was deprived of its right to present evidence and. It argues that she was dismissed for alleged illegal acts based solely on the self-serving affidavits executed by officers of the company. rather. the arguments behind the company’s decreased wage offer were the same arguments it raised in previous CBA negotiations. Trinidad was discriminated against because of the four union officers mentioned in the affidavits. The CA erred in ruling that the Labor Secretary abused his discretion in not resolving the issue of the validity of the dismissal of the officers of the union. The CA erred in resolving the factual issue of dismissal instead of remanding the case for further proceedings. on the following grounds – 1. and babies’ garments.00/day for every year of the CBA period. 3. which resulted in the signing of the waiver. G. The union thus asks this Court to modify the assailed CA ruling through an order improving the CBA wage award and the grant of the non-wage proposals.00/day for a family of six (6) as found by the National Economic and Development Authority. litigation expenses. quitclaim and release. the alleged financial crisis in the region on which the CBA award was based actually did not affect the company because it sourced its raw materials from its mother company.400.000 corporations in the country manufacturing ladies’. in granting only a wage increase out of 44 items in its proposal. to due process of law.R. and that the company be ordered to pay the union moral and exemplary damages. girls’. the strike had not been declared illegal for the company had not initiated an action to have it declared illegal. assets of P525. . thereby avoiding losses. three were granted one month separation pay plus other benefits to settle the dispute in regard to the three.08B. therefore. the award disregarded the factors on which its demands were based such as the peso devaluation and the daily expenditure of P1. it should be based on the company’s financial condition and its number one rank among 7. It also asks that the dismissal of Trinidad be declared illegal. 2. No.The union contends that the CBA wage increases from 1994 to 1998 ranged from P16.1M. also the same arrangement was entered into with the other officers. the only statement in the affidavits against Trinidad was her alleged megaphone message to the striking employees not to return to work.

claiming that the evidence on record is deficient. had it been given the opportunity to present evidence. it must first be properly submitted to him. while the strike was ongoing. and. To prove its point.814[46] that it consistently maintained that the Labor Secretary has no jurisdiction over the dismissal issue.817[49] charging union officers Nenette Gonzales and Margarita Patingo of malicious mischief for stoning a company vehicle on February 25. it included in its motion for partial reconsideration816[48] a copy of the information. that the CA overstepped its jurisdiction when it ruled on a factual issue. 2000. The company likewise disputes the CA’s declaration that it took into consideration all the evidence on the dismissal issue. v. not the legality or illegality of any strike that may have occurred in the meantime. the Labor Secretary’s authority over a labor dispute encompasses only the issues. it could have done so. under Article 263 of the Code. the company posits that sufficient grounds exist to uphold the dismissals. Even assuming that it could no longer submit evidence on the dismissal of the union officers. 2000. on February 8. Secretary of Labor813[45] where the Labor Secretary was adjudged to have the power to assume jurisdiction over a labor dispute and its incidental issues such as unfair labor practices subject of cases already ongoing before the National Labor Relations Commission (NLRC). to support its petition. The company takes exception to the CA ruling that it submitted the dismissal issue to the Labor Secretary claiming that it can be seen from its opposition to the union’s petition to cite the company for contempt. Inc. the sole office of certiorari being the corrections of errors of jurisdiction. jurisdiction over such issue having been vested on the labor arbiters pursuant to Article 217 of the Labor Code.The company submits that the Labor Secretary has no authority to decide the legality or illegality of strikes or lockouts.812[44] It points out that before the Labor Secretary can take cognizance of an incidental issue such as a dismissal question. as in the case of International Pharmaceuticals. for it did not have the opportunity to adduce evidence to prove the involvement of the union officers in the individual acts for which they were dismissed. It maintains that the officers are liable to lose their employment status for knowingly staging a strike after the assumption of jurisdiction by the Labor Secretary and in .815[47] for the issuance of a return-to-work order. including the commission of grave abuse of discretion. that the affidavits it submitted to the Labor Secretary were only intended to establish the union’s violation of the return-towork orders and.

the union officers had engaged in an illegal strike. without complying with the procedural requirements for staging a strike. 2. especially wages.00 is 40% higher than the statutory minimum wage of P223. The forty-two (42) non-wage benefit programs of the company which undeniably extend the reach of the employees' cash wage in enhancing the well-being of the employees and their families. The company’s favorable comparison with industry standards in terms of employee benefits.00 surpassed the statutory minimum increase of P33. and in the local and regional economy. when the union officers and members engaged in and instigated a work slowdown. Its average daily basic wage of P310.defying the return-to-work mandated by the assumption. it took into account the comparative standing of the company in terms of employees' wages and other economic benefits. of the reasonableness of the award. THE COURT'S RULING The CBA Award We affirm the CA's disposition.50. We find the following factors as sufficient justification for the award: 1. which are considered prohibited activities under Article 264(a) of the Labor Code. We find no compelling justification to disturb the award. a form of strike. not to mention that without first having filed a notice. upholding the Labor Secretary’s award in resolving the bargaining deadlock between the union and the company for their 1999-2001 CBA. For the years prior to the 1999 negotiations. As well. 3. The Labor Secretary's Order of May 31. We further agree with it that the worker's over-all well-being is as much affected by his .00. its aggregate daily wage increase of P64. 2000 fully explained these considerations as follows:818[50] We fully agree with the Union that relations between management and labor ought to be governed by the higher precepts of social justice as enshrined in the Constitution and in the laws. in the industry. impacting on the performance of the company as indicated in its negative financial picture in 1999. We are convinced. as the appellate court was.00. and superior to the industry’s average of P258. The regional financial crisis and the downturn in the economy at the time. The parties practically reiterated these positions and the positions taken below in their respective comments to each other’s petition. It was based on the prevailing economic indicators in the workplace.

Likewise.819[51] We also note that during the pendency of the present dispute. amounts to millions of pesos. 2007. P20. the parties entered into a new CBA for the years 2000-2005. Of course[. 2005. x x x But even as we agree with the Union that the Company's negative financial picture for 1999 should not be an overriding consideration in coming up with an adjudicated wage increase. et al.821[53] The successful negotiation of two collective agreements even before the . cost of living. providing for a P45. The CA cited this agreed wage adjustment as an indication of the reasonableness of the disputed award. and are on their face just and reasonable.00/day wage increase for the workers. We accord respect to these conclusions as they were made by a public official especially trained in the delicate task of resolving collective bargaining disputes.00/day for July 19. We deem it reasonable and fair to balance our award on wages. Nieves Roldan-Confesor. The conclusions of the Labor Secretary. “*U+nless there is a clear showing of grave abuse of discretion. the varied needs of the family.00/day for July 19. interfere with the labor expertise of the public respondent Secretary of Labor.wages as by other macro-economic factors as the CPI. 2006. the needed family expenditure is answered for not solely by an individual family member's income alone. It is noteworthy that both the Union and Management recognize that the entire gamut of macro-economic factors necessarily impact on the micro-economic conditions of an individual company even in terms of wage increases. generally. but also from other incomes derived by the entire family from all possible sources. Yet. This is affirmed by the Company when it provides a comparison with the other key players in the industry. Ma. The Union also makes mention of the need to factor in the industry where the employer belongs x x x. advising the Court that it concluded another CBA with the union providing for a wage increase of P22.” as the Court held in Pier Arrastre and Stevedoring Services v.] Cognizance is likewise made of the Company's 42 non-wage benefits programs which substantially [answer] the Union's concerns with respect to the living wage and the needs of a family. this Court cannot. The Labor Secretary himself alluded to “the letter-manifestation received by this Office on 15 June 2000 containing the signatures of some 700 employees of the Company indicating the acceptance of the award rendered in the 31 May 2000 Order. superior to its counterparts in the local garments industry. the existing unemployment rate. We cannot make the historical wage increases as our starting point in determining the appropriate wage adjustment. 2006. drawn as they were from a close examination of the submissions of the parties. It would not be amiss to mention that said benefits have their corresponding monetary valuations that in effect increase a worker's daily pay. coupled with the current economic tailspin warrant a more circumspect view[. even the Union recognizes. are also important considerations. It has been properly shown that its prevailing levels of wages and other benefits are. The Company’s losses for 1999 which.”820[52] There was also the manifestation of the company dated February 7. and P20. do not indicate any legal error. and will not. Considering the foregoing circumstances.] other macro-economic factors such as the contraction of sales and production as well as the growing lack of direct investors.00/day effective July 19. and the need to correlate the rate of wage increase with the CPI are equally important. the other macro-economic factors cited by the company such as the after-effects of the regional financial crisis. much less any grave abuse of discretion.

This grant is not limited to the grounds cited in the notice of strike or lockout that may have preceded the strike or lockout. instead of remanding the case. submitted to the Labor Secretary. As the term “assume jurisdiction” connotes. thereby depriving it of the right to present evidence on the matter. We find from the records that this was an issue that arose from the strike and was. The Illegal Dismissal Issue Before we rule on the substantive aspect of this issue. Thus. its action required the prior and implied act of . We agree with the CA's conclusion that the Labor Secretary erred. including cases over which the labor arbiter has exclusive jurisdiction. and. through the union’s motion for the issuance of an order for immediate reinstatement of the dismissed officers and the company’s opposition to the motion. but was totally out of place in proceeding to resolve the dismissal issue. Article 263(g) is both an extraordinary and a preemptive power to address an extraordinary situation – a strike or lockout in an industry indispensable to the national interest. what the Labor Secretary refused to rule upon was the dismissal from employment that resulted from the strike. we deem it proper to resolve first the company’s submission that the CA erred: (1) in ruling that the Labor Secretary gravely abused his discretion in not deciding the dismissal issue.822[54] In the present case. go beyond the realm of sympathy as they are governed by law and procedural rules. in fact. The recourse to the CA was through the medium of a petition for certiorari under Rule 65 – an extraordinary but limited remedy. (2) in deciding the factual issue itself.”823[55] The dismissal issue and its resolution. to tread once again the [calvary] of a protracted litigation. We cannot disagree with the CA’s sympathies when it stated that a remand of the case “would only compel the individual petitioners. when he did not resolve the dismissal issue on the mistaken reading that this issue falls within the jurisdiction of the labor arbiter. The CA was correct in declaring that the Labor Secretary had seriously erred in not ruling on the dismissal issue. Article 264 significantly dwells on this exact subject matter by defining the circumstances when a union officer or member may be declared to have lost his employment. however. it includes and extends to all questions and controversies arising from or related to the dispute. x x x lowly workers who have been out of work for more than four (4) years. nor is it limited to the incidents of the strike or lockout that in the meanwhile may have taken place. This was an egregious error and an abdication of authority on the matter of strikes – the ultimate weapon in labor disputes that the law specifically singled out under Article 263 of the Labor Code by granting the Labor Secretary assumption of jurisdiction powers.parties could sit down and formalize the 1999-2001 CBA highlights the need for the parties to abide by the decision of the Labor Secretary and move on to the next phase of their collective bargaining relationship. the dismissal issue was properly brought before the Labor Secretary and this development in fact gave rise to his mistaken ruling that the matter is legally within the jurisdiction of the labor arbiter to decide. the intent of the law is to give the Labor Secretary full authority to resolve all matters within the dispute that gave rise to or which arose out of the strike or lockout. to the point of abusing his discretion.

Court of Appeals:825[57] [w]e have laid down the rule that the remand of the case to the lower court for further reception of evidence is not necessary where the Court is in a position to resolve the dispute based on the records before it. As mentioned earlier. the Court. Nacion. including Dionisio. PRO. we similarly recognize that undue hardship. Court of Appeals. . On many occasions. Waiver and Quitclaim and readily accepted their dismissal. shortly after the negotiations reached a deadlock. The dismissed union officers of the union originally numbered twenty-one (21). Vinoya. The parties’ affidavits and their submitted positions constitute sufficient bases to support a decision on the merits of the dismissal issue. and Gomez. The acts alluded to under the first category828[60] involved “leading.suspending the Rules of Court – a prerogative that belongs to this Court alone. Board Member. The affidavits became the bases of the individual notices of termination of employment sent to the union officers. Dinglasan. where appropriate. The first question to resolve is the sufficiency of the evidence and records before us to support a ruling on the merits. such as where the ends of justice. Shop Steward. But as the CA did. As we said in Roman Catholic Archbishop of Manila v. Secretary. The officers of the union subject of the petition were dismissed from the service for allegedly committing illegal acts (1) during the CBA negotiations and (2) during the strike declared by the union. And while we rule that the CA could not validly rule on the merits of this issue. we shall directly rule on the dismissal issue. has resolved actions on the merits instead of remanding them to the trial court for further proceedings. we shall not hesitate to refer back to its dismissal ruling. Completing the list was shop steward Olangar. would result if a remand would be ordered under a situation where we are in the position to resolve the case based on the records before us. and Rosalinda Olangar. Let this case be another reminder to the CA of the limits of its certiorari jurisdiction. Sanchez. would not be subserved by the remand of the case.826[58] Thus. 2nd Vice-President. Rowell Frias. Jerry Jaicten. executed a Release. Board Member. to the point of injustice. fifteen (15) of the dismissed officers. In the recent case of MarcosAraneta v. Bayon. in the public interest and for the expeditious administration of justice.824[56] we categorically ruled that the CA cannot resolve the merits of the case on a petition for certiorari under Rule 65 and must confine itself to the jurisdictional issues raised. twenty (20) of whom – led by union President Cenon Dionisio – were executive officers and members of the union board. We find that the union fully expounded on the merits of the dismissal issue while the company’s positions find principal support from the affidavits of Dayag. Asst. Margarita Patingo. Trinidad. Eloisa Figura.827[59] Those who remained to contest their dismissal were Reyvilosa N.

”831[63] The charges on which the company based its decision to dismiss the union officers and the shop steward may be grouped into the following three categories: (1) defiance of the return-to-work order of the Labor Secretary.832[64] . While it may be true that the affidavits the company submitted to the Labor Secretary did not specifically identify Figuna. In decreeing a return-to-work for the second time. instigating and participating in a deliberate work slowdown during the CBA negotiations. 2000. and 8. participating in a deliberate slowdown during the CBA negotiations” and. (2) commission of illegal acts during the strike. 2000. 2000. Patingo and Olangar to have committed individual illegal acts during the strike. the company failed to prove by substantial evidence the charges against the remaining union officers. The appellate court noted that in all the affidavits the company submitted as evidence “no mention was ever made of *anyone+ of the six (6) remaining individual petitioners. 1999) and on February 22. Jaiden. 3. thus making this dismissal illegal. More specifically. under the second. none of the said affidavits even hinted at the culpabilities of petitioners Eloisa Figuna. save for Reyvilosa Trinidad. Jerry Jaicten. and on February 24 and 25. 2000 (more than two months after the union struck on November 18. 2000. the Labor Secretary noted: To date.829[61] the alleged defiance and violation by the union officers of the assumption of jurisdiction and the return-to-work order of the Labor Secretary dated January 27. the officers were charged with blocking and preventing the entry of returning employees on February 2. the Union continues with its strike. and (3) leading.830[62] The CA erred in declaring that except for Trinidad.instigating. Frias. A report submitted by NCMB-NCR even indicated that all gates of the Company are blocked thereby preventing free ingress and egress to the premises. when acts of violence were committed. Margarita Patingo and Rosalinda Olangar for the alleged illegal acts imputed to them. despite the lapse of the return-to-work period indicated in the Order. 2000. 2000. as well as the second return-to-work order dated February 22. there is no dispute that the union defied the return-to-work orders the Labor Secretary handed down on two occasions. Also. in the course of the strike. first on January 27. They likewise allegedly defied the company's general return-to-work notice for the return of all employees on February 8. Rowell Frias.

Under the law.838[70] There is sufficient indication in the case record that the union officers.839[71] These illegal concerted actions could not have happened at the spur of the moment and could not have been sustained for several months without the sanction and encouragement of the union and its officers. The union and its officers. defied the Labor Secretary's assumption of jurisdiction. collectively. it constitutes a valid ground for dismissal. a form of strike837[69] undertaken by the union without complying with the mandatory legal requirements of a strike notice and strike vote.835[67] Consequently. paragraph 3 of the Labor Code provides that “Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status. they resulted from a collective decision of the entire union leadership and constituted a major component of the union’s strategy to obtain concessions from the company management during the CBA . especially the accompanying return-to-work order within twenty-four (24) hours.” The union officers were answerable not only for resisting the Labor Secretary's assumption of jurisdiction and return-to-work orders.836[68] Article 264(a). and the violation of the Labor Secretary's assumption order. for participating in a work slowdown (during the CBA negotiations). the illegal strike.833[65] the Labor Secretary's assumption of jurisdiction over the dispute or its certification to the National Labor Relations Commission for compulsory arbitration shall have the effect of automatically enjoining the intended or impending strike or lockout and all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions before the strike or lockout. they were also liable for leading and instigating and. their defiance made the strike illegal under the law834[66] and applicable jurisprudence. undoubtedly. as well as the workers. save for shop steward Olangar. were responsible for the work slowdown. in the case of Figura. that started with the slowdown in July 1999 and lasted up to March 2000 (or for about ten (10) months). These acts are similarly prohibited activities.

and November 1999. resulting in a financial loss to the company of P69. the sewers were told by the shop stewards to reduce their efficiency below 75% pursuant to the union decision to slow down production so that the company would suffer losses. even those who were already working were deliberately slow in their movements. Inc. who testified on the impact of the decrease of the workers’ production efficiency that peaked in September. They followed the order as it came from a decision of the union officers at a meeting. the company’s efficiency record for the year 1999843[75] posted Eloisa C. Sanchez. Thus. and were slow in their movements. Dayag.) stated under oath that in October 1999. they did the same thing at about seven o’clock in the morning which was already time for work.19% and from July to November 1999 at 51. Figura’s844[76] work performance from April to June 1999 at 77. Ernesto P. they would mill around the production area or were at the toilet discussing the ongoing CBA negotiations (among others). Victoria P. during the CBA negotiations. 1999). the union members were engaging in a noise-barrage everyday and when it was time to go back to work at noontime. a substantial drop in her efficiency. On November 12. a security officer of the agency servicing the company (Tamaraw Security Service.77%. Specifically. in late October (October 27. corroborated Sanchez's deposition stating that in mid-September 1999.277M. deposed that sometime in the middle of September 1999. the sewers were told by the shop stewards to reduce their efficiency below 75%. Teresita T. October. The work slowdown resulted in production losses to the company which it documented and submitted in evidence841[73] before the Labor Secretary and was summarized in the affidavit842[74] of Leonardo T. only about 50% of the union members returned to their work stations. It was not difficult to comply with the order because they only had to slow down at the pre-production and early segments of the production line so that the rest of the line would suffer. . another sewer. Gomez. a sewer in the company's production department. Nacion. when union officer Lisa Velasquez talked to the union members at lunchtime regarding the CBA negotiations. 1999. That the work slowdown happened is confirmed by the affidavits840[72] and the documentary evidence submitted by the company.negotiations.

24 and 28. Thus. through a letter dated March 2. Judging from the manner the union staged the strike. Salvio Bayon. In a letter also dated March 2. 2000. a company building technician and a member of the union. 2000.848[80] advised the NCMB administrator of the decision of the union executive board for the return to work of all striking workers the following day. it is readily apparent that the union’s objective was to paralyze the company and to maintain the work stoppage for as long as possible. This is the economic war that underlies the Labor Code’s strike provisions. which prompted the Labor Secretary’s intervention through an assumption of jurisdiction. the union persisted with the strike and prevented the entry to the company premises of workers who wanted to report back for work. the union continued with its strike. but they were prevented by a member of the strikers. even with the assumption of jurisdiction and its accompanying return-to-work order. the same thing happened on February 8.847[79] The union.849[81] the company also advised the NCMB Administrator that it was willing to accept all returning employees. he and ten (10) of his co-employees attempted to enter the company premises. without prejudice to whatever legal action it may take against those who committed illegal acts.The union’s two-pronged strategy to soften the company’s stance in the CBA negotiations culminated in its declaration of a strike on November 18. From the illegal work slowdown to . the Labor Secretary issued a second return-to-work directive on February 22. 2000. 2000 where the labor official noted that despite the lapse of the returnto-work period indicated in the order. 2000. 2000. 1999. In particular. led by union President Cenon Dionisio and other officers of the union. and which the same Code also tries to temper by regulation. The above union letter clearly shows the involvement of the entire union leadership in defying the Labor Secretary's assumption of jurisdiction order as well as return-to-work orders.845[77] In the face of the union's defiance of his first return-to-work order. the company agreed to extend the implementation of the return-to-work order to March 6. 2000. deposed that at about seven o'clock in the morning of February 3.846[78] At a conciliation meeting on February 29.

854[86] Further. the Union officers and members refused to do so and defied the same. NLRC. To our mind. thus. in its letter of March 2. In Gold City Integrated Port Service. it was the union officers who were behind the every move of the striking workers. We see no merit in this argument. and collectively deciding the twists and turns of the strike which even became violent as the striking members prevented and coerced returning workers from gaining entry into the company premises. the dismissal of its officers is in order. Inc. there being no case filed on the legality or illegality of the strike. The Labor Secretary himself. 2000 order. the declaration of the strike. and the defiance of the Labor Secretary's orders.” The union attempted to divert attention from its defiance of the return-to-work orders with the specious submission that it was the company which violated the Labor Secretary's January 27. in his order of February 22. Funtila appealed to the striking employees and the officers to remove all the obstacles and to lift their picket line to ensure free ingress and egress. then. Consequently. 2000 order. San Juan De Dios Educational Foundation.853[85] noted that the union continued its strike despite the lapse of the return-to-work period specified in his January 27.” We reiterated this principle in San Juan De Dios Educational Foundation Employees Union-Alliance of Filipino Workers v. the union itself. by not withdrawing its notice of lockout. 2000 order. 2000. In a different vein. There is also the report of the NCMB-NCR clearly indicating that all gates of the company were blocked. There. advised the NCMB that the union board of directors had decided to . v.’ grants the employer the option of declaring a union officer who participated in an illegal strike as having lost his employment. in using the word ‘may. all the union officers who knowingly participated in the illegal strike knowingly placed their employment status at risk.851[83] where we stated that “Despite the receipt of an order from the SOLE to return to their respective jobs. the strike staged by the Union is a prohibited activity under Article 264 of the Labor Code. The respondent Foundation was.850[82] we held that “*t+he law.the filing of the strike notice.852[84] The evidence indicates otherwise. was the letter of the company personnel manager. too. Hence. thereby preventing free ingress to and egress from the company premises.. 2000. Ralph Funtila. Inc. justified in terminating the employment of the petitioner Union's officers. as we earlier noted. the union faulted the company for having dismissed the officers. advising the union that the company will comply with the Labor Secretary's January 27.

the extension of the return-to-work order and the submission of all striking workers. and those who were sick. 2000 indicating that they had been on strike since November 18.return to work on March 3. we find that the company did not waive the right to take action against the erring officers. but twice. As a point of law. 2000. WHEREFORE. He also clarified that it extended the return-to-work. and this was acknowledged by the Labor Secretary himself in his order of March 9.+ without prejudice to the Company's exercise of its prerogative to continue its investigation. however. 2000. who were not notified. we find her dismissal without a valid cause. For having participated in a prohibited activity not once. to prove by substantial evidence the illegal acts allegedly committed by Rosalinda Olangar. who is a shop steward but not a union officer. judgment is hereby rendered AFFIRMING with MODIFICATION the challenged decision and . 2000. the union officers.” The order was issued upon complaint of the union that the officers were placed under preventive suspension. cannot in any way be considered a waiver that the union officers can use to negate liability for their actions. 2000. For failure of the company.857[89] when he directed the company “to accept back to work the twenty (20) union officers and one (1) shop steward*.855[87] In the first place. legally deserve to be dismissed from the service. except those our Decision can no longer reach because of the amicable settlement they entered into with the company. As a final point. as the CA opined in its assailed decision. by the company.856[88] the company will accept all employees who will report for work up to March 6. premises considered. upon request of the union and the DOLE to accommodate employees who were in the provinces. as clarified by Funtila's letter to the NCMB dated March 2. without prejudice to whatever legal action it may take against those who committed illegal acts. 1999 and were defiant of the return-to-work orders since January 28.

2000. ABAD Associate Justice . The collective bargaining award of DOLE Secretary Bienvenido E. SP No. 3. contained in his order dated May 31. The dismissal of ROSALINDA OLANGAR is declared illegal. union 2 Vice-President. BERSAMIN Associate Justice ROBERTO A. Assistant Secretary. SO ORDERED. The dismissal of ELOISA FIGURA. The CA award is SUSTAINED in her case. is likewise AFFIRMED. Press Relations Officer. 60516. ARTURO D. JERRY JAICTEN. BRION Associate Justice WE CONCUR: CONCHITA CARPIO MORALES Associate Justice Chairperson LUCAS P. The dismissal of REYVILOSA TRINIDAD.R.resolution of the Court of Appeals in CA-G. Board Member. is fully AFFIRMED. as follows: 1. is declared VALID and for a just cause. and ROWELL FRIAS. 2. and nd 4. Laguesma.

VILLARAMA. Article VIII of the Constitution. it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. JR. CORONA Chief Justice . RENATO C. and the Division Chairperson’s Attestation. CONCHITA CARPIO MORALES Chairperson Associate Justice CERTIFICATION Pursuant to Section 13.MARTIN S. Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

NATIONAL LABOR RELATIONS COMMISSION. INC. Promulgated: July 2. 2001 . 167218 Present: CARPIO. 2005 Decision858[1] of the Court of Appeals in CA-G. ABAD. In turn.versus NACHURA. JJ. SP No. assails the February 16. J. PERALTA.Republic of the Philippines Supreme Court Manila SECOND DIVISION ERECTOR ADVERTISING SIGN GROUP. Petitioners. The challenged Decision affirmed the February 28. G. .. J. Respondent. Chairperson. the said Decision reversed and set aside the March 30. No. petitioner Erector Advertising Sign Group. JIMMY C.R. and ARCH. Inc. and MENDOZA. 2003 Resolution859[2] of the National Labor Relations Commission in NLRC NCR CA No. AMOROTO. 2010 x-----------------------------------------------------------------------------------------x DECISION PERALTA.R. 80027.: In this petition for review under Rule 45 of the Rules of Court. 028711-01.

premium pay for worked rest days. suddenly barged into the premises of the Outright Division and.865[8] . and of misbehavior. Sometime in the middle of 1996. threatened the employees with bodily harm if they did not stop from doing their work. without being provoked. petitioner engaged the services of Expedito Cloma (Cloma) as company driver and the latter had served as such until his dismissal from service in May 2000. service incentive leave pay and 13th month pay.861[4] In his Complaint862[5] filed with the National Labor Relations Commission (NLRC). The basic facts follow.864[7] This second incident was supposedly narrated fully in a letter dated May 13. as well as moral.Decision860[3] of the Labor Arbiter. The former happened between May 12 and May 15. 2000 addressed to the personnel manager and signed by one Victor Morales and Ruben Que. exemplary and actual damages and attorneys fees. but the instant case appears to be likewise the result of documented instances of absenteeism without prior notice to and approval from his superior. Cloma. It is conceded by petitioner that Cloma has been suspended several times from work due to frequent tardiness and absenteeism. Inc. 2000 when Cloma supposedly failed to report for work without prior notice and prior leave approval863[6] which thus effectively prevented the other workers from being transported to the job site as there was no other driver available. 2000 when allegedly. whereas the latter incident happened on May 11. He likewise claimed his unpaid monetary benefits such as overtime pay. which dismissed for lack of merit the complaint for illegal dismissal filed by respondent Expedito Cloma. is a domestic corporation engaged in the business of constructing billboards and advertising signs. Petitioner Erector Advertising Sign Group. Cloma alleged that he was illegally suspended and then dismissed from his employment without due process of law. without authority.

petitioner served on Cloma two (2) Suspension Orders dated May 15. 2000 na wala man lang pasabi o paalam. Dalawang araw na absent ay katumbas ng tatlong araw na suspension. Ito ay dahil sa [sumusunod] na dahilan: 1. 2000 Para kay: MR. 2000. he was taken by surprise when the security guard on duty prevented him from entering the company‘s premises and. (SECTION 2 PARAGRAPH 2/PANANAKOT ―ISANG LINGGONG SUSPENSYON) Ang iyong suspension ay epektibo kaagad bukas at makakabalik ka lamang sa Mayo 25. Anne Dongel samantalang iba naman ang kanilang Division. 2000. 2000 hanggang Mayo 24.868[11] The letter states: May 20.867[10] When Cloma reported back for work on May 25. 2000. personnel and production manager of petitioner company. 2000. Amoroto (Amoroto). signed and approved by Clavacio and Amoroto. president and chief executive officer. 2000 Para kay: MR. 2000. instead.As a result of these incidents. both signed by Nelson Clavacio (Clavacio). EXPEDITO CLOMA Company Driver Paksa: Notice of Termination Ginoong Expedito Cloma: . EXPEDITO CLOMA Company Driver Paksa: SUSPENSION ORDER Dahil sa iyong pagliban mula pa nuong Mayo 12 hanggang Mayo 15. Anne Dongel na tagaOutright Division na magtrabaho nuong Mayo 11. PARAGRAPH 4: ―Ang pagliban ng walang paalam na sunod-sunod ay may kalakip na kaparusahan. Ang parusang nabanggit ay para sa pagpapairal ng disiplina sa atin at sa ating mga kapwa manggagawa. ikaw ay binibigyan ng tatlong araw na suspensyon na magsisimula ngayon Mayo 15 hanggang Mayo 17. 2000 and May 17. EXPEDITO CLOMA Company Driver Paksa: SUSPENSION ORDER Ikaw ay ginagawaran ng isang linggong Suspensyon mula bukas. 2000. handed him a termination letter dated May 20. Ang pagpigil sa mga trabahador ni Ms. Malinaw na nakasaad sa Company Rules and Regulations SECTION 1. 2000 Para kay: MR.866[9] May 17. the suspension orders are reproduced as follows: May 15. For easy reference. Mayo 18. Ito ay bilang paggawad ng batas at disiplina sa ating sarili at sa iba upang huwag ng pamarisan pa. and approved by Architect Jimmy C. 2000 at pananakot sa mga trabahador ni Ms.

In this connection. 3. the latter nevertheless did not comply with the directive and instead ignored the same. the Labor Arbiter put much weight on the evidence presented by petitioner company bearing on Cloma‘s frequent tardiness and unauthorized absences.870[13] In so ruling. 2003. 2. Anne Dongel. nagpapakita lamang na hindi mo nagampanan ng maayos ang iyong trabaho katulad ng inaasahan sa iyo ng Pamunuang ito. It went on to say that while the onus of proving the existence of the cause for termination and the observance of due process lie on the employer. Ang pagliban ng dalawang araw na wala man lang pasabi o paalam.873[16] On February 28. Cloma walked away and filed the instant complaint for illegal dismissal. Following the submission of position papers and other documentary exhibits by both parties. 2001 Decision dismissing Cloma‘s complaint for lack of merit. had directed Cloma to submit his explanation on his alleged infractions. the Labor Arbiter.869[12] Ridden with angst and anxiety. the Labor Arbiter declared that a plea of denial of procedural due process would not lie when he who had been given an opportunity to be heard had chosen not to avail of such opportunity. . Maraming pagkakataon na ―late‖ na naging dahilan ng pagsabotahe ng operasyon ng mga Production Crews. Ang pagpigil sa operasyon ng ibang Department sa pamamalakad ni Ms. as well as the several incidents of misbehavior and misconduct in which Cloma figured as the protagonist. Cloma appealed to the NLRC. issued its March 30. 4. petitioner company was actually able to establish the validity of Cloma‘s dismissal by its evidence. the NLRC issued its Resolution874[17] reversing and setting aside the Labor Arbiter‘s decision.Malungkot naming ibinabalita sa iyo na napagpasyahan ng Pamunuang ito na tanggalin ka na sa iyong serbisyo bilang ―Company Driver. by memorandum/notice.872[15] Aggrieved. ito ay sapat na dahilan upang tanggalin ka sa iyong posisyon. Mula sa mga dahilan na nabanggit.871[14] It also noted that while the company. after evidentiary evaluation. Ang pananakot sa kapwa manggagawa o trabahador na nagresulta sa pagkauwi ng mga trabahador ng Outright Division.‖ Ito ay dahil sa mga sumusunod na kadahilanan: 1.

plus ten percent (10%) of his total monetary award as attorney‘s fees.877[20] Petitioner‘s motion for reconsideration was denied. 2005. i.673. the letter did not state the dates when these two absences had been incurred. i.e. that he was dismissed without just cause.875[18] Hence. finding that Cloma was dismissed without just cause and without due process.878[21] and forthwith it elevated the case to the Court of Appeals on petition for certiorari. Respondents are hereby ordered to jointly as (sic) severally pay Complainant the amount of P271.876[19] The appeal was disposed of as follows: WHEREFORE.The NLRC pointed out that not only was Cloma dismissed without due process but also. petitioner did not profess having conducted investigation on these matters that would have afforded Cloma the opportunity to confront his witnesses and that Cloma had already been sanctioned for this offense under the May 17.e. The Labor Arbiter‘s decision in the above-entitled case is hereby REVERSED and SET ASIDE.. Ang pananakot sa kapwa manggagawa x x x and Ang pagpigil sa operasyon ng ibang Department x x x. allowances and other benefits. premises considered.. that in relation to the second and third grounds. Complainant‘s appeal is GRANTED.e. and that as to the last ground. the NLRC noted that the best proof on this allegation would have been Cloma‘s corresponding daily time record but which.879[22] On February 16. petitioner failed to make of record at the hearing of the case. i. the Court of Appeals rendered the assailed Decision880[23] adopting the findings and conclusions of the NLRC as follows: . The NLRC based its finding on the termination letter served by petitioner on Cloma such that with respect to the first ground of termination. as well as separation pay in lieu of reinstatement. however. 2000 suspension order. Maraming pagkakataon na late x x x. Ang pagliban ng dalawang araw na wala man lang pasabi o paalam. the NLRC ordered petitioner to pay full backwages. A new one is entered declaring that Complainant‘s dismissal from employment is illegal. SO ORDERED.08 as backwages and separation pay..

883[26] We find no merit in the petition. a written notice stating the cause for termination and a written notice of the intention to terminate employment stating clearly the reason therefor. which raises the sole issue of whether Cloma was dismissed with just cause and with due process of law. nevertheless. could constitute valid grounds for dismissal. 2000. but he nevertheless failed to comply despite the fact that he was residing only a few houses away from the company. . petitioner admits that it is Cloma‘s repeated infractions which gave the company the motivation to finally terminate his services. picking fights with co-workers and others such as reporting for which the management merely let pass but which. Cloma maintains that petitioner‘s evidence is insubstantial to support the theory that the dismissal has complied with due process and is with just cause. It reasons that ample time. alluding to several infractions and violations of company rules and regulations for which he has been suspended many times from work.881[24] Also. it likewise enumerates a number of Cloma‘s other acts of misbehavior work under the influence of alcohol. petitioner did not comply with the two-notice rule required by law to validate an employee‘s dismissal from service. 00-05-02887-2000 is hereby AFFIRMED. has been afforded Cloma so that he could explain why he should not be dismissed. this petition.WHEREFORE. SO ORDERED. prior to May 20.882[25] Commenting on the petition. It claims that the decision to let go of Cloma was the result of a thorough consideration of the totality of the many infractions he has committed. In addition. Yet significantly. that is. petitioner maintains that it observed due process in deciding to dismiss Cloma from service. the instant petition is DENIED. He stresses that the evidence presented by petitioner hardly supports the grounds relied on for his termination and that. The resolution of the National Labor Relations Commission dated 28 February 2003 reversing the decision of the Labor Arbiter dated 30 March 2001 in NLRC CASE No. more importantly. Hence. as well as of his general behavior toward his work. Petitioner insists that the just cause for Cloma‘s termination abounds in the records.

and third. the employer is bound to furnish the employee concerned with two (2) written notices before termination of employment can be legally effected. his absence from work for two (2) days without prior notice and approval. These are. first. yet it is equally certain that the records do not contain any suggestion that petitioner. Here is why: a fleeting glance at these two orders readily reveals that the alleged offenses mentioned therein were not to be used as grounds for termination.The validity of an employee‘s dismissal from service hinges on the satisfaction of the two substantive requirements for a lawful termination. we find that Cloma‘s dismissal from service did not comply with this basic precept. The other is the notice informing the employee of the management‘s decision to sever his employment. This constitutes the substantive aspect. What is clear from the records is that the only notice that was given to Cloma prior to his termination is the May 20. however. One is the notice apprising the employee of the particular acts or omissions for which his dismissal is sought and this may loosely be considered as the proper charge. his act of barging into the premises of the Outright Division and threatening the members of the said division with bodily harm if they did not stop doing their work. has tried to notify the latter of the said charges. whether the employee was accorded due process the basic components of which are the opportunity to be heard and to defend himself.884[27] With respect to due process requirement. only that he did not choose to avail of that opportunity. ample opportunity was thereafter given to him to be heard thereon. The requirement of notice. nowhere in the records does it appear that Cloma attempted to deny these allegations. with respect to these three grounds with which Cloma is charged. petitioner insists that Cloma has been sufficiently informed of the acts constituting the grounds for his termination and that with respect thereto. must come only after the employee is given a reasonable period from receipt of the first notice within which to answer the charge. hardly constitute the first notice required by law prior to termination. We recall that the notice of termination served by petitioner on Cloma cites three reasons why the management has arrived at the decision to dismiss him from service: first. it has been stressed. These orders. Petitioner seems to be referring to the May 15 and May 17. however.885[28] In this case. thereby giving him ample opportunity to be heard and defend himself with the assistance of his representative should he so desire. his frequent tardiness in reporting for work. And second. Indeed. Certainly. whether the dismissal is for any of the causes provided in the Labor Code of the Philippines. second. we find that petitioner has not complied with the basic requirement of serving a pre-dismissal notice on Cloma. This decision. 2000 notice of termination informing him that his employment in the company has been severed for the causes mentioned. 2000 Suspension Orders which it previously served on Cloma. This is the procedural aspect. Be that as it may. is not a mere technicality but a requirement of due process to which every employee is entitled. but rather merely .

There is not an allusion in the said orders that petitioner was giving Cloma sufficient opportunity to submit his defenses or explanation. Finally. from the May 17. Add to that the fact that Cloma‘s daily time records. it suffices to say that even assuming that the May 15. to suspend Cloma from work in the company. but also that petitioner has not overcome the quantum of substantial evidence needed to establish the existence of just causes for dismissal in this case. anent the charge that Cloma had terrorized the staff of the Outright Division and incited a work stoppage. it is plain in the records that the same have not been sufficiently proved by petitioner.. that Cloma has frequently been late in reporting for work. could not have constituted the first notice relative to the charge that Cloma has incurred unauthorized absences for two days as stated in the notice of termination. have not been made of record when they are actually within petitioner‘s power to produce and submit at the trial. in particular. with respect to this ground. Moreover. we find that no error has been committed by the Court of Appeals in ruling that Cloma‘s dismissal from service was both without just cause and without due process of law. aside from the fact that Cloma. this act may no longer be added to support the imposition of the ultimate penalty of dismissal from service nor may it be used as an independent ground to that end. The same applies to the charge of unauthorized absences. we agree with the Court of Appeals that not only did petitioner fail to comply with the procedural due process requirements in terminating Cloma‘s employment. The wording of the orders conveys the idea that as a result of his shortcomings. 2000 Order. hence. 2000 and May 15.e. .for suspension. Observably. In this regard. 2000 for which Cloma has actually been sanctioned with suspension. the May 15. but not that he might be dismissed from service upon the same grounds. has not been furnished a pre-dismissal notice. Cloma‘s dismissal cannot be validly effected. that he has already been penalized with suspension for this offense and. and nothing more. it is clear. With respect to the charges of frequent tardiness and incurring an unauthorized two-day leave of absence.886[29] The same is true with the third ground of termination. Moreover. Cloma was going to be meted the penalty of suspension in accordance with the provisions of the company‘s rules and regulations. because an employee may be dismissed only if the grounds mentioned in the pre-dismissal notice were the ones cited for the termination of employment. This. the notice of termination does not state the inclusive dates on which Cloma actually reported late for his work. petitioner could not identify the dates when Cloma incurred the alleged tardiness in reporting for work. which would have been the best evidence on the matter. still. i.887[30] All told. Instead. 2000 suspension order. For one. inasmuch as the order refers to a four (4)–day absence supposedly incurred between May 12. for causes stated therein. 2000 order could validly take the place of the first notice. what it implies is that the management has already decided.

DIOSDADO M. affirming the February 28. the petition is DENIED.R. CARPIO Associate Justice Chairperson ANTONIO EDUARDO B.WHEREFORE. ABAD Associate Justice JOSE CATRAL MENDOZA Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court‘s Division. 80027. is hereby AFFIRMED. The February 16. SO ORDERED. NACHURA Associate Justice ROBERTO A. PERALTA Associate Justice WE CONCUR: ANTONIO T. . 2005 Decision of the Court of Appeals in CAG. SP No. 2003 Resolution of the National Labor Relations Commission in NLRC NCR CA No. 028711-01.

Chairperson CERTIFICATION Pursuant to Section 13.ANTONIO T. CORONA Chief Justice . I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court‘s Division. RENATO C. Article VIII of the Constitution and the Division Chairperson‘s Attestation. CARPIO Associate Justice Second Division.

an ample opportunity to be heard. Promulgated: July 26. as to its procedural aspect. he must be accorded both substantive and procedural due process by the employer. will be upheld provided that the employer is able to show that compliance with these requirements was not a mere afterthought. This Petition for Review on Certiorari seeks to reverse and set aside the Court of Appeal‘s (CA‘s) June 2. Procedural due process requires that the employee be given a notice of the charge against him. and a notice of termination. the legality of the dismissal. No. 034421-03. 2010 Respondents.R.: In order to validly dismiss an employee. JR. J. 83577. and PEREZ. VELASCO. No. 169999 Present: CORONA. which affirmed with modification the October 28.. C. Even if the aforesaid procedure is conducted after the filing of the illegal dismissal case. LEONARDO-DE CASTRO. and G.Republic of the Philippines Supreme Court Manila FIRST DIVISION NEW PUERTO COMMERCIAL RICHARD LIM. J. SP. and the September 23. Petitioners. DEL CASTILLO. . 2005 Decision888[1] in CA-G.versus - RODEL LOPEZ and FELIX GAVAN. Chairperson..R. 2005 Resolution890[3] . x-----------------------------------------------------------x DECISION DEL CASTILLO. JJ. 2003 Decision889[2] of the National Labor Relations Commission (NLRC) in NCR CA No.

Respondents refused to attend said hearing. and (2) their absence without leave for more than a month. . 2000. 2000. Under a rolling store scheme. Respondents were duty-bound to collect the accounts receivables and remit the same upon their return to petitioners‘ store on a weekly basis. an information for the crime of estafa was filed by the city prosecutor against respondents with the Municipal Trial Court in Puerto Princesa City. the complaint was endorsed for compulsory arbitration at the Regional Arbitration Branch of the NLRC on February 13. As a result. petitioners sent another set of notices to respondents on December 7. On November 3. petitioners served notices of termination on respondents on the grounds of gross misconduct and absence without leave for more than one month. On November 20. On December 6. Palawan. 1999 and respondent Rodel Lopez (Lopez) as roving salesman on October 12. petitioners filed a complaint for three counts of estafa before the prosecutor‘s office against respondents in connection with the alleged misappropriation of sales collections.denying petitioners‘ motion for partial reconsideration. The notice also required respondents to appear before petitioners‘ lawyer on December 2. 2001. 2000 to attend a hearing on December 15. petitioners assigned respondents to sell goods stocked in a van on cash or credit to the sari-sari stores of far-flung barangays and municipalities outside Puerto Princesa City. Thereafter. On December 18. Factual Antecedents Petitioner New Puerto Commercial hired respondent Felix Gavan (Gavan) as a delivery panel driver on February 1. Petitioner Richard Lim is the operations manager of New Puerto Commercial. respondents filed a Complaint891[4] for illegal dismissal and non-payment of monetary benefits against petitioners with the Regional Office of the Department of Labor and Employment in Puerto Princesa City. 2000. 2000. Previously or on November 28. On February 5. 2001. 2000. 2000 to give their side with regard to the foregoing charges. 2000 but respondents again refused to attend. petitioners sent respondents notices to explain why they should not be dismissed for gross misconduct based on (1) the alleged misappropriation of their sales collections. 1999. a conciliation conference was held but the parties failed to reach an amicable settlement.

viz: WHEREFORE. The Decision of the Labor Arbiter dated August 29. the parties submitted their respective position papers. in the light of the foregoing premises.998. hence. Jr. These acts constituted serious misconduct and formed sufficient bases for loss of confidence which are just causes for termination. 2003. are directed to pay herein complainants their proportionate 13th month pay for the year 2002893[6] [sic] as follows: (1. Thus. the appeal is DENIED.67 Felix Gavan.P2. failed to prove that they paid the proportionate amount of 13th month pay due to respondents at the time of their dismissal. The records also showed that respondents were given opportunities to explain their side.) Rodel Lopez. Labor Arbiter Cresencio G.) (2.In due time. . the NLRC rendered a Decision affirming the ruling of the Labor Arbiter. 2002 is AFFIRMED en toto. the Labor Arbiter ordered petitioners to pay respondents the same. however.894[7] The Labor Arbiter ruled that there is substantial evidence tending to establish that respondents committed the misappropriation of their sales collections from the rolling store business. Respondents. Petitioners.67 SO ORDERED. the above case for illegal dismissal is hereby DISMISSED for being devoid of legal merit. Ramos. Labor Arbiter’s Ruling On August 29. 2002. Both substantive and procedural due processes were complied with. the dismissal is valid.P2.998. rendered a Decision892[5] dismissing the complaint for illegal dismissal but ordering petitioners to pay respondents‘ proportionate 13th month pay: WHEREFORE. however. National Labor Relations Commission’s Ruling On October 28.

The NLRC also observed that the investigation on the misappropriation of company funds was not a mere afterthought and complied with the twin-notice rule. the failure of respondents to report for work and their misappropriation of company funds have become settled. or grave abuse of discretion.SO ORDERED. the Decision of the NLRC dated 29 August 2002896[9] is hereby MODIFIED in that private respondents are ordered to pay petitioners nominal damages of P30. affirmed with modification the ruling of the NLRC. SO ORDERED.000. however. and (2) they stopped reporting for work during the last week of October 2000. While the dismissal was for just cause. Thus. Last. in its June 2.895[8] The NLRC agreed with the Labor Arbiter that respondents‘ act of misappropriating company funds constitutes gross misconduct resulting in loss of confidence. it ruled that damages cannot be awarded in favor of respondents because their dismissal was for just causes. In consonance . Further. viz: WHEREFORE. 2005 Decision. respondents admitted misappropriating the subject collections before the hearing officer of the Palawan labor office during the conciliation conference on November 20. Court of Appeal’s Ruling The CA. in view of the foregoing. It held that the formal investigation of respondents for misappropriation of company funds was a mere afterthought because it was conducted after petitioners had notice of the complaint filed before the labor office in Palawan. The decision is affirmed in all other respect.00 each. It noted that respondents never denied that (1) they failed to surrender their collections to petitioners. that respondents were denied procedural due process. These acts constitute grave misconduct which is a valid cause for termination under Article 282 of the Labor Code. the appellate court found.897[10] The appellate court held that it was bound by the factual findings of the NLRC because a petition for certiorari is limited to issues of want or excess of jurisdiction. 2000.

000. .000. and 2. Lopez starting on October 23. this was the only time when they could begin the formal investigation of respondents wherein they followed the twin-notice rule and which led to the termination of respondents on December 18. 2000 when Bagasala finished the investigation and submitted to petitioners the evidence establishing that respondents indeed misappropriated company funds. Naturally. Whether x x x the Court of Appeals erred in awarding the sum of P30. Rather. 2000. it took a couple of weeks for petitioners‘ representative. National Labor Relations Commission.00 each as nominal damages for failure of petitioners to comply with the twin requirements of notice and hearing before dismissing the respondents.899[12] Petitioners’ Arguments Petitioners contend that the investigation of respondents was not an afterthought. Whether x x x the Court of Appeals erred in construing that the investigation held by petitioners is an afterthought. respondents had not yet been dismissed by petitioners. From this decision. it was only on November 18.with the ruling in Agabon v.898[11] respondents are entitled to an award of P30. 2000. Issues Petitioners raise the following issues for our resolution: 1. They stress the following peculiar circumstances of this case: First. 2000 for gross misconduct and absence without leave for more than a month. Considering the distance between the towns serviced by respondents and Puerto Princesa City. Thus.00 each to the respondents as nominal damages. Second. to unearth the anomalies committed by respondents. it was respondents who were guilty of not reporting for work. Armel Bagasala (Bagasala). when the labor complaint was filed on November 3. only petitioners appealed. petitioners were still in the process of collecting evidence on the alleged misappropriation of company funds after they received reports of respondents‘ fraudulent acts. 2000 and Gavan on October 28. at this time also.

2000 was purposely sought by respondents to pre-empt the results of the then ongoing investigation after respondents got wind that petitioners were conducting said investigation because respondents were reassigned to a different sales area during the period of investigation. Respondents’ Arguments Respondents counter that their abandonment of employment was a concocted story. According to respondents.900[13] . as raised in the instant petition. 2000. Further.Petitioners lament that the filing of the labor complaint on November 3. National Labor Relations Commission. they sought help from the Palawan labor office which recommended that they file a labor complaint. They claim that the evidence is insufficient to prove that they did not remit their sales collections to petitioners.e. to establish this claim. At the outset. is whether respondents were denied procedural due process justifying the award of nominal damages in accordance with the ruling in Agabon v. no proof was presented that petitioners‘ served a notice of abandonment at respondents‘ last known addresses as required by Section 2. the filing of the illegal dismissal complaint negates abandonment. as to the issue of substantive due process. the award of nominal damages is improper. Respondents add that they did not hold a position of trust and confidence. They claim that the criminal cases for estafa against respondents were belatedly filed in order to further justify their dismissal from employment and act as leverage relative to the subject labor case they filed against petitioners. No evidence was presented. the only proper issue for our determination. Respondents also contest the finding that they misappropriated company funds. the dismissal was valid because it was based on just causes (i. Thus. Assuming arguendo that respondents abandoned their work. Neither were the minutes of the proceedings before the labor officer presented to prove that they admitted misappropriating the company funds. we note that respondents did not appeal from the decision of the CA which found that. like the daily time record. on November 3. petitioners verbally advised them to look for another job because the company was allegedly suffering from heavy losses. Book V of the Omnibus Rules Implementing the Labor Code. When the requirements of procedural due process are satisfied. Rule XVI.. For this reason. Our Ruling The petition is meritorious. grave misconduct and loss of trust and confidence) due to respondents‘ misappropriation of their sales collections.

the appellate court ruled that there are two conflicting versions of the events and that. Rule I of the Implementing Rules of Book VI of the Labor Code should be interpreted in broad strokes. is not absolutely necessary to satisfy the employee's right to be heard. and (2) the second informs the employee of the employer‘s decision to dismiss him. appellate courts accord the factual findings of the Labor Arbiter and the NLRC not only respect but also finality when supported by substantial evidence. the CA found that respondents were denied their right to procedural due process because the investigation held by petitioners was an afterthought considering that it was called after they had notice of the complaint filed before the labor office in Palawan. and not necessarily that an actual hearing was conducted. although preferred. The employer must furnish the employee with two written notices before the termination of employment can be effected: (1) the first apprises the employee of the particular acts or omissions for which his dismissal is sought. the factual findings of the Labor Arbiter. procedural due process consists of the twin requirements of notice and hearing. that petitioners stopped reporting from work and misappropriated their sales collection are binding on the courts. submissions or pleadings.906[19] .903[16] In the instant case. It is satisfied not only by a formal face to face confrontation but by any meaningful opportunity to controvert the charges against him and to submit evidence in support thereof. it is not limited to a formal hearing only. A hearing means that a party should be given a chance to adduce his evidence to support his side of the case and that the evidence should be taken into account in the adjudication of the controversy. formal ―trial-type‖ hearing. It is not for the Court to re-examine conflicting evidence. re-evaluate the credibility of the witnesses nor substitute the findings of fact of an administrative tribunal which has gained expertise in its specialized field. in a petition for certiorari under Rule 65 of the Rules of Court.904[17] Indeed. In other words. while the phrase ―ample opportunity to be heard‖ [in Article 277 of the Labor Code] may in fact include an actual hearing. Therefore. the existence of an actual. The requirement of a hearing is complied with as long as there was an opportunity to be heard. Philippine Telegraph and Telephone Company:902[15] An employee‘s right to be heard in termination cases under Article 277 (b) as implemented by Section 2 (d).901[14] As we explained in Perez v.In termination proceedings of employees. ―To be heard‖ does not mean verbal argumentation alone inasmuch as one may be heard just as effectively through written explanations. as affirmed by the NLRC. Consequently.905[18] The Court does not substitute its own judgment for that of the tribunal in determining where the weight of evidence lies or what evidence is credible. the courts are precluded from resolving factual issues. However.

it cannot be concluded that the sending of the notices and setting of hearings were a mere afterthought because petitioners were still awaiting the report from Bagasala when respondents pre-empted the results of the ongoing investigation by filing the subject labor complaint. WHEREFORE. SP. 2000 for respondent Gavan. The mere fact that the notices were sent to respondents after the filing of the labor complaint does not. Subsequently.03 in sales collections. as affirmed by the appellate court itself. 2000 for respondent Gavan) after they got wind of the fact that they were being investigated for misappropriation of their sales collection.907[20] then at the time of the filing of the complaint with the labor office on November 3. The June 2.e. On November 18. The October 28. 2003 Decision of the National Labor Relations Commission in NCR CA No. To prevent a possible cover up. the petition is GRANTED. under the peculiar circumstances of this case. on November 28. 034421-03 is REINSTATED and AFFIRMED. . we find that the appellate court misapprehended the import of these factual findings. that respondents failed to report for work starting from October 22. As a result. Thus.However. in the route being serviced by respondents. 2000. Prior to this point in time. Sometime in the third week of October 2000. Bagasala returned from his month-long investigation in the far-flung areas previously serviced by respondents and reported that respondents indeed failed to remit P2. 2000 for respondent Lopez and October 28. As can be seen. 2000. petitioners initiated an investigation by sending one of their trusted salesmen. Thereafter. on December 18. 83577 are REVERSED and SET ASIDE. Bagasala.. while we agree with the CA that the labor tribunal‘s factual determinations can no longer be disturbed for failure of respondents to show grave abuse of discretion on the part of the Labor Arbiter and NLRC. respondents stopped reporting for work (i. termination proceedings were commenced against respondents by sending notices to explain with a notice of hearing scheduled on December 2. by itself.R. 2000 but respondents again refused to attend. as in fact respondents effectively accepted these findings by their failure to appeal from the decision of the CA. respondents were temporarily reassigned to a new route to service. 2000. and. 2000. The surrounding circumstances of this case adequately explain why the requirements of procedural due process were satisfied only after the filing of the labor complaint.257. there was sufficient compliance with the twin requirements of notice and hearing even if the notices were sent and the hearing conducted after the filing of the labor complaint. on November 3. respondents were not yet dismissed from employment. petitioners served notices of termination on respondents for gross misconduct in misappropriating their sales collections and absence without leave for more than a month. Petitioners sent another set of notices to respondents on December 7. no necessity to comply with the twin requirements of notice and hearing. For if it was duly established. respondents failed to give their side despite receipt of said notices. the award of nominal damages by the appellate court is improper. 2000 to attend a hearing on December 15. SO ORDERED. For this reason. Thus. As narrated earlier. 2000 for respondent Lopez and October 28. 2000. starting from October 22. No. establish that the same was a mere afterthought. thus. respondents filed the subject illegal dismissal case to pre-empt the outcome of the ongoing investigation. 2005 Decision and September 23. petitioners received information that respondents were not remitting their sales collections to the company. 2000. 2005 Resolution in CAG. there was.

it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court‘s Division. LEONARDO-DE CASTRO Associate Justice JOSE PORTUGAL PEREZ Associate Justice CERTIFICATION Pursuant to Section 13. DEL CASTILLO Associate Justice WE CONCUR: RENATO C. CORONA Chief Justice Chairperson PRESBITERO J. VELASCO. Associate Justice TERESITA J. . JR. Article VIII of the Constitution.MARIANO C.

No. and MENDOZA. CENTRAL AZUCARERA DE TARLAC LABOR UNION-NLU. Present: G. PERALTA.R. JJ.. J. 188949 CARPIO. . Respondent. ABAD. CORONA Chief Justice Republic of the Philippines Supreme Court Manila SECOND DIVISION CENTRAL AZUCARERA DE TARLAC. Petitioner. NACHURA. July 26.RENATO C. 2010 Promulgated: x------------------------------------------------------------------------------------x DECISION .versus Chairperson.

R. SP No. 106657. assailing the Decision908[1] dated May 28. and the Resolution909[2] dated July 28. J. .NACHURA. 2009. 2009 of the Court of Appeals (CA) in CA-G.: Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court.

911[4] th Respondent objected to this computation.” essential in the computation of the 13 -month pay. petitioner declared a temporary cessation of operations. in instances where the computed 13 -month pay was less than their basic monthly pay. but the rank-and-file employees were allowed to report for work on a fifteen (15) day-per-month rotation basis that lasted until September 2006. Included in petitioner’s computation of the Total Basic Annual Salary were the following: basic monthly salary. respondent staged a strike. petitioner gave the employees their 13 -month pay based on the employee’s total earnings during the year divided by 12.D. The suspension of operation was lifted on June 2006. petitioner used this computation until 2006. In December 2006. all the striking union members were allowed to return to work. It likewise asserted that petitioner did not observe the company practice of giving its employees the guaranteed amount equivalent to their one month pay. 851. th The facts of this case are not in dispute. In December 2005.910[3] th th On November 6. During the grievance meeting. the representative of petitioner explained that the change in the computation of the 13 -month pay was intended to rectify an error th . petitioner granted its employees the mandatory thirteenth (13 ) . petitioner declared another temporary cessation of operations for the months of April and May 2006. In compliance with Presidential Decree (P. The formula used by petitioner in computing the 13 -month pay was: Total Basic Annual Salary divided by twelve (12). night premium pay. Throughout the years. and vacation and sick leaves for each year. Subsequently. It averred that petitioner did not adhere to the usual computation of the 13 -month pay. first eight (8) hours overtime pay on Sunday and legal/special holiday. because the employees worked for only 8 months in 2006. It claimed that the divisor should have been eight (8) instead of 12.The factual antecedents of the case are as follows: Petitioner is a domestic corporation engaged in the business of sugar manufacturing. 2004.) No.month pay since 1975. The controversy stems from the interpretation of the term “basic pay. while respondent is a legitimate labor organization which serves as the exclusive bargaining representative of petitioner’s rank-and-file employees.912[5] th th Petitioner and respondent tried to thresh out their differences in accordance with the grievance procedure as provided in their collective bargaining agreement. During the pendency of the strike.

respondent filed a complaint against petitioner for money claims based on the alleged diminution of benefits/erroneous computation of 13 -month pay before the Regional Arbitration Branch of the National Labor Relations Commission (NLRC). On March 29. particularly the concept of basic pay which should have included only the basic monthly pay of the employees. the parties still failed to settle the dispute. However.913[6] For failure of the parties to arrive at a settlement. 2007.in the computation. respondent applied for preventive mediation before the National Conciliation and Mediation Board.914[7] th . despite four (4) conciliatory meetings.

respondent-appellee is ordered to observe the guaranteed one[-]month th pay by way of 13 month pay. On August 14. Additionally.On October 31. 2008.916[9] The fallo of the Decision reads: th WHEREFORE. the decision appealed is reversed and set aside and respondent-appellee Central Azucarera de Tarlac is hereby ordered to adhere to its established practice of granting th 13 [-] month pay on the basis of gross annual basic which includes basic pay. the NLRC rendered a Decision918[11] reversing the Labor Arbiter. The dispositive portion of the Decision reads: WHEREFORE. premises considered. the Labor Arbiter rendered a Decision915[8] dismissing the complaint and declaring that the petitioner had the right to rectify the error in the computation of the 13 -month pay of its employees. night shift differential and paid vacation and sick leaves for each year. the complaint filed by the complainants against the respondents should be DISMISSED with prejudice for utter lack of merit. 2007. SO ORDERED. SO ORDERED.917[10] Respondents filed an appeal. premium pay for work in rest days and special holidays. 919[12] .

) No. are hereby AFFIRMED. If the employee worked for only a portion of the year. provided that they have worked for at least one month during the calendar year. Petitioner then filed a petition for certiorari under Rule 65 of the Rules of Court before the CA. petitioner filed the instant petition. the 13 -month pay is computed pro rata. The petition is denied for lack of merit.Petitioner filed a motion for reconsideration. alleging that the CA committed a reversible error in affirming the Decision of the NLRC. 851 represents an additional income based on wage but not part of the wage. and affirming the decision and resolution of the NLRC. 2009. viz. However. the same was denied in a Resolution dated November 27.923[16] th th .: WHEREFORE. are entitled to this benefit.922[15] Aggrieved. All rank-and-file employees. the petition is hereby DISMISSED and the assailed August 14. 2008 Decision and November 27. SO ORDERED. and praying that the Decision of the Labor Arbiter be reinstated. the foregoing considered.D. regardless of their designation or employment status and irrespective of the method by which their wages are paid. The 13 -month pay mandated by Presidential Decree (P. 2008 Resolution of the NLRC. It is equivalent to one-twelfth (1/12) of the total basic salary earned by an employee within a calendar year. No costs.920[13] On May 28. the CA rendered a Decision921[14] dismissing the petition. 2008.

Petitioner asserts that such voluntariness was absent in this case. 851 was issued. an error that was discovered by the management only when respondent raised a question concerning the computation of the employees’ 13 -month pay for 2006. No. promulgated on December 22.D.As used in this issuance: (a) an "Thirteenth-month pay" shall mean one twelfth (1/12) of the basic salary of employee within a calendar year. 1976. and all allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary of the employee at the time of the promulgation of the Decree on December 16. voluntarily. and continuously performed the act. 851. does not prove that such an act was not done in error. . No. 1975. No. Definition of certain terms. The Supplementary Rules clarifies that overtime pay. (b) "Basic salary" shall include all remunerations or earnings paid by an employer to an employee for services rendered but may not include cost-of-living allowances granted pursuant to Presidential Decree No. profit-sharing payments. knowing that he is under no obligation to do so. and other remuneration that are not part of the basic salary shall not be included in the computation of the 13 -month pay. earnings. 525 or Letter of Instructions No. Admittedly.924[17] th th The Rules and Regulations Implementing P. 2. It maintains that for the claim of mistake to be negated.Petitioner argues that there was an error in the computation of the 13 -month pay of its employees as a result of its mistake in implementing P. the Supplementary Rules and Regulations Implementing P. defines 13 month pay and basic salary as follows: th Sec. Petitioner insists that the length of time during which an employer has performed a certain act beneficial to the employees. there must be a clear showing that the employer had freely. 1975. 851.D.D. th . 174. On January 16. it was an error that was repeatedly committed for almost thirty (30) years.

926[19] The argument of petitioner that the grant of the benefit was not voluntary and was due to error in the interpretation of what is included in the basic salary deserves scant consideration. No. 1975.On November 16. it was specifically stated that the minimum 13 -month pay required by law shall not be less than one-twelfth (1/12) of the total basic salary earned by an employee within a calendar year. But even in cases of error. 851 and its implementing regulations. No. application. 1987. the Revised Guidelines on the Implementation of the 13 -Month Pay Law was issued. otherwise known as the Non-Diminution Rule. it is clear that there could have no erroneous interpretation or application of what is included in the term “basic salary” for purposes of computing the 13 -month pay of employees. under this Revised Guidelines. 925[18] The rule against diminution of benefits applies if it is shown that the grant of the benefit is based on an express policy or has ripened into a practice over a long period of time and that the practice is consistent and deliberate. and cost-of-living allowances. No doubtful or difficult question . 851 on December 16. it should be shown that the correction is done soon after discovery of the error. Significantly.D. th As correctly ruled by the CA. but does not include allowances and monetary benefits which are not integrated as part of the regular or basic salary. th th Based on the foregoing. such as the cash equivalent of unused vacation and sick leave credits. overtime. the rule will not apply if the practice is due to error in the construction or application of a doubtful or difficult question of law. night shift differential pay and holiday pay continued for almost thirty (30) years and has ripened into a company policy or practice which cannot be unilaterally withdrawn. premium. by individual or collective agreement. Nevertheless. night differential and holiday pay. premium pay for work on rest days and special holidays. and enforcement of the provisions of P. these salary-related benefits should be included as part of the basic salary in the computation of the 13 -month pay if. clear-cut administrative guidelines have been issued to insure uniformity in the interpretation. mandates that benefits given to employees cannot be taken back or reduced unilaterally by the employer because the benefit has become part of the employment contract. company practice or policy. th th Furthermore. the term “basic salary” of an employee for the purpose of computing the 13 -month pay was interpreted to include all remuneration or earnings paid by the employer for services rendered. written or unwritten. However. the same are treated as part of the basic salary of the employees. From the inception of P. th Article 100 of the Labor Code. the practice of petitioner in giving 13 -month pay based on the employees’ gross annual earnings which included the basic monthly salary.D.

Under Section 7 of the Rules and Regulations Implementing P. NACHURA Associate Justice WE CONCUR: ANTONIO T. CARPIO Associate Justice Chairperson . as it indicates a badge of bad faith.D. 2009 and the Resolution dated July 28. th Furthermore. 2009 of the Court of Appeals in CA-G. distressed employers shall qualify for exemption from the requirement of the Decree only upon prior authorization by the Secretary of Labor.of law is involved in this case. The guidelines set by the law are not difficult to decipher. the Decision dated May 28. This act of petitioner in changing the formula at this time cannot be sanctioned. petitioner cannot use the argument that it is suffering from financial losses to claim exemption from the coverage of the law on 13 -month pay.R. Costs against petitioner. th th WHEREFORE. 851. ANTONIO EDUARDO B. thus. it is not entitled to claim such exemption. No. no such prior authorization has been obtained by petitioner. Petitioner only changed the formula in the computation of the 13 -month pay after almost 30 years and only after the dispute between the management and employees erupted. SP No. SO ORDERED.927[20] In this case. The voluntariness of the grant of the benefit was manifested by the number of years the employer had paid the benefit to its employees. or to spare it from its erroneous unilateral computation of the 13 -month pay of its employees. 106657 are hereby AFFIRMED.

CORONA Chief Justice Republic of the Philippines . ABAD Associate Justice JOSE CATRAL MENDOZA Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. Article VIII of the Constitution and the Division Chairperson's Attestation. Second Division CERTIFICATION Pursuant to Section 13. CARPIO Associate Justice Chairperson. RENATO C. ANTONIO T.DIOSDADO M. PERALTA Associate Justice ROBERTO A.

G. ABAD. and ALYSSA M. Promulgated: July 5. INC. 182740 Present: CARPIO MORALES. and LEONIS NAVIGATION CO.Supreme Court Manila THIRD DIVISION LYDIA ESCARCHA. ESCARCHA. Chairperson. J. 2008 resolution930[3] of the Court of Appeals (CA) in CA-G. S. Respondents. J.. 2007 decision929[2] and the April 29. SHEILA MAY ESCARCHA. and/or WORLD MARINE PANAMA..A. No. versus BRION. Petitioner.R. SP No. for and in behalf of JOSEPH ERWIN M. 2010 x-----------------------------------------------------------------------------------------x DECISION BRION. JR.. 98719 that reversed and set aside . BERSAMIN.: We review in this petition for review on certiorari928[1] the October 17. JJ. ESCARCHA.. VILLARAMA.R.

Inc. Eduardo was brought to the Touro Infirmary when M. reversed the Labor Arbiter’s decision. Eduardo S. Sometime in April 1999 (or roughly a month after coming on board). Eduardo was found to be suffering from serious febrile illness. He was employed as a First Engineer on board the M. Diamond Glory with a basic monthly salary of US$950. The attending physician. Patterson (Dr. Dr. Sheila May Escarcha.V. the petitioners). 1999. in turn. 1999. Patterson). James R. and Alyssa Escarcha (collectively. 1999. and he became comatose. He was also declared “unfit for regular duty” and “unfit to travel.V. for and in behalf of Joseph Erwin Escarcha.V.”936[9] Eduardo’s condition worsened despite medical attention.V.935[8] He boarded the M. Diamond Glory on March 11. 2007932[5] resolutions of the National Labor Relations Commission (NLRC). ANTECEDENT FACTS On February 16. and was pronounced fit to work by the company-designated physician. 2006931[4] and the March 12.A. Escarcha (Eduardo) entered into a one-year contract of employment with Leonis Navigation Company.933[6] dismissing the complaint for death compensation benefits of petitioner Lydia Escarcha.934[7] Eduardo submitted himself to the required Pre-Employment Medical Examination (PEME). found Eduardo to be suffering from advanced mycobacterium . the respondents). Diamond Glory was on its way to New Orleans. and World Marine Panama. (collectively. S.00. Diamond Glory docked at the port of New Orleans.the December 29. On May 3. The NLRC resolutions. Eduardo became ill while M.

and Alyssa. The petitioners demanded the payment of death benefits from the respondents which refused to grant the demand. With the failure of conciliation. and anemia. Sheila May.939[12] He held that Eduardo’s illness was pre-existing. Eduardo’s labor union. The petitioners then sought the assistance of the Associated Marine Officers’ and Seamen’s Union of the Philippines. He was discharged from the hospital after one and a half months. Dr. cardiac dysrhythmias. Pulmonary Tuberculosis. The death certificate listed pneumonia as the immediate cause. Tuberculosis Meningitis. THE LABOR ARBITRATION RULINGS Labor Arbiter Jose G. 2001 (approximately two years after repatriation). and Seborrheic Dermatitis as antecedent causes. de Vera (LA de Vera) dismissed the petitioners’ complaint. Eduardo died on June 9. a foreign nurse. 1999. but was ordered to report back for a series of medical check-ups. in pursuing their claim. . and AIDS as underlying cause. advanced Human Immunodeficiency Virus (HIV) disease. that he had concealed his condition from the respondents. Eduardo was repatriated to the Philippines. Scabies. and their three children – Joseph Erwin. and was confined at the San Lazaro Hospital for further treatment and evaluation. Eduardo was already afflicted with HIV when he boarded the respondents’ vessel. Wasting Syndrome. Disseminated Candidiasis. the petitioners proceeded to file their complaint for death compensation benefits against the respondents with the NLRC. LA de Vera noted that Eduardo admitted to Nigel Griffiths (Griffiths). Despite continued treatment. Anemia Secondary to Chronic Disease. A series of grievance meetings was held which proved unfruitful. Patterson’s discharge summary also stated that Eduardo’s Acquired Immune Deficiency Syndrome (AIDS) was under treatment.938[11] At the time of his death.tuberculosis. Eduardo left behind his wife Lydia.937[10] On June 17.

940[13] set aside LA de Vera’s decision and ordered the respondents to pay US$60.00 death benefits to Eduardo’s wife. 98719. and (2) Griffiths’ report.000.737. but the NLRC dismissed their motion in its resolution of March 12. as it did not mention Eduardo’s name. the NLRC declared Griffiths’ report without evidentiary value as it was unsigned. SP No. maintenance. the petitioners moved for the execution of the NLRC resolutions. oxides. 2007. Despite the respondents’ opposition.941[14] THE CA DECISION The respondents filed a petition for certiorari before the CA.00 death benefits to each of their three children. The NLRC held that LA de Vera erred in concluding that Eduardo’s illness was pre-existing based on (1) the result of the HIV test conducted by the National Reference Testing Center for HIV Testing.00. asbestos and carbon monoxides. Similarly. without prejudice to the outcome of their . the respondents agreed to pay the petitioners P4. in its resolution of December 29. While the respondents’ petition was pending. he was responsible for its mechanical propulsion. he was exposed to various engine toxics and deleterious residues and substances such as metallic iron. docketed as CA-G. and US$15. Lydia. 2006. Eduardo monitored the ship’s engine on a daily basis. the labor arbiter issued a writ of execution. As First Engineer.R. To prevent the execution of the NLRC’s judgment. and operation.The NLRC. nor did it particularly state that an HIV test was conducted on Eduardo. He also supervised welding job orders. It did not consider the HIV test result as competent evidence of a pre-existing HIV condition. The NLRC noted that the respondents failed to corroborate their allegation that Eduardo deliberately shopped for agencies that required a PEME without HIV testing. In undertaking these tasks.810. The NLRC further ruled that Eduardo’s illness was aggravated by his employment. The respondents moved for the reconsideration of this resolution.000.

Unlike the 2000 Philippine Overseas Employment Agency (POEA) Standard Employment Contract (SEC). The petitioners argue that Eduardo had no pre-existing illness because he underwent a PEME and was declared fit to work.petition for certiorari before the CA. Moreover. the petitioners claim that a reasonable connection existed between Eduardo’s work and the illnesses that caused his death. It is enough that death occur during the term of the contract. the CA held that the petitioners cannot be compensated for Eduardo’s death because the latter did not disclose that he was already afflicted with HIV when he applied for the position of first engineer. In addition. which governs Eduardo’s employment contract with the respondents. the petitioners failed to show a reasonable connection between Eduardo’s work and his sickness. or that the working conditions increased the risk of contracting the disease. Even if it were otherwise.944[17] THE PETITION FOR REVIEW ON CERTIORARI The petitioners allege that the CA erred in denying the award of death compensation benefits. death arising from a pre-existing illness is not compensable.942[15] The CA reversed and set aside the NLRC resolutions. Although Eduardo was pronounced fit to work after undergoing the PEME. does not require proof of work-relatedness as condition sine qua non for the claim of death compensation benefits. agreed to desist from pursuing the execution proceedings they initiated. The petitioners. in turn. pneumonia and pulmonary tuberculosis are listed as compensable illnesses. the 1996 POEA-SEC. the CA declared the PEME result unreliable to determine a person’s real state of health because a PEME is not exploratory.943[16] According to the CA. 2008. the petitioners contend it was not necessary to prove the workrelatedness of Eduardo’s illnesses. Thus. In fact. . but the CA denied their motion in its resolution of April 29. The petitioners moved for the reconsideration of this decision.

which is based on POEA Memorandum Circular No. In case of death of the seafarer during the term of his contract. The employer shall pay the deceased’s beneficiary all outstanding obligations due the seafarer under this Contract. . COMPENSATION AND BENEFITS FOR DEATH 1. at the exchange rate prevailing during the time of payment. x x x x 4. the employer shall pay his beneficiaries the Philippine Currency equivalent to the amount of Fifty Thousand US dollars (US$50.In their Comment.000) and an additional amount of Seven Thousand US dollars (US$7. The respondents likewise pray that the petitioners be ordered to return the amount of P4. 055-96 or the “Revised Standard Employment Terms and Conditions Governing the Employment of Filipino Seafarers On Board Ocean-going Vessels”946[19] provides for the minimum requirements for Filipino seafarer’s overseas employment. THE COURT’S RULING We do not find the petition meritorious. COMPENSATION AND BENEFITS A. Section 20(A) of the 1996 POEA-SEC.737.000) to each child under the age of twenty-one (21) but not exceeding four (4) children.945[18] the respondents maintain that death benefits are not payable if the death occurred beyond the term of the employment contract or if the deceased fraudulently concealed his real state of health. The Rule on Death Benefits POEA Memorandum Circular No. 055-96.00. The other liabilities of the employer when the seafarer dies as a result of injury or illness during the term of employment are as follows: a. clearly states: Section 20.810.

000) for burial expenses at the exchange rate prevailing during the time of payment. Eduardo’s employment was therefore terminated upon his repatriation on June 17. 1999. the disposition of the remains shall be handled or dealt with in accordance with the master’s best judgment. the employer is liable.] The Collective Bargaining Agreement . Section 18(B) (1) of the 1996 POEA-SEC further provides that the employment of the seafarer is terminated when he “signs-off and is disembarked for medical reasons pursuant to Section 20 (B) [4] of [the] Contract. when Eduardo died on June 9. Sta. the death must occur during the term of his contract of employment. approximately two (2) years after his repatriation. The employer shall pay the beneficiaries of the seafarer the Philippine currency equivalent to the amount of One Thousand US dollars (US$1. Rita: The death of a seaman during the term of employment makes the employer liable to his heirs for death compensation benefits.”948[21] In the present case. his beneficiaries are not entitled to the death benefits enumerated above. cardiac dysrhythmias. the employer/master shall communicate with the manning agency to advise for disposition of seafarer’s remains. As we held in Prudential Shipping and Management Corporation v. 1999. and anemia. to undergo further evaluation and treatment after being diagnosed with advanced mycobacterium tuberculosis. In case death occurs at sea.b. for death of a seafarer to be compensable under this provision. Once it is established that the seaman died during the effectivity of his employment contract.] Stated differently. it is the only condition for compensability. [Emphases supplied. Thus.949[22] [Emphasis supplied. 2001. In all cases. Eduardo was repatriated for medical reasons. his employment with the respondents had long been terminated.947[20] Corollary. advanced HIV disease. c. The employer is liable upon proof that the seaman died during the effectivity of his employment contract. However. he arrived in the Philippines on June 17. if the seaman dies after the termination of his contract of employment. The employer shall transport the remains and personal effects of the seafarer to the Philippines at employer’s expense except if the death occurred in a port where local government laws or regulations do not permit the transport of such remains.

or while travelling to or from the Ship. or while travelling to or from the ship. we see no point in belaboring this issue. and AIDS as underlying cause. Eduardo’s sole bargaining representative. Eduardo boarded the ship on March 11. the Company shall pay the balance remaining x x x after deducting the amounts advanced by the Union to the Seafarer’s next-of-kin.953[26] Eduardo’s death which occurred two years after his repatriation is covered by a death certificate that listed pneumonia as the immediate cause. He died two years later on June 9. Properly understood. but given that Eduardo died two years after the termination of his employment contract. Disseminated Candidiasis. . Scabies and Seborrheic Dermatitis as antecedent causes. Wasting Syndrome. Article XX of this CBA reads: The Company shall pay to the covered Seafarer’s next-of-kin US$60. Section 1. 1999. these findings are significant as they point us to a definite conclusion on the issue of work-relatedness or work-aggravation. so as to entitle him to death compensation under the CBA. Pulmonary Tuberculosis.] As earlier stated.00 for death provided that such covered Seafarer dies while on board the ship.000. Alternatively. 1999.951[24] [Emphases supplied.952[25] We agree with this position. 2001. Tuberculosis Meningitis.The petitioners likewise cannot seek refuge from the Collective Bargaining Agreement (CBA)950[23] executed between the respondents and the Associated Marine Officers’ and Seamen’s Union of the Philippines. Work-relatedness Issues The petitioners argue that work-relatedness of the illnesses that caused Eduardo’s death is not a material issue under the 1996 POEA-SEC. Anemia Secondary to Chronic Disease. the petitioners argue that Eduardo’s death should be compensable because his work triggered the illnesses or worsened them. Eduardo did not die on board the respondents’ ship. and was repatriated on June 17. as it only requires that death occur during the term of the contract. What legal basis the petitioners rely upon – after admitting that Eduardo died two years after repatriation – truly escapes us. Clearly. x x x If the Union has paid a part of the death compensation in accordance with x x x SECTION 2 below.

and to pneumonia as the immediate cause of death. as shown by his death certificate.e. agonizing in character. fumes and other deleterious substances in the place of work. or inhalation of noxious gases. But for a disability or death from this cause to be compensable.] Corollary. painful cough with blood-tinged expectoration.954[27] Our consideration of the attendant facts shows the petitioners failed to adduce evidence establishing these required conditions. the ECC Rules specifically requires for compensability that pneumonia must have been contracted under the following conditions: (a) There must be an honest and definite history of wetting and chilling during the course of employment and also. The signs of consolidation should appear soon (within a few hours) and the symptoms of initial chilling and fever should at least be 24 hours after the injury or exposure.. in the side of the body. i. Pulmonary Tuberculosis955[28] was listed as one of the antecedent causes of Eduardo’s death. dry. The patient must manifest any of the following symptoms within a few days of the accident: (1) severe chill and fever. There must be a direct connection between the offending agent or event and the worker’s illness. Suffice it to state for now that no evidence on record shows that Eduardo’s working conditions on board as a First Engineer caused the pneumonia that brought on his death two years after he had disembarked from his vessel. it was a condition that led to or precipitated the immediate cause of his death. (2) The disease was contracted as a result of the [seafarer’s] exposure to the described risks. (3) short. these are the very same conditions required under the POEA-SEC for pneumonia to be considered a compensable occupational disease. (3) The disease was contracted within a period of exposure and under such other factors necessary to contract it. indicate that pneumonia was simply the final illness that immediately brought about Eduardo’s death. [and] (4) There was no notorious negligence on the part of the [seafarer]. is listed under the Implementing Rules and Regulations of the Labor Code (ECC Rules) as an occupational disease. [Emphases supplied. and (4) physical signs of consolidation. (2) headache and pain. with fine rales. the immediate cause of Eduardo’s death. This is discussed at length below in the discussion on AIDS. of injury to the chest wall with or without rib fracture. as recorded in the death . The long road to pneumonia started from an underlying cause – AIDS – that rendered him susceptible to the antecedent cause of tuberculosis. On the contrary. the causes of Eduardo’s death. all the following conditions must be satisfied: (1) The *seafarer’s+ work must involve the risks described herein.Pneumonia. (b) (c) (d) Significantly.

the virus that causes AIDS can only be transmitted in the following ways: (a) sexual relation with an infected person. leaving it so damaged that certain diseases (opportunistic infections) or cancers develop. however.961[34] HIV is not transmitted by casual contact or even by close. and is the first opportunistic infection to develop. this means that Eduardo’s pneumonia directly sprang from and was directly linked and traceable to pulmonary tuberculosis. nonsexual contact at work.963[36] Pneumonia caused by the fungus Pneumocystis carinii is a common and recurring opportunistic infection in people with AIDS.962[35] Opportunistic infections that develop with AIDS are infections by organisms that do not cause disease in people with healthy immune systems. Eduardo. Both the HIV infection and the opportunistic infections and cancers produce the symptoms of AIDS. resulting in a general breakdown of the body’s immune system. that in turn traced itself to AIDS. described in Eduardo’s death certificate as the underlying cause of death. it is a disease that attacks a person’s immune system. An underlying cause is defined by the World Health Organization as the disease or injury that initiated the train of events leading directly to death. and (c) transfer of the virus from an infected mother to a child before or during birth. No contact of HIV transmission has been traced to the coughing or sneezing of an infected person or to a mosquito bite. or the circumstances of the accident or violence that produced the fatal injury. tuberculosis is listed under the ECC Rules and the POEA-SEC as an occupational disease. AIDS is the final and most serious stage of HIV infection. Parenthetically. no evidence on record shows how Eduardo’s working conditions brought on or aggravated the tuberculosis that became the antecedent cause of his death two years after repatriation. and is difficult to treat if the strain of the . Moreover.957[30] AIDS.960[33] According to the Merck Manual of Medical Information. school or home. (b) injection or infusion of contaminated blood.959[32] and it takes time for HIV to progress to AIDS. is a human disease characterized by a marked decrease of helper-induced T-lymphocyte cells. was not engaged in any of the occupations where tuberculosis is a listed illness.958[31] In simpler terms. Tuberculosis is more frequent and deadlier in people who have HIV infection than in those who do not.certificate.956[29] Related to pneumonia as the immediate cause of death.

and that the “[p]atient had a very stormy course related to his advanced HIV disease.tuberculosis is resistant to antibiotics. or been told he had. Records have shown that it was a pre-existing illness that Eduardo did not disclose during his PEME with the respondents’ medical testing center. this time in relation to his application with the respondents in 1999 (or two years after PROBE’s test). advanced HIV. 1997 (or two years before his deployment with the respondents) as a prerequisite for his employment with another agency – Southfield Agencies (Southfield). In the present case. and the seaman’s own failure to disclose his affliction – Eduardo was able to board the respondents’ vessel in March 1999 despite his HIV positive condition. and he did not disclose that he had been tested HIV positive when he filled up the PEME form.967[40] Fortunately or unfortunately for Eduardo. and declared Eduardo to be HIV positive. we do not find Eduardo’s AIDS to have been work-related. where Eduardo was admitted in May 1999.”968[41] Thus. is a common cause of fever. The PEME was conducted by the respondents’ designated testing center – the Holy Angel Medical Clinic. Records show that within a short two months after deployment with the respondents’ vessel. weight loss. and declared him unfit for sea duty. The PEME was conducted by the PROBE Polyclinic and Diagnostic Center (PROBE). The evidence reveals that Eduardo had undergone a previous PEME on October 29. Thus. found Eduardo positive for HIV. through a confluence of events – a testing center that for some reason did not test a prospective seaman for AIDS. Dr. the claimant bears the burden of reasonably proving the relationship between the work of the deceased and AIDS. Patterson of the Touro Infirmary in New Orleans.969[42] mentioned in the Physician’s Discharge Summary that Eduardo’s AIDS was “under treatment”. The National Reference Testing Center for HIV Testing confirmed the findings of PROBE. this testing center did not require an AIDS clearance test.964[37] AIDS is not listed as an occupational disease both under the POEA-SEC and the ECC Rules. or that the risk of contracting AIDS was increased by the working conditions of the deceased. and diarrhea in people with the advanced disease. among others. In fact. he answered “No” to the question. “Has applicant suffered from. Another mycobacterium. Southfield’s designated testing center.966[39] Eduardo underwent another PEME. any of the following conditions: x x x 21) Sexually Transmitted Disease. Dr. Mycobacterium avium complex. but which the patient knew about 18 months prior to . Eduardo was diagnosed to be suffering from. which was discovered here. Laura S.965[38] Eduardo was then advised to proceed to the Department of Health’s National Reference Testing Center for HIV Testing for further examination and tests. the examining physician. Gonzales.

By a process of elimination. Liberal construction is not a license to disregard the evidence on record or to misapply our laws. The nature of HIV and AIDS negates the petitioners’ claim that the illnesses that caused Eduardo’s death were acquired during his employment on board the respondents’ vessel because he passed the company’s PEME. it appears – in the absence of any record of blood transfusion while on board – that Eduardo acquired his AIDS through sexual relations with an infected person and not because of his brief two-month stay on board or of his working conditions during that period. militate against this claim. usually cursorily made. we cannot escape the conclusion that the petition is without merit and that the CA was correct when it reversed and set aside the NLRC award of death benefits to the petitioners as heirs of Eduardo. This is a conclusion that cannot be helped nor swayed by the intent of our laws and jurisprudence to be read liberally in their application to our overseas Filipino workers. from the causes of AIDS we pointed out above. Eduardo did not succumb to the disease and the opportunistic infections it carried until after two years from the respondents’ discovery of the disease. Eduardo could have acquired his AIDS only through sexual transmission – a claim made by the respondents. . The PEME. the respondents’ testing center did not test for HIV. a PEME cannot lead to the conclusion that Eduardo was HIV-free when he boarded the respondents’ vessel and acquired his HIV/AIDS only while on board the vessel. while communicable. is generally not exploratory in nature. can be transmitted only under specific conditions. As discussed above.973[46] That the petitioners have now secured the execution of the NLRC decision involving a very sizeable sum is unfortunate. We have had occasion to recognize in the past that a PEME. First. the worthlessness of the respondents’ PEME for AIDS determination purposes is hardly disputable. HIV/AIDS is a disease of the immune system that does not progress to the point of attracting opportunistic infections until the immune system has substantially been weakened by the progress of the disease. it does not reveal the real state of health of an applicant. HIV/AIDS.admission. Three reasons. and four years after he was tested positive by PROBE. determines whether one is “fit to work” at sea or “fit for sea service”. it was only at this point that the respondents came to fully know that Eduardo had AIDS.971[44] In the present case. It does not reach this advanced stage in two months’ time as established medical literature shows. and Eduardo did not disclose his HIV positive condition.972[45] Third. Under these circumstances. already touched upon in the discussions above. albeit through an unsigned report by a foreign nurse who was not available for examination during the arbitration and whose statement cannot therefore be appreciated as evidence.”970[43] Apparently. Second. nor is it a totally in-depth and thorough examination of an applicant’s medical condition. Based on these considerations. but is a situation that is not irremediable since the parties themselves agreed that this would be a live issue subject to the final outcome of the case. in the way it is conducted in the maritime industry.

WHEREFORE. SO ORDERED.737.00) to the respondents. ARTURO D. and accordingly AFFIRM the challenged decision and resolution of the Court of Appeals in CA-G. BRION Associate Justice WE CONCUR: CONCHITA CARPIO MORALES Associate Justice Chairperson . In light of this judgment. SP No. Costs against the petitioners. the petitioners are hereby ORDERED to RETURN the amount of Four Million Seven Hundred Thirty-Seven Thousand Eight Hundred Ten Pesos (P4. we DENY the petition for lack of merit. 98719. premises considered.810.R.

CONCHITA CARPIO MORALES Associate Justice Chairperson CERTIFICATION Pursuant to Section 13. RENATO C. BERSAMIN Associate Justice ROBERTO A. ABAD Associate Justice MARTIN S. JR.LUCAS P. it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court‘s Division. VILLARAMA. CORONA . and the Division Chairperson‘s Attestation. Article VIII of the Constitution. Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

J. JJ. BAGOY. SARTE. PERALTA.* Respondent. No. 168495 Present: CARPIO.versus NACHURA.: .Chief Justice Republic of the Philippines Supreme Court Manila SECOND DIVISION DANSART SECURITY FORCE & ALLIED SERVICES COMPANY and DANILO A. ABAD. Petitioners. JEAN O.. . 2010 x----------------------------------------------------------------------------------------x DECISION PERALTA. Chairperson. J. and MENDOZA. Promulgated: July 2.R. G.

SP No. the Labor Arbiter issued a Decision977[4] favorable to respondent with regard to her money claims.m. In her Position Paper. respondent had allegedly been caught sleeping on the job and incurred absences without leave. but did not rule on the issue . presented several reports issued by the National Capital Region. Petitioners. holiday pay. with a salary rate of P166. premium pay. 2002. and the CA Resolution975[2] dated June 8.00 per day. Department of Labor and Employment (DOLE) stating that all mandatory wage increases and other related monetary benefits were complied with by petitioner security agency. be reversed and set aside. Respondent Jean O. 2005 denying herein petitioner's motion for reconsideration. respondent alleged: (1) that she had been required to report for work daily from 7:00 a. in rebuttal of respondent's claim of non-payment of wages and benefits.This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court. which was increased to P180. th th Petitioners countered that it was respondent who abandoned her work beginning November 2001. 2005 of the Court of Appeals (CA). The undisputed facts are as follows. Bagoy was employed by Dansart Security Force and Allied Services Company to guard the establishments of its various clients such as Ironcorn. 13 month pay and service incentive leave pay. On January 31.R. 2003. Chowking and Hindu Temple. respondent filed with the Regional Arbitration Branch a Complaint976[3] against petitioners for underpayment of salaries and non-payment of overtime pay. in CA-G. 84758 reversing the judgment of the National Labor Relations Commission (NLRC). tantamount to constructive dismissal.00 in January 2001. likewise. 13 month pay and service incentive leave pay. and (3) that since December 2001. for which he was given notices of disciplinary action. from April 1999 until November 2001. On May 14. (2) that she was required to work even on Sundays and holidays but was not paid holiday pay. However.m to 7:00 p. she had been on floating status. praying that the Decision974[1] dated January 17.

but the same was denied in a Resolution981[8] dated February 20. All other claims are DISMISSED for lack of merit. should be given proper respect. The dispositive portion of the Decision reads as follows: WHEREFORE. The NLRC held that the DOLE reports. 2005. on January 17. thus: .980[7] Respondent moved for reconsideration of the NLRC Decision. SO ORDERED. SO ORDERED. stating that petitioner security agency had been complying with all mandatory wage increases and other monetary benefits. premises considered. Respondent then filed a petition for certiorari with the CA under Rule 65 of the Rules of Court and. in view of the foregoing. judgment is hereby rendered ordering the respondents Dansart Security Force and Allied Co.of illegal dismissal as this was not included in her complaint. the CA rendered the assailed Decision which disposed.196. Bagoy the amount of ONE HUNDRED SEVENTY-NINE THOUSAND ONE HUNDRED NINETY-SIX PESOS (P179. 2004.978[5] The foregoing Decision was appealed to the NLRC which in turn issued its Decision979[6] dated September 30. the Decision appealed from is hereby SET ASIDE and a new one entered declaring the complaint DISMISSED for lack of merit. and/or Danilo Sarte to pay complainant Jean O.00) representing [her] monetary awards as above-computed. The dispositive portion of the NLRC Decision is set forth hereunder: WHEREFORE. reversing the Labor Arbiter's ruling. 2003.

the present petition is hereby PARTLY GIVEN DUE COURSE and the writ prayed for. that the Labor Arbiter's findings were reversed by the NLRC. 2003 of Labor Arbiter Fatima Jambaro-Franco in NLRC NCR Case No. The foregoing question is a factual one which. Hence. 2005. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN FAILING TO GIVE CONSIDERATION TO THE VALID AND CONCLUSIVE FINDINGS OF THE DEPARTMENT OF LABOR AND EMPLOYMENT THAT PETITIONER DID NOT VIOLATE THE LABOR STANDARDS PROVISIONS OF THE LABOR CODE. however. and the Decision dated January 31. The challenged decision and resolution of the NLRC are hereby ANNULLED and SET ASIDE. premises considered.WHEREFORE. reinstating the Labor Arbiter's Decision.983[10] The petition lacks merit. as a general rule. GRANTED. cannot be entertained in a petition for review on certiorari where only questions of law are allowed.985[12] . No pronouncement as to costs. this petition where it is alleged that: WITH DUE RESPECT. whose Decision was in turn overturned by the CA.982[9] Petitioners' motion for reconsideration of the above Decision was denied per Resolution of the Court of Appeals dated June 8. SO ORDERED. The issue boils down to whether the DOLE Certifications should be considered as sufficient proof that petitioners paid respondent proper wages and all other monetary benefits to which she was entitled as an employee. it behooves the Court to re-examine the records and resolve the conflicting rulings. 00-06-03073-02 is hereby REINSTATED.984[11] Considering.

it is settled jurisprudence that the burden of proving payment of monetary claims rests on the employer. v. Thus. The Court has repeatedly ruled that any doubt arising from the evaluation of evidence as between the employer and the employee must be resolved in favor of the latter. as sustained by the CA. 2002. differentials. The Certifications990[17] from the DOLE stated that there are no pending labor cases against petitioners filed before said office. payrolls.986[13] Moreover. and other claims of workers have been paid – are not in the possession of the worker but in the custody and absolute control of the employer. the burden of showing with legal certainty that the obligation has been discharged with payment falls on the debtor.987[14] Thus. service incentive leave. The reason for the rule is that the pertinent personnel files. records. 2001 stating that petitioner security agency has complied with the payment of backwages for 279 guards. as reiterated in G & M Philippines. but said certifications “do not cover cases filed before the National Labor Relations Commission and the National Conciliation and . in accordance with the rule that one who pleads payment has the burden of proving it. Petitioners do not deny that said DOLE reports and Order are the only evidence they presented to prove payment of respondent's money claims. nor is there any pending case with said government agency filed against the respondent as of May 16. On the other hand. are insufficient to prove that petitioners have indeed paid respondent whatever is due her. x x x 989[16] In this case. Petitioners only assail the weight ascribed by the Labor Arbiter and the CA to the evidence. ruled that the DOLE reports stating that petitioners have not violated any provision of the Labor Code.The Labor Arbiter. asseverating that such documents from the DOLE must be given greater importance as the NLRC did. Cuambot. Inc. petitioners failed to discharge such burden of proof. and the Order of the DOLE Regional Director dated January 17.988[15] to wit: x x x one who pleads payment has the burden of proving it. remittances and other similar documents – which will show that overtime. the NLRC considered the very same pieces of evidence as substantial proof of payment.

th IN VIEW OF THE FOREGOING. It was entirely within petitioners' power to present such employment records that should necessarily be in their possession. No. “the DOLE considered the inspection closed and terminated. remittances. In fact. Costs against petitioners. 2005. 2001 even bolsters respondent's claim that she had not been paid overtime pay. hence. is AFFIRMED.51) benefitting 279 guards” to show compliance with labor laws. does not in any way prove that respondent is one of those 279 guards. the DOLE Reports992[19] stated only that based on records submitted by petitioners. has been paid all her salaries and other benefits in full. since petitioners failed to present personnel files.” The Order991[18] dated January 17. and Service Incentive Leave Pay. such documents from the DOLE do not conclusively prove that respondent. in CA-G. PERALTA Associate Justice WE CONCUR: . the Order dated January 17. underpayment of 13 th month pay. petitioner security agency was found to have committed the following violations: underpayment of overtime pay. Verily.” For the years 2001and 2002. failure to present such evidence must be taken against them. Then. 84758. since petitioner security agency had submitted “*p+ayrolls showing backwages of the above-noted violations amounting to x x x (P443. the Petition is DENIED for lack of merit. SO ORDERED. DIOSDADO M. and underpayment of night shift differential pay. showed that in the year 2000. 2001 issued by the DOLE.512. that backwages for 279 guards had been paid. SP. payrolls. The Decision of the Court of Appeals dated January 17. and other similar documents which would have proven payment of respondent's money claims. in fact. it had no violations.Mediation Board. 13 month pay. underpayment of 5 days Service Incentive Leave Pay.R. said Order stated that. The statement in said Order. in particular.

NACHURA Associate Justice ROBERTO A. ANTONIO T. ABAD Associate Justice JOSE CATRAL MENDOZA Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. CARPIO Associate Justice Chairperson ANTONIO EDUARDO B. Chairperson .ANTONIO T. CARPIO Associate Justice Second Division.

PEREZ. BERSAMIN. CARPIO.CERTIFICATION Pursuant to Section 13. RENATO C. BRION. G. NACHURA. CARPIO MORALES. ABAD. PERALTA.. I certify 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. VILLARAMA.R. x ----------------------------------------------------------------------------------------x . JR. JR. JJ. and MENDOZA. 185215 Present: CORONA.. Article VIII of the Constitution and the Division Chairperson’s Attestation. CORONA Chief Justice Republic of the Philippines Supreme Court Manila EN BANC VIRGINIA D. Promulgated: July 22. 2010 . C. LEONARDO-DE CASTRO. No. Petitioner. Respondents.. BAUTISTA. J.versus - CIVIL SERVICE COMMISSION and DEVELOPMENT BANK OF THE PHILIPPINES. DEL CASTILLO. VELASCO.

2007 of the Civil Service Commission (CSC). On December 3. we take this opportunity to again remind litigants to use only fair and honest means to plead their cause in order not to waste the precious time and resources of our courts. This Petition for Review on Certiorari assails the October 31. this appointment was made permanent subject to the result of the ongoing reorganization of DBP and the approval of the . On December 1. 1986.R. In November 1988. it is through the use of misleading premises that a semblance of demotion was attempted to be passed off in this case. While this principle and its corollary are plain.: There is demotion when an employee is appointed to a position resulting to a diminution in duties.993[1] Where an employee is appointed to a position with the same duties and responsibilities but a rank and salary higher than those enjoyed in his previous position. responsibilities. 1978 when she was appointed as Chief of Division. 1982. 98934 which affirmed the Resolution No. Thus. then President Corazon C. 2008 Decision994[2] of the Court of Appeals (CA) in CA-G. she was promoted to the position of Technical Assistant. among others. SP No. Factual Antecedents Petitioner began her career in DBP on June 1. 81996[4] which authorized. status or rank which may or may not involve a reduction in salary.DECISION DEL CASTILLO.00 which is equivalent to the 14th step of Salary Grade (SG)-20. the reorganization of DBP pursuant to Sections 32997[5] and 33998[6] thereof. petitioner was temporarily appointed in January 1987 as Account Officer with an annual salary of P62. As part of DBP‘s reorganization. J. there is no demotion and the appointment is valid.640. The CSC dismissed petitioner‘s complaint based on the finding that the latter was not demoted upon her appointment as Bank Executive Officer II (BEO II) in the Development Bank of the Philippines (DBP). 070765995[3] dated April 16. Aquino issued Executive Order No.

CSC.00 or the 8th step of SG-24 which was made to retroact to July 1. 1994. Proceedings before the Department of Budget and Management Petitioner‘s complaint was referred to the DBM. the Department of Budget and Management (DBM) promulgated the Government Financial Institutions‘ (GFIs) Index of Occupational Services which mandated GFIs.000. petitioner reiterated her protest in a letter1002[10] addressed to the Vice-Chairman of DBP. to adopt a uniform set of position titles in their plantilla. 1989. SG-25 [under the GFIs Index of Occupational Services] will be highly illogical and totally out of context of . Therefore. 10 (DBM-CCC No. petitioner occupied the position of Account Officer with SG-20 (24th step) with an annual salary of P102. 1991. which found the same to be lacking in merit. petitioner was appointed on a permanent status as BEO II with an annual salary of P131. petitioner protested her appointment as BEO II before the Head of the Personnel Administration Department of the DBP because it allegedly amounted to a demotion. Prior to her appointment thereto. On October 2. As a consequence. To implement the aforesaid law. to allocate [the] subject positions to Account Officer. like the DBP. the DBM issued Corporate Compensation Circular No.1000[8] Proceedings before the Development Bank of the Philippines In a letter1001[9] dated March 23. on February 15. On February 8. She thus opined that her appointment to the position of BEO II constituted a demotion due to the attendant diminution of benefits and emoluments arising from said appointment. It held that the position of Account Officer in DBP is ―not in the rank of Assistant Department Manager II. 6758 (RA 6758). under the GFIs Index of Occupational Services.00. According to petitioner. or ―The Compensation and Classification Act of 1989. prior to the reorganization of DBP.999[7] Republic Act No. was assigned a salary grade of 25 while that of BEO II has a salary grade of 24.250.‖ took effect on July 1. 10) which authorized the GFIs to match their current set of position titles to those prescribed by the GFIs Index of Occupational Services. 1989. 1989 (the date of effectivity of RA 6758). she occupied the position of Account Officer which. 1993.

Moreover. the position of Account Officer with SG-20 was matched with BEO II with SG-24 (8th step). 19981007[15] but the latter failed to act on the same. petitioner only raised her claim to the contested position on September 26. petitioner was appointed to the position of Account Officer with SG-20 on a temporary status. the CSC rendered a decision dismissing petitioner‘s complaint for lack of merit. no demotion because her salary grade was even increased from 20 to 24. Pursuant to DBM-CCC No. 1996 or more than seven years from the time of her appointment. Proceedings before the Court of Appeals Petitioner thereafter appealed to the CA. thus. The CSC ruled that the appointment of petitioner to the position of BEO II was done pursuant to a valid reorganization.1006[14] and February 23. she again wrote a letter-complaint to the CSC. petitioner appealed to the CSC through several letters dated September 26 1996. deemed to have slept on her rights under the equitable doctrine of laches. while applying for early retirement. She is.1008[16] DBP asserted that when the bank started to reorganize in 1987.the accepted organizational set-up for GOCCs1003[11]/GFIs. 10 implementing RA 6758. thus. On the issue of laches. On April 16. 2007.1005[13] October 24. through several letter-appeals with the CSC. there was. 1997. later on. the CA disagreed with the CSC. first with the DBP a month after her appointment as BEO II. Thus. petitioner did not sleep on her . This time the CSC required DBP to comment. It found that petitioner timely protested her alleged demotion through several letter-complaints and appeals. Contrary to petitioner‘s claim. 2001.‖1004[12] Proceedings before the Civil Service Commission Undaunted. In its comment. On October 8. and.

hierarchy of jobs.rights. and 2. On the issue of demotion. Citing Department of Trade and Industry v. petitioner attributes the following errors to the CA: 1. If at all. It ruled that the DBP undertook the matching of positions in order to conform to the GFIs Index of Occupational Services based on the employee‘s nature of function. petitioner‘s appointment as BEO II had. thus. She decries that the assailed reorganization did not promote economy and efficiency but led to the demoralization of the employees who were not appointed to their old position. resulted to an increase thereof from SG-20 to SG24. Petitioner‘s duties and responsibilities as Account Officer with SG-20 and as BEO II with SG-24 are practically the same as shown by her BC-CSC Form 1 (Position Description Form). the CA upheld the findings of the CSC that the appointment of petitioner to BEO II did not constitute a demotion because this was done in good faith and pursuant to a valid reorganization. Issues Before this Court. The position of Account Officer with SG-25 was not abolished after the reorganization. Chairman and Commissioners of Civil Service Commission. there was a decrease in her rank and salary from SG-25 to SG-24.1010[18] petitioner claims that she should have been appointed to a position comparable to her former position. Thus. she was an incumbent Account Officer with SG-25. Rather than lowering her rank and salary. The CA erred in holding that DBP‘s reorganization was valid and done in good faith. and existing salary range.1009[17] Petitioner’s Arguments Petitioner argues that her appointment as BEO II with SG-24 constitutes a demotion because prior to the reorganization of DBP. the delay was attributable to the CSC‘s inaction on her protests which spanned several years. in fact. The CA erred in holding that petitioner‘s appointment from Account Officer to BEO II did not result in a demotion in rank and salary. . negating petitioner‘s claim of demotion.

hierarchy of jobs. the movement from one position to another involving the issuance of an appointment with diminution in duties. The CSC. responsibilities. there can be no demotion because petitioner‘s salary grade was even increased from 20 to 24. Thus. As a result. the evidence duly established that petitioner occupied the position of Account Officer with SG-20. It emphasizes that petitioner failed to prove that there was a reduction in her duties.1014[22] Consequently. Rather. including DBP. status or rank as a result of her appointment to the position of BEO II. Our Ruling We affirm the findings of the CA and DENY the petition. the DBM approved the GFIs Index of Occupational Services which mandated the GFIs.1011[19] Removal from office as a result of reorganization must. the test of good faith lies in whether the purpose of the reorganization is for economy or to make the bureaucracy more efficient. There was no demotion when petitioner was appointed as BEO II. pass the test of good faith. It claims that petitioner failed to prove that she held the position of Account Officer with SG-25 under the GFIs Index of Occupational Services prior to the reorganization of the bank. the observance of the rules on bona . status or rank which may or may not involve a reduction in salary.. The position of Account Officer with SG-20 is not the same as Account Officer with SG-25 under the GFIs Index of Occupational Services.e. Petitioner‘s duties and responsibilities as Account Officer and as BEO II remained essentially the same.1013[21] is tantamount to removal. a reorganization is valid provided that it is done in good faith. and existing salary range.1012[20] A demotion in office. When RA 6758 was passed by Congress. As a general rule. Taken together. thus. is fully in accord with the afore-stated position of the DBP. i. In this jurisdiction.Respondents’ Arguments DBP counters that the appointment of petitioner to BEO II was done in good faith and pursuant to a valid reorganization. DBP fixed the positions of its employees to appropriate positions to conform to the GFIs Index of Occupational Services based on the nature of their functions. to adopt the position titles therein. represented by the Solicitor General. responsibilities. the position of Account Officer with SG-20 was matched to the position of BEO II with SG-24. before a demotion may be effected pursuant to a reorganization. if no cause is shown for it.

Curiously. There was even an increase in her rank and salary. qualification requirements for the position. Consequently. is nothing but an attempt to mislead this Court. and existing salary range. petitioner occupied the position of Account Officer with SG-20 and not Account Officer with SG-25. in her arguments before the CA and this Court.1017[25] While there was a change in title from ―Account Officer‖ to ―Bank Executive Officer. The DBM then issued DBM-CCC No.1015[23] There was no demotion because petitioner was appointed to a position comparable to the one she previously occupied. therefore. It will also be recalled that the DBM had earlier denied petitioner‘s request that her position as Account Officer with SG-20 be matched to Account Officer with SG-25 under the GFIs Index of Occupational Services because the Account Officer position in DBP is not commensurate with the position of Account Officer with SG-25 under the said index.‖ petitioner‘s duties and responsibilities before and after the reorganization remained practically the same. petitioner modified her position by claiming that she was an Account Officer with SG-25 prior to her appointment to the position of BEO II with SG-24. 10 which authorized DBP to match its current set of position titles to those prescribed under the GFIs Index of Occupational Services based on the nature of duties and responsibilities. The records show that prior to her appointment as BEO II. Thus. As correctly found by the CA.fide abolition of public office is essential. Upon the passage of RA 6758. her new appointment merely stated as reason therefor: . petitioner failed to prove that the position of Account Officer with SG-20 in the plantilla of DBP prior to its reorganization and the position of Account Officer with SG-25 under the GFIs Index of Occupational Services are the same. Petitioner claims that she was illegally demoted when she was appointed from Account Officer with SG-25 to BEO II with SG-24 after the reorganization of DBP in 1989. This is stated in petitioner‘s own evidence consisting of her service record1016[24] as well as the admissions in her letter-complaints before the DBP and CSC. including DBP. hierarchy of jobs. the DBM promulgated the GFIs Index of Occupational Services which mandated the adoption of a uniform system of position titles in GFIs. Petitioner‘s contention is untenable and misleading. to our mind. petitioner‘s position of Account Officer with SG-20 was matched to the position of BEO II with SG-24 because she exercised supervisory functions over certain bank personnel. express our disapproval over the manner by which petitioner pleaded her cause which. We must.

petitioner even admitted before the CA that she continued to exercise supervisory functions over bank personnel after she was appointed as BEO II. she limited her claim of demotion on the alleged decrease of her salary grade from 25 to 24 which. there was a corresponding increase in the new staffing pattern of the DTI after the reorganization.250. issues and arguments not adequately brought to the attention of the lower tribunal will not be ordinarily considered by a reviewing court as they cannot be raised for the first time on appeal. Finally.―Change in Item Number due to Reorganization. Under these circumstances. the incumbents were replaced by those less qualified in terms of educational qualification. Instead.00. We noted that when the position of therein respondent Espejo was abolished. as stated earlier. petitioner never assailed the reduction in the scope of her duties and responsibilities arising from her appointment as BEO II in the proceedings below. performance and merit. there was a clear intent to ease out the incumbents in order to favor less qualified individuals in the guise of a reorganization plan. petitioner posits for the first time on appeal that the supervisory function of BEO II is less than her former position. Petitioner did not assail the alleged reduction in the scope of her duties and responsibilities. Further. However.1020[28] She further claimed that in 1993 she was assigned to head a unit where she exercised supervisory functions over more than 20 bank personnel.1021[29] Thus. we affirmed the ruling of the CSC which found that the reorganization of the Department of Trade and Industry (DTI) was done in bad faith. Within this context.1019[27] Besides. we uphold the findings of the CA that petitioner‘s duties and responsibilities after the reorganization remained substantially the same. petitioner‘s reliance on the case of Department of Trade and Industry v. said appointment resulted to an increase of her salary grade from 20 to 24 translating to an increase of her annual salary from P102. Chairman and Commissioners of Civil Service Commission1022[30] is misplaced. theories. The reorganization of the DBP was made in good faith. In contrast.00 to P131. herein petitioner has failed to prove that DBP acted in bad faith when it appointed her as BEO II. Well-settled is the rule that points of law. . In a last ditch effort to save her case. In said case. as correctly observed by the DBP and CSC. has no legal and factual bases to stand on.000. Interestingly. there is no room for us to rule that a demotion took place because petitioner even benefited from an increase in rank and salary.‖1018[26] What is more. petitioner proffered no evidence to establish the extent of the alleged reduction of her duties and responsibilities other than her self-serving allegations. even if we were to relax this rule.

affirming Resolution No. SP No.None of the circumstances under Section 21023[31] of RA 66561024[32] which would be indicia of bad faith in the process of reorganization is present here. In fact. 2008 Decision of the Court of Appeals in CA-G. the petition is DENIED.R. Given that these findings are supported by substantial evidence.1025[33] WHEREFORE. There is. the reorganization worked in petitioner‘s favor as her salary grade was increased from 20 to 24. thus. Quite the contrary. All in all. 98934. no evidence to suggest that DBP acted in bad faith. CORONA Chief Justice . is AFFIRMED. we agree with the findings of the CA that there was no demotion because petitioner was appointed to a position comparable to her former position. SO ORDERED. The October 31. MARIANO C. when supported by substantial evidence. Costs against petitioner. her new position entailed an increase in her salary grade from 20 to 24. 070765 of the Civil Service Commission which found that petitioner‘s appointment as Bank Executive Officer II in the Development Bank of the Philippines did not result to her demotion. we adhere to the settled principle that the findings of an administrative body. DEL CASTILLO Associate Justice WE CONCUR: RENATO C. are accorded not only respect but also finality by this Court.

CARPIO Associate Justice CONCHITA CARPIO MORALES Associate Justice PRESBITERO J. VILLARAMA. PERALTA Associate Justice LUCAS P. ABAD Associate Justice MARTIN S. VELASCO. BERSAMIN Associate Justice ROBERTO A. JR.ANTONIO T. JR. NACHURA Associate Justice TERESITA J. Associate Justice ANTONIO EDUARDO B. LEONARDO-DE CASTRO Associate Justice ARTURO D. Associate Justice JOSE PORTUGAL PEREZ Associate Justice JOSE CATRAL MENDOZA Associate Justice CERTIFICATION Pursuant to Section 13. Article VIII of the Constitution. it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court. . BRION Associate Justice (No part) DIOSDADO M.

RENATO C. CORONA Chief Justice .

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