G.R. No.
160828 August 9, 2010 PRI has a collective bargaining agreement (CBA) with NAMAPRI-SPFL for a period of five (5)
PICOP RESOURCES, INCORPORATED (PRI), Petitioner,
vs.
ANACLETO L. TAÑECA, GEREMIAS S. TATO, JAIME N. CAMPOS, MARTINIANO A.
MAGAYON, JOSEPH B. BALGOA, MANUEL G. ABUCAY, MOISES M. ALBARAN,
MARGARITO G. ALICANTE, JERRY ROMEO T. AVILA, LORENZO D. CANON, RAUL P.
DUERO, DANILO Y. ILAN, MANUEL M. MATURAN, JR., LUISITO R. POPERA, CLEMENTINO
C. QUIMAN, ROBERTO Q. SILOT, CHARLITO D. SINDAY, REMBERT B. SUZON ALLAN J.
TRIMIDAL, and NAMAPRI-SPFL, Respondents.
DECISION
PERALTA, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the
reversal of the Decision1 dated July 25, 2003 and Resolution2 dated October 23, 2003 of
the Court of Appeals in CA-G.R. SP No. 71760, setting aside the Resolutions dated October
8, 20013 and April 29, 20024 of the National Labor Relations Commission in NLRC CA No. M-
006309-2001 and reinstating the Decision5 dated March 16, 2001 of the Labor Arbiter.
The facts, as culled from the records, are as follows:
On February 13, 2001, respondents Anacleto Tañeca, Loreto Uriarte, Joseph Balgoa, Jaime
Campos, Geremias Tato, Martiniano Magayon, Manuel Abucay and fourteen (14) others
filed a Complaint for unfair labor practice, illegal dismissal and money claims against
petitioner PICOP Resources, Incorporated (PRI), Wilfredo Fuentes (in his capacity as PRI's
Vice President/Resident Manager), Atty. Romero Boniel (in his capacity as PRI's Manager
of Legal/Labor), Southern Philippines Federation of Labor (SPFL), Atty. Wilbur T. Fuentes
(in his capacity as Secretary General of SPFL), Pascasio Trugillo (in his capacity as Local
President of Nagkahiusang Mamumuo sa PICOP Resources, Inc.- SPFL [NAMAPRI-
SPFL]) and Atty. Proculo Fuentes, Jr.6 (in his capacity as National President of SPFL).
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), which is the collective bargaining agent for the rank-and-file employees of petitioner
PRI.
years from May 22, 1995 until May 22, 2000.
The CBA contained the following union security provisions:
Article II- Union Security and Check-Off
Section 6. Maintenance of membership.
6.1 All employees within the appropriate bargaining unit who are members of the
UNION at the time of the signing of this AGREEMENT shall, as a condition of continued
employment by the COMPANY, maintain their membership in the UNION in good
standing during the effectivity of this AGREEMENT.
6.2 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.
6.3 The COMPANY, upon the written request of the UNION and after compliance with the
requirements of the New Labor Code, shall give notice of termination of services of any
employee who shall fail to fulfill the condition provided in Section 6.1 and 6.2 of this
Article, 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, or
that membership was denied or terminated for reasons other than voluntary resignation
or non-payment of regular union dues. Separation under the Section is understood to be
for cause, consequently, the dismissed employee is not entitled to separation benefits
provided under the New Labor Code and in this AGREEMENT."7
On May 16, 2000, Atty. Proculo P. Fuentes (Atty. 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. 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 By-Laws, and
the terms and conditions of the CBA, specifically Article II, Sections 6.1 and 6.2 on Union
Security Clause.
In a letter dated May 23, 2000, Mr. 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. NAMAPRI-SPFL, likewise, furnished PRI with machine
copy of the authorization letters dated March 19, 20 and 21, 2000, which contained the
names and signatures of employees.
Acting on the May 16 and May 23, 2000 letters of the NAMAPRI-SPFL, Atty. Romero A.
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.
Within the period from May 26 to June 2, 2000, a number of employees who were served
"explanation memorandum" submitted their explanation, while some did not.
In a letter dated June 2, 2000, Atty. Boniel endorsed the explanation letters of the
employees to Atty. Fuentes for evaluation and final disposition in accordance with the
CBA.
After evaluation, in a letter dated July 12, 2000, Atty. Fuentes advised the management of
PRI that the Union found the member's explanations to be unsatisfactory. He reiterated
the demand for termination, but only of 46 member-employees, including respondents.
On October 16, 2000, 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. A Notice dated October 21, 2000 was also served on the Department of Labor
and Employment Office (DOLE), Caraga Region.
Respondents then accused PRI of Unfair Labor Practice punishable under Article 248 (a),
(b), (c), (d) and (e) of the Labor Code, while Atty. Fuentes and Wilbur T. Fuentes and
Pascasio Trujillo were accused of violating Article 248 (a) and (b) of the Labor Code.
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. They claimed that they continue to remain on record as bona fide members of
NAMAPRI-SPFL. 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.
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. They claimed that while it may be
true that they signed the said authorization before the start of the freedom period, the
petition of FFW was only filed with the DOLE on May 18, 2000, or 58 days after the start of
the freedom period.
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; and not to cause the downfall of NAMAPRI-SPFL.
Furthermore, respondents contended that there was lack of procedural due process. Both
the letter dated May 16, 2000 of Atty. Fuentes and the follow-up letter dated May 23,
2000 of Trujillo addressed to PRI did not mention their names. Respondents stressed that
NAMAPRI-SPFL merely requested PRI to investigate union members who supported the
Petition for Certification Election of FFW. Respondents claimed that they should have been
summoned individually, confronted with the accusation and investigated accordingly and
from where the Union may base its findings of disloyalty and, thereafter, recommend to
management the termination for causes.1avvphi1
Respondents, likewise, argued that at the time NAMAPRI-SPFL demanded their
termination, it was no longer the bargaining representative of the rank-and-file workers of
PRI, because the CBA had already expired on May 22, 2000. Hence, there could be no
justification in PRI’s act of dismissing respondents due to acts of disloyalty.
Respondents asserted that the act of PRI, Wilfredo Fuentes and 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, restraint or coercion of respondents’ exercise of their right
to self-organization. The act indirectly required petitioners to support and maintain their
membership with NAMAPRI-SPFL as a condition for their continued employment. The acts
of NAMAPRI-SPFL, Atty. 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.
In a Decision8 dated March 16, 2001, the Labor Arbiter declared the respondents’ dismissal SECURITY CLAUSE, EVEN BEYOND THE 5-YEAR PERIOD WHEN NO NEW CBA HAS YET BEEN
to be illegal and ordered PRI to reinstate respondents to their former or equivalent ENTERED INTO.
positions without loss of seniority rights and to jointly and solidarily pay their backwages.

The dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby entered:
1. Declaring complainants’ dismissal illegal; and
2. Ordering respondents Picop Resources Inc. (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 ₱420,339.30 as shown in
the said Annex "A" plus damages in the amount of ₱10,000.00 each, or a total of
₱210,000.00 and attorney’s fees equivalent to 10% of the total monetary award.
SO ORDERED.9
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, REVISED RULES OF COURT.10
We will first delve on the technical issue raised.
PRI perceived a patent error in the mode of appeal elected by respondents for the purpose
of assailing the decision of the NLRC. It claimed that assuming that the NLRC erred in its
judgment on the legal issues, its error, if any, is not tantamount to abuse of discretion
falling within the ambit of Rule 65.

PRI and NAMAPRI-SPFL appealed to the National Labor Relations Commission (NLRC), Petitioner is mistaken.
which reversed the decision of the Labor Arbiter; thus, declaring the dismissal of
The power of the Court of Appeals to review NLRC decisions via Rule 65 or Petition
respondents from employment as legal.
for Certiorari has been settled as early as in our decision in St. Martin Funeral Home v.
Respondents filed a motion for reconsideration, but it was denied on April 29, 2001 for National Labor Relations Commission.11 This Court held that the proper vehicle for such
lack of merit. review was a Special Civil Action for Certiorari under Rule 65 of the Rules of Court, and
that this action should be filed in the Court of Appeals in strict observance of the doctrine
Unsatisfied, respondents filed a petition for certiorari under Rule 65 before the Court of
of the hierarchy of courts.12 Moreover, it is already settled that under Section 9 of Batas
Appeals and sought the nullification of the Resolution of the NLRC dated October 8, 2001
Pambansa Blg. 129, as amended by Republic Act No. 7902[10] (An Act Expanding the
which reversed the Decision dated March 16. 2001 of Labor Arbiter and the Resolution
Jurisdiction of the Court of Appeals, amending for the purpose of Section Nine of Batas
dated April 29, 2002, which denied respondent’s motion for reconsideration.
Pambansa Blg. 129 as amended, known as the Judiciary Reorganization Act of 1980 ), the
On July 25, 2003, the Court of Appeals reversed and set aside the assailed Resolutions of Court of Appeals – pursuant to the exercise of its original jurisdiction over Petitions
the NLRC and reinstated the Decision dated March 16, 2001 of the Labor Arbiter. for Certiorari – is specifically given the power to pass upon the evidence, if and when
necessary, to resolve factual issues. 13
Thus, before this Court, PRI, as petitioner, raised the following issues:
We now come to the main issue of whether there was just cause to terminate the
I employment of respondents.
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
PRI argued that the dismissal of the respondents was valid and legal. It claimed to have
acted in good faith at the instance of the incumbent union pursuant to the Union Security
Clause of the CBA.
Citing Article 253 of the Labor Code,14 PRI contends that as parties to the CBA, 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.
Petitioner's argument is untenable.
"Union security" is a generic term, which is applied to and comprehends "closed shop,"
"union shop," "maintenance of membership," or any other form of agreement which
imposes upon employees the obligation to acquire or retain union membership as a
condition affecting employment. 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. There is maintenance of membership shop when employees, who are union
members as of the effective date of the agreement, or who thereafter become members,
must maintain union membership as a condition for continued employment until they are
promoted or transferred out of the bargaining unit, or the agreement is terminated. A
closed shop, on the other hand, may be defined as an enterprise in which, by agreement
between the employer and his employees or their representatives, no person may be
employed in any or certain agreed departments of the enterprise unless he or she is,
becomes, and, for the duration of the agreement, remains a member in good standing of a
union entirely comprised of or of which the employees in interest are a part.15
However, in terminating the employment of an employee by enforcing the union security
clause, the employer needs to determine and prove that: (1) the union security clause is
applicable; (2) the union is requesting for the enforcement of the union security provision
in the CBA; and (3) there is sufficient evidence to support the decision of the union to
expel the employee from the union. These requisites constitute just cause for terminating
an employee based on the union security provision of the CBA.16
As to the first requisite, there is no question that the CBA between PRI and respondents
included a union security clause, specifically, a maintenance of membership as stipulated
in Sections 6 of Article II, Union Security and Check-Off. Following the same provision, PRI,
upon written request from the Union, can indeed terminate the employment of the
employee who failed to maintain its good standing as a union member.
Secondly, it is likewise undisputed that NAMAPRI-SPFL, in two (2) occasions demanded
from PRI, in their letters dated May 16 and 23, 2000, to terminate the employment of
respondents due to their acts of disloyalty to the Union.
However, as to the third requisite, we find that there is no sufficient evidence to support
the decision of PRI to terminate the employment of the respondents.
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. It contends that the acts of respondents are a violation of the Union
Security Clause, as provided in their Collective Bargaining Agreement.
We are unconvinced.
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, 20
and 21, or before the "freedom period," is not sufficient ground to terminate the
employment of respondents inasmuch as the petition itself was actually filed during the
freedom period. Nothing in the records would show that respondents failed to maintain
their membership in good standing in the Union. Respondents did not resign or withdraw
their membership from the Union to which they belong. Respondents continued to pay
their union dues and never joined the FFW.
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. However, 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." Likewise, as per records, it was clear that the actual
Petition for Certification Election of FFW was filed only on May 18, 2000. 17 Thus, it was
within the ambit of the freedom period which commenced from March 21, 2000 until May
21, 2000. Strictly speaking, what is prohibited is the filing of a petition for certification
election outside the 60-day freedom period.18 This is not the situation in this case. If at all,
the signing of the authorization to file a certification election was merely preparatory to
the filing of the petition for certification election, or an exercise of respondents’ right to
self-organization.
Moreover, 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." It claimed that they are still bound by the Union Security Clause of the CBA
even after the expiration of the CBA; hence, the need to terminate the employment of
respondents.
Petitioner's reliance on Article 253 is misplaced.
The provision of Article 256 of the Labor Code is particularly enlightening. It reads:
Article 256. Representation issue in organized establishments. - In organized
establishments, 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, 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. To have a valid election, at least a majority of all eligible voters in the unit
must have cast their votes. 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. When an
election which provides for three or more choices results in no choice receiving a majority
of the valid votes cast, a run-off election shall be conducted between the labor unions
receiving the two highest number of votes: Provided, That the total number of votes for all
contending unions is at least fifty per cent (50%) of the number of votes cast.
At the expiration of the freedom period, the employer shall continue to recognize the
majority status of the incumbent bargaining agent where no petition for certification
election is filed.19
Applying the same provision, 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, they could only do so when no petition for certification
election was filed. The reason is, 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.20 The provision for status quo is conditioned on the fact that no
certification election was filed during the freedom period. 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.21
In the instant case, four (4) petitions were filed as early as May 12, 2000. In fact, a petition
for certification election was already ordered by the Med-Arbiter of DOLE Caraga Region
on August 23, 2000.22
Therefore, following Article 256, at the expiration of the freedom period, PRI's obligation
to recognize NAMAPRI-SPFL as the incumbent bargaining agent does not hold true when
petitions for certification election were filed, as in this case.
Moreover, the last sentence of Article 253 which provides for automatic renewal pertains
only to the economic provisions of the CBA, and does not include representational aspect
of the CBA. An existing CBA cannot constitute a bar to a filing of a petition for certification
election. When there is a representational issue, the status quo provision in so far as the
need to await the creation of a new agreement will not apply. Otherwise, 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, thereafter, support another
union when filing a petition for certification election. If we apply it, there will always be an
issue of disloyalty whenever the employees exercise their right to self-organization. The
holding of a certification election is a statutory policy that should not be circumvented, 23 or
compromised.1avvphi
Time and again, we have ruled that we adhere to the policy of enhancing the welfare of
the workers. Their freedom to choose who should be their bargaining representative is of
paramount importance. 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. 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. Not only some, but all of them should have
the right to do so. What is equally important is that everyone be given a democratic space
in the bargaining unit concerned.24
We will emphasize anew that the power to dismiss is a normal prerogative of the
employer. This, however, is not without limitations. 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. Dismissals
must not be arbitrary and capricious. Due process must be observed in dismissing an
employee, because it affects not only his position but also his means of livelihood.
Employers should, therefore, respect and protect the rights of their employees, which
include the right to labor.25

An employee who is illegally dismissed is entitled to the twin reliefs of full backwages and
reinstatement. If reinstatement is not viable, separation pay is awarded to the employee.
In awarding separation pay to an illegally dismissed employee, in lieu of reinstatement, the
amount to be awarded shall be equivalent to one month salary for every year of service.
Under Republic Act No. 6715, employees who are illegally dismissed are entitled to full
backwages, inclusive of allowances and other benefits, or their monetary equivalent,
computed from the time their actual compensation was withheld from them up to the
time of their actual reinstatement. But if reinstatement is no longer possible, the
backwages shall be computed from the time of their illegal termination up to the finality of
the decision. Moreover, respondents, having been compelled to litigate in order to seek
redress for their illegal dismissal, are entitled to the award of attorney’s fees equivalent to
10% of the total monetary award.26

WHEREFORE, the petition is DENIED. The Decision dated July 25, 2003 and the Resolution
dated October 23, 2003 of the Court of Appeals in CA-G.R. SP No. 71760, which set aside
the Resolutions dated October 8, 2001 and April 29, 2002 of the National Labor Relations
Commission in NLRC CA No. M-006309-2001, are AFFIRMED accordingly. Respondents are
hereby awarded full backwages and other allowances, without qualifications and
diminutions, computed from the time they were illegally dismissed up to the time they are
actually reinstated. Let this case be remanded to the Labor Arbiter for proper computation
of the full backwages due respondents, in accordance with Article 279 of the Labor Code,
as expeditiously as possible.

SO ORDERED.
G.R. No. 157214 June 7, 2005 6. Attend to certain medical administrative function such as accomplishing medical forms,
evaluating conditions of employees applying for sick leave of absence and subsequently
PHILIPPINE GLOBAL COMMUNICATIONS, INC., petitioner,
issuing proper certification, and all matters referred which are medical in nature.
vs.
RICARDO DE VERA, respondent. The parties agreed and formalized respondent’s proposal in a document denominated
as RETAINERSHIP CONTRACT4 which will be for a period of one year subject to renewal, it
DECISION
being made clear therein that respondent will cover "the retainership the Company
GARCIA, J.: previously had with Dr. K. Eulau" and that respondent’s "retainer fee" will be at P4,000.00
a month. Said contract was renewed yearly.5 The retainership arrangement went on from
Before us is this appeal by way of a petition for review on certiorari from the 12 1981 to 1994 with changes in the retainer’s fee. However, for the years 1995 and 1996,
September 2002 Decision1 and the 13 February 2003 Resolution2 of the Court of Appeals in renewal of the contract was only made verbally.
CA-G.R. SP No. 65178, upholding the finding of illegal dismissal by the National Labor
Relations Commission against petitioner. The turning point in the parties’ relationship surfaced in December 1996 when Philcom,
thru a letter6 bearing on the subject boldly written as "TERMINATION – RETAINERSHIP
As culled from the records, the pertinent facts are: CONTRACT", informed De Vera of its decision to discontinue the latter’s "retainer’s
Petitioner Philippine Global Communications, Inc. (PhilCom), is a corporation engaged in contract with the Company effective at the close of business hours of December 31, 1996"
the business of communication services and allied activities, while respondent Ricardo De because management has decided that it would be more practical to provide medical
Vera is a physician by profession whom petitioner enlisted to attend to the medical needs services to its employees through accredited hospitals near the company premises.
of its employees. At the crux of the controversy is Dr. De Vera’s status vis a vis petitioner On 22 January 1997, De Vera filed a complaint for illegal dismissal before the National
when the latter terminated his engagement. Labor Relations Commission (NLRC), alleging that that he had been actually employed by
It appears that on 15 May 1981, De Vera, via a letter dated 15 May 1981,3 offered his Philcom as its company physician since 1981 and was dismissed without due process. He
services to the petitioner, therein proposing his plan of works required of a practitioner in averred that he was designated as a "company physician on retainer basis" for reasons
industrial medicine, to include the following: allegedly known only to Philcom. He likewise professed that since he was not conversant
with labor laws, he did not give much attention to the designation as anyway he worked
1. Application of preventive medicine including periodic check-up of employees; on a full-time basis and was paid a basic monthly salary plus fringe benefits, like any other
2. Holding of clinic hours in the morning and afternoon for a total of five (5) hours daily for regular employees of Philcom.
consultation services to employees; On 21 December 1998, Labor Arbiter Ramon Valentin C. Reyes came out with a
3. Management and treatment of employees that may necessitate hospitalization decision7 dismissing De Vera’s complaint for lack of merit, on the rationale that as a
including emergency cases and accidents; "retained physician" under a valid contract mutually agreed upon by the parties, De Vera
was an "independent contractor" and that he "was not dismissed but rather his contract
4. Conduct pre-employment physical check-up of prospective employees with no with [PHILCOM] ended when said contract was not renewed after December 31, 1996".
additional medical fee;

5. Conduct home visits whenever necessary;

On De Vera’s appeal to the NLRC, the latter, in a decision8 dated 23 October 2000, On 12 September 2002, the Court of Appeals rendered a decision, 10 modifying that of the
reversed (the word used is "modified") that of the Labor Arbiter, on a finding that De Vera NLRC by deleting the award of traveling allowance, and ordering payment of separation
is Philcom’s "regular employee" and accordingly directed the company to reinstate him to pay to De Vera in lieu of reinstatement, thus:
his former position without loss of seniority rights and privileges and with full backwages
WHEREFORE, premises considered, the assailed judgment of public respondent, dated 23
from the date of his dismissal until actual reinstatement. We quote the dispositive portion
October 2000, is MODIFIED. The award of traveling allowance is deleted as the same is
of the decision:
hereby DELETED. Instead of reinstatement, private respondent shall be paid separation
WHEREFORE, the assailed decision is modified in that respondent is ordered to reinstate pay computed at one (1) month salary for every year of service computed from the time
complainant to his former position without loss of seniority rights and privileges with full private respondent commenced his employment in 1981 up to the actual payment of the
backwages from the date of his dismissal until his actual reinstatement computed as backwages and separation pay. The awards of backwages and 13th month pay STAND.
follows:
SO ORDERED.
Backwages: In time, Philcom filed a motion for reconsideration but was denied by the appellate court
in its resolution of 13 February 2003.11
a) Basic Salary
From Dec. 31, 1996 to Apr. 10, 2000 = 39.33 mos. Hence, Philcom’s present recourse on its main submission that -
P44,400.00 x 39.33 mos. P1,750,185.00
THE COURT OF APPEALS ERRED IN SUSTAINING THE DECISION OF THE NATIONAL LABOR
13th Month Pay: RELATIONS COMMISSION AND RENDERING THE QUESTIONED DECISION AND RESOLUTION
b) 145,848.75 IN A WAY THAT IS NOT IN ACCORD WITH THE FACTS AND APPLICABLE LAWS AND
1/12 of P1,750,185.00
JURISPRUDENCE WHICH DISTINGUISH LEGITIMATE JOB CONTRACTING AGREEMENTS
Travelling allowance: FROM THE EMPLOYER-EMPLOYEE RELATIONSHIP.
c) 39,330.00
P1,000.00 x 39.33 mos. We GRANT.

Under Rule 45 of the Rules of Court, only questions of law may be reviewed by this Court
in decisions rendered by the Court of Appeals. There are instances, however, where the
GRAND TOTAL P1,935,363.75
Court departs from this rule and reviews findings of fact so that substantial justice may be
The decision stands in other aspects. served. The exceptional instances are where:

SO ORDERED.
With its motion for reconsideration having been denied by the NLRC in its order of 27
February 2001,9 Philcom then went to the Court of Appeals on a petition for certiorari,
thereat docketed as CA-G.R. SP No. 65178, imputing grave abuse of discretion amounting
to lack or excess of jurisdiction on the part of the NLRC when it reversed the findings of the
labor arbiter and awarded thirteenth month pay and traveling allowance to De Vera even
as such award had no basis in fact and in law.
"xxx xxx xxx (1) the conclusion is a finding grounded entirely on speculation, surmise and
conjecture; (2) the inference made is manifestly mistaken; (3) there is grave abuse of
discretion; (4) the judgment is based on a misapprehension of facts; (5) the findings of fact
are conflicting; (6) the Court of Appeals went beyond the issues of the case and its findings
are contrary to the admissions of both appellant and appellees; (7) the findings of fact of
the Court of Appeals are contrary to those of the trial court; (8) said findings of facts are
conclusions without citation of specific evidence on which they are based;
(9) the facts set forth in the petition as well as in the petitioner’s main and reply briefs are
not disputed by the respondents; and (10) the findings of fact of the Court of Appeals are
premised on the supposed absence of evidence and contradicted by the evidence on
record."12
As we see it, the parties’ respective submissions revolve on the primordial issue of
whether an employer-employee relationship exists between petitioner and respondent,
the existence of which is, in itself, a question of fact13 well within the province of the NLRC.
Nonetheless, given the reality that the NLRC’s findings are at odds with those of the labor
arbiter, the Court, consistent with its ruling in Jimenez vs. National Labor Relations
Commission,14 is constrained to look deeper into the attendant circumstances obtaining in
this case, as appearing on record.
In a long line of decisions,15 the Court, in determining the existence of an employer-
employee relationship, has invariably adhered to the four-fold test, to wit: [1] the selection
and engagement of the employee; [2] the payment of wages; [3] the power of dismissal;
and [4] the power to control the employee’s conduct, or the so-called "control test",
considered to be the most important element.
Applying the four-fold test to this case, we initially find that it was respondent himself who
sets the parameters of what his duties would be in offering his services to petitioner. This
is borne by no less than his 15 May 1981 letter16 which, in full, reads:
"May 15, 1981
Mrs. Adela L. Vicente
Vice President, Industrial Relations
PhilCom, Paseo de Roxas
Makati, Metro Manila
Madam:
I shall have the time and effort for the position of Company physician with your
corporation if you deemed it necessary. I have the necessary qualifications, training and
experience required by such position and I am confident that I can serve the best interests
of your employees, medically.
My plan of works and targets shall cover the duties and responsibilities required of a
practitioner in industrial medicine which includes the following:
1. Application of preventive medicine including periodic check-up of employees;
2. Holding of clinic hours in the morning and afternoon for a total of five (5) hours daily for
consultation services to employees;
3. Management and treatment of employees that may necessitate hospitalization
including emergency cases and accidents;
4. Conduct pre-employment physical check-up of prospective employees with no
additional medical fee;
5. Conduct home visits whenever necessary;
6. Attend to certain medical administrative functions such as accomplishing medical forms,
evaluating conditions of employees applying for sick leave of absence and subsequently
issuing proper certification, and all matters referred which are medical in nature.
On the subject of compensation for the services that I propose to render to the
corporation, you may state an offer based on your belief that I can very well qualify for the
job having worked with your organization for sometime now.
I shall be very grateful for whatever kind attention you may extend on this matter and
hoping that it will merit acceptance, I remain
Very truly yours,
(signed)
RICARDO V. DE VERA, M.D."
Significantly, the foregoing letter was substantially the basis of the labor arbiter’s finding
that there existed no employer-employee relationship between petitioner and
respondent, in addition to the following factual settings:
The fact that the complainant was not considered an employee was recognized by the
complainant himself in a signed letter to the respondent dated April 21, 1982 attached as
Annex G to the respondent’s Reply and Rejoinder. Quoting the pertinent portion of said
letter:
‘To carry out your memo effectively and to provide a systematic and workable time
schedule which will serve the best interests of both the present and absent employee, may
I propose an extended two-hour service (1:00-3:00 P.M.) during which period I can devote
ample time to both groups depending upon the urgency of the situation. I shall readjust
my private schedule to be available for the herein proposed extended hours, should you
consider this proposal.
As regards compensation for the additional time and services that I shall render to the
employees, it is dependent on your evaluation of the merit of my proposal and your
confidence on my ability to carry out efficiently said proposal.’
The tenor of this letter indicates that the complainant was proposing to extend his time
with the respondent and seeking additional compensation for said extension. This shows
that the respondent PHILCOM did not have control over the schedule of the complainant
as it [is] the complainant who is proposing his own schedule and asking to be paid for the
same. This is proof that the complainant understood that his relationship with the
respondent PHILCOM was a retained physician and not as an employee. If he were an
employee he could not negotiate as to his hours of work.
The complainant is a Doctor of Medicine, and presumably, a well-educated person. Yet,
the complainant, in his position paper, is claiming that he is not conversant with the law
and did not give much attention to his job title- on a ‘retainer basis’. But the same
complainant admits in his affidavit that his service for the respondent was covered by a
retainership contract [which] was renewed every year from 1982 to 1994. Upon reading
the contract dated September 6, 1982, signed by the complainant himself (Annex ‘C’ of
Respondent’s Position Paper), it clearly states that is a retainership contract. The retainer
fee is indicated thereon and the duration of the contract for one year is also clearly
indicated in paragraph 5 of the Retainership Contract. The complainant cannot claim that
he was unaware that the ‘contract’ was good only for one year, as he signed the same
without any objections. The complainant also accepted its renewal every year thereafter
until 1994. As a literate person and educated person, the complainant cannot claim that
he does not know what contract he signed and that it was renewed on a year to year
basis.17
The labor arbiter added the indicia, not disputed by respondent, that from the time he
started to work with petitioner, he never was included in its payroll; was never deducted
any contribution for remittance to the Social Security System (SSS); and was in fact
subjected by petitioner to the ten (10%) percent withholding tax for his professional fee, in
accordance with the National Internal Revenue Code, matters which are simply
inconsistent with an employer-employee relationship. In the precise words of the labor
arbiter:
"xxx xxx xxx After more than ten years of services to PHILCOM, the complainant would
have noticed that no SSS deductions were made on his remuneration or that the
respondent was deducting the 10% tax for his fees and he surely would have complained
about them if he had considered himself an employee of PHILCOM. But he never raised
those issues. An ordinary employee would consider the SSS payments important and thus
make sure they would be paid. The complainant never bothered to ask the respondent to
remit his SSS contributions. This clearly shows that the complainant never considered
himself an employee of PHILCOM and thus, respondent need not remit anything to the SSS
in favor of the complainant."18
Clearly, the elements of an employer-employee relationship are wanting in this case. We
may add that the records are replete with evidence showing that respondent had to bill
petitioner for his monthly professional fees.19 It simply runs against the grain of common
experience to imagine that an ordinary employee has yet to bill his employer to receive his
salary.
We note, too, that the power to terminate the parties’ relationship was mutually vested
on both. Either may terminate the arrangement at will, with or without cause.20
Finally, remarkably absent from the parties’ arrangement is the element of control,
whereby the employer has reserved the right to control the employee not only as to the
result of the work done but also as to the means and methods by which the same is to be
accomplished.21
Here, petitioner had no control over the means and methods by which respondent went
about performing his work at the company premises. He could even embark in the private
practice of his profession, not to mention the fact that respondent’s work hours and the
additional compensation therefor were negotiated upon by the parties. 22 In fine, the
parties themselves practically agreed on every terms and conditions of respondent’s
engagement, which thereby negates the element of control in their relationship. For sure,
respondent has never cited even a single instance when petitioner interfered with his
work.
Yet, despite the foregoing, all of which are extant on record, both the NLRC and the Court
of Appeals ruled that respondent is petitioner’s regular employee at the time of his
separation.
Partly says the appellate court in its assailed decision:
Be that as it may, it is admitted that private respondent’s written ‘retainer contract’ was
renewed annually from 1981 to 1994 and the alleged ‘renewal’ for 1995 and 1996, when it
was allegedly terminated, was verbal.
Article 280 of the Labor code (sic) provides:
‘The provisions of written agreement to the contrary notwithstanding and regardless of
the oral agreements of the parties, an employment shall be deemed to be regular where
the employee has been engaged to perform in the usual business or trade of the
employer, except where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at the time of
the engagement of the employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of the season.’
‘An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any employee who has rendered at least one (1) year of
service, whether such is continuous or broken, shall be considered a regular with respect
to the activity in which he is employed and his employment shall continue while such
activity exists.’
Parenthetically, the position of company physician, in the case of petitioner, is usually
necessary and desirable because the need for medical attention of employees cannot be
foreseen, hence, it is necessary to have a physician at hand. In fact, the importance and
desirability of a physician in a company premises is recognized by Art. 157 of the Labor
Code, which requires the presence of a physician depending on the number of employees
and in the case at bench, in petitioner’s case, as found by public respondent, petitioner
employs more than 500 employees.
Going back to Art. 280 of the Labor Code, it was made therein clear that the provisions of a
written agreement to the contrary notwithstanding or the existence of a mere oral
agreement, if the employee is engaged in the usual business or trade of the employer,
more so, that he rendered service for at least one year, such employee shall be considered
as a regular employee.
Private respondent herein has been with petitioner since 1981 and his employment was
not for a specific project or undertaking, the period of which was pre-determined and
neither the work or service of private respondent seasonal. (Emphasis by the CA itself).
We disagree to the foregoing ratiocination.
The appellate court’s premise that regular employees are those who perform activities
which are desirable and necessary for the business of the employer is not determinative in
this case. For, we take it that any agreement may provide that one party shall render
services for and in behalf of another, no matter how necessary for the latter’s
business, even without being hired as an employee. This set-up is precisely true in the
case of an independent contractorship as well as in an agency agreement. Indeed, Article
280 of the Labor Code, quoted by the appellate court, is not the yardstick for determining
the existence of an employment relationship. As it is, the provision merely distinguishes
between two (2) kinds of employees, i.e., regular and casual. It does not apply where, as
here, the very existence of an employment relationship is in dispute.23
Buttressing his contention that he is a regular employee of petitioner, respondent invokes
Article 157 of the Labor Code, and argues that he satisfies all the requirements
thereunder. The provision relied upon reads:
ART. 157. Emergency medical and dental services. – It shall be the duty of every employer
to furnish his employees in any locality with free medical and dental attendance and
facilities consisting of:
(a) The services of a full-time registered nurse when the number of employees exceeds
fifty (50) but not more than two hundred (200) except when the employer does not
maintain hazardous workplaces, in which case the services of a graduate first-aider shall be
provided for the protection of the workers, where no registered nurse is available. The
Secretary of Labor shall provide by appropriate regulations the services that shall be
required where the number of employees does not exceed fifty (50) and shall determine
by appropriate order hazardous workplaces for purposes of this Article;
(b) The services of a full-time registered nurse, a part-time physician and dentist, and an
emergency clinic, when the number of employees exceeds two hundred (200) but not
more than three hundred (300); and
(c) The services of a full-time physician, dentist and full-time registered nurse as well as a
dental clinic, and an infirmary or emergency hospital with one bed capacity for every one
hundred (100) employees when the number of employees exceeds three hundred (300).
In cases of hazardous workplaces, no employer shall engage the services of a physician or
dentist who cannot stay in the premises of the establishment for at least two (2) hours, in
the case of those engaged on part-time basis, and not less than eight (8) hours in the case
of those employed on full-time basis. Where the undertaking is nonhazardous in nature,
the physician and dentist may be engaged on retained basis, subject to such regulations as
the Secretary of Labor may prescribe to insure immediate availability of medical and
dental treatment and attendance in case of emergency.
Had only respondent read carefully the very statutory provision invoked by him, he would
have noticed that in non-hazardous workplaces, the employer may engage the services of
a physician "on retained basis." As correctly observed by the petitioner, while it is true that
the provision requires employers to engage the services of medical practitioners in certain
establishments depending on the number of their employees, nothing is there in the law
which says that medical practitioners so engaged be actually hired as employees, 24 adding
that the law, as written, only requires the employer "to retain", not employ, a part-time
physician who needed to stay in the premises of the non-hazardous workplace for two (2)
hours.25
Respondent takes no issue on the fact that petitioner’s business of telecommunications is
not hazardous in nature. As such, what applies here is the last paragraph of Article 157
which, to stress, provides that the employer may engage the services of a physician and
dentist "on retained basis", subject to such regulations as the Secretary of Labor may
prescribe. The successive "retainership" agreements of the parties definitely hue to the
very statutory provision relied upon by respondent.
physician. Nowhere does the law provide that the physician or dentist so engaged thereby
becomes a regular employee. The very phrase that they may be engaged "on retained
basis", revolts against the idea that this engagement gives rise to an employer-employee
relationship.
With the recognition of the fact that petitioner consistently engaged the services of
respondent on a retainer basis, as shown by their various "retainership contracts", so can
petitioner put an end, with or without cause, to their retainership agreement as therein
provided.27
We note, however, that even as the contracts entered into by the parties invariably
provide for a 60-day notice requirement prior to termination, the same was not complied
with by petitioner when it terminated on 17 December 1996 the verbally-renewed
retainership agreement, effective at the close of business hours of 31 December 1996.
Be that as it may, the record shows, and this is admitted by both parties,28 that execution
of the NLRC decision had already been made at the NLRC despite the pendency of the
present recourse. For sure, accounts of petitioner had already been garnished and
released to respondent despite the previous Status Quo Order29 issued by this Court. To all
intents and purposes, therefore, the 60-day notice requirement has become moot and
academic if not waived by the respondent himself.
WHEREFORE, the petition is GRANTED and the challenged decision of the Court of Appeals
REVERSED and SET ASIDE. The 21 December 1998 decision of the labor arbiter is
REINSTATED.
No pronouncement as to costs.
SO ORDERED.

Deeply embedded in our jurisprudence is the rule that courts may not construe a statute
that is free from doubt. Where the law is clear and unambiguous, it must be taken to
mean exactly what it says, and courts have no choice but to see to it that the mandate is
obeyed.26 As it is, Article 157 of the Labor Code clearly and unequivocally allows employers
in non-hazardous establishments to engage "on retained basis" the service of a dentist or
G.R. No. 200857 October 22, 2014 2. Jovert R. Seva July 29, 1999 Supervisor
FVR SKILLS AND SERVICES EXPONENTS, INC. (SKILLEX), FULGENCIO V. RANA and MONINA
3. Valeriano Bingco, Jr. August 1, 1999 Leadman
R. BURGOS, Petitioners,
vs.
4. Michael Pantano January 22, 1999 Janitor
JOVERT SEV A, JOSUEL V. V ALENCERINA, JANET ALCAZAR, ANGELITO AMPARO,
BENJAMIN ANAEN, JR., JOHN HILBERT BARBA, BONIFACIO BATANG, JR., VALERIANO 5. Marlon C. Consorte May 6, 1999 Janitor
BINGCO,JR., RONALD CASTRO, MARLON CONSORTE, ROLANDO CORNELIO, EDITO
CULDORA, RUEL DUNCIL, MERVIN FLORES, LORD GALISIM, SOTERO GARCIA, JR., REY 6. Lord Galisim May 28, 1999 Janitor
GONZALES, DANTE ISIP, RYAN ISMEN, JOEL JUNIO, CARLITO LATOJA, ZALDY MARRA,
MICHAEL PANTANO, GLENN PILOTON, NORELDO QUIRANTE, ROEL RANCE, RENANTE 7. Sotero A. Garcia, Jr. April 14, 2000 Janitor
ROSARIO and LEONARDA TANAEL, Respondents.
8. Joel G. Junio May 4, 2000 Service Crew
DECISION

BRION, J.: 9. Zaldy R. Marra August 21, 2001 Janitor

We resolve in this petition for review on certiorari 1 the challenge to the December 22, 10. Ryan G. Ismen April 20, 2002 Janitor
2011 decision2 and the March 2, 2012 resolution3 (assailed CA rulings) of the Court of
Appeals (CA) in CA-G.R. SP No. 120991. These assailed CA rulings affirmed the April 28, 11. Glenn Piloton January 6, 2003 Janitor
2011 decision4 and the June 16, 2011 resolution5 (NLRC rulings) of the National Labor
Relations Commission (NLRC) in NLRC LAC No. 08-001687-10 (NLRC NCR Case Nos. 08- Janitor/Sanitation
12. Rey V. Gonzales August 15, 2003
11557-09 and 08-11399-09). The NLRC rulings in turn reversed and set aside the June 4, Aide
2010 decision6 of the labor arbiter (LA).
Janitor/Sanitation
Factual Antecedents 13. Roel P. Rance August 16, 2003
Aide
The twenty-eight (28) respondents in this case were employees of petitioner FVR Skills and
14. Mervin D. Flores January 1, 2004 Janitor
Services Exponents, Inc. (petitioner), an independent contractor engaged in the business
of providing janitorial and other manpower services to its clients. As early as 1998, some of
15. Renante Rosario January 13, 2004 Janitor
the respondents had already been under the petitioner's employ.

The respondents' respective names, dates of hiring, and positions are indicated in the 16. Ronald Castro February 2, 2004 Service Crew
table7 below.
17. John Hilbert D. February 22,
Service Crew
Respondents Date of Hiring Position Barba 2004

February 14, 18. Noreldo S. Quirante March 13, 2004 Janitor

1. Edito Culdora Janitor
1998
 19. Benjamin C. Anaen, The petitioner and Robinsons no longer extended their contract of janitorial services.
April 22, 2004 Service Crew Consequently, the petitioner dismissed the respondents as they were project employees
Jr.
whose duration of employment was dependent on the petitioner's service contract with
20. Rolando G. Cornelio August 5, 2004 Janitor Robinsons.

The respondents responded to the termination of their employment by filing a complaint

Janitor
21. Angelito A. Amparo July 28, 2005 for illegal dismissal with the NLRC. They argued that they were not project employees;
Aide/Sanitation
they were regular employees who may only be dismissed for just or authorized
Aide causes.11 The respondents also asked for payment of their unpaid wage differential, 13th
month pay differential, service incentive leave pay, holiday pay and separation pay.12
22. Leonarda Tanael February 1, 2007 Janitor The Labor Arbitration Rulings

23. Janet Alcazar March 1, 2007 Janitor
24. Dante F. Isip February 1, 2007 Janitor
Janitor/
25. Carlito Latoja February 1, 2007
Aide
Janitor/Sanitation
26. Ruel Duncil February 1, 2007
Aide
The LA ruled in the petitioner's favor. He held that the respondents were not regular
employees. They wereproject employees whose employment was dependent on the
petitioner's service contract with Robinsons. Since this contract was not renewed, the
respondents' employment contracts must also be terminated.13
Sanitation
Also, in light of the petitioner's admission during the clarificatory hearing that the
respondents were entitled to their wage differential pay, 13th month differential pay and
holiday pay,the LA granted the respondents' money claims in the amount of
₱103,501.01.14

The respondents disagreed with the LA and appealed to the NLRC, which reversed the LA's
27. Bonifacio P. Batang, Janitor/Sanitation
February 1, 2007 ruling, and held that they were regular employees. The NLRC considered that the
Jr. Aide
respondents had been under the petitioner's employ for more than a year already, some
28. Josuel Valencerina February 1, 2007 Supervisor of them as early as 1998.

On April 21, 2008, the petitioner entered into a Contract of Janitorial Service8 (service
contract) with Robinsons Land Corporation (Robinsons). Both agreed that the petitioner
shall supply janitorial, manpower and sanitation services to Robinsons Place Ermita Mall
for a period of one year - from January 1, 2008 to December 31, 2008.9 Pursuant to this,
the respondents were deployed to Robinsons.
Halfway through the service contract, the petitioner asked the respondents to execute
individual contracts which stipulated that their respective employments shall end on
December 31, 2008, unless earlier terminated.10
Thus, as regular employees, the respondents may only be dismissed for just or authorized
causes, which the petitioner failed to show. The NLRC also awarded the respondents their
separation pay of one (1) month for every year of service as well as their full backwages
from February 1, 2009 the date of their illegal dismissal, until the finality of the decision.15
The CA's Ruling
The CA dismissed the petitioner's certiorari petition and affirmed the NLRC's decision.
The CA noted that the petitioner individually hired the respondents on various dates from
1998 to 2007, to work as janitors, service crews and sanitation aides. These jobs were
necessary or desirable to the petitioner's business of providing janitorial, manpower and
sanitation services to its clients. The continuing need for the respondents' services, which
lasted for more than a year, validated that the respondents were regular and not project
employees.16
The CA also ruled that the fixed term employment contracts signed by the respondents
had no binding effect. The petitioner only used these contracts to justify the
respondents'illegal dismissal; the petitioner never asked the respondents to execute any
contract since their initial hiring. Only after it became apparent that the petitioner's
service contract with Robinsons would not be renewed (after its expiration on December
31, 2008), did the petitioner ask the respondents to sign their employment
contracts.17 This circumstance, coupled with the threat that the respondents would not be
given their salaries if they would not sign the contracts, showed the petitioner's intent to
use the contracts to prevent the respondents from attaining regular status.
Lastly, the CA held that petitioners Fulgencio V. Rana (Rana) and Monina R. Burgos
(Burgos), the president and general manager of FVR Skills and Services Exponents, Inc.,
respectively, are solidarily liable with the corporation for the payment of the respondents'
monetary awards. As corporate officers, they acted in bad faith when they intimidated the
respondents in the course of asking them to sign their individual employment contracts.18
The Petition
The petitioner now submits that the CA erred in ruling that the respondents were regular
employees and that they had been illegally dismissed. The respondents' contracts of
employments did not only provide for a fixed term, but werealso dependent on the
continued existence of the Robinsons' service contract.19 Since this main contract had not
been renewed, the respondents' respective employment contracts were properly
terminated. Based on this reasoning, no illegal dismissal took place, only the expiration of
the respondents' fixed term contracts.
In the absence of any illegal dismissal, the CA also erred in affirming the NLRC's award of
separation pay to the respondents.
Lastly, the petitioner asserts that Rana and Burgos should not be held solidarily liable with
the corporation for respondents' monetary claims; they have personalities separate and
distinct from the corporation.
The Case for the Respondents
The respondents reiterate that even before the execution of the petitioner's service
contract with Robinsons, they had already been working for the petitioner between the
years 1998 to 2007. Since their hiring, they had been performing janitorial and other
manpower activities that were necessary or desirable to the petitioner's business.20
They further argue that the employment contracts they executed were void since these
were signed under duress; the petitioner threatened not to release their salaries if they
would refuse to sign.21
Lastly, the respondents assert that the CA did not err in holding Rana and Burgos solidarily
liable with the corporation. These officers acted in bad faith when they obliged the
respondents to execute the employment contracts under threat.22
The Court's Ruling
We resolve to DENY the petition.
The respondents are regular employees, not project employees.
Article 280 (now Article 294)23 of the Labor Code governs the determination of whether an
employee is a regular or a project employee.24
Under this provision, there are two kinds of regular employees, namely: (1) those who
were engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer; and (2) those casual employees who became regular
after one year of service, whether continuous or broken, but only with respect to the
activity for which they have been hired.
We distinguish these two types of regular employees from a project employee, or one
whose employment was fixed for a specific project or undertaking, whose completion or
termination had been determined at the time of engagement.
A careful look at the factual circumstances of this case leads us to the legal conclusion that
the respondents are regular and not project employees.
The primary standard in determining regular employment is the reasonable connection
between the particular activity performed by the employee and the employer's business or
trade. This connection can be ascertained by considering the nature ofthe work performed
and its relation to the scheme of the particular business, or the trade in its entirety.25
Guided by this test, we conclude that the respondents' work as janitors, service crews and
sanitation aides, are necessary or desirable to the petitioner's business of providing
janitorial and manpower services to its clients as an independent contractor.
Also, the respondents had already been working for the petitioner as early as 1998. Even
before the service contract with Robinsons, the respondents were already under the
petitioner's employ.26 They had been doing the same type of work and occupying the same
positions from the time they were hired and until they were dismissed in January 2009.The
petitioner did not present any evidence torefute the respondents' claim that from the time
of their hiring until the time of their dismissal, there was no gap in between the projects
where theywere assigned to. The petitioner continuously availed of their servicesby
constantly deploying them to its clients.
Lastly, under Department Order (DO) 18-02,27 the applicable labor issuance to the
petitioner's case, the contractor or subcontractor is considered as the employer of the
contractual employee for purposes of enforcing the provisions of the Labor Code and
other social legislation.28
DO 18-02 grants contractual employees all the rights and privileges due a regular
employee, including the following: (a) safe and healthful working conditions;(b) labor
standards such as service incentive leave, rest days, overtime pay, holiday pay, 13th month
pay and separation pay; (c) social security and welfare benefits; (d) self-organization,
collective bargaining and peaceful concerted action; and (e) security of tenure.29
In this light, we thus conclude that although the respondents were assigned as contractual
employees to the petitioner's various clients, under the law, they remain to be the
petitioner'sr regular employees, who are entitled to all the rights and benefits of regular
employment.
The respondents' employment contracts, which were belatedly signed, are voidable.
The records show that at the time ofthe respondents' dismissal, they had already been
continuously working for the petitioner for more than a year. Despite this, they never
signed any employment contracts with the petitioner, except the contracts they belatedly
signed when the petitioner's own contract of janitorial services with Robinsons neared
expiration.
As already discussed, for an employee to be validly categorized as a project employee, it is
necessary that the specific project or undertaking had been identified and its period and
completion date determined and made known to the employee atthe time of his
engagement. This provision ensures that the employee is completely apprised of the terms
of his hiring and the corresponding rights and obligations arising from his undertaking.
Notably, the petitioner's service contract with Robinsons was from January 1 to December
31, 2008.
The respondents were only asked to sign their employment contracts for their deployment
with Robinsons halfway through 2008, when the petitioner's service contract was about to
expire. We find the timing of the execution of the respondents' respective employment
contracts to be indicative of the petitioner's calculated plan to evade the respondents'
right to security of tenure, to ensure their easy dismissal as soon as the Robinsons'
contract expired. The attendant circumstances cannot but raise doubts as to the
petitioner's good faith.
If the petitioner really intended the respondents to be project employees, then the
contracts should have been executed right from the time of hiring, or when the
respondents were first assigned to Robinsons, not when the petitioner's service contract
was winding up.The terms and conditions of the respondents' engagement should have
been disclosed and explained to them from the commencement of their employment. The
petitioner's failure to do so supports the conclusion that it had been in bad faith in evading
the respondents' right to security of tenure.
In Glory Philippines, Inc. v. Vergara,30 the Court rejected the validity of a fixed term
contract belatedly executed, and ruled that its belated signing was a deliberate employer
ploy to evade the employees' right to security of tenure. As the Court explained:
To us, the private respondent's illegal intention became clearer from such acts. Its making
the petitioners sign written employment contracts a few days before the purported end of
their employment periods (as stated in such contracts) was a diaphanous ploy to set
periods with a view for their possible severance from employment should the private
respondent so willed it. If the term of the employment was truly determined at the
beginning of the employment, why was there delay in the signing of the ready-made
contracts that were entirely prepared by the employer? Also, the changes in the positions
supposedly held by the petitioners in the company belied the private respondent's
adamant contention that the petitioners were hired solely for the purpose of manning PIS
during its alleged dry run period that ended on October 20, 1998. We view such situation
as a very obvious ploy of the private respondent to evade the petitioner's eventual
regularization.31 [Emphasis ours]
Moreover, under Article 1390 of the Civil Code, contracts where the consent of a party was
vitiated by mistake, violence, intimidation, undue influence or fraud, are voidable or
annullable. The petitioner's threat of nonpayment of the respondents' salaries clearly
amounted to intimidation. Under this situation, and the suspect timing when these
contracts were executed, we rule that these employment contracts were voidable and
were effectively questioned when the respondents filed their illegal dismissal complaint.
The respondents were illegally dismissed.
To be valid, an employee's dismissal must comply with the substantive and procedural
requirements of due process.1âwphi1 Substantively, a dismissal should be supported by a
just or authorized cause.32 Procedurally, the employer must observe the twin notice and
hearing requirements in carrying out an employee's dismissal.33
The petitioner argues that these substantive and procedural requisites do not apply to the
respondents' case since they were employed under fixed term contracts. According to the
petitioner, the respondents' employment contracts lapsed by operation of law asthe
necessary consequence of the termination and non-renewal of its service contract with
Robinsons. Because of this, there was no illegal dismissal to speak of, only contract
expiration.
We do not agree with the petitioner.
Having already determined that the respondents are regular employees and not project
employees, and that the respondents' belated employment contracts could not be given
any binding effect for being signed under duress, we hold that illegal dismissal took place
when the petitioner failed to comply with the substantive and procedural due process
requirements of the law.
The petitioner also asserts that the respondents' subsequent absorption by Robinsons'
new contractors Fieldmen Janitorial Service Corporation and Altaserv negates their illegal
dismissal. This reasoning is patently erroneous. The charge of illegal dismissal was made
only against the petitioner which is a separate juridical entity from Robinsons' new
contractors; it cannot escape liabilityby riding on the goodwill of others.
By law, the petitioner must bear the legal consequences of its violation of the respondents'
right to security of tenure. The facts of this case show that since the respondents' hiring,
they had been under the petitioner's employ as janitors, service crews and sanitation
aides. Their services had been continuously provided to the petitioner without any gap.
Notably, the petitioner never refuted this allegation of the respondents. Further, there
was no allegation that the petitioner went out of business after the nonrenewal of the
Robinsons' service contract.Thus, had it not been for the respondents' dismissal, they
would have been deployed to the petitioner's other existing clients.
In D.M. Consunji, Inc. v. Jamin,34 an employee was dismissed after the expiration of the
project he was lastengaged in. After ruling that the respondent-employee was a regular
and not a project employee, this Court affirmed the grant of backwages, computed from
the time of the employee's illegal dismissal until his actual reinstatement. In these lights,
we rule that the respondents are entitled to their full backwages, inclusive of their
allowances and other benefits from the time of their dismissal up to their actual
reinstatement.35
With regard to the award of separation pay, we agree with the CA's finding that this
litigation resulted to strained relations between the petitioner and the respondents. Thus,
we also affirm the CA's ruling that instead of reinstatement, the respondents should
bepaid their respective separation pays equivalent to one (1) month pay for every year of
service.36
We cannot give credence to the petitioner's assertion that under Section 10 of DO 18-
02,37 the respondents are not entitled to separation pay because their employment was
terminated due tothe completion of the project where they had been engaged. This
provision must be construed with the rest of DO 18-02's other provisions.
As earlier pointed out, Section 7 of DO 18-02 treats contractual employees as the
independent contractor's regular employees for purposes of enforcing the Labor Code and
other social legislation laws. Consequently, a finding of regular employment entitles them
to the rights granted to regular employees, particularly the right to security of tenure and
to separation pay. Thus, a holistic reading of DO 18-02,38 guides us to the conclusion that
Section 10 only pertains to contractual employees who are really project employees. They
are not entitled to separation pay since the end of the project for which they had been
hired necessarily results to the termination of their employment. On the other hand, we
already found that the respondents are the petitioner's regular employees. Thus, their
illegal dismissal entitles them to backwages and reinstatement or separation pay, in case
reinstatement is no longer feasible.
Solidary liability of the petitioner's officers
June 16, 2011. Petitioners Fulgencio V. Rana and Monina R. Burgos are hereby absolved
from paying the respondents' monetary awards in their personal capacity. No costs.
SO ORDERED.

Finally, we modify the CA's ruling that Rana and Burgos, as the petitioner's president and
general manager, should beheld solidarily liable with the corporation for its monetary
liabilities with the respondents.

A corporation is a juridical entity with legal personality separate and distinct from those
acting for and in its behalf and, in general, from the people comprising it. The general rule
is that, obligations incurred by the corporation, acting through its directors, officers and
employees, are its sole liabilities.39

A director or officer shall only be personally liable for the obligations of the corporation, if
the following conditions concur: (1) the complainant alleged in the complaint that the
director or officer assented to patently unlawful acts of the corporation, or that the officer
was guilty of gross negligence or bad faith; and (2) the complainant clearly and
convincingly proved such unlawful acts, negligence or bad faith.40

In the present case, the respondents failed to show the existence of the first requisite.
They did not specifically allege in their complaint that Rana and Burgos willfully and
knowingly assented to the petitioner's patently unlawful act of forcing the respondents to
sign the dubious employment contracts in exchange for their salaries. The respondents
also failed to prove that Rana and Burgos had been guilty of gross negligence or bad faith
in directing the affairs of the corporation. To hold an officer personally liable for the debts
of the corporation, and thus pierce the veil of corporate fiction, it is necessary to clearly
and convincingly establish the bad faith or wrongdoing of such officer, since bad faith is
never presumed.41 Because the respondents were not able to clearly show the definite
participation of Burgos and Rana in their illegal dismissal, we uphold the general rule that
corporate officers are not personally liable for the money claims of the discharged
employees, unless they acted with evident malice and bad faith in terminating their
employment.42

WHEREFORE, in light of these considerations, we hereby DENYthe petition. We AFFIRM

with MODIFICATION the Court of Appeals' decision dated December 22, 2011 and
resolution dated March 2, 2012 in CAG.R. SP No. 120991, which also AFFIRMED the
National Labor Relation Commission's decision dated April 28,2011 and resolution dated
G.R. No. 183250 March 10, 2010
WILLIAM UY CONSTRUCTION CORP. and/or TERESITA UY and WILLIAM UY, Petitioners,
vs.
JORGE R. TRINIDAD, Respondent.
DECISION
ABAD, J.:
This case is about the tenure of project employees in the construction industry.
The Facts and the Case
On August 1, 2006 respondent Jorge R. Trinidad filed a complaint for illegal dismissal and
unpaid benefits against petitioner William Uy Construction Corporation. Trinidad claimed
that he had been working with the latter company for 16 years since 1988 as driver of its
service vehicle, dump truck, and transit mixer. He had signed several employment
contracts with the company that identified him as a project employee although he had
always been assigned to work on one project after another with some intervals.
Respondent Trinidad further alleged that in December 2004 petitioner company
terminated him from work after it shut down operations because of lack of projects. He
learned later, however, that although it opened up a project in Batangas, it did not hire
him back for that project.
Petitioner company countered1 that it was in the construction business. By the nature of
such business, it had to hire and engage the services of project construction workers,
including respondent Trinidad, whose employments had to be co-terminous with the
completion of specific company projects. For this reason, every time the company
employed Trinidad, he had to execute an employment contract with it, called
Appointment as Project Worker.
Petitioner company stressed that employment intervals or gaps were inherent in the
construction business. Consequently, after it finished its Boni Serrano-Katipunan
Interchange Project in December 2004, Trinidad’s work ended as well. In compliance with
labor rules, the company submitted an establishment termination report to the
Department of Labor and Employment (DOLE).
On December 23, 2006 the Labor Arbiter rendered a decision, dismissing respondent
Trinidad’s complaint for unjust dismissal. The Labor Arbiter, however, ordered petitioner
company to pay Trinidad ₱1,500.00 in unpaid service incentive leave, taking into
consideration the three-year prescriptive period for money claims.2 The Labor Arbiter held
that, since Trinidad was a project employee and since his company submitted the
appropriate establishment termination report to DOLE, his loss of work cannot be
regarded as unjust dismissal. The Labor Arbiter found no basis for granting Trinidad
overtime pay, holiday pay, and 13th month pay.
On August 31, 2007 the National Labor Relations Commission (NLRC) affirmed the Labor
Arbiter’s ruling,3 prompting respondent Trinidad to elevate his case to the Court of Appeals
(CA).4 On April 24, 2008 the latter rendered a decision, reversing the NLRC’s findings.
Petitioner company moved for a reconsideration of the decision but the CA denied the
motion.
The Issue Presented
The core issue presented in the case is whether or not the CA correctly ruled that
petitioner company’s repeated rehiring of respondent Trinidad over several years as
project employee for its various projects automatically entitled him to the status of a
regular employee.
The Court’s Ruling
The CA held that, although respondent Trinidad initially worked as a project employee, he
should be deemed to have acquired the status of a regular employee since petitioner
company repeatedly rehired him in its past 35 projects that lasted 16 years. The CA
explained that Trinidad’s work as driver of the company’s service vehicle, dump truck, and
transit mixer was vital, necessary, and indispensable to the company’s construction
business. The intervals between his employment contracts were inconsequential since
stoppage in operations at the end of every construction project was a foreseeable
interruption of work.
But the test for distinguishing a "project employee" from a "regular employee" is whether
or not he has been assigned to carry out a "specific project or undertaking," with the
duration and scope of his engagement specified at the time his service is
contracted.5 Here, it is not disputed that petitioner company contracted respondent
Trinidad’s service by specific projects with the duration of his work clearly set out in his
employment contracts.6 He remained a project employee regardless of the number of termination of that employment. Indeed, both the Labor Arbiter and the NLRC were
years and the various projects he worked for the company.7 satisfied that the fact of petitioner company’s compliance with DOLE Order 19 had been
proved in this case.
Generally, length of service provides a fair yardstick for determining when an employee
initially hired on a temporary basis becomes a permanent one, entitled to the security and Parenthetically, the Social Security System should be able to alleviate the temporary
benefits of regularization. But this standard will not be fair, if applied to the construction unemployment of construction workers, a problem that is inherent in the nature of their
industry, simply because construction firms cannot guarantee work and funding for its work.
payrolls beyond the life of each project. And getting projects is not a matter of course.
WHEREFORE, the Court GRANTS the petition, SETS ASIDE the decision of the Court of
Construction companies have no control over the decisions and resources of project
Appeals in CA-G.R. SP 101903 dated April 24, 2008, and REINSTATES the decision of the
proponents or owners. There is no construction company that does not wish it has such
National Labor Relations Commission in NLRC-NCR-CA 051703-07(7) dated August 31,
control but the reality, understood by construction workers, is that work depended on
2007, which affirmed the decision of the Labor Arbiter in NLRC-NCR Case 07-05764-06.
decisions and developments over which construction companies have no say.
SO ORDERED.
For this reason, the Court held in Caseres v. Universal Robina Sugar Milling
Corporation8 that the repeated and successive rehiring of project employees do not qualify
them as regular employees, as length of service is not the controlling determinant of the
employment tenure of a project employee, but whether the employment has been fixed
for a specific project or undertaking, its completion has been determined at the time of
the engagement of the employee.

In this case, respondent Trinidad’s series of employments with petitioner company were
co-terminous with its projects. When its Boni Serrano-Katipunan Interchange Project was
finished in December 2004, Trinidad’s employment ended with it. He was not dismissed.
His employment contract simply ended with the project for which he had signed up. His
employment history belies the claim that he continuously worked for the company.
Intervals or gaps separated one contract from another.9

The CA noted that DOLE Order 19 required employers to submit a report of termination of
employees every completion of construction project. And, since petitioner company
submitted at the hearing before the Labor Arbiter only the termination report covering
respondent Trinidad’s last project, it failed to satisfy such requirement.

But respondent Trinidad did not say in his complaint that he had been illegally dismissed
after each of the projects for which he had been signed up. His complaint was essentially
that he should have been rehired from the last project since he had already acquired the
status of a regular employee. Consequently, petitioner company needed only to show the
last status of Trinidad’s employment, namely, that of a project employee under a contract
that had ended and the company’s compliance with the reporting requirement for the
G.R. No. 167345 November 23, 2007
e PACIFIC GLOBAL CONTACT CENTER, INC. and/or JOSE VICTOR SISON, Petitioners,
vs.
MA. LOURDES CABANSAY, Respondent.
DECISION
NACHURA, J.:
Established in our labor law jurisprudence is the principle that while compassion and
human consideration should guide the disposition of cases involving termination of
employment, since it affects one’s means of livelihood, it should not be overlooked that
the benefits accorded to labor do not include compelling an employer to retain the
services of an employee who has been shown to be a gross liability to the employer.1
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court
assailing the January 10, 2005 Decision2 of the Court of Appeals (CA) in CA-G.R. SP No.
83248, and the March 7, 2005 Resolution3 denying the motion for reconsideration thereof.
The facts are undisputed. Respondent Ma. Lourdes Cabansay (Cabansay) was hired as
Senior Traning Manager of ePacific Global Contact Center, Inc. with a monthly salary of
₱38,000.00 on April 18, 20014 and became a regular employee on August 1, 2001. In
March 2002, respondent was tasked to prepare a new training process for the company’s
Telesales Trainees.5
After reviewing the training module prepared by respondent, Mr. Rosendo S. Ballesteros
(Ballesteros), the company’s Senior Vice President-Business Development Group, found
that the same did not contain any changes and that they were not ready to present it. 6 He
thus instructed respondent through an electronic mail (e-mail) to postpone the
presentation and the implementation of the new training process.7 Ballesteros further
emphasized that the Department needed more time to teach the trainees on how to get
leads, focus on developing their telemarketing skills and acquire proper motivation.8
In response to Ballesteros’s e-mail instructions, Cabansay wrote, also via e-mail, as follows:
From: Miami Cabansay
Sent: Friday, April 05, 2002 7:58 AM
To: Ro Ballesteros; Lorna Garcia – ePacific
Cc: ‘Butch Nievera’
Subject: RE: dlp.new training process presentation.04042002
Importance: High
Sensitivity: Confidential
Ro, the presentation is going to be discussed in detail. As we discussed yesterday i (sic)
SPECIFICALLY told you that I WILL DISCUSS the new training process and explain it to them
in detail. Didn’t you see the last past (sic) of the 5-day classroom training, (sic) the last day
includes PROSPECTING, that’s where the CCA trainees will be taught how to get leads both
local and abroad.
The criteria for the evaluation? It’s already done by Richie, we’re going to distribute the
hard copies and discuss it in DETAIL in this afternoon’s briefing.
This is a very simple presentation and I WILL NOT POSTPONE it today, it’s very easy to
comprehend and as per YOUR INSTRUCTION we will be implementing it next week, so
when should we present this to the TLs?
Let’s not make SIMPLE THINGS COMPLICATED.
I will go on with the presentation this afternoon.9
Adversely reacting to respondent’s attitude, Ballesteros sent Cabansay a memo on April 6,
2002, informing the latter that he found her message to be a clear act of insubordination,
causing him to lose his trust and confidence in her as Manager of the Training
Department.10 He then asked respondent to explain in writing why she should not be
terminated as a consequence of her acts.11
Meanwhile, no presentation of the training module was made on April 5, 2002 because
the Senior Manager for Telesales, Ms. Lorna Garcia, on instruction of Ballesteros, informed
all the participants that the same was postponed because Management was not yet ready
to present the module.12
Clarifying that this was merely a case of miscommunication and that she had no intention
to disregard the order to postpone the implementation of the new training process,
Cabansay submitted two memoranda dated April 8 and 11, 2002.13
However, on April 11, 2002, the same day she submitted her second explanation,
Cabansay received a memorandum from the HR Department/Office of the President
notifying her that she had been terminated from the service effective immediately for
having committed an act of insubordination resulting in the management’s loss of trust
and confidence in her.14
Respondent, thus, filed a case for illegal dismissal docketed as NLRC-NCR-04-02441-02
with the Labor Arbitration Branch of the National Labor Relations Commission (NLRC). In
her position paper,15 she sought, among others, payment of full backwages, separation
pay, actual, moral and exemplary damages, cash equivalent of vacation and sick leave,
13th month pay, and attorney’s fees.16
On September 2, 2002, Labor Arbiter (LA) Madjayran H. Ajan rendered his
Decision17 dismissing the complaint. The Labor Arbiter ruled that reading Cabansay’s e-mail
message between the lines would clearly show that she willfully disobeyed the order of
Ballesteros.18 The her claim for 13th month pay, as well as for the cash equivalent of her
sick and vacation leave, the LA ruled that she impliedly agreed, when she did not object, to
the company’s submission that the pro-rated equivalent of her 13th month pay was
already paid to her and that she did not meet the company’s conditions for conversion to
cash of her leave credits.19 The dispositive portion of the LA’s Decision reads:
WHEREFORE, premises all considered, judgment is hereby rendered DISMISSING the
complaint for lack of merit. Finding the termination of the complainant valid and legal. (sic)
All other claims are Dismissed for lack of merit.
SO ORDERED.20
On appeal, the NLRC, in its August 29, 2003 Resolution in NLRC NCR CA No. 033624-
02,21 affirmed the decision of the LA. The Commission ruled that Ballesteros’s order to
postpone the implementation of the training module was reasonable, lawful, made known
to Cabansay and pertained to the duties which she had been engaged to
discharge.22 However, her reply—"xxx I WILL NOT POSTPONE it today xxx Let’s not make
SIMPLE THINGS COMPLICATED"—was a willful defiance of the lawful order of her
superior.23 Since her position as Senior Training Manager carries with it the highest degree
of responsibility in upholding the interest of her employer and in setting a standard of
discipline among officers and employees, the company had a valid cause to dismiss
Cabansay when she deliberately disobeyed the order of Ballesteros resulting in the latter’s
loss of trust and confidence in her.24 The NLRC further ruled that the company sufficiently
afforded her due process prior to her dismissal.25
Consequently, she should not be reinstated to her job or be paid separation pay,
backwages, moral and exemplary damages and attorney’s fees.26 The NLRC disposed of the
case as follows:
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 en
toto.
SO ORDERED.27
When her motion for reconsideration was denied by the NLRC, 28 Cabansay filed a petition
for certiorari under Rule 65 before the CA docketed as CA-G.R. SP No. 83248.29
On January 10, 2005, the appellate court rendered its Decision30 granting the petition. The
CA ruled that Cabansay’s termination could be justified neither by insubordination nor loss
of trust and confidence. A perusal of the e-mail instructions sent by Ballesteros to her
would show that, although the alleged order to postpone the presentation of the training
module was reasonable and lawful, it was not clearly made known to her. The phrase "I
don’t think [we are ready to present this to all TL]" could not be deemed an order as it
merely suggested an opinion.31 Moreover, the e-mail reply of Cabansay cannot be
considered an act of willful defiance or insubordination. The language used was not harsh
and no rude remarks or demeaning statements were made. She was only explaining her
view on the matter, which could not be considered unlawful considering that she was also
a managerial employee clothed with discretionary powers. Clearly, her acts did not
constitute the "wrongful and perverse attitude" that otherwise would sanction dismissal.
And even if she were guilty of insubordination, such minor infraction should not merit the
ultimate and supreme penalty of dismissal.32 The fallo of the CA Decision reads:
UPON THE VIEW WE TAKE OF THIS CASE, THUS, the petition at bench must be, as it hereby
is, GRANTED. The challenged resolutions of the NLRC dated August 29, 2003 and January
19, 2004 are hereby NULLIFIED and SET ASIDE. Petitioner is declared to have been illegally
dismissed by private respondent company. Private respondent is hereby ordered to pay
petitioner full backwages, separation pay and attorney’s fees. To this end, this case is
REMANDED to the Labor Arbiter for the computation of the separation pay, backwages
and other monetary awards to petitioner. Without special pronouncement as to costs.
SO ORDERED.33
Petitioner ePacific duly filed a motion for reconsideration34 but this was denied by the
appellate court in the March 7, 2005 Resolution.35
The said denial prompted petitioners to come to us raising the following grounds:
x x x (T)hat there is a prima facie evidence of grave abuse of discretion on the part of the
Hon. Court of Appeals in finding that the complainant was illegally dismissed on the bases
of the evidence presented.
That the Hon. Court of Appeals erred in applying the pertinent laws in the instant case.
The Hon. Court of Appeals had decided a question of substance in the instant case, not
theretofore determined by the Hon. Supreme Court and that the Court of Appeals had
decided in a way not in accord with law or with applicable decisions of the Supreme Court.
The Hon. Court of Appeals has so far departed from the accepted usual course of judicial
proceedings.36
The main issue to be resolved in this case is whether or not respondent Cabansay was
illegally dismissed.
We have consistently ruled in a plethora of cases that, in petitions for review on certiorari
under Rule 45 of the Rules of Court, only questions of law may be raised, 37 except if the
factual findings of the appellate court are mistaken, absurd, speculative, conjectural,
conflicting, tainted with grave abuse of discretion, or contrary to the findings culled by the
court of origin.38 As the findings and conclusions of the LA and the NLRC, in this case,
starkly conflict with those of the CA, we are constrained to delve into the records and
examine the questioned findings.
After a careful review of the records and considering the arguments of the parties, the
Court finds the petition impressed with merit.
Both the Labor Arbiter and the NLRC were unanimous in their findings that respondent
was validly dismissed. In arriving at this conclusion, the LA and the NLRC examined the e-
mail correspondence of Ballesteros and the respondent. They found that Ballesteros made
a lawful order to postpone the implementation of the new training process, yet
respondent incorrigibly refused to heed his instructions and sent an e-mail to him stating
that she would go on with its presentation. Such an act of insubordination resulted in the
management’s loss of trust and confidence in her.
This is a finding which the Court does not wish to disturb.
Oft-repeated is the rule that appellate courts accord the factual finding of the labor
tribunal not only respect but also finality when supported by substantial evidence,39 unless
there is showing that the labor tribunal arbitrarily disregarded evidence before them or
misapprehended evidence of such nature as to compel a contrary conclusion if properly
appreciated.40 Substantial evidence has been defined to be such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion, and its absence is
shown not by stressing that there is contrary evidence on record, direct or circumstantial,
for the appellate court cannot substitute its own judgment or criterion for that of the labor
tribunal in determining wherein lies the weight of evidence or what evidence is entitled to
belief.41
In the instant case, we find that the labor tribunal did not arbitrarily disregard or
misapprehend the evidence. Its finding that respondent was validly dismissed is likewise
warranted by substantial evidence. Thus, we agree with petitioner’s stance that the
findings of the LA, as affirmed by the NLRC, should not have been set aside by the
appellate court. Deference to the expertise acquired by the labor tribunal and the limited
scope granted in the exercise of certiorari jurisdiction restrain any probe into the
correctness of the LA’s and the NLRC’s evaluation of evidence.42
The petitioners anchor their termination of respondent’s services on Article 282,
paragraphs (a) and (c), of the Labor Code, as amended, which provides:
ARTICLE 282. TERMINATION BY EMPLOYER
An employer may terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;
xxxx
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or
duly authorized representative;

Willful disobedience or insubordination necessitates the concurrence of at least two
requisites: (1) the employee’s assailed conduct must have been willful, that is,
characterized by a wrongful and perverse attitude; and (2) the order violated must have
been reasonable, lawful, made known to the employee and must pertain to the duties
which he had been engaged to discharge.43 On the other hand, loss of trust and
confidence, to be a valid ground for dismissal, must be based on a willful breach of trust
and founded on clearly established facts. A breach is willful if it is done intentionally,
knowingly and purposely, without justifiable excuse, as distinguished from an act done
carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds
and not on the employer’s arbitrariness, whims, caprices or suspicion; otherwise, the
employee would eternally remain at the mercy of the employer. Loss of confidence must
not also be indiscriminately used as a shield by the employer against a claim that the
dismissal of an employee was arbitrary. And, in order to constitute a just cause for
dismissal, the act complained of must be work-related and show that the employee
concerned is unfit to continue working for the employer.44
In the case at bar, the reasonableness and lawfulness of Ballesteros’s order is not in
question, so is its relation to the duties of respondent. What is disputed herein is rather its
clarity. Respondent Cabansay contends that the directive was not clearly made known to
her: Ballesteros’s order was to postpone the implementation but not the presentation of
the new training process/module to the team leaders.
Respondent’s contention is untenable. It should be noted that what is involved in the
directive is the new training process, which logically cannot be implemented without being
presented or communicated to the team leaders of the company. Thus, when Ballesteros
ordered the cessation of its implementation, there can be no other inference than that he
wanted to postpone the presentation of the training process which was then already
scheduled. Evident further in Ballesteros’s e-mail is that he did not find any changes in the
new module; hence, he wanted the implementation thereof to be deferred and instructed
respondent to consult with the other managers to gather more input.
Be that as it may, respondent cannot belie the fact that she well-understood the directive
for her to postpone the presentation of the module, as she herself acknowledged in her e-
mail reply to SVP Ballesteros that she would "discuss the new training process and explain
it to them in detail" in the afternoon on that day, thus, she would not postpone the
scheduled presentation. There is no doubt, therefore, that the order of Ballesteros was
clearly made known to respondent.
As to the willfulness of her conduct, the same is manifest in her e-mail reply, which, as it is
written, is characterized by abject aggressiveness and antagonism: the e-mail has a
begrudging tone and is replete with capitalized words eliciting her resolve to indeed
contravene the SVP’s directive. Thus, she categorically said, "This is a very simple
presentation and I WILL NOT POSTPONE it today, it’s very easy to comprehend and as per
YOUR INSTRUCTION we will be implementing it next week, so when should we present this
to the TLs? Let’s not make SIMPLE THINGS COMPLICATED. I will go on with the
presentation this afternoon."
While respondent Cabansay was a managerial employee, a Senior Training Manager
entrusted with the delicate matter of molding the minds and characters of call center
agents and team leaders, and clothed with discretion to determine what was in the best
interest of the company, her managerial discretion was not without limits. Its parameters
were contained the moment her discretion was exercised and then opposed by the
immediate superior officer/employer for being against the policies and welfare of the
company. Hence, any action in pursuit of the discretion thus opposed ceased to be
discretionary and could be considered as willful disobedience.45
Indeed, by refusing to postpone the presentation and implementation of the new training
process, respondent intentionally, knowingly and purposely, without justifiable excuse,
breached the trust and confidence reposed in her by her employer. To present and discuss
a training module, which is deemed by management as still inadequate in its content, will
certainly not only waste the time, effort and energy of the participants in the discussion
but will also entail losses on the part of the company.
It is of no moment that the presentation did not push through, and that no actual damage
was done by respondent to the company. The mere fact that respondent refused to obey
the reasonable and lawful order to defer the presentation and implementation of the
module already gave a just cause for petitioners to dismiss her. Verily, had it not been for
the timely intervention of the Telesales Senior Manager, under the instructions of the SVP,
harm could have been done to company resources.
Let it be stressed that insofar as the application of the doctrine of trust and confidence is
concerned, jurisprudence has distinguished the treatment of managerial employees or
employees occupying positions of trust and confidence from that of rank-and-file to be noted that from April 8, 2002, when respondent had her chance to explain her side,
personnel. petitioners were contemplating for several days and presumably were considering her
reasons before they finally dismissed her. In any case, the essence of due process is that a
party be afforded a reasonable opportunity to be heard and to submit any evidence he
With respect to the latter, loss of trust and confidence as a ground for dismissal requires may have in support of his defense.50
proof of involvement in the alleged events in question, but as regards managerial
IN VIEW OF ALL THE FOREGOING, the petition is GRANTED. The January 10, 2005 Decision
employees, the mere existence of a basis for believing that such employee has breached
and the March 7, 2005 Resolution of the Court of Appeals in CA-G.R. SP No. 83248 are
the trust of his employer would suffice for his or her dismissal. 46 For this purpose, there is
REVERSED AND SET ASIDE. The Decision of the Labor Arbiter, as affirmed by the NLRC,
no need to present proof beyond reasonable doubt. It is sufficient that there is some basis
dismissing the respondent’s complaint for illegal dismissal is REINSTATED.
for the loss of trust or that the employer has reasonable ground to believe that the
employee is responsible for the misconduct which renders him unworthy of the trust and SO ORDERED.
confidence demanded by his position.47 Respondent’s conduct, in this case, is sufficient
basis for the company to lose its trust and confidence in her. Under the circumstances, the
company cannot be expected to retain its trust and confidence in and continue to employ
a manager whose attitude is perceived to be inimical to its interests. Unlike other just
causes for dismissal, trust in an employee, once lost, is difficult, if not impossible to
regain.48

As to the respondent’s argument that petitioners failed to comply with the requirements
of statutory due process, we do not agree. Before the services of an employee can be
validly terminated, the employer must furnish him with two written notices: (a) a written
notice served on the employee specifying the ground or grounds for termination, and
giving to said employee reasonable opportunity within which to explain his side; and, (b) a
written notice of termination served on the employee indicating that upon due
consideration of all the circumstances, grounds have been established to justify his
termination.49

In this case, the facts are clear that petitioners, through Ballesteros, informed respondent
in the April 6, 2002 memo that the company found her message to be a clear act of
insubordination leading to the company’s loss of trust and confidence in her as a manager
of the training department. In the same memo, petitioners asked her to explain her side in
writing. After the respondent submitted her two memoranda-explanations successively on
April 8 and 11, 2002, petitioners served her the notice of her termination. Verily,
petitioners complied with the requirement of statutory due process in the dismissal of
respondent. The fact that the letter of termination or the second notice was received by
respondent on April 11, 2002, on the same day she submitted her second explanation,
does not put to naught petitioners’ observance of the requirement of due process. It has