GR. NO.

185665
EASTERN TELECOMMUNICATION PHILS
VS.
EASTERN TELECOMMUNICATION EMPLOYEES UNION
D E C I S I O N

MENDOZA, J.:


Before the Court s a petton for revew on certorar
seekng modcaton of the |une 25, 2008 Decson
|1|
of the Court of
Appeas (CA) and ts December 12, 2008 Resouton,
|2|
n CA-G.R. SP No.
91974, annung the Apr 28, 2005 Resouton
|3|
of the Natona Labor
Reatons Commsson (NLRC) n NLRC-NCR-CC-000273-04 entted "In
the Matter of the Labor Dispute in Eastern e!e"o##uni"ations,
$hi!ippines, In".%

The Facts

As syntheszed by the NLRC, the facts of the case are as
foows, &i':

Eastern Teecommuncatons Phs., Inc. (ETPI) s
a corporaton engaged n the busness of provdng
teecommuncatons factes, partcuary easng
nternatona date nes or crcuts, reguar andnes,
nternet and data servces, empoyng approxmatey 400
empoyees.

Eastern Teecoms Empoyees Unon (ETEU) s the
certed excusve barganng agent of the companys
rank and e empoyees wth a strong foowng of 147
reguar members. It has an exstng coect|ve|
barganng agreement wth the company to expre n the
year 2004 wth a Sde Agreement sgned on September
3, 2001.

In essence, the abor dspute was a spn-oh of
the companys pan to defer payment of the 2003 14
th
,
15
th
and 16
th
month bonuses sometme n Apr 2004.
The companys man ground n postponng the payment
of bonuses s due to aege contnung deteroraton of
companys nanca poston whch started n the year
2000. However, ETPI whe postponng payment of
bonuses sometme n Apr 2004, such payment woud
aso be sub|ect to avaabty of funds.

Invokng the Sde Agreement of the exstng
Coectve Barganng Agreement for the perod 2001-
2004 between ETPI and ETEU whch stated as foows:

(). E#p!o*#ent Re!ate+
,onuses. he Co#pan* "on-r#s that
the .)
th
, ./
th
an+ .0
th
#onth bonuses
(other than .1
th
#onth pa*) are
2rante+.%

The unon strongy opposed the deferment n payment of
the bonuses by ng a preventve medaton compant
wth the NCMB on |uy 3, 2003, the purpose of whch
compant s to determne the date when the bonus
shoud be pad.

In the conference hed at the NCMB, ETPI
reterated ts stand that payment of the bonuses woud
ony be made n Apr 2004 to whch date of payment,
the unon agreed. Thus, consderng the agreement
forged between the partes, the sad agreement was
reduced to a Memorandum of Agreement. The unon
requested that the Presdent of the company shoud be
made a sgnatory to the agreement, however, the atter
refused to sgn. In addton to such a refusa, the
company made a sudden turnaround n ts poston by
decarng that they w no onger pay the bonuses unt
the ssue s resoved through compusory arbtraton.


The companys change n poston was contaned
n a etter dated Apr 14, 2004 wrtten to the unon by
Mr. Sonny |aver, Vce-Presdent for Human Resources
and Admnstraton, statng that "the deferred reease of
bonuses had been superseded and voded due to the
unons ng of the ssue to the NCMB on |uy 18, 2003."
He decared that "unt the matter s resoved n a
compusory arbtraton, the company cannot and w not
pay any bonuses to any and a unon members."

Thus, on Apr 26, 2004, ETEU ed a Notce of
Strke on the ground of unfar abor practce for faure of
ETPI to pay the bonuses n gross voaton of the
economc provson of the exstng CBA.

On May 19, 2004, the Secretary of Labor and
Empoyment, ndng that the company s engaged n an
ndustry consdered vta to the economy and any work
dsrupton thereat w adversey ahect not ony ts
operaton but aso that of the other busness reyng on
ts servces, certed the abor dspute for compusory
arbtraton pursuant to Artce 263 (q) of the Labor Code
as amended.

Actng on the certed abor dspute, a hearng
was caed on |uy 16, 2004 wheren the partes have
submtted that the ssues for resouton are (1) unfar
abor practce and (2) the grant of 14
th
, 15
th
and
16
th
month bonuses for 2003, and 14
th
month bonus for
2004. Thereafter, they were drected to submt ther
respectve poston papers and evdence n support
thereof after whch submsson, they agreed to have the
case consdered submtted for decson.
|4|


In ts poston paper,
|5|
the Eastern Teecoms Empoyees
Unon (EE3) camed that Eastern Teecommuncatons Phppnes,
Inc. (E$I) had consstenty and vountary been gvng out 14
th
month
bonus durng the month of Apr, and 15
th
and 16
th
month bonuses every
December of each year (sub4e"t bonuses) to ts empoyees from 1975 to
2002, even when t dd not reaze any net prots. ETEU posted that by
reason of ts ong and reguar concesson, the payment of these
monetary benets had rpened nto a company practce whch coud no
onger be unateray wthdrawn by ETPI. ETEU added that ths ong-
standng company practce had been expressy conrmed n the Sde
Agreements of the 1998-2001 and 2001-2004 Coectve Barganng
Agreements (C,A) whch provded for the contnuous grant of these
bonuses n no uncertan terms. ETEU theorzed that the grant of the
sub|ect bonuses s not ony a company practce but aso a contractua
obgaton of ETPI to the unon members.

ETEU contended that the un|usted and macous refusa of the
company to pay the sub|ect bonuses was a cear voaton of the
economc provson of the CBA and consttutes unfar abor
practce (3L$). Accordng to ETEU, such refusa was nothng but a poy to
spte the unon for brngng the matter of deay n the payment of the
sub|ect bonuses to the Natona Concaton and Medaton
Board (NCM,). It prayed for the award of mora and exempary damages
as we as attorneys fees for the unfar abor practce aegedy
commtted by the company.

On the other hand, ETPI n ts poston paper,
|6|
questoned the
authorty of the NLRC to take cognzance of the case contendng that t
had no |ursdcton over the ssue whch merey nvoved the
nterpretaton of the economc provson of the 2001-2004 CBA Sde
Agreement. Nonetheess, t mantaned that the compant for
nonpayment of 14
th
, 15
th
and 16
th
month bonuses for 2003 and
14
th
month bonus for 2004 was bereft of any ega and factua bass. It
averred that the sub|ect bonuses were not part of the egay
demandabe wage and the grant thereof to ts empoyees was an act of
pure gratuty and generosty on ts part, nvovng the exercse of
management prerogatve and aways dependent on the nanca
performance and reazaton of prots. It posted that t resorted to the
dscontnuance of payment of the bonuses due to the unabated huge
osses that the company had contnuousy experenced. It camed that t
had been suherng serous busness osses snce 2000 and to requre the
company to pay the sub|ect bonuses durng ts dre nanca strats
woud n ehect penaze t for ts past generosty. It aeged that the non-
payment of the sub|ect bonuses was nether agrant nor macous and,
hence, woud not amount to unfar abor practce.

Further, ETPI argued that the bonus provson n the 2001-2004
CBA Sde Agreement was a mere amrmaton that the dstrbuton of
bonuses was dscretonary to the company, premsed and condtoned on
the success of the busness and avaabty of cash. It submtted that
sad bonus provson partook of the nature of a "one-tme" grant whch
the empoyees may demand ony durng the year when the Sde
Agreement was executed and was never ntended to cover the entre
term of the CBA. Fnay, ETPI emphaszed that even f t had an
uncondtona obgaton to grant bonuses to ts empoyees, the drastc
decne n ts nanca condton had aready egay reeased t therefrom
pursuant to Artce 1267 of the Cv Code.

On Apr 28, 2005, the NLRC ssued ts Resouton dsmssng
ETEUs compant and hed that ETPI coud not be forced to pay the
unon members the 14
th
, 15
th
and 16
th
month bonuses for the year 2003
and the 14
th
month bonus for the year 2004 nasmuch as the payment of
these addtona benets was bascay a management prerogatve,
beng an act of generosty and muncence on the part of the company
and contngent upon the reazaton of prots. The NLRC pronounced that
ETPI may not be obged to pay these extra compensatons n vew of the
substanta decne n ts nanca condton. Lkewse, the NLRC found
that ETPI was not guty of the ULP charge eaboratng that no sumcent
and substanta evdence was adduced to attrbute mace to the
company for ts refusa to pay the sub|ect bonuses. The dspostve
porton of the resouton reads:

WHEREFORE, premses consdered, the nstant
compant s hereby DISMISSED for ack of mert.

SO ORDERED.
|7|

Respondent ETEU moved for reconsderaton but the moton was
dened by the NLRC n ts Resouton dated August 31, 2005.

Aggreved, ETEU ed a petton for certorar
|8|
before the CA
ascrbng grave abuse of dscreton on the NLRC for dsregardng ts
evdence whch aegedy woud prove that the sub|ect bonuses were
part of the unon members wages, saares or compensatons. In
addton, ETEU asserted that the NLRC commtted grave abuse of
dscreton when t rued that ETPI s not contractuay bound to gve sad
bonuses to the unon members.

In ts assaed |une 25, 2008 Decson, the CA decared that the
Sde Agreements of the 1998 and 2001 CBA created a contractua
obgaton on ETPI to confer the sub|ect bonuses to ts empoyees
wthout quacaton or condton. It aso found that the grant of sad
bonuses has aready rpened nto a company practce and ther dena
woud amount to dmnuton of the empoyees benets. It hed that ETPI
coud not seek refuge under Artce 1267 of the Cv Code because ths
provson woud appy ony when the dmcuty n fung the contractua
obgaton was manfesty beyond the contempaton of the partes,
whch was not the case theren. The CA, however, sustaned the NLRC
ndng that the aegaton of ULP was devod of mert. The dspostve
porton of the questoned decson reads:

WHEREFORE, premses consdered, the nstant
petton s GRANTED and the resouton of the Natona
Labor Reatons Commsson dated Apr 28, 2005 s
hereby ANNULLED and SET ASIDE. Respondent Eastern
Teecommuncatons Phppnes, Inc. s ordered to pay
the members of pettoner ther 14
th
, 15
th
and 16
th
month
bonuses for the year 2003 and 14
th
month

for the year
2004. The compant for unfar abor practce aganst
sad respondent s DISMISSED.

SO ORDERED.
|9|



ISSUES

Dssatsed, ETPI now comes to ths Court va Rue 45, rasng
the foowng errors aegedy commtted by the CA, to wt:

I.
THE COURT OF APPEALS COMMITTED GRAVE ERROR OF
LAW WHEN IT ANNULLED AND SET ASIDE THE
RESOLUTIONS OF THE NLRC DISREGARDING THE WELL
SETTLED RULE THAT A WRIT OF CERTIORARI (UNDER
RULE 65) ISSUES ONLY FOR CORRECTION OF ERRORS OF
|URISDICTION OR GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF |URISDICTION.

II.

THE COURT OF APPEALS COMMITTED GRAVE ERROR OF
LAW WHEN IT DISREGARDED THE RULE THAT FINDINGS
OF FACTS OF OUASI-|UDICIAL BODIES ARE ACCORDED
FINALITY IF THEY ARE SUPPORTED BY SUBSTANTIAL
EVIDENCE CONSIDERING THAT THE CONCLUSIONS OF
THE NLRC WERE BASED ON SUBSTANTIAL AND
OVERWHELMING EVIDENCE AND UNDISPUTED FACTS.

III.

IT WAS A GRAVE ERROR OF LAW FOR THE COURT OF
APPEALS TO CONSIDER THAT THE BONUS GIVEN BY
EASTERN COMMUNICATIONS TO ITS EMPLOYEES IS NOT
DEPENDENT ON THE REALIZATION OF PROFITS.

IV.

THE COURT OF APPEALS COMMITTED A GRAVE ERROR OF
LAW WHEN IT DISREGARDED THE UNDISPUTED FACT
THAT EASTERN COMMUNICATIONS IS SUFFERING FROM
TREMENDOUS FINANCIAL LOSSES, AND ORDERED
EASTERN COMMUNICATIONS TO GRANT THE BONUSES
REGARDLESS OF THE FINANCIAL DISTRESS OF EASTERN
COMMUNICATIONS.

V.

THE COURT OF APPEALS COMMITTED A GRAVE ERROR OF
LAW WHEN IT ARRIVED AT THE CONCLUSION THAT THE
GRANT OF BONUS GIVEN BY EASTERN COMMUNICATIONS
TO ITS EMPLOYEES HAS RIPENED INTO A COMPANY
PRACTICE.
|10|


A carefu perusa of the voumnous peadngs ed by the partes
eads the Court to concude that ths case revoves around the foowng
core ssues:

1. Whether or not pettoner ETPI s abe to pay 14
th
,
15
th
and 16
th
month bonuses for the year 2003 and
14
th
month bonus for the year 2004 to the members of
respondent unon; and

2. Whether or not the CA erred n not dsmssng outrght
ETEUs petton for certorar.

ETPI nssts that t s under no ega compuson to pay 14
th
,
15
th
and 16
th
month bonuses for the year 2003 and 14
th
month bonus for
the year 2004 contendng that they are not part of the demandabe
wage or saary and that ther grant s condtona based on successfu
busness performance and the avaabty of company prots from whch
to source the same. To thwart ETEUs monetary cams, t nssts that the
dstrbuton of the sub|ect bonuses fas we wthn the companys
prerogatve, beng an act of pure gratuty and generosty on ts part.
Thus, t can wthhod the grant thereof especay snce t s currenty
pagued wth economc dmcutes and nanca osses. It aeges that the
companys sca stuaton greaty decned due to tremendous and
extraordnary osses t sustaned begnnng the year 2000. It cams that
t cannot be compeed to act beray and confer upon ts empoyees
addtona benets over and above those mandated by aw when t
cannot ahord to do so. It posts that so ong as the gvng of bonuses w
resut n the nanca run of an aready dstressed company, the
empoyer cannot be forced to grant the same.

ETPI further avers that the act of gvng the sub|ect bonuses dd
not rpen nto a company practce argung that t has aways been a
contngent one dependent on the reazaton of prots and, hence, the
workers are not entted to bonuses f the company does not make
prots for a gven year. It asseverates that the 1998 and 2001 CBA Sde
Agreements dd not contractuay ahord ETEU a vested property rght to
a perenna payment of the bonuses. It opnes that the bonus provson
n the Sde Agreement aows the gvng of benets ony at the tme of ts
executon. For ths reason, t cannot be sad that the grant has rpened
nto a company practce. In addton, t argues that even f such
tradtona company practce exsts, the CA shoud have apped Artce
1267 of the Cv Code whch reeases the obgor from the performance
of an obgaton when t has become so dmcut to fu the same.

It s the pettoners stance that the CA shoud have dsmssed
outrght the respondent unons petton for certorar aegng that no
queston of |ursdcton whatsoever was rased theren but, nstead, what
was beng sought was a |udca re-evauaton of the adequacy or
nadequacy of the evdence on record. It cams that the CA erred n
dsregardng the ndngs of the NLRC whch were based on substanta
and overwhemng evdence as we as on undsputed facts. ETPI added
that the CA court shoud have refraned from tackng ssues of fact and,
nstead, mted tsef on ssues of |ursdcton and grave abuse of
|ursdcton amountng to ack or excess of t.

The Courts Rung

As a genera rue, n pettons for revew under Rue 45, the
Court, not beng a trer of facts, does not normay embark on a re-
examnaton of the evdence presented by the contendng partes durng
the tra of the case consderng that the ndngs of facts of the CA are
concusve and bndng on the Court. The rue, however, admts of
severa exceptons, one of whch s when the ndngs of the appeate
court are contrary to those of the tra court or the ower admnstratve
body, as the case may be.
|11|
Consderng the ncongruent factua
concusons of the CA and the NLRC, ths Court nds Itsef obged to
resove t.

The pvota queston determnatve of ths controversy s whether
the members of ETEU are entted to the payment of 14
th
, 15
th
and
16
th
month bonuses for the year 2003 and 14
th
month bonus for year
2004.

After an assduous assessment of the record, the Court nds no
mert n the petton.

From a ega pont of vew, a bonus s a gratuty or act of
beraty of the gver whch the recpent has no rght to demand as a
matter of rght.
|12|
The grant of a bonus s bascay a management
prerogatve whch cannot be forced upon the empoyer who may not be
obged to assume the onerous burden of grantng bonuses or other
benets asde from the empoyees basc saares or wages.
|13|

A bonus, however, becomes a demandabe or enforceabe
obgaton when t s made part of the wage or saary or compensaton of
the empoyee.
|14|
Partcuary nstructve s the rung of the Court
n Metro ransit Or2ani'ation, In". &. Nationa! Labor Re!ations
Co##ission,
|15|
where t was wrtten:

Whether or not a bonus forms part of wages
depends upon the crcumstances and condtons for ts
payment. If t s addtona compensaton whch the
empoyer promsed and agreed to gve wthout any
condtons mposed for ts payment, such as success of
busness or greater producton or output, then t s part
of the wage. But f t s pad ony f prots are reazed or
f a certan eve of productvty s acheved, t cannot be
consdered part of the wage. Where t s not payabe to
a but ony to some empoyees and ony when ther
abor becomes more emcent or more productve, t s
ony an nducement for emcency, a prze therefore, not
a part of the wage.


The consequenta queston that needs to be setted, therefore,
s whether the sub|ect bonuses are demandabe or not. Stated
dherenty, can these bonuses be consdered part of the wage, saary or
compensaton makng them enforceabe obgatons?

The Court beeves so.

In the case at bench, t s ndubtabe that ETPI and ETEU agreed
on the ncuson of a provson for the grant of 14
th
, 15
th
and 16
th
month
bonuses n the 1998-2001 CBA Sde Agreement,
|16|
as we as n the
2001-2004 CBA Sde Agreement,
|17|
whch was sgned on September 3,
2001. The provson, whch was smary worded, states:

Empoyment-Reated Bonuses
The Company conrms that the 14
th
, 15
th
and 16
th
month
bonuses (other than the 13
th
month pay) are granted.

A readng of the above provson reveas that the same provdes
for the gvng of 14
th
, 15
th
and 16
th
month bonuses 5ithout 6ua!i-"ation.
The wordng of the provson does not aow any other nterpretaton.
There were no condtons speced n the CBA Sde Agreements for the
grant of the benets contrary to the cam of ETPI that the same s
|usted ony when there are prots earned by the company. Terse and
cear, the sad provson does not state that the sub|ect bonuses sha be
made to depend on the ETPIs nanca standng or that ther payment
was contngent upon the reazaton of prots. Nether does t state that
f the company derves no prots, no bonuses are to be gven to the
empoyees. In ne, the payment of these bonuses was not reated to the
protabty of busness operatons.

The records are aso bereft of any showng that the ETPI made t
cear before or durng the executon of the Sde Agreements that the
bonuses sha be sub|ect to any condton. Indeed, f ETPI and ETEU
ntended that the sub|ect bonuses woud be dependent on the company
earnngs, such ntenton shoud have been expressy decared n the Sde
Agreements or the bonus provson shoud have been deeted atogether.
In the absence of any proof that ETPIs consent was vtated by fraud,
mstake or duress, t s presumed that t entered nto the Sde
Agreements vountary, that t had fu knowedge of the contents
thereof and that t was aware of ts commtment under the contract.
Very, by vrtue of ts ncorporaton n the CBA Sde Agreements, the
grant of 14
th
, 15
th
and 16
th
month bonuses has become more than |ust an
act of generosty on the part of ETPI but a contractua obgaton t has
undertaken. Moreover, the contnuous conferment of bonuses by ETPI to
the unon members from 1998 to 2002 by vrtue of the Sde Agreements
evdenty negates ts argument that the gvng of the sub|ect bonuses s
a management prerogatve.

From the foregong, ETPI cannot nsst on busness osses as a
bass for dsregardng ts undertakng. It s manfesty cear that athough
t ncurred busness osses of P149,068,063.00 n the year 2000, t
contnued to dstrbute 14
th
, 15
th
and 16
th
month bonuses for sad year.
Notwthstandng such huge osses, ETPI entered nto the 2001-2004 CBA
Sde Agreement on September 3, 2001 whereby t contracted to grant
the sub|ect bonuses to ETEU n no uncertan terms. ETPI contnued to
sustan osses for the succeedng years of 2001 and 2002 n the
amounts of P348,783,013.00 and P315,474,444.00, respectvey. St
and a, ths dd not deter t from honorng the bonus provson n the
Sde Agreement as t contnued to gve the sub|ect bonuses to each of
the unon members n 2001 and 2002 despte ts aeged precarous
nanca condton. Parenthetcay, t must be emphaszed that ETPI
even agreed to the payment of the 14
th
, 15
th
and 16
th
month bonuses for
2003 athough t opted to defer the actua grant n Apr 2004. A gven,
busness osses coud not be cted as grounds for ETPI to repudate ts
obgaton under the 2001-2004 CBA Sde Agreement.

The Court nds no mert n ETPIs contenton that the bonus
provson conrms the grant of the sub|ect bonuses ony on a snge
nstance because f ths s so, the partes shoud have ncuded such
mtaton n the agreement. Nowhere n the Sde Agreement does t say
that the sub|ect bonuses sha be conferred once durng the year the
Sde Agreement was sgned. The Court quotes wth approva the
observaton of the CA n ths regard:

ETPI argues that assumng the bonus provson n
the Sde Agreement of the 2001-2004 CBA enttes the
unon members to the sub|ect bonuses, t s merey n
the nature of a "one-tme" grant and not ntended to
cover the entre term of the CBA. The contenton s
untenabe. The bonus provson n queston s exacty the
same as that contaned n the Sde Agreement of the
1998-2001 CBA and there s no denyng that from 1998
to 2001, ETPI granted the sub|ect bonuses for each of
those years. Thus, ETPI may not now cam that the
bonus provson n the Sde Agreement of the 2001-2004
CBA s ony a "one-tme" grant.
|18|


ETPI then argues that even f t s contractuay bound to
dstrbute the sub|ect bonuses to ETEU members under the Sde
Agreements, ts current nanca dmcutes shoud have reeased t from
the obgatory force of sad contract nvokng Artce 1267 of the Cv
Code. Sad provson decares:

Artce 1267. When the servce has become so
dmcut as to be manfesty beyond the contempaton of
the partes, the obgor may aso be reeased therefrom,
n whoe or n part.

The Court s not persuaded.

The partes to the contract must be presumed to have assumed
the rsks of unfavorabe deveopments. It s, therefore, ony n absoutey
exceptona changes of crcumstances that equty demands assstance
for the debtor.
|19|
In the case at bench, the Court determnes that ETPIs
camed depressed nanca state w not reease t from the bndng
ehect of the 2001-2004 CBA Sde Agreement.

ETPI appears to be we aware of ts deteroratng nanca
condton when t entered nto the 2001-2004 CBA Sde Agreement wth
ETEU and obged tsef to pay bonuses to the members of ETEU.
Consderng that ETPI had been contnuousy suherng huge osses from
2000 to 2002, ts busness osses n the year 2003 were not exacty
unforeseen or unexpected. Consequenty, t cannot be sad that the
dmcuty n compyng wth ts obgaton under the Sde Agreement was
"manfesty beyond the contempaton of the partes." Besdes, as hed
n Centra! ,an7 of the $hi!ippines &. Court of Appea!s,
|20|
mere pecunary
nabty to fu an engagement does not dscharge a contractua
obgaton. Contracts, once perfected, are bndng between the
contractng partes. Obgatons arsng therefrom have the force of aw
and shoud be comped wth n good fath. ETPI cannot renege from the
obgaton t has freey assumed when t sgned the 2001-2004 CBA Sde
Agreement.

Grantng ar2uen+o that the CBA Sde Agreement does not
contractuay bnd pettoner ETPI to gve the sub|ect bonuses,
nevertheess, the Court nds that ts act of grantng the same has
become an estabshed company practce such that t has vrtuay
become part of the empoyees saary or wage. A bonus may be granted
on equtabe consderaton when the gvng of such bonus has been the
companys ong and reguar practce. In $hi!ippine App!ian"e Corporation
&. Court of Appea!s,
|21|
t was pronounced:

To be consdered a "reguar practce," however,
the gvng of the bonus shoud have been done over a
ong perod of tme, and must be shown to have been
consstent and deberate. The test or ratonae of ths
rue on ong practce requres an ndubtabe showng
that the empoyer agreed to contnue gvng the benets
knowng fuy we that sad empoyees are not covered
by the aw requrng payment thereof.

The records show that ETPI, asde from compyng wth the
reguar 13th month bonus, has been further gvng ts
empoyees 14
th
month bonus every Apr as we as 15
th
and 16
th
month
bonuses every December of the year, wthout fa, from 1975 to 2002 or
for 27 years whether t earned prots or not. The consderabe ength of
tme ETPI has been gvng the speca grants to ts empoyees ndcates a
unatera and vountary act on ts part to contnue gvng sad
benets knowng that such act was not requred by aw. Accordngy, a
company practce n favor of the empoyees has been estabshed and
the payments made by ETPI pursuant thereto rpened nto benets
en|oyed by the empoyees.

The gvng of the sub|ect bonuses cannot be peremptory
wthdrawn by ETPI wthout voatng Artce 100 of the Labor Code:

Art. 100. Prohbton aganst emnaton or
dmnuton of benets. - Nothng n ths Book sha be
construed to emnate or n any way dmnsh
suppements, or other empoyee benets beng en|oyed
at the tme of promugaton of ths Code.

The rue s setted that any benet and suppement beng
en|oyed by the empoyees cannot be reduced, dmnshed, dscontnued
or emnated by the empoyer. The prncpe of non-dmnuton of
benets s founded on the consttutona mandate to protect the rghts of
workers and to promote ther wefare and to ahord abor fu protecton.
|22|

Interestngy, ETPI never presented countervang evdence to
refute ETEUs cam that the company has been contnuousy payng
bonuses snce 1975 up to 2002 regardess of ts nanca state. Its faure
to controvert the aegaton, when t had the opportunty and resources
to do so, works n favor of ETEU. Tme and agan, t has been hed that
shoud doubts exst between the evdence presented by the empoyer
and the empoyee, the scaes of |ustce must be tted n favor of the
atter.
|23|

WHEREFORE, the petton s DENIED. The |une 25, 2008 Decson
of the Court of Appeas and ts December 12, 2008 Resouton
are AFFIRMED.

SO ORDERED.
G.R. No. 176985 April 1, 2013
RICARDO E. VERGARA, JR., Petitioer,
!".
COCA#CO$A %O&&$ER' P(I$IPPINE', INC., Re"po)et.
D E C I ' I O N
PERALTA, J.:
Before Us is a petition for review on certiorari under Rule 45 of the Rules of Civil
Procedure assailing the anuar! ", #$$% &ecision
'
and (arch ), #$$%
Resolution
#
of the Court of Appeals *CA+ in CA ,, -,R, .P /o, "4)##, which
affir0ed the anuar! 1', #$$) &ecision
1
and (arch 2, #$$) Resolution
4
of the
/ational La3or Relations Co00ission */LRC+ 0odif!ing the .epte03er 1$, #$$1
&ecision
5
of the La3or Ar3iter *LA+ 3! deleting the sales 0anage0ent incentives in
the co0putation of petitioner4s retire0ent 3enefits,
Petitioner Ricardo E, 5ergara, r, was an e0plo!ee of respondent Coca6Cola
Bottlers Philippines, 7nc, fro0 (a! '")2 until he retired on anuar! 1', #$$# as a
&istrict .ales .upervisor *&..+ for Las Pi8as Cit!, (etro (anila, As stipulated in
respondent9s e:isting Retire0ent Plan Rules and Regulations at the ti0e, the
Annual Perfor0ance 7ncentive Pa! of R.(s, &..s, and ...s shall 3e considered
in the co0putation of retire0ent 3enefits, as follows; Basic (onthl! .alar! <
(onthl! Average Perfor0ance 7ncentive *which is the total perfor0ance incentive
earned during the !ear i00ediatel! preceding = '# 0onths+ > /o, of ?ears in
.ervice,
)
Clai0ing his entitle0ent to an additional PhP4%4,)$$,$$ as .ales (anage0ent
7ncentives *.(7+
%
and to the a0ount of PhP4"),$'),)% which respondent allegedl!
deducted illegall!, representing the unpaid accounts of two dealers within his
@urisdiction, petitioner filed a co0plaint 3efore the /LRC on une '', #$$# for the
pa!0ent of his ABull Retire0ent Benefits, (erit 7ncrease, Co00issionC7ncentives,
Length of .ervice, Actual, (oral and E:e0plar! &a0ages, and Attorne!9s Bees,A
2
After a series of 0andator! conference, 3oth parties partiall! settled with regard
the issue of 0erit increase and length of service,
"
.u3seDuentl!, the! filed their
respective Position Paper and Repl! thereto dealing on the two re0aining issues
of .(7 entitle0ent and illegal deduction,
En .epte03er 1$, #$$1, the LA rendered a &ecision
'$
in favor of petitioner,
directing respondent to rei03urse the a0ount illegall! deducted fro0 petitioner9s
retire0ent pacFage and to integrate therein his .(7 privilege, Upon appeal of
respondent, however, the /LRC 0odified the award and deleted the pa!0ent of
.(7,
Petitioner then 0oved to partiall! e:ecute the rei03urse0ent of illegal deduction,
which the LA granted despite respondent9s opposition,
''
Later, without pre@udice to
the pendenc! of petitioner9s petition for certiorari 3efore the CA, the parties
e:ecuted a Co0pro0ise Agree0ent
'#
on Ecto3er 4, #$$), where3! petitioner
acFnowledged full pa!0ent 3! respondent of the a0ount of PhP4"),$'),)%
covering the a0ount illegall! deducted,
The CA dis0issed petitioner9s case on anuar! ", #$$% and denied his 0otion for
reconsideration two 0onths thereafter, Gence, this present petition to resolve the
singular issue of whether the .(7 should 3e included in the co0putation of
petitioner9s retire0ent 3enefits on the ground of consistent co0pan! practice,
Petitioner insistentl! avers that 0an! &..s who retired without achieving the sales
and collection targets were given the average .(7 in their retire0ent pacFage,
He den!,
This case does not fall within an! of the recogniIed e:ceptions to the rule that onl!
Duestions of law are proper in a petition for review on certiorari under Rule 45 of
the Rules of Court, .ettled is the rule that factual findings of la3or officials, who are
dee0ed to have acDuired e:pertise in 0atters within their respective @urisdiction,
are generall! accorded not onl! respect 3ut even finalit!, and 3ind us when
supported 3! su3stantial evidence,
'1
Certainl!, it is not our function to assess and
evaluate the evidence all over again, particularl! where the findings of 3oth the CA
and the /LRC coincide,
7n an! event, even if this Court would evaluate petitioner4s argu0ents on its
supposed 0erits, He still find no reason to distur3 the CA ruling that affir0ed the
/LRC, The findings and conclusions of the CA show that the evidence and the
argu0ents of the parties had all 3een carefull! considered and passed upon,
There are no relevant and co0pelling facts to @ustif! a different resolution which the
CA failed to consider as well as no factual conflict 3etween the CA and the /LRC
decisions,
-enerall!, e0plo!ees have a vested right over e:isting 3enefits voluntaril! granted
to the0 3! their e0plo!er,
'4
Thus, an! 3enefit and supple0ent 3eing en@o!ed 3! the
e0plo!ees cannot 3e reduced, di0inished, discontinued or eli0inated 3! the
e0plo!er,
'5
The principle of non6di0inution of 3enefits is actuall! founded on the
Constitutional 0andate to protect the rights of worFers, to pro0ote their welfare,
and to afford the0 full protection,
')
7n turn, said 0andate is the 3asis of Article 4 of
the La3or Code which states that Aall dou3ts in the i0ple0entation and
interpretation of this Code, including its i0ple0enting rules and regulations, shall
3e rendered in favor of la3or,A
'%
There is di0inution of 3enefits when the following reDuisites are present; *'+ the
grant or 3enefit is founded on a polic! or has ripened into a practice over a long
period of ti0eJ *#+ the practice is consistent and deli3erateJ *1+ the practice is not
due to error in the construction or application of a dou3tful or difficult Duestion of
lawJ and *4+ the di0inution or discontinuance is done unilaterall! 3! the e0plo!er,
'2
To 3e considered as a regular co0pan! practice, the e0plo!ee 0ust prove 3!
su3stantial evidence that the giving of the 3enefit is done over a long period of
ti0e, and that it has 3een 0ade consistentl! and deli3eratel!,
'"
urisprudence has
not laid down an! hard6and6fast rule as to the length of ti0e that co0pan! practice
should have 3een e:ercised in order to constitute voluntar! e0plo!er
practice,
#$
The co00on deno0inator in previousl! decided cases appears to 3e
the regularit! and deli3erateness of the grant of 3enefits over a significant period of
ti0e,
#'
7t reDuires an indu3ita3le showing that the e0plo!er agreed to continue
giving the 3enefit Fnowing full! well that the e0plo!ees are not covered 3! an!
provision of the law or agree0ent reDuiring pa!0ent thereof,
##
7n su0, the 3enefit
0ust 3e characteriIed 3! regularit!, voluntar! and deli3erate intent of the e0plo!er
to grant the 3enefit over a considera3le period of ti0e,
#1
Upon review of the entire case records, He find no su3stantial evidence to prove
that the grant of .(7 to all retired &..s regardless of whether or not the! Dualif! to
the sa0e had ripened into co0pan! practice, &espite 0ore than sufficient
opportunit! given hi0 while his case was pending 3efore the /LRC, the CA, and
even to this Court, petitioner utterl! failed to adduce proof to esta3lish his
allegation that .(7 has 3een consistentl!, deli3eratel! and voluntaril! granted to all
retired &..s without an! Dualification or conditions whatsoever, The onl! two
pieces of evidence that he stu33ornl! presented throughout the entiret! of this
case are the sworn state0ents of Renato C, Gidalgo *Gidalgo+ and Ra0on 5,
5elaIDueI *5elasDueI+, for0er &..s of respondent who retired in #$$$ and '""2,
respectivel!, The! clai0ed that the .(7 was included in their retire0ent pacFage
even if the! did not 0eet the sales and collection Dualifiers,
#4
Gowever, @u:taposing
these with the evidence presented 3! respondent would reveal the frailt! of their
state0ents,
The declarations of Gidalgo and 5elaIDueI were sufficientl! countered 3!
respondent through the affidavits e:ecuted 3! /or0an R, Biola *Biola+, (oises &,
Escasura *Escasura+, and (a, 5anessa R, Balles *Balles+,
#5
Biola pointed out the
various stop6gap 0easures undertaFen 3! respondent 3eginning '""" in order to
arrest the deterioration of its accounts receiva3les 3alance, two of which relate to
the policies on the grant of .(7 and to the change in the 0anage0ent structure of
respondent upon its re6acDuisition 3! .an (iguel Corporation, Escasura
represented that he has personal Fnowledge of the circu0stances 3ehind the
retire0ent of Gidalgo and 5elaIDueI, Ge attested that contrar! to petitioner9s
clai0, Gidalgo was in fact Dualified for the .(7, As for 5elaIDueI, Escasura
asserted that even if he *5elaIDueI+ did not Dualif! for the .(7, respondent9s
-eneral (anager in its Cala03a plant still granted his *5elaIDueI+ reDuest, along
with other nu0erous concessions, to achieve industrial peace in the plant which
was then e:periencing la3or relations pro3le0s, Lastl!, Balles confir0ed that
petitioner failed to 0eet the trade receiva3le Dualifiers of the .(7, .he also cited
the cases of Ed 5alencia *5alencia+ and E00anuel -utierreI *-utierreI+, 3oth
&..s of respondent who retired on anuar! 1', #$$# and &ece03er 1$, #$$#,
respectivel!, .he noted that, unliFe 5alencia, -utierreI also did not receive the
.(7 as part of his retire0ent pa!, since he failed to Dualif! under the polic!
guidelines, The verit! of all these state0ents and representations stands and holds
true to Us, considering that petitioner did not present an! iota of proof to de3unF
the sa0e,1wphi1
Therefore, respondent4s isolated act of including the .(7 in the retire0ent pacFage
of 5elaIDueI could hardl! 3e classified as a co0pan! practice that 0a! 3e
considered an enforcea3le o3ligation, To repeat, the principle against di0inution of
3enefits is applica3le onl! if the grant or 3enefit is founded on an e:press polic! or
has ripened into a practice over a long period of ti0e which is consistent and
deli3erateJ it presupposes that a co0pan! practice, polic! and tradition favora3le to
the e0plo!ees has 3een clearl! esta3lishedJ and that the pa!0ents 0ade 3! the
co0pan! pursuant to it have ripened into 3enefits en@o!ed 3! the0,
#)
Certainl!, a
practice or custo0 is, as a general rule, not a source of a legall! de0anda3le or
enforcea3le right,
#%
Co0pan! practice, @ust liFe an! other fact, ha3its, custo0s,
usage or patterns of conduct, 0ust 3e proven 3! the offering part! who 0ust allege
and esta3lish specific, repetitive conduct that 0ight constitute evidence of ha3it or
co0pan! practice,
#2
To close, He rule that petitioner could have salvaged his case had he step up to
disprove respondent9s contention that he 0isera3l! failed to 0eet the collection
Dualifiers of the .(7, Respondent argues that K
An e:a0ination of the Co0pan!9s aged trial 3alance reveals that petitioner did not
0eet the trade receiva3le Dualifier, En the contrar!, the said trial 3alance reveals
that petitioner had a large a0ount of uncollected overdue accounts, Bor the !ear
#$$', his percentage collection efficienc! for current issuance was at an average
of '1,5L a 0onth as against the reDuired %$L, Bor the sa0e, petitioner9s
collection efficienc! was at an average of )$,#5L per 0onth for receiva3les aged
'61$ da!s, which is again, wa! 3elow the reDuired "$L, Bor receiva3les aged 1'6
)$ da!s during said !ear, petitioner9s collection efficienc! was at an average of
5),'%L per 0onth, which is appro:i0atel! half of the reDuired '$$L, Horse, for
receiva3les over )$ da!s old, petitioner9s average collection efficienc! per 0onth
was a reprehensivel! low '4,'$L as against the reDuired '$$L,
#"
The a3ove data was repeatedl! raised 3! respondent in its Re@oinder *To
Co0plainant9s Repl!+ 3efore the LA,
1$
(e0orandu0 of Appeal
1'
and Epposition *To
Co0plainant6Appellee9s (otion for Reconsideration+
1#
3efore the /LRC, and
Co00ent *En the Petition+,
11
(e0orandu0 *Bor the Private Respondent+,
14
and
Co00ent *En the (otion for Reconsideration+
15
3efore the CA, 7nstead of frontall!
re3utting the data, petitioner treated the0 with deafening silenceJ thus, reasona3l!
and logicall! i0pl!ing lacF of evidence to support the contrar!,
HGEREBERE, the petition is &E/7E&, The anuar! ", #$$% &ecision and (arch
), #$$% Resolution of the Court of Appeals in CA6-,R, .P /o, "4)##, which
affir0ed the anuar! 1', #$$) &ecision and (arch 2, #$$) Resolution of the
/LRC deleting the LA4s inclusion of sales 0anage0ent incentives in the
co0putation of petitioner4s retire0ent 3enefits, is here3! ABB7R(E&,
.E ER&ERE&,
G.R. No. 176985 April 1, 2013
RICARDO E. VERGARA, JR., Petitioer,
!".
COCA#CO$A %O&&$ER' P(I$IPPINE', INC., Re"po)et.
D E C I ' I O N
PERALTA, J.:
Before Us is a petition for review on certiorari under Rule 45 of the Rules of Civil
Procedure assailing the anuar! ", #$$% &ecision
'
and (arch ), #$$%
Resolution
#
of the Court of Appeals *CA+ in CA ,, -,R, .P /o, "4)##, which
affir0ed the anuar! 1', #$$) &ecision
1
and (arch 2, #$$) Resolution
4
of the
/ational La3or Relations Co00ission */LRC+ 0odif!ing the .epte03er 1$, #$$1
&ecision
5
of the La3or Ar3iter *LA+ 3! deleting the sales 0anage0ent incentives in
the co0putation of petitioner4s retire0ent 3enefits,
Petitioner Ricardo E, 5ergara, r, was an e0plo!ee of respondent Coca6Cola
Bottlers Philippines, 7nc, fro0 (a! '")2 until he retired on anuar! 1', #$$# as a
&istrict .ales .upervisor *&..+ for Las Pi8as Cit!, (etro (anila, As stipulated in
respondent9s e:isting Retire0ent Plan Rules and Regulations at the ti0e, the
Annual Perfor0ance 7ncentive Pa! of R.(s, &..s, and ...s shall 3e considered
in the co0putation of retire0ent 3enefits, as follows; Basic (onthl! .alar! <
(onthl! Average Perfor0ance 7ncentive *which is the total perfor0ance incentive
earned during the !ear i00ediatel! preceding = '# 0onths+ > /o, of ?ears in
.ervice,
)
Clai0ing his entitle0ent to an additional PhP4%4,)$$,$$ as .ales (anage0ent
7ncentives *.(7+
%
and to the a0ount of PhP4"),$'),)% which respondent allegedl!
deducted illegall!, representing the unpaid accounts of two dealers within his
@urisdiction, petitioner filed a co0plaint 3efore the /LRC on une '', #$$# for the
pa!0ent of his ABull Retire0ent Benefits, (erit 7ncrease, Co00issionC7ncentives,
Length of .ervice, Actual, (oral and E:e0plar! &a0ages, and Attorne!9s Bees,A
2
After a series of 0andator! conference, 3oth parties partiall! settled with regard
the issue of 0erit increase and length of service,
"
.u3seDuentl!, the! filed their
respective Position Paper and Repl! thereto dealing on the two re0aining issues
of .(7 entitle0ent and illegal deduction,
En .epte03er 1$, #$$1, the LA rendered a &ecision
'$
in favor of petitioner,
directing respondent to rei03urse the a0ount illegall! deducted fro0 petitioner9s
retire0ent pacFage and to integrate therein his .(7 privilege, Upon appeal of
respondent, however, the /LRC 0odified the award and deleted the pa!0ent of
.(7,
Petitioner then 0oved to partiall! e:ecute the rei03urse0ent of illegal deduction,
which the LA granted despite respondent9s opposition,
''
Later, without pre@udice to
the pendenc! of petitioner9s petition for certiorari 3efore the CA, the parties
e:ecuted a Co0pro0ise Agree0ent
'#
on Ecto3er 4, #$$), where3! petitioner
acFnowledged full pa!0ent 3! respondent of the a0ount of PhP4"),$'),)%
covering the a0ount illegall! deducted,
The CA dis0issed petitioner9s case on anuar! ", #$$% and denied his 0otion for
reconsideration two 0onths thereafter, Gence, this present petition to resolve the
singular issue of whether the .(7 should 3e included in the co0putation of
petitioner9s retire0ent 3enefits on the ground of consistent co0pan! practice,
Petitioner insistentl! avers that 0an! &..s who retired without achieving the sales
and collection targets were given the average .(7 in their retire0ent pacFage,
He den!,
This case does not fall within an! of the recogniIed e:ceptions to the rule that onl!
Duestions of law are proper in a petition for review on certiorari under Rule 45 of
the Rules of Court, .ettled is the rule that factual findings of la3or officials, who are
dee0ed to have acDuired e:pertise in 0atters within their respective @urisdiction,
are generall! accorded not onl! respect 3ut even finalit!, and 3ind us when
supported 3! su3stantial evidence,
'1
Certainl!, it is not Eur function to assess and
evaluate the evidence all over again, particularl! where the findings of 3oth the CA
and the /LRC coincide,
7n an! event, even if this Court would evaluate petitioner4s argu0ents on its
supposed 0erits, He still find no reason to distur3 the CA ruling that affir0ed the
/LRC, The findings and conclusions of the CA show that the evidence and the
argu0ents of the parties had all 3een carefull! considered and passed upon,
There are no relevant and co0pelling facts to @ustif! a different resolution which the
CA failed to consider as well as no factual conflict 3etween the CA and the /LRC
decisions,
-enerall!, e0plo!ees have a vested right over e:isting 3enefits voluntaril! granted
to the0 3! their e0plo!er,
'4
Thus, an! 3enefit and supple0ent 3eing en@o!ed 3! the
e0plo!ees cannot 3e reduced, di0inished, discontinued or eli0inated 3! the
e0plo!er,
'5
The principle of non6di0inution of 3enefits is actuall! founded on the
Constitutional 0andate to protect the rights of worFers, to pro0ote their welfare,
and to afford the0 full protection,
')
7n turn, said 0andate is the 3asis of Article 4 of
the La3or Code which states that Aall dou3ts in the i0ple0entation and
interpretation of this Code, including its i0ple0enting rules and regulations, shall
3e rendered in favor of la3or,A
'%
There is di0inution of 3enefits when the following reDuisites are present; *'+ the
grant or 3enefit is founded on a polic! or has ripened into a practice over a long
period of ti0eJ *#+ the practice is consistent and deli3erateJ *1+ the practice is not
due to error in the construction or application of a dou3tful or difficult Duestion of
lawJ and *4+ the di0inution or discontinuance is done unilaterall! 3! the e0plo!er,
'2
To 3e considered as a regular co0pan! practice, the e0plo!ee 0ust prove 3!
su3stantial evidence that the giving of the 3enefit is done over a long period of
ti0e, and that it has 3een 0ade consistentl! and deli3eratel!,
'"
urisprudence has
not laid down an! hard6and6fast rule as to the length of ti0e that co0pan! practice
should have 3een e:ercised in order to constitute voluntar! e0plo!er
practice,
#$
The co00on deno0inator in previousl! decided cases appears to 3e
the regularit! and deli3erateness of the grant of 3enefits over a significant period of
ti0e,
#'
7t reDuires an indu3ita3le showing that the e0plo!er agreed to continue
giving the 3enefit Fnowing full! well that the e0plo!ees are not covered 3! an!
provision of the law or agree0ent reDuiring pa!0ent thereof,
##
7n su0, the 3enefit
0ust 3e characteriIed 3! regularit!, voluntar! and deli3erate intent of the e0plo!er
to grant the 3enefit over a considera3le period of ti0e,
#1
Upon review of the entire case records, He find no su3stantial evidence to prove
that the grant of .(7 to all retired &..s regardless of whether or not the! Dualif! to
the sa0e had ripened into co0pan! practice, &espite 0ore than sufficient
opportunit! given hi0 while his case was pending 3efore the /LRC, the CA, and
even to this Court, petitioner utterl! failed to adduce proof to esta3lish his
allegation that .(7 has 3een consistentl!, deli3eratel! and voluntaril! granted to all
retired &..s without an! Dualification or conditions whatsoever, The onl! two
pieces of evidence that he stu33ornl! presented throughout the entiret! of this
case are the sworn state0ents of Renato C, Gidalgo *Gidalgo+ and Ra0on 5,
5elaIDueI *5elasDueI+, for0er &..s of respondent who retired in #$$$ and '""2,
respectivel!, The! clai0ed that the .(7 was included in their retire0ent pacFage
even if the! did not 0eet the sales and collection Dualifiers,
#4
Gowever, @u:taposing
these with the evidence presented 3! respondent would reveal the frailt! of their
state0ents,
The declarations of Gidalgo and 5elaIDueI were sufficientl! countered 3!
respondent through the affidavits e:ecuted 3! /or0an R, Biola *Biola+, (oises &,
Escasura *Escasura+, and (a, 5anessa R, Balles *Balles+,
#5
Biola pointed out the
various stop6gap 0easures undertaFen 3! respondent 3eginning '""" in order to
arrest the deterioration of its accounts receiva3les 3alance, two of which relate to
the policies on the grant of .(7 and to the change in the 0anage0ent structure of
respondent upon its re6acDuisition 3! .an (iguel Corporation, Escasura
represented that he has personal Fnowledge of the circu0stances 3ehind the
retire0ent of Gidalgo and 5elaIDueI, Ge attested that contrar! to petitioner9s
clai0, Gidalgo was in fact Dualified for the .(7, As for 5elaIDueI, Escasura
asserted that even if he *5elaIDueI+ did not Dualif! for the .(7, respondent9s
-eneral (anager in its Cala03a plant still granted his *5elaIDueI+ reDuest, along
with other nu0erous concessions, to achieve industrial peace in the plant which
was then e:periencing la3or relations pro3le0s, Lastl!, Balles confir0ed that
petitioner failed to 0eet the trade receiva3le Dualifiers of the .(7, .he also cited
the cases of Ed 5alencia *5alencia+ and E00anuel -utierreI *-utierreI+, 3oth
&..s of respondent who retired on anuar! 1', #$$# and &ece03er 1$, #$$#,
respectivel!, .he noted that, unliFe 5alencia, -utierreI also did not receive the
.(7 as part of his retire0ent pa!, since he failed to Dualif! under the polic!
guidelines, The verit! of all these state0ents and representations stands and holds
true to Us, considering that petitioner did not present an! iota of proof to de3unF
the sa0e,1wphi1
Therefore, respondent4s isolated act of including the .(7 in the retire0ent pacFage
of 5elaIDueI could hardl! 3e classified as a co0pan! practice that 0a! 3e
considered an enforcea3le o3ligation, To repeat, the principle against di0inution of
3enefits is applica3le onl! if the grant or 3enefit is founded on an e:press polic! or
has ripened into a practice over a long period of ti0e which is consistent and
deli3erateJ it presupposes that a co0pan! practice, polic! and tradition favora3le to
the e0plo!ees has 3een clearl! esta3lishedJ and that the pa!0ents 0ade 3! the
co0pan! pursuant to it have ripened into 3enefits en@o!ed 3! the0,
#)
Certainl!, a
practice or custo0 is, as a general rule, not a source of a legall! de0anda3le or
enforcea3le right,
#%
Co0pan! practice, @ust liFe an! other fact, ha3its, custo0s,
usage or patterns of conduct, 0ust 3e proven 3! the offering part! who 0ust allege
and esta3lish specific, repetitive conduct that 0ight constitute evidence of ha3it or
co0pan! practice,
#2
To close, He rule that petitioner could have salvaged his case had he step up to
disprove respondent9s contention that he 0isera3l! failed to 0eet the collection
Dualifiers of the .(7, Respondent argues that K
An e:a0ination of the Co0pan!9s aged trial 3alance reveals that petitioner did not
0eet the trade receiva3le Dualifier, En the contrar!, the said trial 3alance reveals
that petitioner had a large a0ount of uncollected overdue accounts, Bor the !ear
#$$', his percentage collection efficienc! for current issuance was at an average
of '1,5L a 0onth as against the reDuired %$L, Bor the sa0e, petitioner9s
collection efficienc! was at an average of )$,#5L per 0onth for receiva3les aged
'61$ da!s, which is again, wa! 3elow the reDuired "$L, Bor receiva3les aged 1'6
)$ da!s during said !ear, petitioner9s collection efficienc! was at an average of
5),'%L per 0onth, which is appro:i0atel! half of the reDuired '$$L, Horse, for
receiva3les over )$ da!s old, petitioner9s average collection efficienc! per 0onth
was a reprehensivel! low '4,'$L as against the reDuired '$$L,
#"
The a3ove data was repeatedl! raised 3! respondent in its Re@oinder *To
Co0plainant9s Repl!+ 3efore the LA,
1$
(e0orandu0 of Appeal
1'
and Epposition *To
Co0plainant6Appellee9s (otion for Reconsideration+
1#
3efore the /LRC, and
Co00ent *En the Petition+,
11
(e0orandu0 *Bor the Private Respondent+,
14
and
Co00ent *En the (otion for Reconsideration+
15
3efore the CA, 7nstead of frontall!
re3utting the data, petitioner treated the0 with deafening silenceJ thus, reasona3l!
and logicall! i0pl!ing lacF of evidence to support the contrar!,
HGEREBERE, the petition is &E/7E&, The anuar! ", #$$% &ecision and (arch
), #$$% Resolution of the Court of Appeals in CA6-,R, .P /o, "4)##, which
affir0ed the anuar! 1', #$$) &ecision and (arch 2, #$$) Resolution of the
/LRC deleting the LA4s inclusion of sales 0anage0ent incentives in the
co0putation of petitioner4s retire0ent 3enefits, is here3! ABB7R(E&,
.E ER&ERE&,
G.R. No. 80609 A*+*"t 23, 1988
P(I$IPPINE $ONG DI'&ANCE &E$EP(ONE CO,PAN-, petitioer,
!".
&(E NA&IONA$ $A%OR RE$A&ION' CO,,I''ION .) ,ARI$-N
A%/CA-, re"po)et".
Nicanor G. Nuevas for petitioner.

CR/0, J.:
The onl! issue presented in the case at 3ar is the legalit! of the award of financial
assistance to an e0plo!ee who had 3een dis0issed for cause as found 3! the
pu3lic respondent,
(aril!n A3uca!, a traffic operator of the Philippine Long &istance Telephone
Co0pan!, was accused 3! two co0plainants of having de0anded and received
fro0 the0 the total a0ount of P1,2$$,$$ in consideration of her pro0ise to
facilitate approval of their applications for telephone installation,
1
7nvestigated and
heard, she was found guilt! as charged and accordingl! separated fro0 the
service,
2
.he went to the (inistr! of La3or and E0plo!0ent clai0ing she had
3een illegall! re0oved, After consideration of the evidence and argu0ents of the
parties, the co0pan! was sustained and the co0plaint was dis0issed for lacF of
0erit, /evertheless, the dispositive portion of la3or ar3iter4s decision declared;
HGEREBERE, the instant co0plaint is dis0issed for lacF of
0erit,
Considering that &r, Gelen Banga!an and (rs, Consolacion
(artineI are not totall! 3la0eless in the light of the fact that the
deal happened outhide the pre0ises of respondent co0pan!
and that their act of giving P1,2$$,$$ without an! receipt is
tanta0ount to corruption of pu3lic officers, co0plainant 0ust 3e
given one 0onth pa! for ever! !ear of service as financial
assistance,
3
Both the petitioner and the private respondent appealed to the /ational La3or
Relations Board, which upheld the said decision in toto and dis0issed the
appeals,
1
The private respondent tooF no further action, there3! i0pliedl!
accepting the validit! of her dis0issal, The petitioner, however, is now 3efore us to
Duestion the affir0ance of the a3ove6 Duoted award as having 3een 0ade with
grave a3use of discretion,
7n its challenged resolution of .epte03er ##, '"2%, the /LRC said;
,,, Anent the award of separation pa! as financial assistance in
co0plainant4s favor, He find the sa0e to 3e eDuita3le, taFing
into consideration her long !ears of service to the co0pan!
where3! she had undou3tedl! contri3uted to the success of
respondent, Hhile we do not in an! wa! approve of
co0plainants *private respondent+ 0alfeasance, for which she is
to suffer the penalt! of dis0issal, it is for reasons of eDuit! and
co0passion that we resolve to uphold the award of financial
assistance in her favor,
5
The position of the petitioner is si0pl! stated; 7t is conceded that an e0plo!ee
illegall! dis0issed is entitled to reinstate0ent and 3acFwages as reDuired 3! the
la3or laws, Gowever, an e0plo!ee dis0issed for cause is entitled to neither
reinstate0ent nor 3acFwages and is not allowed an! relief at all 3ecause his
dis0issal is in accordance with law, 7n the case of the private respondent, she has
3een awarded financial assistance eDuivalent to ten 0onths pa! corresponding to
her '$ !ear service in the co0pan! despite her re0oval for cause, .he is,
therefore, in effect rewarded rather than punished for her dishonest!, and without
an! legal authoriIation or @ustification, The award is 0ade on the ground of eDuit!
and co0passion, which cannot 3e a su3stitute for law, (oreover, such award puts
a pre0iu0 on dishonest! and encourages instead of deterring corruption,
Bor its part, the pu3lic respondent clai0s that the e0plo!ee is sufficientl! punished
with her dis0issal, The grant of financial assistance is not intended as a reward for
her offense 3ut 0erel! to help her for the loss of her e0plo!0ent after worFing
faithfull! with the co0pan! for ten !ears, 7n support of this position, the .olicitor
-eneral cites the cases of Birestone Tire and Ru33er Co0pan! of the Philippines
v, Lariosa
6
and .oco v, (ercantile Corporation of &avao,
7
where the e0plo!ees
were dis0issed for cause 3ut were nevertheless allowed separation pa! on
grounds of social and co0passionate @ustice, As the Court put it in the Birestone
case;
7n view of the foregoing, we rule that Birestone had valid grounds
to dispense with the services of Lariosa and that the /LRC acted
with grave a3use of discretion in ordering his reinstate0ent,
Gowever, considering that Lariosa had worFed with the co0pan!
for eleven !ears with no Fnown previous 3ad record, the ends of
social and co0passionate @ustice would 3e served if he is paid
full separation pa! 3ut not reinstate0ent without 3acFwages 3!
the /LRC,
7n the said case, the e0plo!ee was validl! dis0issed for theft 3ut the /LRC
nevertheless awarded hi0 full separation pa! for his '' !ears of service with the
co0pan!, 7n .oco, the e0plo!ee was also legall! separated for unauthoriIed use
of a co0pan! vehicle and refusal to attend the grievance proceedings 3ut he was
@ust the sa0e granted one6half 0onth separation pa! for ever! !ear of his '26!ear
service,
.i0ilar action was taFen in Bilipro, 7nc, v, /LRC,
8
where the e0plo!ee was validl!
dis0issed for preferring certain dealers in violation of co0pan! polic! 3ut was
allowed separation pa! for his # !ears of service, 7n (etro &rug Corporation v,
/LRC,
9
the e0plo!ee was validl! re0oved for loss of confidence 3ecause of her
failure to account for certain funds 3ut she was awarded separation pa! eDuivalent
to one6half 0onth4s salar! for ever! !ear of her service of '5 !ears, 7n Engineering
EDuip0ent, 7nc, v, /LRC,
10
the dis0issal of the e0plo!ee was @ustified 3ecause he
had instigated la3or unrest a0ong the worFers and had serious differences with
the0, a0ong other grounds, 3ut he was still granted three 0onths separation pa!
corresponding to his 16!ear service, 7n /ew Brontier (ines, 7nc, v, /LRC,
11
the
e0plo!ee4s 16 !ear service was held validl! ter0inated for lacF of confidence and
a3andon0ent of worF 3ut he was nonetheless granted three 0onths separation
pa!, And in .an (iguel Corporation v, &eput! (inister of La3or and E0plo!0ent,
et al ,,
12
full separation pa! for ), '$, and ') !ears service, respectivel!, was also
allowed three e0plo!ees who had 3een dis0issed after the! were found guilt! of
0isappropriating co0pan! funds,
The rule e03odied in the La3or Code is that a person dis0issed for cause as
defined therein is not entitled to separation pa!,
13
The cases a3ove cited constitute
the e:ception, 3ased upon considerations of eDuit!, EDuit! has 3een defined as
@ustice outside law,
11
3eing ethical rather than @ural and 3elonging to the sphere of
0orals than of law,
15
7t is grounded on the precepts of conscience and not on an!
sanction of positive law,
16
Gence, it cannot prevail against the e:pressed provision
of the la3or laws allowing dis0issal of e0plo!ees for cause and without an!
provision for separation pa!,
.trictl! speaFing, however, it is not correct to sa! that there is no e:press
@ustification for the grant of separation pa! to lawfull! dis0issed e0plo!ees other
than the a3stract consideration of eDuit!, The reason is that our Constitution is
replete with positive co00ands for the pro0otion of social @ustice, and particularl!
the protection of the rights of the worFers, The enhance0ent of their welfare is one
of the pri0ar! concerns of the present charter, 7n fact, instead of confining itself to
the general co00it0ent to the cause of la3or in Article 77 on the &eclaration of
Principles of .tate Policies, the new Constitution contains a separate article
devoted to the pro0otion of social @ustice and hu0an rights with a separate su36
topic for la3or, Article M777 e:pressl! recogniIes the vital role of la3or, hand in hand
with 0anage0ent, in the advance0ent of the national econo0! and the welfare of
the people in general, The categorical 0andates in the Constitution for the
i0prove0ent of the lot of the worFers are 0ore than sufficient 3asis to @ustif! the
award of separation pa! in proper cases even if the dis0issal 3e for cause,
The Court notes, however, that where the e:ception has 3een applied, the
decisions have not 3een consistent as to the @ustification for the grant of separation
pa! and the a0ount or rate of such award, Thus, the e0plo!ees dis0issed for theft
in the Birestone case and for ani0osities with fellow worFers in the Engineering
EDuip0ent case were 3oth awarded separation pa! notnvithstanding that the first
cause was certainl! 0ore serious than the second, /o less curiousl!, the
e0plo!ee in the .oco case was allowed onl! one6half 0onth pa! for ever! !ear of
his '2 !ears of service, 3ut in Bilipro the award was two 0onths separation pa! for
# !ears9 service, 7n Birestone, the e0plovee was allowed full separation pa!
corresponding to his '' !ears of service, 3ut in (etro, the e0plo!ee was granted
onl! one6half 0onth separation pa! for ever! !ear of her '5!ear service, 7t would
see0 then that length of service is not necessaril! a criterion for the grant of
separation pa! and neither apparentl! is the reason for the dis0issal,
The Court feels that distinctions are in order, He note that heretofore the
separation pa!, when it was considered warranted, was reDuired regardless of the
nature or degree of the ground proved, 3e it 0ere inefficienc! or so0ething graver
liFe i00oralit! or dishonest!, The 3enediction of co0passion was 0ade to cover a
0ultitude of sins, as it were, and to @ustif! the helping hand to the validl! dis0issed
e0plo!ee whatever the reason for his dis0issal, This polic! should 3e re6
e:a0ined, 7t is ti0e we rationaliIed the e:ception, to 0aFe it fair to 3oth la3or and
0anage0ent, especiall! to la3or,
There should 3e no Duestion that where it co0es to such valid 3ut not iniDuitous
causes as failure to co0pl! with worF standards, the grant of separation pa! to the
dis0issed e0plo!ee 0a! 3e 3oth @ust and co0passionate, particularl! if he has
worFed for so0e ti0e with the co0pan!, Bor e:a0ple, a su3ordinate who has
irreconcila3le polic! or personal differences with his e0plo!er 0a! 3e validl!
dis0issed for de0onstrated loss of confidence, which is an allowa3le ground, A
worFing 0other who has to 3e freDuentl! a3sent 3ecause she has also to taFe care
of her child 0a! also 3e re0oved 3ecause of her poor attendance, this 3eing
another authoriIed ground, 7t is not the e0plo!ee4s fault if he does not have the
necessar! aptitude for his worF 3ut on the other hand the co0pan! cannot 3e
reDuired to 0aintain hi0 @ust the sa0e at the e:pense of the efficienc! of its
operations, Ge too 0a! 3e validl! replaced, Under these and si0ilar
circu0stances, however, the award to the e0plo!ee of separation pa! would 3e
sustaina3le under the social @ustice polic! even if the separation is for cause,
But where the cause of the separation is 0ore serious than 0ere inefficienc!, the
generosit! of the law 0ust 3e 0ore discerning, There is no dou3t it is
co0passionate to give separation pa! to a sales0an if he is dis0issed for his
ina3ilit! to fill his Duota 3ut surel! he does not deserve such generosit! if his
offense is 0isappropriation of the receipts of his sales, This is no longer 0ere
inco0petence 3ut clear dishonest!, A securit! guard found sleeping on the @o3 is
dou3tless su3@ect to dis0issal 3ut 0a! 3e allowed separation pa! since his
conduct, while inept, is not depraved, But if he was in fact not reall! sleeping 3ut
sleeping with a prostitute during his tour of dut! and in the co0pan! pre0ises, the
situation is changed co0pletel!, This is not onl! inefficienc! 3ut i00oralit! and the
grant of separation pa! would 3e entirel! un@ustified,
He hold that henceforth separation pa! shall 3e allowed as a 0easure of social
@ustice onl! in those instances where the e0plo!ee is validl! dis0issed for causes
other than serious 0isconduct or those reflecting on his 0oral character, Hhere
the reason for the valid dis0issal is, for e:a0ple, ha3itual into:ication or an
offense involving 0oral turpitude, liFe theft or illicit se:ual relations with a fellow
worFer, the e0plo!er 0a! not 3e reDuired to give the dis0issed e0plo!ee
separation pa!, or financial assistance, or whatever other na0e it is called, on the
ground of social @ustice,
A contrar! rule would, as the petitioner correctl! argues, have the effect, of
rewarding rather than punishing the erring e0plo!ee for his offense, And we do not
agree that the punish0ent is his dis0issal onl! and that the separation pa! has
nothing to do with the wrong he has co00itted, Ef course it has, 7ndeed, if the
e0plo!ee who steals fro0 the co0pan! is granted separation pa! even as he is
validl! dis0issed, it is not unliFel! that he will co00it a si0ilar offense in his ne:t
e0plo!0ent 3ecause he thinFs he can e:pect a liFe lenienc! if he is again found
out, This Find of 0isplaced co0passion is not going to do la3or in general an!
good as it will encourage the infiltration of its ranFs 3! those who do not deserve
the protection and concern of the Constitution,
The polic! of social @ustice is not intended to countenance wrongdoing si0pl!
3ecause it is co00itted 3! the underprivileged, At 3est it 0a! 0itigate the penalt!
3ut it certainl! will not condone the offense, Co0passion for the poor is an
i0perative of ever! hu0ane societ! 3ut onl! when the recipient is not a rascal
clai0ing an undeserved privilege, .ocial @ustice cannot 3e per0itted to 3e refuge
of scoundrels an! 0ore than can eDuit! 3e an i0pedi0ent to the punish0ent of the
guilt!, Those who invoFe social @ustice 0a! do so onl! if their hands are clean and
their 0otives 3la0eless and not si0pl! 3ecause the! happen to 3e poor, This great
polic! of our Constitution is not 0eant for the protection of those who have proved
the! are not worth! of it, liFe the worFers who have tainted the cause of la3or with
the 3le0ishes of their own character,
Appl!ing the a3ove considerations, we hold that the grant of separation pa! in the
case at 3ar is un@ustified, The private respondent has 3een dis0issed for
dishonest!, as found 3! the la3or ar3iter and affir0ed 3! the /LRC and as she
herself has i0pliedl! ad0itted, The fact that she has worFed with the PL&T for
0ore than a decade, if it is to 3e considered at all, should 3e taFen against her as it
reflects a regretta3le lacF of lo!alt! that she should have strengthened instead of
3etra!ing during all of her '$ !ears of service with the co0pan!, 7f regarded as a
@ustification for 0oderating the penalt! of dis0issal, it will actuall! 3eco0e a priIe
for dislo!alt!, perverting the 0eaning of social @ustice and under0ining the efforts
of la3or to cleanse its ranFs of all undesira3les,
The Court also rules that the separation pa!, if found due under the circu0stances
of each case, should 3e co0puted at the rate of one 0onth salar! for ever! !ear of
service, assu0ing the length of such service is dee0ed 0aterial, This is without
pre@udice to the application of special agree0ents 3etween the e0plo!er and the
e0plo!ee stipulating a higher rate of co0putation and providing for 0ore 3enefits
to the discharged e0plo!ee,
17
HGEREBERE, the petition is -RA/TE&, The challenged resolution of .epte03er
##,'"2%, is ABB7R(E& in totoe:cept for the grant of separation pa! in the for0 of
financial assistance, which is here3! &7.ALLEHE&, The te0porar! restraining
order dated (arch #1, '"22, is L7BTE&, 7t is so ordered,
G.R. No. 188717 J.*.r2 29, 2011
,ANI$A 3A&ER CO,PAN-, Petitioner,
vs,
CAR$I&O DE$ RO'ARIO, Respondent,
& E C 7 . 7 E /
PERE0, J.:
This is a Petition for Review on Certiorari
'
filed pursuant to Rule 45 of the Revised
Rules of Court, assailing the 1' (arch #$$" &ecision
#
rendered 3! the Bifth
&ivision of the Court of Appeals in CA6-,R, .P /o, "#5 21, 7n its assailed decision,
the appellate court; * '+ reversed as grave a3use of discretion the Resolution of the
/ational La3or Relations Co00ission */LRC+ which dis0issed the petition of
(anila Hater Co0pan! *(anila Hater+ on technical groundsJ and *#+ proceeded to
affir0 with 0odification the ruling of the La3or Ar3iter, (anila Hater was ordered to
pa! respondent Carlito &el Rosario *&el Rosario+ separation pa! to 3e co0puted
fro0 ' August '""% up to une #$$$,
7n a Resolution
1
dated % ul! #$$", the appellate court refused to reconsider its
earlier decision,
The Bacts
En ## Ecto3er '"%", &el Rosario was e0plo!ed as 7nstru0ent Technician 3!
(etropolitan HaterworFs and .ewerage .!ste0 *(H..+, .o0eti0e in '""),
(H.. was reorganiIed pursuant to Repu3lic Act /o, 2$4' or the /ational Hater
Crisis Act of '""5, and its i0ple0enting guidelines K E:ecutive Erder /o, #2),
Because of the reorganiIation, (anila Hater a3sor3ed so0e e0plo!ees of (H..
including &el Rosario, En ' August '""%, &el Rosario officiall! 3eca0e an
e0plo!ee of (anila Hater,
.o0eti0e in (a! #$$$, (anila Hater discovered that #4 water 0eters were
0issing in its stocFroo0, Upon initial investigation, it appeared that &el Rosario
and his co6e0plo!ee, a certain &anilo (anguera, were involved in the pilferage
and the sale of water 0eters to the co0pan!9s contractor, ConseDuentl!, (anila
Hater issued a (e0orandu0 dated #1 une #$$$, directing &el Rosario to e:plain
in writing within %# hours wh! he should not 3e dealt with ad0inistrativel! for the
loss of the said water 0eters,
4
7n his letter6e:planation,
5
&el Rosario confessed his
involve0ent in the act charged and pleaded for forgiveness, pro0ising not to
co00it si0ilar acts in the future,
En #" une #$$$, (anila Hater conducted a hearing to afford &el Rosario the
opportunit! to personall! defend hi0self and to e:plain and clarif! his defenses to
the charge against hi0, &uring the for0al investigation &el Rosario was found
responsi3le for the loss of the water 0eters and therefore lia3le for violating
.ection '',' of the Co0pan!9s Code of Conduct,
)
(anila Hater proceeded to
dis0iss &el Rosario fro0 e0plo!0ent on 1 ul! #$$$,
%
This pro0pted &el Rosario to file an action for illegal dis0issal clai0ing that his
severance fro0 e0plo!0ent is without @ust cause, 7n his Position Paper su30itted
3efore the la3or officer, &el Rosario averred that his ad0ission to the 0isconduct
charged was not voluntar! 3ut was coerced 3! the co0pan!, .uch ad0ission
therefore, 0ade without the assistance of a counsel, could not 3e 0ade 3asis in
ter0inating his e0plo!0ent,
Refuting the allegations of &el Rosario, (anila Hater pointed out that he was
indeed involved in the taFing of the water 0eters fro0 the co0pan!9s stocF roo0
and of selling these to a private contractor for personal gain, 7nvoFing .ection '','
of the Co0pan!9s Code of Conduct, (anila Hater averred that such act of stealing
the co0pan!9s propert! is punisha3le 3! dis0issal, The co0pan! invited the
attention of this Court to the fact that &el Rosario hi0self confessed his
involve0ent to the loss of the water 0eters not onl! in his letter6e:planation, 3ut
also during the for0al investigation, and in 3oth instances, pleaded for his
e0plo!er9s forgiveness,
2
After weighing the positions taFen 3! the opposing parties, including the evidence
adduced in support of their respective cases, the La3or Ar3iter issued a
&ecision
"
dated 1$ (a! #$$# dis0issing for lacF of 0erit the co0plaint filed 3! &el
Rosario who was, however, awarded separation pa!, According to the La3or
Ar3iter, &el Rosario9s length of service for #' !ears, without previous derogator!
record, warrants the award of separation pa!, The decretal portion of the decision
reads;
HGEREBERE, viewed fro0 the foregoing, @udg0ent is here3! rendered
&7.(7..7/- the co0plaint for illegal dis0issal for lacF of 0erit,
N(anila HaterO is here3! ordered to pa! co0plainant separation pa! eDuivalent to
one6half *'C#+ 0onth9s salar! for ever! !ear of service 3ased on his 3asic salar!
*Php '',#44,$$+ at the ti0e of his dis0issal, This shall 3e co0puted fro0 N' August
'""%O up to une #$$$, the total a0ount of which is E/E GU/&RE& E7-GTEE/
TGEU.A/& .7MT?6THE *Php ''2,$)#,$$+ PE.E.,
'$
7n a Resolution
''
dated 1$ .epte03er #$$1, the /LRC dis0issed the appeal
interposed 3! (anila Hater for its failure to append a certification against foru0
shopping in its (e0orandu0 of Appeal,
.i0ilarl! ill6fated was (anila Hater9s (otion for Reconsideration which was denied
3! the /LRC in a Resolution
'#
dated #2 April #$$5,
En Certiorari, the Court of Appeals in its &ecision dated 1' (arch #$$", reversed
the /LRC Resolution and held that it co00itted a grave a3use of discretion when
it dis0issed (anila Hater9s appeal on 0ere technicalit!, The appellate court,
however, proceeded to affir0 the decision of the La3or Ar3iter awarding separation
pa! to &el Rosario, Considering that &el Rosario rendered #' !ears of service to
the co0pan! without previous derogator! record, the appellate court considered
the granting of separation pa! 3! the la3or officer @ustified, The fallo of the assailed
Court of Appeals &ecision reads;
HGEREBERE, the petition is partl! granted, The assailed Resolutions dated
.epte03er 1$, #$$1 and NApril #2, #$$5O of pu3lic respondent /LRC are set aside,
The &ecision dated (a! 1$, #$$# of the NLOa3or NAOr3iter is reinstated, su3@ect to
the 0odification that the co0putation of the award of separation pa! NtoO private
respondent shall 3e counted fro0 August ', '""% : : : up to une #$$$,
'1
7n a Resolution
'4
dated % ul! #$$", the Court of Appeals refused to reconsider its
earlier decision,
Unrelenting, (anila Hater filed the instant Petition for Review on Certiorari
assailing the foregoing Court of Appeals &ecision and Resolution on the sole
ground that;
TGE NCEURT EB APPEAL.O .ER7EU.L? ERRE& 7/ 7..U7/- TGE
PUE.T7E/E& &EC7.7E/ A/& RE.ELUT7E/ HG7CG &7RECTL?
CE/TRA5E/E BEEQ 57, RULE ', A/& .ECT7E/ % EB TGE E(/7BU. RULE.
7(PLE(E/T7/- TGE LABER CE&E A/& PRE5A7L7/- UR7.PRU&E/CE
HG7CG CATE-ER7CALL? PRE57&E TGAT A/ E(PLE?EE .EPARATE& BRE(
.ER7EU. (7.CE/&UCT 7. /ET E/T7TLE& TE TER(7/AT7E/ *.EPARAT7E/+
PA?,
'5
The Court9s Ruling
7n the instant petition, (anila Hater essentiall! Duestions the award of separation
pa! to respondent who was dis0issed for stealing the co0pan!9s propert! which
a0ounted to gross 0isconduct, 7t argues that separation pa! or financial
assistance is not awarded to e0plo!ees guilt! of gross 0isconduct or for cause
reflecting on his 0oral character,
')
&el Rosario for his part 0aintains that there is no legal ground to @ustif! his
ter0ination fro0 e0plo!0ent, Ge insists that his ad0ission pertaining to his
involve0ent in the loss of the water 0eters was 0erel! coerced 3! the co0pan!,
.ince his dis0issal was without valid or @ust cause, &el Rosario avers that (anila
Hater is guilt! of illegal dis0issal rendering it lia3le for the pa!0ent of 3acFwages
and separation pa!,
'%
7t 0ust 3e stressed at the outset that the correctness of the La3or Ar3iter9s
pronounce0ent on the legalit! of &el Rosario9s dis0issal is no longer an issue and
is 3e!ond 0odification, Hhile (anila Hater ti0el! appealed the ruling of the La3or
Ar3iter awarding separation pa! to &el Rosario, the latter did not Duestion the
dis0issal of his illegal ter0ination case,
'2
7t is settled in our @urisprudence that a
part! who has not appealed cannot o3tain fro0 the appellate court an! affir0ative
relief other than the ones granted in the appealed decision,
'"
&ue process prevents
the grant of additional awards to parties who did not appeal,
#$
Gaving said that, this
Court will no longer dwell on the issue of whether or not &el Rosario was illegall!
dis0issed fro0 e0plo!0ent, 7ncluded in the closed aspect of the case is
respondent9s argu0ent that the a3sence of his counsel when he ad0itted the
charge against hi0 di0inished the evidentiar! value of such ad0ission,
/onetheless, it 0a! 3e 0entioned that the constitutional right to counsel is
availa3le onl! during custodial investigation, 7f the investigation is 0erel!
ad0inistrative conducted 3! the e0plo!er and not a cri0inal investigation, the
ad0ission 0ade during such investigation 0a! 3e used as evidence to @ustif!
dis0issal,
#'
Eur focus will 3e on the propriet! of the award for separation pa!,
As a general rule, an e0plo!ee who has 3een dis0issed for an! of the @ust causes
enu0erated under Article #2#
##
of the La3or Code is not entitled to a separation
pa!,
#1
.ection %, Rule 7, BooF 57 of the E0ni3us Rules i0ple0enting the La3or
Code provides;
.ec, %, Ter0ination of e0plo!0ent 3! e0plo!er, R The @ust causes for ter0inating
the services of an e0plo!ee shall 3e those provided in Article #2# of the Code, The
separation fro0 worF of an e0plo!ee for a @ust cause does not entitle hi0 to the
ter0ination pa! provided in the Code, without pre@udice, however, to whatever
rights, 3enefits and privileges he 0a! have under the applica3le individual or
collective agree0ent with the e0plo!er or voluntar! e0plo!er polic! or practice,
7n e:ceptional cases, however, the Court has granted separation pa! to a legall!
dis0issed e0plo!ee as an act of Asocial @usticeA or on AeDuita3le grounds,A
#4
7n
3oth instances, it is reDuired that the dis0issal *'+ was not for serious 0isconductJ
and *#+ did not reflect on the 0oral character of the e0plo!ee,
#5
7n the leading case of Philippine Long &istance Telephone Co0pan! v, /LRC,
#)
we
laid down the rule that separation pa! shall 3e allowed as a 0easure of social
@ustice onl! in the instances where the e0plo!ee is validl! dis0issed for causes
other than serious 0isconduct reflecting his 0oral character, He clarified that;
He hold that henceforth separation pa! shall 3e allowed as a 0easure of social
@ustice onl! in those instances where the e0plo!ee is validl! dis0issed for causes
other than serious 0isconduct or those reflecting on his 0oral character, Hhere
the reason for the valid dis0issal is, for e:a0ple, ha3itual into:ication or an
offense involving 0oral turpitude, liFe theft or illicit se:ual relations with a fellow
worFer, the e0plo!er 0a! not 3e reDuired to give the dis0issed e0plo!ee
separation pa!, or financial assistance, or whatever other na0e it is called, on the
ground of social @ustice,
A contrar! rule would, as the petitioner correctl! argues, have the effect, of
rewarding rather than punishing the erring e0plo!ee for his offense, And we do not
agree that the punish0ent is his dis0issal onl! and that the separation pa! has
nothing to do with the wrong he has co00itted, Ef course it has, 7ndeed, if the
e0plo!ee who steals fro0 the co0pan! is granted separation pa! even as he is
validl! dis0issed, it is not unliFel! that he will co00it a si0ilar offense in his ne:t
e0plo!0ent 3ecause he thinFs he can e:pect a liFe lenienc! if he is again found
out, This Find of 0isplaced co0passion is not going to do la3or in general an!
good as it will encourage the infiltration of its ranFs 3! those who do not deserve
the protection and concern of the Constitution,
The polic! of social @ustice is not intended to countenance wrongdoing si0pl!
3ecause it is co00itted 3! the underprivileged, At 3estN,O it 0a! 0itigate the
penalt! 3ut it certainl! will not condone the offense, Co0passion for the poor is an
i0perative of ever! hu0ane societ! 3ut onl! when the recipient is not a rascal
clai0ing an undeserved privilege, .ocial @ustice cannot 3e per0itted to 3e refuge
of scoundrels an! 0ore than can eDuit! 3e an i0pedi0ent to the punish0ent of the
guilt!, Those who invoFe social @ustice 0a! do so onl! if their hands are clean and
their 0otives 3la0eless and not si0pl! 3ecause the! happen to 3e poor, This great
polic! of our Constitution is not 0eant for the protection of those who have proved
the! are not worth! of it, liFe the worFers who have tainted the cause of la3or with
the 3le0ishes of their own character,
#%
7n the su3seDuent case of To!ota (otor Phils, Corp, HorFers Association
*T(PCHA+ v, /ational La3or Relations Co00ission,
#2
we e:panded the
e:clusions and elucidated that separation pa! shall 3e allowed as a 0easure of
social @ustice onl! in instances where the e0plo!ee is validl! dis0issed for causes
other than serious 0isconduct, willful diso3edience, gross and ha3itual neglect of
dut!, fraud or willful 3reach of trust, co00ission of a cri0e against the e0plo!er or
his fa0il!, or those reflecting on his 0oral character, 7n the sa0e case, we
instructed the la3or officials that the! 0ust 3e 0ost @udicious and circu0spect in
awarding separation pa! or financial assistance as the constitutional polic! to
provide full protection to la3or is not 0eant to 3e an instru0ent to oppress the
e0plo!ers,
#"
The co00it0ent of the court to the cause of the la3or should not
e03arrass us fro0 sustaining the e0plo!ers when the! are right, as here, 7n fine,
we should 3e 0ore cautious in awarding financial assistance to the undeserving
and those who are unworth! of li3eralit! of the law,
1$
-uided 3! the foregoing rules, we have carefull! treaded the path of
co0passionate @ustice in the su3seDuent cases so as not to slip and favor la3or at
the e:pense of 0anage0ent,
7n TiraIona v, Phillippine E&. Techno6.ervice, 7nc, *PET, 7nc,+,
1'
we denied the
award of separation pa! to an e0plo!ee who was dis0issed fro0 e0plo!0ent due
to loss of trust and confidence,
Hhile NthisO Court co00iserates with the plight of TiraIona, who has recentl!
0anifested that she has since 3een suffering fro0 her poor health condition, the
Court cannot grant her plea for the award of financial 3enefits 3ased solel! on this
unfortunate circu0stance, Bor all its conceded 0erit, eDuit! is availa3le onl! in the
a3sence of law and not as its replace0ent, EDuit! as an e:ceptional e:tenuating
circu0stance does not favor, nor 0a! it 3e used to reward, the indolent or the
wrongdoer for that 0atter, This Court will not allow a part!, in guise of eDuit!, to
3enefit fro0 its own fault,
1#
*E0phasis supplied+,
The attendant circu0stances in the present case considered, we are constrained
to den! &el Rosario separation pa! since the ad0itted cause of his dis0issal
a0ounts to serious 0isconduct, Ge is not onl! responsi3le for the loss of the water
0eters in flagrant violation of the co0pan!9s polic! 3ut his act is in utter disregard
of his partnership with his e0plo!er in the pursuit of 0utual 3enefits,
7n the recent case of &aa3a! v, Coca6Cola Bottlers,
11
this Court reiterated our
ruling in To!ota and disallowed the pa!0ent of separation pa! to an e0plo!ee who
was found guilt! of stealing the co0pan!9s propert!, He repeated that an award of
separation pa! in such an instance is 0isplaced co0passion for the undeserving
who 0a! find their wa! 3acF and weaFen the fi3er of la3or,
That &el Rosario rendered #' !ears of service to the co0pan! will not save the
da! for hi0,1wphi1 To this case, Central Pangasinan Electric Cooperative, 7nc, v,
/ational La3or Relations Co00ission is on all fours, thus;
Although long !ears of service 0ight generall! 3e considered for the award of
separation 3enefits or so0e for0 of financial assistance to 0itigate the effects of
ter0ination, this case is not the appropriate instance for generosit! under the
La3or Code nor under our prior decisions, The fact that private respondent served
petitioner for 0ore than twent! !ears with no negative record prior to his dis0issal,
in our view of this case, does not call for such award of 3enefits, since his violation
reflects a regretta3le lacF of lo!alt! and worse, 3etra!al of the co0pan!, 7f an
e0plo!ee4s length of service is to 3e regarded as a @ustification for 0oderating the
penalt! of dis0issal, such gesture will actuall! 3eco0e a priIe for dislo!alt!,
distorting the 0eaning of social @ustice and under0ining the efforts of la3or to
cleanse its ranFs of undesira3les,
14
*E0phasis supplied+,
7ndu3ita3l!, the appellate court erred in awarding separation pa! to &el Rosario
without taFing into consideration that the transgression he co00itted constitutes a
serious offense, The grant of separation pa! to a dis0issed e0plo!ee is
deter0ined 3! the cause of the dis0issal, The !ears of service 0a! deter0ine how
0uch separation pa! 0a! 3e awarded, 7t is, however, not the reason wh! such pa!
should 3e granted at all,
7n su0, we hold that the award of separation pa! or an! other Find of financial
assistance to &el Rosario, under the no0enclature of co0passionate @ustice, is not
warranted in the instant case, A contrar! rule would have the effect of rewarding
rather than punishing an erring e0plo!ee, distur3ing the no3le concept of social
@ustice,
HGEREBERE, pre0ises considered, the petition is -RA/TE&, The assailed
&ecision and Resolution of the Court of Appeals are here3! RE5ER.E& and .ET
A.7&E,
.E ER&ERE&,
G.R. No. 169510 A*+*"t 8, 2011
A&O4 %IG 3EDGE CO,PAN-, INC., Petitioner,
vs,
JE'/' P. GI'ON, Respondent,
& E C 7 . 7 E /
PERA$&A, J.:
This is a petition for review on certiorari seeFing to reverse and set aside the
&ecision
'
dated (a! 1', #$$5 of the Court of Appeals *CA+ in CA6-,R, .P /o,
2%24), and the Resolution
#
dated August #1, #$$5 den!ing petitioner9s 0otion for
reconsideration,
The procedural and factual antecedents are as follows;
.o0eti0e in Be3ruar! '""#, respondent esus P, -ison was engaged as part6ti0e
consultant on retainer 3asis 3! petitioner AtoF Big Hedge Co0pan!, 7nc, through
its then Asst, 5ice6President and Acting Resident (anager, Rutillo A, Torres, As a
consultant on retainer 3asis, respondent assisted petitioner4s retained legal
counsel with 0atters pertaining to the prosecution of cases against illegal surface
occupants within the area covered 3! the co0pan!4s 0ineral clai0s, Respondent
was liFewise tasFed to perfor0 liaison worF with several govern0ent agencies,
which he said was his e:pertise,
Petitioner did not reDuire respondent to report to its office on a regular 3asis,
e:cept when occasionall! reDuested 3! the 0anage0ent to discuss 0atters
needing his e:pertise as a consultant, As pa!0ent for his services, respondent
received a retainer fee of P1,$$$,$$ a 0onth,
1
which was delivered to hi0 either at
his residence or in a local restaurant, The parties e:ecuted a retainer agree0ent,
3ut such agree0ent was 0isplaced and can no longer 3e found,
The said arrange0ent continued for the ne:t eleven !ears,
.o0eti0e thereafter, since respondent was getting old, he reDuested that
petitioner cause his registration with the .ocial .ecurit! .!ste0 *...+, 3ut
petitioner did not accede to his reDuest, Ge later reiterated his reDuest 3ut it was
ignored 3! respondent considering that he was onl! a retainerCconsultant, En
Be3ruar! 4, #$$1, respondent filed a Co0plaint
4
with the ... against petitioner for
the latter4s refusal to cause his registration with the ...,
En the sa0e date, (ario &, Cera, in his capacit! as resident 0anager of petitioner,
issued a (e0orandu0
5
advising respondent that within 1$ da!s fro0 receipt
thereof, petitioner is ter0inating his retainer contract with the co0pan! since his
services are no longer necessar!,
En Be3ruar! #', #$$1, respondent filed a Co0plaint
)
for illegal dis0issal, unfair
la3or practice, underpa!0ent of wages, non6pa!0ent of '1th 0onth pa!, vacation
pa!, and sicF leave pa! with the /ational La3or Relations Co00ission */LRC+,
Regional Ar3itration Branch *RAB+, Cordillera Ad0inistrative Region, against
petitioner, (ario &, Cera, and Teofilo R, Asuncion, r, The case was docFeted as
/LRC Case /o, RAB6CAR6$#6$$"26$1,
Respondent alleged that;
: : : N.Oo0eti0e in anuar! '""#, Rutillo A, Torres, then the resident 0anager of
respondent AtoF Big Hedge Co,, 7nc,, or AtoF for 3revit!, approached hi0 and
asFed hi0 if he can help the co0pan!9s pro3le0 involving the %$$ 0illion pesos
crop da0age clai0s of the residents living at the 0inesite of AtoF, Ge participated
in a series of dialogues conducted with the residents, (r, Torres offered to pa!
hi0 P1,$$$,$$ per 0onth plus representation e:penses, 7t was also agreed upon
3! hi0 and Torres that his participation in resolving the pro3le0 was te0porar!
and there will 3e no e0plo!er6e0plo!ee relationship 3etween hi0 and AtoF, 7t was
also agreed upon that his co0pensation, allowances and other e:penses will 3e
paid through dis3urse0ent vouchers,
En Be3ruar! ', '""# he @oined AtoF, Ene weeF thereafter, the aggrieved crop
da0age clai0ants 3arricaded the onl! passage to and fro0 the 0inesite, 7n the
earl! 0orning of Be3ruar! ', '""#, a dialogue was 0ade 3! AtoF and the crop
da0age clai0ants, Unfortunatel!, AtoF9s representatives, including hi0, were
virtuall! held hostage 3! the irate clai0ants who de0anded on the spot pa!0ent of
their clai0s, Ge was a3le to convince the clai0ants to release the co0pan!
representatives pending referral of the issue to higher 0anage0ent,
A case was filed in court for the lifting of the 3arricades and the court ordered the
lifting of the 3arricade, Hhile AtoF was prosecuting its case with the clai0ants,
another case erupted involving its partner, Benguet Corporation, After AtoF parted
wa!s with Benguet Corporation, so0e properties acDuired 3! the partnership and
so0e receiva3les 3! Benguet Corporation was the pro3le0, Ge was again
entangled with docu0entation, conferences, 0eetings, planning, e:ecution and
clerical worFs, After two !ears, the controvers! was resolved and AtoF received its
share of the properties of the partnership, which is a3out 5 0illion pesos worth of
eDuip0ent and condonation of AtoF9s accounta3ilities with Benguet Corporation in
the a0ount of P"$$,$$$,$$,
7n the 0eanti0e, crop da0age clai0ants lost interest in pursuing their clai0s
against AtoF and AtoF was relieved of the 3urden of pa!ing %$$ 0illion pesos, 7n
3etween attending the pro3le0s of the crop da0age issue, he was also assigned
to do liaison worFs with the .EC, Bureau of (ines, 0unicipal govern0ent of
7togon, Benguet, the Courts and other govern0ent offices,
After the crop da0age clai0s and the controvers! were resolved, he was
per0anentl! assigned 3! AtoF to taFe charge of so0e liaison 0atters and pu3lic
relations in Baguio and Benguet Province, and to report regularl! to AtoF9s office in
(anila to attend 0eetings and so he had to sta! in (anila at least one weeF a
0onth,
Because of his length of service, he invited the attention of the top officers of the
co0pan! that he is alread! entitled to the 3enefits due an e0plo!ee under the law,
3ut 0anage0ent ignored his reDuests, Gowever, he continued to avail of his
representation e:penses and rei03urse0ent of co0pan!6related e:penses, Ge
also en@o!ed the privilege of securing interest free salar! loans pa!a3le in one !ear
through salar! deduction,
7n the succeeding !ears of his e0plo!0ent, he was designated as liaison officer,
pu3lic relation officer and legal assistant, and to assist in the e@ection of illegal
occupants in the 0ining clai0s of AtoF,
.ince he was getting older, 3eing alread! 5) !ears old, he reiterated his reDuest to
the co0pan! to cause his registration with the ..., Gis reDuest was again ignored
and so he filed a co0plaint with the ..., After filing his co0plaint with the ...,
respondents ter0inated his services,
%
En .epte03er #), #$$1, after the parties have su30itted their respective
pleadings, La3or Ar3iter Rolando &, -a03ito rendered a &ecision
2
ruling in favor
of the petitioner, Binding no e0plo!er6e0plo!ee relationship 3etween petitioner
and respondent, the La3or Ar3iter dis0issed the co0plaint for lacF of 0erit,
Respondent then appealed the decision to the /LRC,
En ul! 1$, #$$4, the /LRC, .econd &ivision, issued a Resolution
"
affir0ing the
decision of the La3or Ar3iter, Respondent filed a (otion for Reconsideration, 3ut it
was denied in the Resolution
'$
dated .epte03er 1$, #$$4,
Aggrieved, respondent filed a petition for review under Rule )5 of the Rules of
Court 3efore the CA Duestioning the decision and resolution of the /LRC, which
was later docFeted as CA6-,R, .P /o, 2%24), 7n support of his petition,
respondent raised the following issues;
a+ Hhether or not the &ecision of the Gonora3le La3or Ar3iter and the
su3seDuent Resolutions of the Gonora3le Pu3lic Respondent affir0ing
the sa0e, are in har0on! with the law and the facts of the caseJ
3+ Hhether or not the Gonora3le La3or Ar3iter Co00itted a -rave A3use
of &iscretion in &is0issing the Co0plaint of Petitioner and whether or not
the Gonora3le Pu3lic Respondent Co00itted a -rave A3use of
&iscretion when it affir0ed the said &ecision,
''
En (a! 1', #$$5, the CA rendered the assailed &ecision annulling and setting
aside the decision of the /LRC, the decretal portion of which reads;
3(ERE5ORE, the petition is GRAN&ED, The assailed Resolution of the /ational
La3or Relations Co00ission dis0issing petitioner4s co0plaint for illegal dis0issal
is ANN/$$ED and 'E& A'IDE, Private respondent AtoF Big Hedge Co0pan!
7ncorporated is ORDERED to reinstate petitioner esus P, -ison to his for0er or
eDuivalent position without loss of seniorit! rights and to pa! hi0 full 3acFwages,
inclusive of allowances and other 3enefits or their 0onetar! eDuivalent co0puted
fro0 the ti0e these were withheld fro0 hi0 up to the ti0e of his actual and
effective reinstate0ent, This case is ordered RE,ANDED to the La3or Ar3iter for
the proper co0putation of 3acFwages, allowances and other 3enefits due to
petitioner, Costs against private respondent AtoF Big Hedge Co0pan!
7ncorporated,
'O ORDERED,
'#
7n ruling in favor of the respondent, the CA opined, a0ong other things, that 3oth
the La3or Ar3iter and the /LRC 0a! have overlooFed Article #2$ of the La3or
Code,
'1
or the provision which distinguishes 3etween two Finds of e0plo!ees, i.e.,
regular and casual e0plo!ees, Appl!ing the provision to the respondent4s case, he
is dee0ed a regular e0plo!ee of the petitioner after the lapse of one !ear fro0 his
e0plo!0ent, Considering also that respondent had 3een perfor0ing services for
the petitioner for eleven !ears, respondent is entitled to the rights and privileges of
a regular e0plo!ee,
The CA added that although there was an agree0ent 3etween the parties that
respondent4s e0plo!0ent would onl! 3e te0porar!, it clearl! appears that
petitioner disregarded the sa0e 3! repeatedl! giving petitioner several tasFs to
perfor0, (oreover, although respondent 0a! have waived his right to attain a
regular status of e0plo!0ent when he agreed to perfor0 these tasFs on a
te0porar! e0plo!0ent status, still, it was the law that recogniIed and considered
hi0 a regular e0plo!ee after his first !ear of rendering service to petitioner, As
such, the waiver was ineffective,
Gence, the petition assigning the following errors;
7, HGETGER ER /ET TGE CEURT EB APPEAL. &EC7&E& PUE.T7E/. EB
.UB.TA/CE CE/TRAR? TE LAH A/& APPL7CABLE RUL7/-. EB TG7.
GE/ERABLE CEURT HGE/ 7T -A5E &UE CEUR.E TE TGE PET7T7E/ BER
CERT7ERAR7 &E.P7TE TGE BACT TGAT TGERE HA. /E .GEH7/- TGAT TGE
/AT7E/AL LABER RELAT7E/. CE((7..7E/ CE((7TTE& -RA5E ABU.E EB
&7.CRET7E/,
77, HGETGER ER /ET TGE CEURT EB APPEAL. &EC7&E& PUE.T7E/. EB
.UB.TA/CE CE/TRAR? TE TGE LAH A/& APPL7CABLE RUL7/-. EB TG7.
GE/ERABLE CEURT HGE/ 7T BA.E& 7T. B7/&7/- TGAT RE.PE/&E/T 7.
E/T7TLE& TE RE-ULAR E(PLE?(E/T E/ A PRE57.7E/ EB LAH TGAT TG7.
GE/ERABLE CEURT GA. &ECLARE& TE BE 7/APPL7CABLE 7/ CA.E TGE
EM7.TE/CE EB A/ E(PLE?ER6E(PLE?EE RELAT7E/.G7P 7. 7/ &7.PUTE
ER 7. TGE BACT 7/ 7..UE,
777, HGETGER ER /ET TGE CEURT EB APPEAL. &EC7&E& PUE.T7E/. EB
.UB.TA/CE CE/TRAR? TE LAH A/& APPL7CABLE RUL7/-. EB TG7.
GE/ERABLE CEURT HGE/ 7T ERRE/EEU.L? BEU/& TGAT RE.PE/&E/T
7. A RE-ULAR E(PLE?EE EB TGE CE(PA/?,
75, HGETGER ER /ET TGE CEURT EB APPEAL. &EC7&E& PUE.T7E/. EB
.UB.TA/CE CE/TRAR? TE LAH A/& APPL7CABLE RUL7/-. EB TG7.
GE/ERABLE CEURT HGE/ 7T ERRE/EEU.L? &7RECTE& RE.PE/&E/T4.
RE7/.TATE(E/T &E.P7TE TGE BACT TGAT TGE /ATURE EB TGE .ER57CE.
GE PRE57&E& TE TGE CE(PA/? HA. .E/.7T75E A/& CE/B7&E/T7AL,
'4
Petitioner argues that since the petition filed 3! the respondent 3efore the CA was
a petition for certiorari under Rule )5 of the Rules of Court, the CA should have
li0ited the issue on whether or not there was grave a3use of discretion on the part
of the /LRC in rendering the resolution affir0ing the decision of the La3or Ar3iter,
Petitioner also posits that the CA erred in appl!ing Article #2$ of the La3or Code in
deter0ining whether there was an e0plo!er6e0plo!ee relationship 3etween the
petitioner and the respondent, Petitioner contends that where the e:istence of an
e0plo!er6e0plo!ee relationship is in dispute, Article #2$ of the La3or Code is
inapplica3le, The said article onl! set the distinction 3etween a casual e0plo!ee
fro0 a regular e0plo!ee for purposes of deter0ining the rights of an e0plo!ee to
3e entitled to certain 3enefits,
Petitioner insists that respondent is not a regular e0plo!ee and not entitled to
reinstate0ent,
En his part, respondent 0aintains that he is an e0plo!ee of the petitioner and that
the CA did not err in ruling in his favor,
The petition is 0eritorious,
At the outset, respondent4s recourse to the CA was the proper re0ed! to Duestion
the resolution of the /LRC, 7t 3ears stressing that there is no appeal fro0 the
decision or resolution of the /LRC, As this Court enunciated in the case of St.
Martin Funeral Home v. NLR,
'5
the special civil action of certiorari under Rule )5
of the Rules of Civil Procedure, which is filed 3efore the CA, is the proper vehicle
for @udicial review of decisions of the /LRC, The petition should 3e initiall! filed
3efore the Court of Appeals in strict o3servance of the doctrine on hierarch! of
courts as the appropriate foru0 for the relief desired,
')
This Court not 3eing a trier
of facts, the resolution of unclear or a03iguous factual findings should 3e left to the
CA as it is procedurall! eDuipped for that purpose, Bro0 the decision of the Court
of Appeals, an ordinar! appeal under Rule 45 of the Rules of Civil Procedure
3efore the .upre0e Court 0a! 3e resorted to 3! the parties, Gence, respondent4s
resort to the CA was appropriate under the circu0stances,
Anent the pri0ordial issue of whether or not an e0plo!er6e0plo!ee relationship
e:ists 3etween petitioner and respondent,
Hell6entrenched is the doctrine that the e:istence of an e0plo!er6e0plo!ee
relationship is ulti0atel! a Duestion of fact and that the findings thereon 3! the
La3or Ar3iter and the /LRC shall 3e accorded not onl! respect 3ut even finalit!
when supported 3! su3stantial evidence,
'%
Being a Duestion of fact, the
deter0ination whether such a relationship e:ists 3etween petitioner and
respondent was well within the province of the La3or Ar3iter and the /LRC, Being
supported 3! su3stantial evidence, such deter0ination should have 3een accorded
great weight 3! the CA in resolving the issue,
To ascertain the e:istence of an e0plo!er6e0plo!ee relationship @urisprudence has
invaria3l! adhered to the four6fold test, to wit; *'+ the selection and engage0ent of
the e0plo!eeJ *#+ the pa!0ent of wagesJ *1+ the power of dis0issalJ and *4+ the
power to control the e0plo!ee4s conduct, or the so6called Acontrol test,A
'2
Ef these
four, the last one is the 0ost i0portant,
'"
The so6called Acontrol testA is co00onl!
regarded as the 0ost crucial and deter0inative indicator of the presence or
a3sence of an e0plo!er6e0plo!ee relationship, Under the control test, an
e0plo!er6e0plo!ee relationship e:ists where the person for who0 the services are
perfor0ed reserves the right to control not onl! the end achieved, 3ut also the
0anner and 0eans to 3e used in reaching that end,
#$
Appl!ing the afore0entioned test, an e0plo!er6e0plo!ee relationship is apparentl!
a3sent in the case at 3ar, A0ong other things, respondent was not reDuired to
report ever!da! during regular office hours of petitioner, Respondent4s 0onthl!
retainer fees were paid to hi0 either at his residence or a local restaurant, (ore
i0portantl!, petitioner did not prescri3e the 0anner in which respondent would
acco0plish an! of the tasFs in which his e:pertise as a liaison officer was neededJ
respondent was left alone and given the freedo0 to acco0plish the tasFs using his
own 0eans and 0ethod, Respondent was assigned tasFs to perfor0, 3ut petitioner
did not control the 0anner and 0ethods 3! which respondent perfor0ed these
tasFs, 5eril!, the a3sence of the ele0ent of control on the part of the petitioner
engenders a conclusion that he is not an e0plo!ee of the petitioner,
(oreover, the a3sence of the parties4 retainership agree0ent notwithstanding,
respondent clearl! ad0itted that petitioner hired hi0 in a li0ited capacit! onl! and
that there will 3e no e0plo!er6e0plo!ee relationship 3etween the0, As averred in
respondent4s Position Paper;
#'
#, Bor the participation of co0plainant regarding this particular pro3le0 of AtoF, (r,
Torres offered hi0 a pa! in the a0ount of Php1,$$$,$$ per 0onth plus
representation e:penses, !t was also a"ree# $% Mr. &orres an# the complainant
that his participation on this particular pro$lem of 'to( will $e temporar% since the
pro$lem was then contemplate# to $e limite# in nature) hence) there will $e no
emplo%er*emplo%ee relationship $etween him an# 'to(, Co0plainant agreed on
this arrange0ent, 7t was also agreed that co0plainant4s co0pensations,
allowances, representation e:penses and rei03urse0ent of co0pan!6 related
e:penses will 3e processed and paid through dis3urse0ent vouchersJ
##
Respondent was well aware of the agree0ent that he was hired 0erel! as a liaison
or consultant of the petitioner and he agreed to perfor0 tasFs for the petitioner on
a te0porar! e0plo!0ent status onl!, Gowever, respondent anchors his clai0 that
he 3eca0e a regular e0plo!ee of the petitioner 3ased on his contention that the
Ate0porar!A aspect of his @o3 and its Ali0itedA nature could not have lasted for
eleven !ears unless so0e ti0e during that period, he 3eca0e a regular e0plo!ee
of the petitioner 3! continuall! perfor0ing services for the co0pan!,
Contrar! to the conclusion of the CA, respondent is not an e0plo!ee, 0uch 0ore a
regular e0plo!ee of petitioner, The appellate court4s pre0ise that regular
e0plo!ees are those who perfor0 activities which are desira3le and necessar! for
the 3usiness of the e0plo!er is not deter0inative in this case, 7n fact, an!
agree0ent 0a! provide that one part! shall render services for and in 3ehalf of
another, no 0atter how necessar! for the latter4s 3usiness, even without 3eing
hired as an e0plo!ee,
#1
Gence, respondent4s length of service and petitioner4s
repeated act of assigning respondent so0e tasFs to 3e perfor0ed did not result to
respondent4s entitle0ent to the rights and privileges of a regular e0plo!ee,
Burther0ore, despite the fact that petitioner 0ade use of the services of
respondent for eleven !ears, he still cannot 3e considered as a regular e0plo!ee
of petitioner, Article #2$ of the La3or Code, in which the lower court used to
3uttress its findings that respondent 3eca0e a regular e0plo!ee of the petitioner,
is not applica3le in the case at 3ar, 7ndeed, the Court has ruled that said provision
is not the !ardsticF for deter0ining the e:istence of an e0plo!0ent relationship
3ecause it 0erel! distinguishes 3etween two Finds of e0plo!ees, i,e,, regular
e0plo!ees and casual e0plo!ees, for purposes of deter0ining the right of an
e0plo!ee to certain 3enefits, to @oin or for0 a union, or to securit! of tenureJ it does
not appl! where the e:istence of an e0plo!0ent relationship is in dispute,
#4
7t is,
therefore, erroneous on the part of the Court of Appeals to rel! on Article #2$ in
deter0ining whether an e0plo!er6e0plo!ee relationship e:ists 3etween
respondent and the petitioner
Considering that there is no e0plo!er6e0plo!ee relationship 3etween the parties,
the ter0ination of respondent4s services 3! the petitioner after due notice did not
constitute illegal dis0issal warranting his reinstate0ent and the pa!0ent of full
3acFwages, allowances and other 3enefits,
HGEREBERE, pre0ises considered, the petition is -RA/TE&, The &ecision and
the Resolution of the Court of Appeals in CA6-,R, .P /o, 2%24), are RE5ER.E&
and .ET A.7&E, The Resolutions dated ul! 1$, #$$4 and .epte03er 1$, #$$4 of
the /ational La3or Relations Co00ission are RE7/.TATE&,
.E ER&ERE&,
G.R. No. 116881 5e6r*.r2 5, 2007
COCA CO$A %O&&$ER' 7P(I$'.8, INC.9ERIC ,ON&INO$A,
,..+er, Petitioners,
vs,
DR. DEAN N. C$I,ACO, Respondent,
& E C 7 . 7 E /
A0C/NA, J.:
This is a petition for review on certiorari of the &ecision of the Court of
Appeals
'
pro0ulgated on ul! %, #$$$, and its Resolution pro0ulgated on anuar!
1$, #$$', den!ing petitioner9s 0otion for reconsideration, The Court of Appeals
ruled that an e0plo!er6e0plo!ee relationship e:ists 3etween respondent &r, &ean
/, Cli0aco and petitioner Coca6Cola Bottlers Phils,, 7nc, *Coca6Cola+, and that
respondent was illegall! dis0issed,
Respondent &r, &ean /, Cli0aco is a 0edical doctor who was hired 3! petitioner
Coca6Cola Bottlers Phils,, 7nc, 3! virtue of a Retainer Agree0ent that stated;
HGEREA., the CE(PA/? desires to engage on a retainer 3asis the services of a
ph!sician and the said &ECTER is accepting such engage0ent upon ter0s and
conditions hereinafter set forthJ
/EH, TGEREBERE, in consideration of the pre0ises and the 0utual agree0ent
hereinafter contained, the parties agree as follows;
', This Agree0ent shall onl! 3e for a period of one *'+ !ear
3eginning anuar! ', '"22 up to &ece03er 1', '"22, The said ter0
notwithstanding, either part! 0a! ter0inate the contract upon giving a
thirt! *1$+6da! written notice to the other,
#, The co0pensation to 3e paid 3! the co0pan! for the services of the
&ECTER is here3! fi:ed at PE.E.;Three Thousand Eight Gundred
*P 1,2$$,$$+ per 0onth, The &ECTER 0a! charge professional fee for
hospital services rendered in line with his specialiIation, All pa!0ents in
connection with the Retainer Agree0ent shall 3e su3@ect to a withholding
ta: of ten percent *'$L+ to 3e withheld 3! the CE(PA/? under the
E:panded Hithholding Ta: .!ste0, 7n the event the withholding ta: rate
shall 3e increased or decreased 3! appropriate laws, then the rate herein
stipulated shall accordingl! 3e increased or decreased pursuant to such
laws,
1, That in consideration of the a3ove 0entioned retainer9s fee, the
&ECTER agrees to perfor0 the duties and o3ligations enu0erated in the
CE(PREGE/.75E (E&7CAL PLA/, hereto attached as Anne: AAA and
0ade an integral part of this Retainer Agree0ent,
4, That the applica3le provisions in the Eccupational .afet! and Gealth
.tandards, (inistr! of La3or and E0plo!0ent shall 3e followed,
5, That the &ECTER shall 3e directl! responsi3le to the e0plo!ee
concerned and their dependents for an! in@ur! inflicted on, har0 done
against or da0age caused upon the e0plo!ee of the CE(PA/? or their
dependents during the course of his e:a0ination, treat0ent or
consultation, if such in@ur!, har0 or da0age was co00itted through
professional negligence or inco0petence or due to the other valid causes
for action,
), That the &ECTER shall o3serve clinic hours at the CE(PA/?9.
pre0ises fro0 (onda! to .aturda! of a 0ini0u0 of two *#+ hours each
da! or a 0a:i0u0 of THE *#+ hours each da! or treat0ent
fro0 %;1$ a,0, to2;1$ a,0, and 1;$$ p,0, to 4;$$ p,0,, respectivel! unless
such schedule is otherwise changed 3! the CE(PA/? as NtheO situation
so warrants, su3@ect to the La3or Code provisions on Eccupational .afet!
and Gealth .tandards as the CE(PA/? 0a! deter0ine, 7t is understood
that the &ECTER shall sta! at least two *#+ hours a da! in the CE(PA/?
clinic and that such two *#+ hours 3e devoted to the worFshift with the
0ost nu03er of e0plo!ees, 7t is further understood that the &ECTER
shall 3e on call at all ti0es during the other worFshifts to attend to
e0ergenc! caseNsOJ
%, That no e0plo!ee6e0plo!er relationship shall e:ist 3etween the
CE(PA/? and the &ECTER whilst this contract is in effect, and in case
of its ter0ination, the &ECTER shall 3e entitled onl! to such retainer fee
as 0a! 3e due hi0 at the ti0e of ter0ination,
#
The Co0prehensive (edical Plan,
1
which contains the duties and responsi3ilities
of respondent, adverted to in the Retainer Agree0ent, provided;
A, EBECT75E
These o3@ectives have 3een set to give full consideration to NtheO e0plo!ees9 and
dependents9 health;
', Pro0pt and adeDuate treat0ent of occupational and non6occupational
in@uries and diseases,
#, To protect e0plo!ees fro0 an! occupational health haIard 3!
evaluating health factors related to worFing conditions,
1, To encourage e0plo!ees NtoO 0aintain good personal health 3! setting
up e0plo!ee orientation and education on health, h!giene and sanitation,
nutrition, ph!sical fitness, first aid training, accident prevention and
personnel safet!,
4, To evaluate other 0atters relating to health such as a3senteeis0,
leaves and ter0ination,
5, To give fa0il! planning 0otivations,
B, CE5ERA-E
', All e0plo!ees and their dependents are e03raced 3! this progra0,
#, The health progra0 shall cover pre6e0plo!0ent and annual p,e,,
h!giene and sanitation, i00uniIations, fa0il! planning, ph!sical fitness
and athletic progra0s and other activities such as group health education
progra0, safet! and first aid classes, organiIation of health and safet!
co00ittees,
1, Periodicall!, this progra0 will 3e reviewed and ad@usted 3ased on
e0plo!ees9 needs,
C, ACT757T7E.
', Annual Ph!sical E:a0ination,
#, Consultations, diagnosis and treat0ent of occupational and non6
occupational illnesses and in@uries,
1, 700uniIations necessar! for @o3 conditions,
4, Periodic inspections for food services and rest roo0s,
5, Conduct health education progra0s and present education 0aterials,
), Coordinate with .afet! Co00ittee in developing specific studies and
progra0 to 0ini0iIe environ0ental health haIards,
%, -ive fa0il! planning 0otivations,
2, Coordinate with Personnel &epart0ent regarding ph!sical fitness and
athletic progra0s,
", 5isiting and follow6up treat0ent of Co0pan! e0plo!ees and their
dependents confined in the hospital,
The Retainer Agree0ent, which 3egan on anuar! ', '"22, was renewed annuall!,
The last one e:pired on &ece03er 1', '""1, &espite the non6renewal of the
Retainer Agree0ent, respondent continued to perfor0 his functions as co0pan!
doctor to Coca6Cola until he received a letter
4
dated (arch ", '""5 fro0 petitioner
co0pan! concluding their retainership agree0ent effective 1$ da!s fro0 receipt
thereof,
7t is noted that as earl! as .epte03er '""#, petitioner was alread! 0aFing
inDuiries regarding his status with petitioner co0pan!, Birst, he wrote a letter
addressed to &r, Hillie .!, the Acting President and Chairperson of the Co00ittee
on (e03ership, Philippine College of Eccupational (edicine, 7n response, &r, .!
wrote a letter
5
to the Personnel Efficer of Coca6Cola Bottlers Phils,, Bacolod Cit!,
stating that respondent should 3e considered as a regular part6ti0e ph!sician,
having served the co0pan! continuousl! for four *4+ !ears, Ge liFewise stated that
respondent 0ust receive all the 3enefits and privileges of an e0plo!ee under
Article '5% *3+
)
of the La3or Code,
Petitioner co0pan!, however, did not taFe an! action, Gence, respondent 0ade
another inDuir! directed to the Assistant Regional &irector, Bacolod Cit! &istrict
Effice of the &epart0ent of La3or and E0plo!0ent *&ELE+, who referred the
inDuir! to the Legal .ervice of the &ELE, (anila, 7n his letter
%
dated (a! '2, '""1,
&irector &ennis P, Ancheta, Legal .ervice, &ELE, stated that he 3elieved that an
e0plo!er6e0plo!ee relationship e:isted 3etween petitioner and respondent 3ased
on the Retainer Agree0ent and the Co0prehensive (edical Plan, and the
application of the Afour6foldA test, Gowever, &irector Ancheta e0phasiIed that the
e:istence of e0plo!er6e0plo!ee relationship is a Duestion of fact, Gence,
ter0ination disputes or 0one! clai0s arising fro0 e0plo!er6e0plo!ee relations
e:ceeding P5,$$$ 0a! 3e filed with the /ational La3or Relations Co00ission
*/LRC+, Ge stated that their opinion is strictl! advisor!,
An inDuir! was liFewise addressed to the .ocial .ecurit! .!ste0 *...+,
Thereafter, (r, Ro0eo R, Tupas, E7C6B7& of ...6Bacolod Cit!, wrote a letter
2
to
the Personnel Efficer of Coca6Cola Bottlers Phils,, 7nc, infor0ing the latter that the
legal staff of his office was of the opinion that the services of respondent partaFe of
the nature of worF of a regular co0pan! doctor and that he was, therefore, su3@ect
to social securit! coverage,
Respondent inDuired fro0 the 0anage0ent of petitioner co0pan! whether it was
agreea3le to recogniIing hi0 as a regular e0plo!ee, The 0anage0ent refused to
do so,
En Be3ruar! #4, '""4, respondent filed a Co0plaint
"
3efore the /LRC, Bacolod
Cit!, seeFing recognition as a regular e0plo!ee of petitioner co0pan! and pra!ed
for the pa!0ent of all 3enefits of a regular e0plo!ee, including '1th (onth Pa!,
Cost of Living Allowance, Golida! Pa!, .ervice 7ncentive Leave Pa!, and Christ0as
Bonus, The case was docFeted as RAB Case /o, $)6$#6'$'126"4,
Hhile the co0plaint was pending 3efore the La3or Ar3iter, respondent received a
letter dated (arch ", '""5 fro0 petitioner co0pan! concluding their retainership
agree0ent effective thirt! *1$+ da!s fro0 receipt thereof, This pro0pted
respondent to file a co0plaint for illegal dis0issal against petitioner co0pan! with
the /LRC, Bacolod Cit!, The case was docFeted as RAB Case /o, $)6$46'$'%%6
"5,
7n a &ecision
'$
dated /ove03er #2, '""), La3or Ar3iter esus /, RodrigueI, r,
found that petitioner co0pan! lacFed the power of control over respondent9s
perfor0ance of his duties, and recogniIed as valid the Retainer Agree0ent
3etween the parties, Thus, the La3or Ar3iter dis0issed respondent9s co0plaint in
the first case, RAB Case /o, $)6$#6'$'126"4, The dispositive portion of the
&ecision reads;
HGEREBERE, pre0ises considered, @udg0ent is here3! rendered dis0issing the
instant co0plaint seeFing recognition as a regular e0plo!ee,
.E ER&ERE&,
''
7n a &ecision
'#
dated Be3ruar! #4, '""%, La3or Ar3iter Ben@a0in PelaeI dis0issed
the case for illegal dis0issal *RAB Case /o, $)6$46'$'%%6"5+ in view of the
previous finding of La3or Ar3iter esus /, RodrigueI, r, in RAB Case /o, $)6$#6
'$'126"4 that co0plainant therein, &r, &ean Cli0aco, is not an e0plo!ee of Coca6
Cola Bottlers Phils,, 7nc,
Respondent appealed 3oth decisions to the /LRC, Bourth &ivision, Ce3u Cit!,
7n a &ecision
'1
pro0ulgated on /ove03er #2, '""%, the /LRC dis0issed the
appeal in 3oth cases for lacF of 0erit, 7t declared that no e0plo!er6e0plo!ee
relationship e:isted 3etween petitioner co0pan! and respondent 3ased on the
provisions of the Retainer Agree0ent which contract governed respondent9s
e0plo!0ent,
Respondent9s 0otion for reconsideration was denied 3! the /LRC in a
Resolution
'4
pro0ulgated on August %, '""2,
Respondent filed a petition for review with the Court of Appeals,
7n a &ecision pro0ulgated on ul! %, #$$$, the Court of Appeals ruled that an
e0plo!er6e0plo!ee relationship e:isted 3etween petitioner co0pan! and
respondent after appl!ing the four6fold test; *'+ the power to hire the e0plo!eeJ *#+
the pa!0ent of wagesJ *1+ the power of dis0issalJ and *4+ the e0plo!er9s power to
control the e0plo!ee with respect to the 0eans and 0ethods 3! which the worF is
to 3e acco0plished,
The Court of Appeals held;
The Retainer Agree0ent e:ecuted 3! and 3etween the parties, when read together
with the Co0prehensive (edical Plan which was 0ade an integral part of the
retainer agree0ents, coupled with the actual services rendered 3! the petitioner,
would show that all the ele0ents of the a3ove test are present,
Birst, the agree0ents provide that Athe CE(PA/? desires to engage on a retainer
3asis the services of a ph!sician and the said &ECTER is accepting such
engage0ent : : :A *Rollo, p.+e 25+, This clearl! shows that Coca6Cola e:ercised
its power to hire the services of petitioner,
.econdl!, paragraph *#+ of the agree0ents showed that petitioner would 3e
entitled to a final co0pensation of Three Thousand Eight Gundred Pesos per
0onth, which a0ount was later raised to .even Thousand Bive Gundred on the
latest contract, This would represent the ele0ent of pa!0ent of wages,
Thirdl!, it was provided in paragraph *'+ of the agree0ents that the sa0e shall 3e
valid for a period of one !ear, AThe said ter0 notwithstanding, either part! 0a!
ter0inate the contract upon giving a thirt! *1$+ da! written notice to the
other,A 7Rollo, p.+e 258, This would show that Coca6Cola had the power of
dis0issing the petitioner, as it later on did, and this could 3e done for no particular
reason, the sole reDuire0ent 3eing the for0er9s co0pliance with the 1$6da! notice
reDuire0ent,
Lastl!, paragraphs *1+ and *)+ of the agree0ents reveal that Coca6Cola e:ercised
the 0ost i0portant ele0ent of all, that is, control, over the conduct of petitioner in
the latter9s perfor0ance of his duties as a doctor for the co0pan!,
7t was stated in paragraph *1+ that the doctor agrees to perfor0 the duties and
o3ligations enu0erated in the Co0prehensive (edical Plan referred to a3ove, 7n
paragraph *)+, the fi:ed and definite hours during which the petitioner 0ust render
service to the co0pan! is laid down,
He sa! that there e:ists Coca6Cola9s power to control petitioner 3ecause the
particular o3@ectives and activities to 3e o3served and acco0plished 3! the latter
are fi:ed and set under the Co0prehensive (edical Plan which was 0ade an
integral part of the retainer agree0ent, (oreover, the ti0es for acco0plishing
these o3@ectives and activities are liFewise controlled and deter0ined 3! the
co0pan!, Petitioner is su3@ect to definite hours of worF, and due to this, he
perfor0s his duties to Coca6Cola not at his own pleasure 3ut according to the
schedule dictated 3! the co0pan!,
7n addition, petitioner was designated 3! Coca6Cola to 3e a 0e03er of its Bacolod
Plant9s .afet! Co00ittee, The 0inutes of the 0eeting of the said co00ittee dated
Be3ruar! '), '""4 included the na0e of petitioner, as plant ph!sician, as a0ong
those co0prising the co00ittee,
7t was averred 3! Coca6Cola in its co00ent that the! e:ercised no control over
petitioner for the reason that the latter was not directed as to the procedure and
0anner of perfor0ing his assigned tasFs, 7t went as far as sa!ing that Apetitioner
was not told how to i00uniIe, in@ect, treat or diagnose the e0plo!ees of the
respondent *Rollo, p.+e 228+, He 3elieve that if the Acontrol testA would 3e
interpreted this strictl!, it would result in an a3surd and ridiculous situation wherein
we could declare that an entit! e:ercises control over another9s activities onl! in
instances where the latter is directed 3! the for0er on each and ever! stage of
perfor0ance of the particular activit!, An!thing less than that would 3e tanta0ount
to no control at all,
To our 0inds, it is sufficient if the tasF or activit!, as well as the 0eans of
acco0plishing it, is dictated, as in this case where the o3@ectives and activities
were laid out, and the specific ti0e for perfor0ing the0 was fi:ed 3! the controlling
part!,
'5
(oreover, the Court of Appeals declared that respondent should 3e classified as a
regular e0plo!ee having rendered si: !ears of service as plant ph!sician 3! virtue
of several renewed retainer agree0ents, 7t underscored the provision in Article
#2$
')
of the La3or Code stating that Aan! e0plo!ee who has rendered at least one
!ear of service, whether such service is continuous or 3roFen, shall 3e considered
a regular e0plo!ee with respect to the activit! in which he is e0plo!ed, and his
e0plo!0ent shall continue while such activit! e:ists,A Burther, it held that the
ter0ination of respondent9s services without an! @ust or authoriIed cause
constituted illegal dis0issal,
7n addition, the Court of Appeals found that respondent9s dis0issal was an act
oppressive to la3or and was effected in a wanton, oppressive or 0alevolent
0anner which entitled respondent to 0oral and e:e0plar! da0ages,
The dispositive portion of the &ecision reads;
HGEREBERE, in view of the foregoing, the &ecision of the /ational La3or
Relations Co00ission dated /ove03er #2, '""% and its Resolution dated August
%, '""2 are found to have 3een issued with grave a3use of discretion in appl!ing
the law to the esta3lished facts, and are here3! RE5ER.E& and .ET A.7&E, and
private respondent Coca6Cola Bottlers, Phils,, 7nc, is here3! ordered to;
', Reinstate the petitioner with full 3acFwages without loss of seniorit!
rights fro0 the ti0e his co0pensation was withheld up to the ti0e he is
actuall! reinstatedJ however, if reinstate0ent is no longer possi3le, to pa!
the petitioner separation pa! eDuivalent to one *'+ 0onth9s salar! for
ever! !ear of service rendered, co0puted at the rate of his salar! at the
ti0e he was dis0issed, plus 3acFwages,
#, Pa! petitioner 0oral da0ages in the a0ount of P5$,$$$,$$,
1, Pa! petitioner e:e0plar! da0ages in the a0ount of P5$,$$$,$$,
4, -ive to petitioner all other 3enefits to which a regular e0plo!ee of
Coca6Cola is entitled fro0 the ti0e petitioner 3eca0e a regular e0plo!ee
*one !ear fro0 effectivit! date of e0plo!0ent+ until the ti0e of actual
pa!0ent,
.E ER&ERE&,
'%
Petitioner co0pan! filed a 0otion for reconsideration of the &ecision of the Court
of Appeals,
7n a Resolution pro0ulgated on anuar! 1$, #$$', the Court of Appeals stated that
petitioner co0pan! noted that its &ecision failed to 0ention whether respondent
was a full6ti0e or part6ti0e regular e0plo!ee, 7t also Duestioned how the 3enefits
under their Collective Bargaining Agree0ent which the Court awarded to
respondent could 3e given to hi0 considering that such 3enefits were given onl! to
regular e0plo!ees who render a full da!9s worF of not less that eight hours, 7t was
ad0itted that respondent is onl! reDuired to worF for two hours per da!,
The Court of Appeals clarified that respondent was a Aregular part6ti0e e0plo!ee
and should 3e accorded all the proportionate 3enefits due to this categor! of
e0plo!ees of NpetitionerO Corporation under the CBA,A 7t sustained its decision on
all other 0atters sought to 3e reconsidered,
Gence, this petition filed 3! Coca6Cola Bottlers Phils,, 7nc,
The issues are;
', TGAT TGE GE/ERABLE CEURT EB APPEAL. CE((7TTE&
RE5ER.7BLE ERRER, BA.E& E/ A .UB.TA/T7AL PUE.T7E/ EB
LAH, 7/ RE5ER.7/- TGE B7/&7/-. EB TGE LABER ARB7TER. A/&
TGE /AT7E/AL LABER RELAT7E/. CE((7..7E/, CE/TRAR? TE
TGE &EC7.7E/. EB TGE GE/ERABLE .UPRE(E CEURT E/ TGE
(ATTER,
#, TGAT TGE GE/ERABLE CEURT EB APPEAL. CE((7TTE&
RE5ER.7BLE ERRER, BA.E& E/ A .UB.TA/T7AL PUE.T7E/ EB
LAH, 7/ RE5ER.7/- TGE B7/&7/-. EB TGE LABER ARB7TER. A/&
TGE /AT7E/AL LABER RELAT7E/. CE((7..7E/, A/& GEL&7/-
7/.TEA& TGAT TGE HERQ EB A PG?.7C7A/ 7. /ECE..AR? A/&
&E.7RABLE TE TGE BU.7/E.. EB .EBT&R7/Q. (A/UBACTUR7/-,
CE/TRAR? TE TGE RUL7/-. EB TGE .UPRE(E CEURT 7/
A/ALE-EU. CA.E.,
1, TGAT TGE GE/ERABLE CEURT EB APPEAL. CE((7TTE&
RE5ER.7BLE ERRER, BA.E& E/ A .UB.TA/T7AL PUE.T7E/ EB
LAH, 7/ RE5ER.7/- TGE B7/&7/-. EB TGE LABER ARB7TER. A/&
TGE /AT7E/AL LABER RELAT7E/. CE((7..7E/, A/& GEL&7/-
7/.TEA& TGAT TGE PET7T7E/ER. EMERC7.E& CE/TREL E5ER
TGE HERQ EB TGE RE.PE/&E/T,
4, TGAT TGE GE/ERABLE CEURT EB APPEAL. CE((7TTE&
RE5ER.7BLE ERRER, BA.E& E/ A .UB.TA/T7AL PUE.T7E/ EB
LAH, 7/ RE5ER.7/- TGE B7/&7/-. EB TGE LABER ARB7TER. A/&
TGE /AT7E/AL LABER RELAT7E/. CE((7..7E/, A/& B7/&7/-
TGAT TGERE 7. E(PLE?ER6E(PLE?EE RELAT7E/.G7P PUR.UA/T
TE ART7CLE #2$ EB TGE LABER CE&E,
5, TGAT TGE GE/ERABLE CEURT EB APPEAL. CE((7TTE&
RE5ER.7BLE ERRER, BA.E& E/ A .UB.TA/T7AL PUE.T7E/ EB
LAH, 7/ RE5ER.7/- TGE B7/&7/-. EB TGE LABER ARB7TER. A/&
TGE /AT7E/AL LABER RELAT7E/. CE((7..7E/, A/& B7/&7/-
TGAT TGERE EM7.TE& 7LLE-AL &7.(7..AL HGE/ TGE E(PLE?E/T
EB TGE RE.PE/&E/T HA. TER(7/ATE& H7TGEUT U.T CAU.E,
), TGAT TGE GE/ERABLE CEURT EB APPEAL. CE((7TTE&
RE5ER.7BLE ERRER, BA.E& E/ A .UB.TA/T7AL PUE.T7E/ EB
LAH, 7/ RE5ER.7/- TGE B7/&7/-. EB TGE LABER ARB7TER. A/&
TGE /AT7E/AL LABER RELAT7E/. CE((7..7E/, A/& B7/&7/-
TGAT TGE RE.PE/&E/T 7. A RE-ULAR PART T7(E E(PLE?EE
HGE 7. E/T7TLE& TE PREPERT7E/ATE BE/EB7T. A. A RE-ULAR
PART T7(E E(PLE?EE ACCER&7/- TE TGE PET7T7E/ER.9 CBA,
%, TGAT TGE GE/ERABLE CEURT EB APPEAL. CE((7TTE&
RE5ER.7BLE ERRER, BA.E& E/ A .UB.TA/T7AL PUE.T7E/ EB
LAH, 7/ RE5ER.7/- TGE B7/&7/-. EB TGE LABER ARB7TER. A/&
TGE /AT7E/AL LABER RELAT7E/. CE((7..7E/, A/& B7/&7/-
TGAT TGE RE.PE/&E/T 7. E/T7TLE& TE (ERAL A/& EME(PLAR?
&A(A-E.,
The 0ain issue in this case is whether or not there e:ists an e0plo!er6e0plo!ee
relationship 3etween the parties, The resolution of the 0ain issue will deter0ine
whether the ter0ination of respondent9s e0plo!0ent is illegal,
The Court, in deter0ining the e:istence of an e0plo!er6e0plo!ee relationship, has
invaria3l! adhered to the four6fold test; *'+ the selection and engage0ent of the
e0plo!eeJ *#+ the pa!0ent of wagesJ *1+ the power of dis0issalJ and *4+ the power
to control the e0plo!ee9s conduct, or the so6called Acontrol test,A considered to 3e
the 0ost i0portant ele0ent,
'2
The Court agrees with the finding of the La3or Ar3iter and the /LRC that the
circu0stances of this case show that no e0plo!er6e0plo!ee relationship e:ists
3etween the parties, The La3or Ar3iter and the /LRC correctl! found that
petitioner co0pan! lacFed the power of control over the perfor0ance 3!
respondent of his duties, The La3or Ar3iter reasoned that the Co0prehensive
(edical Plan, which contains the respondent9s o3@ectives, duties and o3ligations,
does not tell respondent Ahow to conduct his ph!sical e:a0ination, how to
i00uniIe, or how to diagnose and treat his patients, e0plo!ees of NpetitionerO
co0pan!, in each case,A Ge liFened this case to that ofNeri v. National La$or
Relations ommission,
'"
which held;
7n the case of petitioner /eri, it is ad0itted that BEBTC issued a @o3 description
which detailed her functions as a radioCtele: operator, Gowever, a cursor! reading
of the @o3 description shows that what was sought to 3e controlled 3! BEBTC was
actuall! the end result of the tasF, e,g,, that the dail! inco0ing and outgoing
telegraphic transfer of funds received and rela!ed 3! her, respectivel!, tallies with
that of the register, The guidelines were laid down 0erel! to ensure that the
desired end result was achieved, 7t did not, however, tell /eri how the radioCtele:
0achine should 3e operated,
7n effect, the La3or Ar3iter held that petitioner co0pan!, through the
Co0prehensive (edical Plan, provided guidelines 0erel! to ensure that the end
result was achieved, 3ut did not control the 0eans and 0ethods 3! which
respondent perfor0ed his assigned tasFs,
The /LRC affir0ed the findings of the La3or Ar3iter and stated that it is precisel!
3ecause the co0pan! lacFs the power of control that the contract provides that
respondent shall 3e directl! responsi3le to the e0plo!ee concerned and their
dependents for an! in@ur!, har0 or da0age caused through professional
negligence, inco0petence or other valid causes of action,
The La3or Ar3iter also correctl! found that the provision in the Retainer Agree0ent
that respondent was on call during e0ergenc! cases did not 0aFe hi0 a regular
e0plo!ee, Ge e:plained, thus;
LiFewise, the allegation of co0plainant that since he is on call at an!ti0e of the
da! and night 0aFes hi0 a regular e0plo!ee is off6tangent, Co0plainant does not
dispute the fact that outside of the two *#+ hours that he is reDuired to 3e at
respondent co0pan!9s pre0ises, he is not at all further reDuired to @ust sit around
in the pre0ises and wait for an e0ergenc! to occur so as to ena3le hi0 fro0 using
such hours for his own 3enefit and advantage, 7n fact, co0plainant 0aintains his
own private clinic attending to his private practice in the cit!, where he services his
patients, 3ills the0 accordingl! 66 and if it is an e0plo!ee of respondent co0pan!
who is attended to 3! hi0 for special treat0ent that needs hospitaliIation or
operation, this is su3@ect to a special 3illing, (ore often than not, an e0plo!ee is
reDuired to sta! in the e0plo!er9s worFplace or pro:i0atel! close thereto that he
cannot utiliIe his ti0e effectivel! and gainfull! for his own purpose, .uch is not the
prevailing situation here,1awphi1.net
7n addition, the Court finds that the schedule of worF and the reDuire0ent to 3e on
call for e0ergenc! cases do not a0ount to such control, 3ut are necessar!
incidents to the Retainership Agree0ent,
The Court also notes that the Retainership Agree0ent granted to 3oth parties the
power to ter0inate their relationship upon giving a 1$6da! notice, Gence, petitioner
co0pan! did not wield the sole power of dis0issal or ter0ination,
The Court agrees with the La3or Ar3iter and the /LRC that there is nothing wrong
with the e0plo!0ent of respondent as a retained ph!sician of petitioner co0pan!
and upholds the validit! of the Retainership Agree0ent which clearl! stated that no
e0plo!er6e0plo!ee relationship e:isted 3etween the parties, The Agree0ent also
stated that it was onl! for a period of ' !ear 3eginning anuar! ', '"22 to
&ece03er 1', '""2, 3ut it was renewed on a !earl! 3asis,
Considering that there is no e0plo!er6e0plo!ee relationship 3etween the parties,
the ter0ination of the Retainership Agree0ent, which is in accordance with the
provisions of the Agree0ent, does not constitute illegal dis0issal of respondent,
ConseDuentl!, there is no 3asis for the 0oral and e:e0plar! da0ages granted 3!
the Court of Appeals to respondent due to his alleged illegal dis0issal,
HGEREBERE, the petition is -RA/TE& and the &ecision and Resolution of the
Court of Appeals are RE5ER.E& and .ET A.7&E, The &ecision and Resolution
dated /ove03er #2, '""% and August %, '""2, respectivel!, of the /ational La3or
Relations Co00ission are RE7/.TATE&,
/o costs,
.E ER&ERE&,
G.R. No. 155207 August 1! 2008
"ILHELMINA S. ORO#CO! pettoner,
vs.
THE $I$TH %IVISION O$ THE HONORA&LE COURT O$ APPEALS!
PHILIPPINE %AILY IN'UIRER! ()* LETICIA +IMENE#
MAGSANOC! respondents.
% E C I S I O N
NACHURA! J.,
The case before ths Court rases a nove queston never before decded
n our |ursdcton - whether a newspaper coumnst s an empoyee of
the newspaper whch pubshes the coumn.
In ths Petton for Revew under Rue 45 of the Revsed Rues on Cv
Procedure, pettoner Whemna S. Orozco assas the Decson
1
of the
Court of Appeas (CA) n CA-G.R. SP No. 50970 dated |une 11, 2002 and
ts Resouton
2
dated September 11, 2002 denyng her Moton for
Reconsderaton. The CA reversed and set asde the Decson
3
of the
Natona Labor Reatons Commsson (NLRC), whch n turn had amrmed
the Decson
4
of the Labor Arbter ndng that Orozco was an empoyee
of prvate respondent $hi!ippine Dai!* In6uirer (PDI) and was egay
dsmssed as coumnst of sad newspaper.
In March 1990, PDI engaged the servces of pettoner to wrte a weeky
coumn for ts Lfestye secton. She regousy submtted her artces
every week, except for a sx-month stnt n New York Cty when she,
nonetheess, sent severa artces through ma. She receved
compensaton of P250.00 - ater ncreased to P300.00 - for every
coumn pubshed.
5
On November 7, 1992, pettoners coumn appeared n the PDI for the
ast tme. Pettoner cams that her then edtor, Ms. Lta T. Logarta,
6
tod
her that respondent Letca |menez Magsanoc, PDI Edtor n Chef,
wanted to stop pubshng her coumn for no reason at a and advsed
pettoner to tak to Magsanoc hersef. Pettoner narrates that when she
taked to Magsanoc, the atter nformed her that t was PDI Charperson
Eugena Aposto who had asked to stop pubcaton of her coumn, but
that n a teephone conversaton wth Aposto, the atter sad that
Magsanoc nformed her (Aposto) that the Lfestye secton aready had
many coumnsts.
7
On the other hand, PDI cams that n |une 1991, Magsanoc met wth the
Lfestye secton edtor to dscuss how to mprove sad secton. They
agreed to cut down the number of coumnsts by keepng ony those
whose coumns were we-wrtten, wth reguar feedback and foowng.
In ther |udgment, pettoners coumn faed to mprove, contnued to be
supercay and poory wrtten, and faed to meet the hgh standards of
the newspaper. Hence, they decded to termnate pettoners coumn.
8
Aggreved by the newspapers acton, pettoner ed a compant for
ega dsmssa, backwages, mora and exempary damages, and other
money cams before the NLRC.
On October 29, 1993, Labor Arbter Arthur Amansec rendered a
Decson n favor of pettoner, the dspostve porton of whch
reads:
WHEREFORE, |udgment s hereby rendered, ndng companant
to be an empoyee of respondent company; orderng respondent
company to renstate her to her former or equvaent poston,
wth backwages.
Respondent company s aso ordered to pay her 13
th
month pay
and servce ncentve eave pay.
Other cams are hereby dsmssed for ack of mert.
SO ORDERED.
9
The Labor Arbter found that:
|R|espondent company exercsed fu and compete contro over
the means and method by whch companants work - that of a
reguar coumnst - had to be accompshed. Ths contro mght
not be found n an nstructon, verba or ora, gven to
companant denng the means and method she shoud wrte
her coumn. Rather, ths contro s manfested and certaned (sc)
n respondents admtted prerogatve to re|ect any artce
submtted by companant for pubcaton.
By vrtue of ths power, companant was hepessy constraned
to adopt her sub|ects and stye of wrtng to sut the edtora
taste of her edtor. Otherwse, oh to the trash can went her
artces.
Moreover, ths contro s aready manfested n coumn tte,
"Femnst Reecton" aotted companant. Under ths tte,
companants wrtng was controed and mted to a womans
perspectve on matters of femnne nterests. That respondent
had no contro over the sub|ect matter wrtten by companant s
strongy beed by ths observaton. Even the ength of
companants artces were set by respondents.
Inevtaby, respondents woud have no contro over when or
where companant wrote her artces as she was a coumnst
who coud produce an artce n thrty (3) (sc) months or three
(3) days, dependng on her mood or the amount of research
requred for an artce but her actons were controed by her
obgaton to produce an artce a week. If companant dd not
have to report for work eght (8) hours a day, sx (6) days a
week, t s because her task was many menta. Lasty, the fact
that her artces were (sc) pubshed weeky for three (3) years
show that she was respondents reguar empoyee, not a once-
n-a-bue-moon contrbutor who was not under any pressure or
obgaton to produce reguar artces and who wrote at hs own
whm and esure.
10
PDI appeaed the Decson to the NLRC. In a Decson dated August 23,
1994, the NLRC Second Dvson dsmssed the appea thereby amrmng
the Labor Arbters Decson. The NLRC ntay noted that PDI faed to
perfect ts appea, under Artce 223 of the Labor Code, due to non-ng
of a cash or surety bond. The NLRC sad that the reason prohered by PDI
for not ng the bond - that t was dmcut or mpossbe to determne
the amount of the bond snce the Labor Arbter dd not specfy the
amount of the |udgment award - was not persuasve. It sad that a PDI
had to do was compute based on the amount t was payng pettoner,
countng the number of weeks from November 7, 1992 up to
promugaton of the Labor Arbters decson.
11
The NLRC aso resoved the appea on ts merts. It found no error n the
Labor Arbters ndngs of fact and aw. It sustaned the Labor Arbters
reasonng that respondent PDI exercsed contro over pettoners work.
PDI then ed a Petton for Revew
12
before ths Court seekng the
reversa of the NLRC Decson. However, n a Resouton
13
dated
December 2, 1998, ths Court referred the case to the Court of Appeas,
pursuant to our rung n 8t. Martin 9unera! :o#es &. Nationa! Labor
Re!ations Co##ission.
14
The CA rendered ts assaed Decson on |une 11, 2002. It set asde the
NLRC Decson and dsmssed pettoners Compant. It hed that the
NLRC msapprecated the facts and rendered a rung wantng n
substanta evdence. The CA sad:
The Court does not agree wth pubc respondent NLRCs
concuson. Frst, prvate respondent admtted that she was and
|had| never been consdered by pettoner PDI as ts empoyee.
Second, t s not dsputed that prvate respondent had no
empoyment contract wth pettoner PDI. In fact, her
engagement to contrbute artces for pubcaton was based on
a verba agreement between her and the pettoners Lfestye
Secton Edtor. Moreover, t was evdent that prvate respondent
was not requred to report to the omce eght (8) hours a day.
Further, t s not dsputed that she stayed n New York for sx (6)
months wthout pettoners permsson as to her eave of
absence nor was she gven any dscpnary acton for the same.
These undsputed facts negate prvate respondents cam that
she s an empoyee of pettoner.
Moreover, wth regards (sc) to the contro test, the pubc
respondent NLRCs rung that the gudenes gven by pettoner
PDI for prvate respondent to foow, e.g. n terms of space
aocaton and ength of artce, s not the form of contro
envsoned by the gudenes set by the Supreme Court. The
ength of the artce s obvousy mted so that a the artces to
be featured n the paper can be accommodated. As to the topc
of the artce to be pubshed, t s but ogca that prvate
respondent shoud not wrte morbd topcs such as death
because she s contrbutng to the festye secton. Other than
sad gven mtatons, f the same coud be consdered
mtatons, the topcs of the artces submtted by prvate
respondent were a her choces. Thus, the pettoner PDI n
decdng to pubsh prvate respondents artces ony contros
the resut of the work and not the means by whch sad artces
were wrtten.
As such, the above facts faed to measure up to the contro test
necessary for an empoyer-empoyee reatonshp to exst.
15
Pettoners Moton for Reconsderaton was dened n a Resouton dated
September 11, 2002. She then ed the present Petton for Revew.
In a Resouton dated Apr 29, 2005, the Court, wthout gvng due
course to the petton, ordered the Labor Arbter to carfy the amount of
the award due pettoner and, thereafter, ordered PDI to post the
requste bond. Upon compance therewth, the petton woud be gven
due course. Labor Arbter Amansec cared that the award under the
Decson amounted to P15,350.00. Thus, PDI posted the requste bond
on |anuary 25, 2007.
16
We sha ntay dspose of the procedura ssue rased n the Petton.
Pettoner argues that the CA erred n not dsmssng outrght PDIs
Petton for Certiorari for PDIs faure to post a cash or surety bond n
voaton of Artce 223 of the Labor Code.
Ths ssue was setted by ths Court n ts Resouton dated Apr 29,
2005.
17
There, the Court hed:
But whe the postng of a cash or surety bond s |ursdctona
and s a condton sne qua non to the perfecton of an appea,
there s a pethora of |ursprudence recognzng exceptona
nstances wheren the Court reaxed the bond requrement as a
condton for postng the appea.
x x x x
In the case of aberrah &. NLRC, the Court made note of the fact
that the assaed decson of the Labor Arbter concerned dd not
contan a computaton of the monetary award due the
empoyees, a crcumstance whch s kewse present n ths case.
In sad case, the Court stated,
As a rue, compance wth the requrements for the
perfecton of an appea wthn the regamentary (sc)
perod s mandatory and |ursdctona. However, n
Natona Federaton of Labor Unons v. Ladrdo as we as
n severa other cases, ths Court reaxed the
requrement of the postng of an appea bond wthn the
regementary perod as a condton for perfectng the
appea. Ths s n ne wth the prncpe that substanta
|ustce s better served by aowng the appea to be
resoved on the merts rather than dsmssng t based on
a techncaty.
The |udgment of the Labor Arbter n ths case merey stated that
pettoner was entted to backwages, 13
th
month pay and
servce ncentve eave pay wthout however ncudng a
computaton of the aeged amounts.
x x x x
In the case of N9L3 &. La+ri+o III, ths Court postuated that
"prvate respondents cannot be expected to post such appea
bond equvaent to the amount of the monetary award when the
amount thereof was not ncuded n the decson of the abor
arbter." The computaton of the amount awarded to pettoner
not havng been ceary stated n the decson of the abor
arbter, prvate respondents had no bass for determnng the
amount of the bond to be posted.
Thus, whe the requrements for perfectng an appea must be
strcty foowed as they are consdered ndspensabe
nterdctons aganst needess deays and for ordery dscharge of
|udca busness, the aw does admt of exceptons when
warranted by the crcumstances. Techncaty shoud not be
aowed to stand n the way of equtaby and competey
resovng the rghts and obgatons of the partes. But whe ths
Court may reax the observance of regementary perods and
technca rues to acheve substanta |ustce, t s not prepared
to gve due course to ths petton and make a pronouncement
on the weghty ssue obtanng n ths case unt the aw has
been duy comped wth and the requste appea bond duy pad
by prvate respondents.
18
Records show that PDI has comped wth the Courts drectve for the
postng of the bond;
19
thus, that ssue has been ad to rest.
We now proceed to rue on the merts of ths case.
The man ssue we must resove s whether pettoner s an empoyee of
PDI, and f the answer be n the amrmatve, whether she was egay
dsmssed.
We rue for the respondents.
The exstence of an empoyer-empoyee reatonshp s essentay a
queston of fact.
20
Factua ndngs of quas-|udca agences ke the
NLRC are generay accorded respect and naty f supported by
substanta evdence.
21
Consderng, however, that the CAs ndngs are n drect conct wth
those of the Labor Arbter and NLRC, ths Court must now make ts own
examnaton and evauaton of the facts of ths case.
It s true that pettoner hersef admtted that she "was not, and |had|
never been consdered respondents empoyee because the terms of
works were arbtrary decded upon by the respondent."
22
However, the
empoyment status of a person s dened and prescrbed by aw and not
by what the partes say t shoud be.
23
Ths Court has constanty adhered to the "four-fod test" to determne
whether there exsts an empoyer-empoyee reatonshp between
partes.
24
The four eements of an empoyment reatonshp are: (a) the
seecton and engagement of the empoyee; (b) the payment of wages;
(c) the power of dsmssa; and (d) the empoyers power to contro the
empoyees conduct.
25
Of these four eements, t s the power of contro whch s the most
cruca
26
and most determnatve factor,
27
so mportant, n fact, that the
other eements may even be dsregarded.
28
As ths Court has prevousy
hed:
the sgncant factor n determnng the reatonshp of the
partes s the presence or absence of supervsory authorty to
contro the method and the detas of performance of the servce
beng rendered, and the degree to whch the prncpa may
ntervene to exercse such contro.
29
In other words, the test s whether the empoyer contros or has reserved
the rght to contro the empoyee, not ony as to the work done, but aso
as to the means and methods by whch the same s accompshed.
30
Pettoner argues that severa factors exst to prove that respondents
exercsed contro over her and her work, namey:
a. As to the Contents of her Coumn - The PETITIONER had to
nsure that the contents of her coumn hewed cosey to the
ob|ectves of ts Lfestye Secton and the over-a prncpes that
the newspaper pro|ects tsef to stand for. As admtted, she
wanted to wrte about death n reaton to A Sous Day but was
advsed not to.
b. As to Tme Contro - The PETITIONER, as a coumnst, had to
observe the deadnes of the newspaper for her artces to be
pubshed. These deadnes were usuay that tme perod when
the Secton Edtor has to "cose the pages" of the Lfestye
Secton where the coumn n ocated. "To cose the pages"
means to prepare them for prntng and pubcaton.
As a coumnst, the PETITIONERs wrtngs had a dente day on
whch t was gong to appear. So she submtted her artces two
days before the desgnated day on whch the coumn woud
come out.
Ths s the usua routne of newspaper work. Deadnes are set to
fu the newspapers obgatons to the readers wth regard to
tmeness and freshness of deas.
c. As to Contro of Space - The PETITIONER was tod to submt
ony two or three pages of artce for the coumn, (sc) "Femnst
Reectons" per week. To go beyond that, the Lfestye edtor
woud aready chop oh the artce and pubsh the rest for the
next week. Ths shows that PRIVATE RESPONDENTS had contro
over the space that the PETITIONER was assgned to .
d. As to Dscpne - Over tme, the newspaper readers eyes are
traned or habtuated to ook for and read the works of ther
favorte reguar wrters and coumnsts. They are condtoned,
based on ther day purchase of the newspaper, to ook for
specc spaces n the newspapers for ther favorte wrte-ups/or
opnons on matters reevant and sgncant ssues asde from
not beng ate or amss n the responsbty of tmey submsson
of ther artces.
The PETITIONER was dscpned to submt her artces on hghy
reevant and sgncant ssues on tme by the PRIVATE
RESPONDENTS who have a say on whether the topcs beong to
those consdered as hghy reevant and sgncant, through the
Lfestye Secton Edtor. The PETITIONER had to dscuss the
topcs rst and submt the artces two days before pubcaton
date to keep her coumn n the newspaper space reguary as
expected or wthout mss by ts readers.
31
Gven ths dscusson by pettoner, we then ask the queston: Is this the
for# of "ontro! that our !abor !a5s "onte#p!ate su"h as to estab!ish an
e#p!o*er;e#p!o*ee re!ationship bet5een petitioner an+ respon+ent $DI?
It s not.
Pettoner has msconstrued the "contro test," as dd the Labor Arbter
and the NLRC.
Not a rues mposed by the hrng party on the hred party ndcate that
the atter s an empoyee of the former. Rues whch serve as genera
gudenes towards the achevement of the mutuay desred resut are
not ndcatve of the power of contro.
32
Thus, ths Court has expaned:
It shoud, however, be obvous that not every form of contro
that the hrng party reserves to hmsef over the conduct of the
party hred n reaton to the servces rendered may be accorded
the ehect of estabshng an empoyer-empoyee reatonshp
between them n the ega or technca sense of the term. A ne
must be drawn somewhere, f the recognzed dstncton
between an empoyee and an ndvdua contractor s not to
vansh atogether. Reastcay, t woud be a rare contract of
servce that gves untrammeed freedom to the party hred and
eschews any nterventon whatsoever n hs performance of the
engagement.
Logcay, the ne shoud be drawn between rues that merey
serve as gudenes towards the achevement of the mutuay
desred resut wthout dctatng the means or methods to be
empoyed n attanng t, and those that contro or x the
methodoogy and bnd or restrct the party hred to the use of
such means. The rst, whch am ony to promote the resut,
create no empoyer-empoyee reatonshp unke the second,
whch address both the resut and the means used to acheve t.
x x x.
33
The man determnant therefore s whether the rues set by the
empoyer are meant to contro not |ust the resuts of the work but aso
the means and method to be used by the hred party n order to acheve
such resuts. Thus, n ths case, we are to examne the factors
enumerated by pettoner to see f these are merey gudenes or f they
ndeed fu the requrements of the contro test.
Pettoner beeves that respondents acts are meant to contro how she
executes her work. We do not agree. A carefu examnaton reveas that
the factors enumerated by the pettoner are nherent condtons n
runnng a newspaper. In other words, the so-caed contro as to tme,
space, and dscpne are dctated by the very nature of the newspaper
busness tsef.
We agree wth the observatons of the Omce of the Soctor Genera
that:
The Inqurer s the pubsher of a newspaper of genera
crcuaton whch s wdey read throughout the country. As such,
pubc nterest dctates that every artce appearng n the
newspaper shoud subscrbe to the standards set by the Inqurer,
wth ts thousands of readers n mnd. It s not, therefore,
unusua for the Inqurer to contro what woud be pubshed n
the newspaper. What s mportant s the fact that such contro
pertans ony to the end resut, .e., the submtted artces. The
Inqurer has no contro over |pettoner| as to the means or
method used by her n the preparaton of her artces. The
artces are done by |pettoner| hersef wthout any nterventon
from the Inqurer.
34
Pettoner has not shown that PDI, actng through ts edtors, dctated
how she was to wrte or produce her artces each week. Asde from the
constrants presented by the space aocaton of her coumn, there were
no restrants on her creatvty; pettoner was free to wrte her coumn n
the manner and stye she was accustomed to and to use whatever
research method she deemed sutabe for her purpose. The apparent
mtaton that she had to wrte ony on sub|ects that betted the
Lfestye secton dd not transate to contro, but was smpy a ogca
consequence of the fact that her coumn appeared n that secton and
therefore had to cater to the preference of the readers of that secton.
The perceved constrant on pettoners coumn was dctated by her own
choce of her coumns perspectve. The coumn tte "Femnst
Reectons" was of her own choosng, as she hersef admtted, snce she
had been known as a femnst wrter.
35
Thus, respondent PDI, as we as
her readers, coud reasonaby expect her coumns to speak from such
perspectve.
Contrary to pettoners protestatons, t does not appear that there was
any actua restrant or mtaton on the sub|ect matter - wthn the
Lfestye secton - that she coud wrte about. Respondent PDI dd not
dctate how she wrote or what she wrote n her coumn. Nether dd PDIs
gudenes dctate the knd of research, tme, and ehort she put nto each
coumn. In fact, pettoner hersef sad that she receved "no comments
on her artces.except for her to shorten them to t nto the box aotted
to her coumn." Therefore, the contro that PDI exercsed over pettoner
was ony as to the nshed product of her ehorts, .e., the coumn tsef,
by way of ether shortenng or outrght re|ecton of the coumn.
The newspapers power to approve or re|ect pubcaton of any specc
artce she wrote for her coumn cannot be the contro contempated n
the "contro test," as t s but ogca that one who commssons another
to do a pece of work shoud have the rght to accept or re|ect the
product. The mportant factor to consder n the "contro test" s st the
eement of contro over how the work tsef s done, not |ust the end
resut thereof.
In contrast, a reguar reporter s not as ndependent n dong hs or her
work for the newspaper. We note the common practce n the newspaper
busness of assgnng ts reguar reporters to cover specc sub|ects,
geographca ocatons, government agences, or areas of concern, more
commony referred to as "beats." A reporter must produce stores wthn
hs or her partcuar beat and cannot swtch to another beat wthout
permsson from the edtor. In most newspapers aso, a reporter must
nform the edtor about the story that he or she s workng on for the day.
The story or artce must aso be submtted to the edtor at a speced
tme. Moreover, the edtor can easy pu out a reporter from one beat
and ask hm or her to cover another beat, f the need arses.
Ths s not the case for pettoner. Athough pettoner had a weeky
deadne to meet, she was not precuded from submttng her coumn
ahead of tme or from submttng coumns to be pubshed at a ater
tme. More mportanty, respondents dd not dctate upon pettoner the
sub|ect matter of her coumns, but ony mposed the genera gudene
that the artce shoud conform to the standards of the newspaper and
the genera tone of the partcuar secton.
Where a person who works for another performs hs |ob more or ess at
hs own peasure, n the manner he sees t, not sub|ect to dente hours
or condtons of work, and s compensated accordng to the resut of hs
ehorts and not the amount thereof, no empoyer-empoyee reatonshp
exsts.
36
Asde from the contro test, ths Court has aso used the economc reaty
test. The economc reates prevang wthn the actvty or between the
partes are examned, takng nto consderaton the totaty of
crcumstances surroundng the true nature of the reatonshp between
the partes.
37
Ths s especay approprate when, as n ths case, there s
no wrtten agreement or contract on whch to base the reatonshp. In
our |ursdcton, the benchmark of economc reaty n anayzng possbe
empoyment reatonshps for purposes of appyng the Labor Code ought
to be the economc dependence of the worker on hs empoyer.
38
Pettoners man occupaton s not as a coumnst for respondent but as
a womens rghts advocate workng n varous womens
organzatons.
39
Lkewse, she hersef admts that she aso contrbutes
artces to other pubcatons.
40
Thus, t cannot be sad that pettoner
was dependent on respondent PDI for her contnued empoyment n
respondents ne of busness.
41
The nevtabe concuson s that pettoner was not respondent PDIs
empoyee but an ndependent contractor, engaged to do ndependent
work.
There s no nexbe rue to determne f a person s an empoyee or an
ndependent contractor; thus, the characterzaton of the reatonshp
must be made based on the partcuar crcumstances of each
case.
42
There are severa factors
43
that may be consdered by the courts,
but as we aready sad, the rght to contro s the domnant factor n
determnng whether one s an empoyee or an ndependent contractor.
44
In our |ursdcton, the Court has hed that an ndependent contractor s
one who carres on a dstnct and ndependent busness and undertakes
to perform the |ob, work, or servce on ones own account and under
ones own responsbty accordng to ones own manner and method,
free from the contro and drecton of the prncpa n a matters
connected wth the performance of the work except as to the resuts
thereof.
45
On ths pont, 8on'a &. A,8;C,N ,roa+"astin2 Corporation
46
s
enghtenng. In that case, the Court found, usng the four-fod test, that
pettoner, |ose Y. Sonza, was not an empoyee of ABS-CBN, but an
ndependent contractor. Sonza was hred by ABS-CBN due to hs "unque
sks, taent and ceebrty status not possessed by ordnary empoyees,"
a crcumstance that, the Court sad, was ndcatve, though not
concusve, of an ndependent contractua reatonshp. Independent
contractors often present themseves to possess unque sks, expertse
or taent to dstngush them from ordnary empoyees.
47
The Court aso
found that, as to payment of wages, Sonzas taent fees were the resut
of negotatons between hm and ABS-CBN.
48
As to the power of
dsmssa, the Court found that the terms of Sonzas engagement were
dctated by the contract he entered nto wth ABS-CBN, and the same
contract provded that ether party may termnate the contract n case of
breach by the other of the terms thereof.
49
However, the Court hed that
the foregong are not determnatve of an empoyer-empoyee
reatonshp. Instead, t s st the power of contro that s most
mportant.
On the power of contro, the Court found that n performng hs work,
Sonza ony needed hs sks and taent - how he devered hs nes,
appeared on teevson, and sounded on rado were outsde ABS-CBNs
contro.
50
Thus:
We nd that ABS-CBN was not nvoved n the actua
performance that produced the nshed product of SONZAs
work. ABS-CBN dd not nstruct SONZA how to perform hs |ob.
ABS-CBN merey reserved the rght to modfy the program
format and artme schedue "for more ehectve programmng."
ABS-CBNs soe concern was the quaty of the shows and ther
standng n the ratngs. Ceary, ABS-CBN dd not exercse contro
over the means and methods of performance of SONZAs work.
SONZA cams that ABS-CBNs power not to broadcast hs shows
proves ABS-CBNs power over the means and methods of the
performance of hs work. Athough ABS-CBN dd have the opton
not to broadcast SONZAs show, ABS-CBN was st obgated to
pay SONZAs taent fees... Thus, even f ABS-CBN was
competey dssatsed wth the means and methods of SONZAs
performance of hs work, or even wth the quaty or product of
hs work, ABS-CBN coud not dsmss or even dscpne SONZA.
A that ABS-CBN coud do s not to broadcast SONZAs show but
ABS-CBN must st pay hs taent fees n fu.
Ceary, ABS-CBNs rght not to broadcast SONZAs show,
burdened as t was by the obgaton to contnue payng n fu
SONZAs taent fees, dd not amount to contro over the means
and methods of the performance of SONZAs work. ABS-CBN
coud not termnate or dscpne SONZA even f the means and
methods of performance of hs work - how he devered hs nes
and appeared on teevson - dd not meet ABS-CBNs approva.
Ths proves that ABS-CBNs contro was mted ony to the resut
of SONZAs work, whether to broadcast the na product or not.
In ether case, ABS-CBN must st pay SONZAs taent fees n fu
unt the expry of the Agreement.
In <au2han, et a!. &. =arner, et a!., the Unted States Crcut
Court of Appeas rued that vaudeve performers were
ndependent contractors athough the management reserved the
rght to deete ob|ectonabe features n ther shows. Snce the
management dd not have contro over the manner of
performance of the sks of the artsts, t coud ony contro the
resut of the work by deetng ob|ectonabe features.
SONZA further contends that ABS-CBN exercsed contro over hs
work by suppyng a equpment and crew. No doubt, ABS-CBN
supped the equpment, crew and artme needed to broadcast
the "Me & |ay" programs. However, the equpment, crew and
artme are not the "toos and nstrumentates" SONZA needed
to perform hs |ob. What SONZA prncpay needed were hs
taent or sks and the costumes necessary for hs appearance.
Even though ABS-CBN provded SONZA wth the pace of work
and the necessary equpment, SONZA was st an ndependent
contractor snce ABS-CBN dd not supervse and contro hs work.
ABS-CBNs soe concern was for SONZA to dspay hs taent
durng the arng of the programs.
A rado broadcast specast who works under mnma
supervson s an ndependent contractor. SONZAs work as
teevson and rado program host requred speca sks and
taent, whch SONZA admttedy possesses. The records do not
show that ABS-CBN exercsed any supervson and contro over
how SONZA utzed hs sks and taent n hs shows.
51
The nstant case presents a parae to 8on'a. Pettoner was engaged as
a coumnst for her taent, sk, experence, and her unque vewpont as
a femnst advocate. How she utzed a these n wrtng her coumn was
not sub|ect to dctaton by respondent. As n 8on'a, respondent PDI was
not nvoved n the actua performance that produced the nshed
product. It ony reserved the rght to shorten pettoners artces based
on the newspapers capacty to accommodate the same. Ths fact, we
note, was not unque to pettoners coumn. It s a reaty n the
newspaper busness that space constrants often dctate the ength of
artces and coumns, even those that reguary appear theren.
Furthermore, respondent PDI dd not suppy pettoner wth the toos and
nstrumentates she needed to perform her work. Pettoner ony
needed her taent and sk to come up wth a coumn every week. As
such, she had a the toos she needed to perform her work.
Consderng that respondent PDI was not pettoners empoyer, t cannot
be hed guty of ega dsmssa.
"HERE$ORE, the foregong premses consdered, the Petton
s %ISMISSE%. The Decson and Resouton of the Court of Appeas n
CA-G.R. SP No. 50970 are hereby A$$IRME%.
SO OR%ERE%.
G.R. No. 179652 ,.r:; 6, 2012
PEOP$E<' %ROADCA'&ING 'ERVICE 7%O,%O RAD-O P(I$'.,
INC.8, Petitioner,
vs,
&(E 'ECRE&AR- O5 &(E DEPAR&,EN& O5 $A%OR AND E,P$O-,EN&,
&(E REGIONA$ DIREC&OR, DO$E REGION VII, .) JANDE$EON
J/E0AN, Respondents,
R E . E L U T 7 E /
VE$A'CO, JR., J.:
7n a Petition for Certiorari under Rule )5, petitioner People9s Broadcasting .ervice,
7nc, *Bo03o Rad!o Phils,, 7nc,+ Duestioned the &ecision and Resolution of the
Court of Appeals *CA+ dated Ecto3er #), #$$) and une #), #$$%, respectivel!, in
C,A, -,R, CEB6.P /o, $$255,
Private respondent andeleon ueIan filed a co0plaint against petitioner with the
&epart0ent of La3or and E0plo!0ent *&ELE+ Regional Effice /o, 577, Ce3u Cit!,
for illegal deduction, nonpa!0ent of service incentive leave, '1th 0onth pa!,
pre0iu0 pa! for holida! and rest da! and illegal di0inution of 3enefits, dela!ed
pa!0ent of wages and noncoverage of ..., PA-67B7- and Philhealth,
'
After the
conduct of su00ar! investigations, and after the parties su30itted their position
papers, the &ELE Regional &irector found that private respondent was an
e0plo!ee of petitioner, and was entitled to his 0one! clai0s,
#
Petitioner sought
reconsideration of the &irector9s Erder, 3ut failed, The Acting &ELE .ecretar!
dis0issed petitioner9s appeal on the ground that petitioner su30itted a &eed of
Assign0ent of BanF &eposit instead of posting a cash or suret! 3ond, Hhen the
0atter was 3rought 3efore the CA, where petitioner clai0ed that it had 3een
denied due process, it was held that petitioner was accorded due process as it had
3een given the opportunit! to 3e heard, and that the &ELE .ecretar! had
@urisdiction over the 0atter, as the @urisdictional li0itation i0posed 3! Article '#" of
the La3or Code on the power of the &ELE .ecretar! under Art, '#2*3+ of the Code
had 3een repealed 3! Repu3lic Act /o, *RA+ %%1$,
1
7n the &ecision of this Court, the CA &ecision was reversed and set aside, and the
co0plaint against petitioner was dis0issed, The dispositive portion of the &ecision
reads as follows;
3(ERE5ORE, the petition is GRAN&ED, The &ecision dated #) Ecto3er #$$)
and the Resolution dated #) une #$$% of the Court of Appeals in C,A, -,R, CEB6
.P /o, $$255 are REVER'ED and 'E& A'IDE. The Erder of the then Acting
.ecretar! of the &epart0ent of La3or and E0plo!0ent dated #% anuar! #$$5
den!ing petitioner9s appeal, and the Erders of the &irector, &ELE Regional Effice
/o, 577, dated #4 (a! #$$4 and #% Be3ruar! #$$4, respectivel!,
are ANN/$$ED. The co0plaint against petitioner is DI',I''ED,
4
The Court found that there was no e0plo!er6e0plo!ee relationship 3etween
petitioner and private respondent, 7t was held that while the &ELE 0a! 0aFe a
deter0ination of the e:istence of an e0plo!er6e0plo!ee relationship, this function
could not 3e co6e:tensive with the visitorial and enforce0ent power provided in Art,
'#2*3+ of the La3or Code, as a0ended 3! RA %%1$, The /ational La3or Relations
Co00ission */LRC+ was held to 3e the pri0ar! agenc! in deter0ining the
e:istence of an e0plo!er6e0plo!ee relationship, This was the interpretation of the
Court of the clause Ain cases where the relationship of e0plo!er6e0plo!ee still
e:istsA in Art, '#2*3+,
5
Bro0 this &ecision, the Pu3lic Attorne!9s Effice *PAE+ filed a (otion for
Clarification of &ecision *with Leave of Court+, The PAE sought to clarif! as to
when the visitorial and enforce0ent power of the &ELE 3e not considered as co6
e:tensive with the power to deter0ine the e:istence of an e0plo!er6e0plo!ee
relationship,
)
7n its Co00ent,
%
the &ELE sought clarification as well, as to the
e:tent of its visitorial and enforce0ent power under the La3or Code, as a0ended,
The Court treated the (otion for Clarification as a second 0otion for
reconsideration, granting said 0otion and reinstating the petition,
2
7t is apparent
that there is a need to delineate the @urisdiction of the &ELE .ecretar! vis6S6vis
that of the /LRC,
Under Art, '#" of the La3or Code, the power of the &ELE and its dul! authoriIed
hearing officers to hear and decide an! 0atter involving the recover! of wages and
other 0onetar! clai0s and 3enefits was Dualified 3! the proviso that the co0plaint
not include a clai0 for reinstate0ent, or that the aggregate 0one! clai0s not
e:ceed PhP 5,$$$, RA %%1$, or an Act Burther .trengthening the 5isitorial and
Enforce0ent Powers of the .ecretar! of La3or, did awa! with the PhP 5,$$$
li0itation, allowing the &ELE .ecretar! to e:ercise its visitorial and enforce0ent
power for clai0s 3e!ond PhP 5,$$$, The onl! Dualification to this e:panded power
of the &ELE was onl! that there still 3e an e:isting e0plo!er6e0plo!ee
relationship,
7t is conceded that if there is no e0plo!er6e0plo!ee relationship, whether it has
3een ter0inated or it has not e:isted fro0 the start, the &ELE has no @urisdiction,
Under Art, '#2*3+ of the La3or Code, as a0ended 3! RA %%1$, the first sentence
reads, A/otwithstanding the provisions of Articles '#" and #'% of this Code to the
contrar!, and in cases where the relationship of e0plo!er6e0plo!ee still e:ists, the
.ecretar! of La3or and E0plo!0ent or his dul! authoriIed representatives shall
have the power to issue co0pliance orders to give effect to the la3or standards
provisions of this Code and other la3or legislation 3ased on the findings of la3or
e0plo!0ent and enforce0ent officers or industrial safet! engineers 0ade in the
course of inspection,A 7t is clear and 3e!ond de3ate that an e0plo!er6e0plo!ee
relationship 0ust e:ist for the e:ercise of the visitorial and enforce0ent power of
the &ELE, The Duestion now arises, 0a! the &ELE 0aFe a deter0ination of
whether or not an e0plo!er6e0plo!ee relationship e:ists, and if so, to what e:tentT
The first portion of the Duestion 0ust 3e answered in the affir0ative,
The prior decision of this Court in the present case accepts such answer, 3ut
places a li0itation upon the power of the &ELE, that is, the deter0ination of the
e:istence of an e0plo!er6e0plo!ee relationship cannot 3e co6e:tensive with the
visitorial and enforce0ent power of the &ELE, But even in conceding the power of
the &ELE to deter0ine the e:istence of an e0plo!er6e0plo!ee relationship, the
Court held that the deter0ination of the e:istence of an e0plo!er6e0plo!ee
relationship is still pri0aril! within the power of the /LRC, that an! finding 3! the
&ELE is 0erel! preli0inar!,
This conclusion 0ust 3e revisited,
/o li0itation in the law was placed upon the power of the &ELE to deter0ine the
e:istence of an e0plo!er6e0plo!ee relationship, /o procedure was laid down
where the &ELE would onl! 0aFe a preli0inar! finding, that the power was
pri0aril! held 3! the /LRC, The law did not sa! that the &ELE would first seeF the
/LRC9s deter0ination of the e:istence of an e0plo!er6e0plo!ee relationship, or
that should the e:istence of the e0plo!er6e0plo!ee relationship 3e disputed, the
&ELE would refer the 0atter to the /LRC, The &ELE 0ust have the power to
deter0ine whether or not an e0plo!er6e0plo!ee relationship e:ists, and fro0
there to decide whether or not to issue co0pliance orders in accordance with Art,
'#2*3+ of the La3or Code, as a0ended 3! RA %%1$,
The &ELE, in deter0ining the e:istence of an e0plo!er6e0plo!ee relationship,
has a read! set of guidelines to follow, the sa0e guide the courts the0selves use,
The ele0ents to deter0ine the e:istence of an e0plo!0ent relationship are; *'+
the selection and engage0ent of the e0plo!eeJ *#+ the pa!0ent of wagesJ *1+ the
power of dis0issalJ *4+ the e0plo!er9s power to control the e0plo!ee9s
conduct,
"
The use of this test is not solel! li0ited to the /LRC, The &ELE
.ecretar!, or his or her representatives, can utiliIe the sa0e test, even in the
course of inspection, 0aFing use of the sa0e evidence that would have 3een
presented 3efore the /LRC,
The deter0ination of the e:istence of an e0plo!er6e0plo!ee relationship 3! the
&ELE 0ust 3e respected, The e:panded visitorial and enforce0ent power of the
&ELE granted 3! RA %%1$ would 3e rendered nugator! if the alleged e0plo!er
could, 3! the si0ple e:pedient of disputing the e0plo!er6e0plo!ee relationship,
force the referral of the 0atter to the /LRC, The Court issued the declaration that
at least a pri0a facie showing of the a3sence of an e0plo!er6e0plo!ee
relationship 3e 0ade to oust the &ELE of @urisdiction, But it is precisel! the &ELE
that will 3e faced with that evidence, and it is the &ELE that will weigh it, to see if
the sa0e does successfull! refute the e:istence of an e0plo!er6e0plo!ee
relationship,
7f the &ELE 0aFes a finding that there is an e:isting e0plo!er6e0plo!ee
relationship, it taFes cogniIance of the 0atter, to the e:clusion of the /LRC, The
&ELE would have no @urisdiction onl! if the e0plo!er6e0plo!ee relationship has
alread! 3een ter0inated, or it appears, upon review, that no e0plo!er6e0plo!ee
relationship e:isted in the first place,
The Court, in li0iting the power of the &ELE, gave the rationale that such li0itation
would eli0inate the prospect of co0peting conclusions 3etween the &ELE and the
/LRC, The prospect of co0peting conclusions could @ust as well have 3een
eli0inated 3! according respect to the &ELE findings, to the e:clusion of the
/LRC, and this He 3elieve is the 0ore prudent course of action to taFe,
This is not to sa! that the deter0ination 3! the &ELE is 3e!ond Duestion or
review,1avvphi1 .uffice it to sa!, there are @udicial re0edies such as a petition for
certiorari under Rule )5 that 0a! 3e availed of, should a part! wish to dispute the
findings of the &ELE,
7t 0ust also 3e re0e03ered that the power of the &ELE to deter0ine the
e:istence of an e0plo!er6e0plo!ee relationship need not necessaril! result in an
affir0ative finding, The &ELE 0a! well 0aFe the deter0ination that no e0plo!er6
e0plo!ee relationship e:ists, thus divesting itself of @urisdiction over the case, 7t
0ust not 3e precluded fro0 3eing a3le to reach its own conclusions, not 3! the
parties, and certainl! not 3! this Court,
Under Art, '#2*3+ of the La3or Code, as a0ended 3! RA %%1$, the &ELE is full!
e0powered to 0aFe a deter0ination as to the e:istence of an e0plo!er6e0plo!ee
relationship in the e:ercise of its visitorial and enforce0ent power, su3@ect to
@udicial review, not review 3! the /LRC,
There is a view that despite Art, '#2*3+ of the La3or Code, as a0ended 3! RA
%%1$, there is still a threshold a0ount set 3! Arts, '#" and #'% of the La3or Code
when 0one! clai0s are involved, i,e,, that if it is for PhP 5,$$$ and 3elow, the
@urisdiction is with the regional director of the &ELE, under Art, '#", and if the
a0ount involved e:ceeds PhP 5,$$$, the @urisdiction is with the la3or ar3iter, under
Art, #'%, The view states that despite the wording of Art, '#2*3+, this would onl!
appl! in the course of regular inspections undertaFen 3! the &ELE, as
differentiated fro0 cases under Arts, '#" and #'%, which originate fro0 co0plaints,
There are several cases, however, where the Court has ruled that Art, '#2*3+ has
3een a0ended to e:pand the powers of the &ELE .ecretar! and his dul!
authoriIed representatives 3! RA %%1$, 7n these cases, the Court resolved that the
&ELE had the @urisdiction, despite the a0ount of the 0one! clai0s involved,
Burther0ore, in these cases, the inspection held 3! the &ELE regional director
was pro0pted specificall! 3! a co0plaint, Therefore, the initiation of a case
through a co0plaint does not divest the &ELE .ecretar! or his dul! authoriIed
representative of @urisdiction under Art, '#2*3+,
To recapitulate, if a co0plaint is 3rought 3efore the &ELE to give effect to the la3or
standards provisions of the La3or Code or other la3or legislation, and there is a
finding 3! the &ELE that there is an e:isting e0plo!er6e0plo!ee relationship, the
&ELE e:ercises @urisdiction to the e:clusion of the /LRC, 7f the &ELE finds that
there is no e0plo!er6e0plo!ee relationship, the @urisdiction is properl! with the
/LRC, 7f a co0plaint is filed with the &ELE, and it is acco0panied 3! a clai0 for
reinstate0ent, the @urisdiction is properl! with the La3or Ar3iter, under Art, #'%*1+ of
the La3or Code, which provides that the La3or Ar3iter has original and e:clusive
@urisdiction over those cases involving wages, rates of pa!, hours of worF, and
other ter0s and conditions of e0plo!0ent, if acco0panied 3! a clai0 for
reinstate0ent, 7f a co0plaint is filed with the /LRC, and there is still an e:isting
e0plo!er6e0plo!ee relationship, the @urisdiction is properl! with the &ELE, The
findings of the &ELE, however, 0a! still 3e Duestioned through a petition for
certiorari under Rule )5 of the Rules of Court,
7n the present case, the finding of the &ELE Regional &irector that there was an
e0plo!er6e0plo!ee relationship has 3een su3@ected to review 3! this Court, with
the finding 3eing that there was no e0plo!er6e0plo!ee relationship 3etween
petitioner and private respondent, 3ased on the evidence presented, Private
re"po)et pre"ete) "el=#"er!i+ .lle+.tio" ." >ell ." "el=#)e=e.ti+
e!i)e:e.
10
&;e =i)i+" o= t;e Re+io.l Dire:tor >ere ot 6."e) o
"*6"t.ti.l e!i)e:e, .) pri!.te re"po)et =.ile) to pro!e t;e e?i"te:e o=
. e@plo2er#e@plo2ee rel.tio";ip. &;e DO$E ;.) o A*ri")i:tio o!er t;e
:."e, ." t;ere >." o e@plo2er#e@plo2ee rel.tio";ip pre"et. &;*", t;e
)i"@i"".l o= t;e :o@pl.it .+.i"t petitioer i" proper.
3(ERE5ORE, t;e De:i"io o= t;i" Co*rt i G.R. No. 179652 i" ;ere62
A55IR,ED, >it; t;e ,ODI5ICA&ION t;.t i t;e e?er:i"e o= t;e DO$EB"
!i"itori.l .) e=or:e@et po>er, t;e $.6or 'e:ret.r2 or t;e l.tterB"
.*t;oriCe) repre"et.ti!e ";.ll ;.!e t;e po>er to )eter@ie t;e e?i"te:e o=
. e@plo2er#e@plo2ee rel.tio";ip, to t;e e?:l*"io o= t;e N$RC.
'O ORDERED
GR. NO. 149433 DEC 15, 2010
COCA COLA EXPORT CORP VS. GACAYAN

LEONARDO-DE CASTRO, J.:


Before the Court is a Petition for Review on Certiorari filed by petitioner The Coca
Cola Export Corporation against respondent Clarita P. Gacayan, assailing the
ecision
!"#
dated $ay %&, '&&" and the subse(uent Resolution
!'#
dated )ugust *, '&&" of
the Court of )ppeals in C)+G.R. ,P -o. .*"*'. The Court of )ppeals reversed and set
aside the Resolutions dated )pril "., "**/
!%#
and 0une "*, "**/
!.#
of the -ational 1abor
Relations Co22ission 3-1RC4, and ordered the i22ediate reinstate2ent of respondent to
her for2er position or to a substantially e(uivalent position without loss of seniority rights
and with full bac5wages.

The attendant facts are as follows6

Petitioner The Coca Cola Export Corporation, duly organi7ed and existing under the
laws of the Philippines, is engaged in the 2anufacture, distribution and export of beverage
base, concentrate, and other products bearing its trade na2e.

Respondent Clarita P. Gacayan began wor5ing with petitioner on 8ctober /,
"*/9. )t the ti2e her e2ploy2ent was ter2inated on )pril :, "**9, for alleged loss of
trust and confidence, respondent was holding the position of ,enior ;inancial )ccountant.

<nder petitioner=s co2pany policy, one of the benefits en>oyed by its e2ployees
was the rei2burse2ent of 2eal and transportation expenses incurred while rendering
overti2e wor5. This rei2burse2ent was allowed only when the e2ployee wor5ed
overti2e for at least four hours on a ,aturday, ,unday or holiday, and for at least two hours
on wee5days. The 2axi2u2 a2ount allowed to be rei2bursed was one hundred fifty
3P"9&.&&4 pesos. ?t was in connection with this co2pany policy that petitioner called the
attention of respondent and re(uired her to explain the alleged alterations in three receipts
which she sub2itted to support her clai2 for rei2burse2ent of 2eal expenses, to wit6 "4
$conald=s Receipt -o. /@9.*% dated 8ctober ", "**. for P""".&&A
!9#
'4 ,ha5ey=s Pi77a
Parlor Receipt -o. "'':9/ dated -ove2ber '&, "**. for P"@..&:A
!:#
and %4 ,ha5ey=s Pi77a
Parlor Receipt -o. ."'@. dated 0uly "*, "**. for P"%&.9&.

8n -ove2ber '", "**., petitioner issued a 2e2orandu2
!@#
to respondent
infor2ing her of the alteration in the date of the $conald=s Receipt -o. /@9.*%, which
she sub2itted in support of her clai2 for 2eal allowance allegedly consu2ed on 8ctober ",
"**., and re(uiring her to explain the said alteration.

Respondent wrote her explanation on the sa2e note and stated that the alteration
2ay have been 2ade by the staff fro2 $conald=s as they so2eti2es 2a5e 2ista5es in
issuing receipts. Respondent also narrated that her sister, 8dette, so2eti2es buys food for
her and that she is not (uite sure if the receipt in (uestion was the correct one which 8dette
gave her.

<pon verification with the )ssistant Branch $anager of the $conald=s $a5ati
Cine2a ,(uare outlet which issued the sub>ect receipt, petitioner discovered that the date of
issuance of the receipt was altered. The receipt was actually issued for a 2eal bought on
8ctober ', "**. and not on 8ctober ", "**..
!/#

8n ece2ber *, "**., petitioner sent another 2e2orandu2
!*#
to respondent and
re(uired her to explain in writing why her -ove2ber '", "**. clai2 for rei2burse2ent of
2eal expense should not be considered fraudulent since there was an alteration in the
receipt which she sub2itted. The second receipt contained a handwritten alteration which
read B" P; extra 2o>osC which was superi2posed on the co2puter generated print+out of
the food ite2 actually purchased.

8n ece2ber "*, "**., respondent sub2itted her explanation
!"&#
and clai2ed that
what she ordered for lunch was a Bbuddy pac5 and an extra 2o>os.C Respondent explained
that the delivery staff brought a wrong receipt as it did not correspond to the food that she
actually ordered. Respondent added that she as5ed the delivery staff to alter the receipt
thin5ing that he could >ust write the correct ite2s ordered and sign the said receipt to
authenticate the alterations 2ade thereon. ,he further stated that there was no intention on
her part to co22it fraud since she was >ust avoiding the hassle of waiting for a replace2ent
receipt.

Petitioner then referred respondent=s explanation to the )ssistant $anager of the
,ha5ey=s Pi77a Parlor which issued the sub>ect receipt. <pon verification,
!""#
it was
discovered that the receipt was actually for three orders of Bunch of 1unch, and not for
Buddy Pac5 which has an ite2 code of CD9, not BP, as clai2ed by respondent. The
)ssistant $anager also denied respondent=s clai2 that it was their representative,
specifically their delivery staff, who 2ade the alteration on the receipt.
!"'#

8n 0anuary %, "**9, petitioner sent respondent a letter
!"%#
directing her to explain
why she should not be sub>ected to disciplinary sanctions for violating ,ection ??, -o. "9,
paragraph 3d4 of the co2pany=s rules and regulations which punishes with dis2issal the
sub2ission of any fraudulent ite2 of expense.

Conse(uently, respondent sub2itted her explanation
!".#
on 0anuary ., "**9, and
denied any personal 5nowledge in the co22ission of the alterations in the sub>ect
receipts. Respondent asserted that she did not notice the alteration in the $conald=s
receipt since she Bdid not give close attention to it.C ,he further stated that her sister=s
driverE2essenger 2ay have caused the alteration, but she could not be certain about
it. Fith regard to the ,ha5ey=s receipt, respondent 2aintained that what she ordered was a
buddy pac5 with extra 2o>os.

8n 0anuary "', "**9, petitioner sent respondent a 2e2orandu2
!"9#
inviting her to
a hearing and for2al investigation on 0anuary "@, "**9, to give her an opportunity to
explain the issues against her. Respondent was also advised that she was free to bring
along a counsel of her choice.

8n 0anuary "@, "**9, respondent appeared at the hearing. ,he was re2inded of
her right to have her own lawyer present at the proceedings of the investigation and was
extensively (uestioned regarding the alterations on the $conald=s and ,ha5ey=s Pi77a
Parlor receipts which she sub2itted in support of her clai2 for rei2burse2ent of 2eal
expenses.
!":#

8n 0anuary "*, "**9, petitioner notified
!"@#
respondent that the continuation of the
investigation was set on 0anuary '%, "**9 for the presentation of the delivery personnel of
,ha5ey=s Pi77a Parlor. Petitioner also infor2ed respondent of a third receipt with an
alteration which she sub2itted in support of her clai2 for rei2burse2ent for 2eal
allowance + ,ha5ey=s Pi77a Parlor Receipt -o. ."'@. dated 0uly "*, "**.,
!"/#
which
contained an annotation BwE C)G 9&H only I P"%&.9&.C ,uch annotation 2eant that
respondent was clai2ing only half of the total a2ount indicated in the receipt as the said
2eal was supposedly shared with another e2ployee, Cora7on ). Garona. ,aid e2ployee,
however, denied that she ordered and shared the food covered by the receipt in (uestion.
!"*#

<pon verification by petitioner with the restaurant supervisor of the 1as PiJas branch
of the ,ha5ey=s Pi77a Parlor which issued the sub>ect receipt, it was discovered that said
receipt was issued for food purchased on 0uly "@, "**. and not for 0uly "*, "**.,
!'&#
as
clai2ed by respondent.

Respondent did not attend the 0anuary '%, "**9 hearing, citing her doctor=s
advice
!'"#
to rest since she was suffering fro2 Bsevere 2ixed 2igraine and 2uscle
contraction headache.C Respondent also co2plained of the alleged partiality of the
investigating co22ittee against her.

)t the said hearing, the delivery personnel of ,ha5ey=s Pi77a Parlor was
presented. De 2aintained that what he delivered to respondent was her order for three
Bunch of 1unch pac5s and not one order of Buddy Pac5 with extra 2o>os.
!''#


8n 0anuary '., "**9, respondent filed an application for leave
!'%#
fro2 0anuary
"%, "**9 up to ;ebruary %, "**9. )gain on 0anuary %", "**9, respondent filed another
application for leave
!'.#
for the period ;ebruary :, "**9 to ;ebruary '., "**9.

8n ;ebruary '%, "**9, petitioner sent another notice
!'9#
to respondent infor2ing
her of the re+setting of the continuation of the for2al investigation on $arch "9,
"**9. Respondent was also advised that the said scheduled hearing was her last opportunity
to fully explain her side, and that she had the option of bringing a lawyer at the hearing.

Respondent did not attend the $arch "9, "**9 hearing. Petitioner then concluded
the for2al investigation.

Thereafter, in a letter
!':#
dated )pril ., "**9, petitioner dis2issed respondent for
fraudulently sub2itting ta2pered andEor altered receipts in support of her petty cash
rei2burse2ents in gross violation of the co2pany=s rules and regulations.

8n 0une :, "**9, respondent filed a co2plaint
!'@#
for illegal dis2issal, non+
pay2ent of service incentive leave, sic5 leave and vacation leave with prayer for
reinstate2ent, pay2ent of bac5wages as well as for da2ages and attorney=s fees, against
petitioner with the -1RC, doc5eted as -1RC+-CR Case -o. &&+&:+&.&&&+*9. )fter the
2andatory conciliation proceedings failed, the parties were re(uired to sub2it their
respective position papers.

?n her position paper, respondent averred that, assu2ing arguendo that she altered
the receipts in (uestion, dis2issal was too harsh a penalty for her considering that6 B3a4 it
was her first offense in her * K years of serviceA 3b4 the offense i2puted was 2inor, as only
the dates and ite2s, not the a2ounts, were altered or the a2ounts involved were very
2ini2alA 3c4 the co2pany did not suffer 2aterial da2age, as she was really entitled to
the P"9&.&& allowance even without acco2panying receiptA and 3d4 respondent acted
without 2alice, as she really rendered 3unpaid4 overti2e wor5 on those three dates.C
!'/#


8n the other hand, petitioner 2aintained in its position paper that respondent was
dis2issed for cause, that of Bta2pering official receipts to substantiate her clai2 for 32eal4
rei2burse2ent which reflects her (uestionable integrity and honesty.C
!'*#
Petitioner added
that in ter2inating the services of an e2ployee for breach of trust, Bit is enough that the
2isconduct of the e2ployee tends to pre>udice the e2ployer=s interest since it would be
unreasonable to re(uire the e2ployer to wait until he is 2aterially in>ured before re2oving
the cause of the i2pending evil.C
!%&#


?n a ecision
!%"#
dated 0une "@, "**:, 1abor )rbiter Ra2on Galentin C. Reyes
ruled in favor of petitioner and dis2issed respondent=s co2plaint for lac5 of 2erit. The
relevant portions of the ecision read6

!T#he ter2ination of co2plainant is clearly valid.

Respondent !herein petitioner# co2plied with the notice
re(uire2ent strictly to the letter. Co2plainant !herein respondent# was
given the first notice which the ,upre2e Court a2ply ter2ed in the
foregoing >urisprudence as the Bproper chargeC. This 8ffice further
notes that 2ore than one notice was given to the co2plainant
!respondent#. ?n fact, co2plainant !respondent# was repeatedly
directed to answer the charges against her. )s she in fact did.

x x x x

?t was only after the evidence against co2plainant
!respondent# was received and her fraudulent participation 2orally
ascertained that respondent !petitioner# finally decided to ter2inate
his 3sic4services. )nd after arriving at a conclusion, co2plainant
!respondent# was conse(uently infor2ed of her ter2ination which was
the sanction i2posed on her.

)gain, following the yardstic5 laid down by the Tiu doctrine
cited above, the procedure in ter2inating co2plainant !respondent# was
definitely followed. Der ter2ination is therefore valied 3sic4 and 2ust
be upheld for all intents and purposes.

x x x x

Going now to the substantive aspect of co2plainant=s
!respondent=s# ter2ination, this 8ffice li5ewise finds that there existed
>ust cause to ter2inate her services.

Co2plainant !Respondent# was ter2inated for repeatedly
sub2itting fraudulent ite2s of expense, clearly in violation of
respondent=s !petitioner=s# co2pany rules and regulations which
conse(uently resulted in loss of trust and confidence.
!%'#


<ndaunted, respondent appealed the 1abor )rbiter=s decision to the -1RC.

?n a Resolution
!%%#
dated )pril "., "**/, the -1RC affir2ed the ruling of the 1abor
)rbiter, thus6

)fter a careful review of the evidences presented before <s,
including the >urisprudence cited, Fe decided to loo5 deeper into what
led or 2otivated herein co2plainant !respondent# to do as she did.

?t had been established that three 3%4 receipts were
alteredEta2pered with and were subse(uently sub2itted by co2plainant
!respondent# to the co2pany so that she could clai2 her allowed 2eal
allowance of P"9&.&& per 2eal on days she rendered overti2e
wor5. Co2plainant !Respondent# ad2itted the alterations were done
by her but she was (uic5 to retort and tries to >ustify why she should
not be held guilty of a fraudulent act.

)s if the co2pany owes her so 2uch for rendering overti2e
wor5 gratuitously, she now tries to BcollectC, so to spea5, fro2 the
co2pany by way of e2phasi7ing the benefits it gets fro2 her 3in ter2s
of the alleged savings of about 2ore than P*&&.&&, had it paid her
overti2e pay and basic and pre2iu2 pay4. ,he now hastens to
conclude that since the co2pany had greatly benefitted fro2 her
overti2e services, she did not violate co2pany rules and regulations
when she ta2pered the receipts which she attached as her >ustification
for rei2burse2ent for 2eal allowance.

This line of reasoning is absurd, if not utterly
dangerous. )d2itting the co22ission of the act but at the sa2e breath
denying any fraudulent intent is inconsistent. <nder no circu2stances
was her 2isconduct excusable. Dere the a2ount beco2es i22aterial,
her position irrelevant. )s correctly ruled by the 1abor )rbiter a (uo,
the disciplinary action ta5en by respondent co2pany !petitioner# on
co2plainant !respondent# applies to all e2ployees regardless of
ran5. Fe also agree with the findings of the 1abor )rbiter below that
co2plainant !respondent# was afforded due process.

?n fine, in the absence of showing that the decision was
rendered whi2sically and capriciously, Fe )ffir2.

FDERE;8RE, in the light of the foregoing, the assailed
ecision dated "@ 0une "**: is hereby );;?R$E.
!%.#


Respondent filed a $otion for Reconsideration which was denied in the
Resolution
!%9#
dated 0une "*, "**/.

)ggrieved, respondent elevated the case to the Court of
)ppeals via certiorari in C)+G.R. ,P -o. .*"*'.

)s stated at the threshold hereof, the Court of )ppeals, in its assailed ecision dated
$ay %&, '&&", reversed and set aside the Resolutions dated )pril "., "**/ and 0une "*,
"**/ of the -1RC. The Court of )ppeals ruled that the penalty of dis2issal i2posed on
respondent was too harsh and further directed petitioner to i22ediately reinstate
respondent to her for2er position, if possible, or a substantially e(uivalent position without
loss of seniority rights and with full bac5wages. The Court of )ppeals ratiocinated thus6

Fe consider the penalty of dis2issal i2posed on the petitioner to be
too harsh.

Petitioner !Respondent# has held an unble2ished record for
nine+and+a+half 3* K4 years and the respondent co2pany !petitioner#, in
the sa2e period, found her perfor2ance satisfactory, as evidenced by
the pro2otions she received over the years and her being tas5ed to train
in other countries. The offenses she allegedly co22itted did not cause
any pre>udice or loss to the co2pany since the a2ounts were actually
due her as part of her co2pensation for overti2e. 8n the other hand,
petitioner !respondent# sufficiently explained that in sub2itting the
falsified receipts, she was acting on the belief that the said re(uire2ent
was 2erely for record+5eeping purposes for she was already entitled to
the 2oney e(uivalent thereof as consideration for services already
rendered. Dence, the presence of good faith on the part of petitioner
!respondent#, her long years of exe2plary service and the absence of
loss on the part of the e2ployer, ta5en together, >ustify the application
of Lap vs. -1RC, supra. ?n the aforecited case, the ,upre2e Court
considered the e2ployee=s long years of unble2ished service, the
return of the funds borrowed fro2 the e2ployer and the e2ployee=s
lac5 of intent to deviate fro2 the rules, as circu2stances >ustifying the
award of separation pay, in lieu of reinstate2ent. Considering
however, that there was no evidence of strained relations between the
parties in the case at bench precluding a har2onious wor5ing
relationship should reinstate2ent be decreed, then the reinstate2ent of
petitioner !respondent# is proper. Fith respect to the allegation of
dishonesty on the part of private respondent, the Court considers the
Bigno2iny and 2ental tortureC suffered by petitioner throughout the
proceedings, in view of her high position with respondent co2pany, to
be practically punish2ent for said 2isdeed. 3Philippine )irlines vs.
Philippine )ir 1ines E2ployees )ssociation, supra.4

;inally, the private respondent !petitioner# raised in issue the
ti2eliness of the filing of the herein petition. Based on their
co2putation, the petition was only filed four days after !the# sixty+day
period prescribed in the ,ection ., Rule :9 of the Rules of
Court. Considering however, that >urisprudence is replete with
instances where the ,upre2e Court has relaxed the technical rules in
the exercise of e(uity >urisdiction when there are strong considerations
of substantial >ustice that are 2anifest in the petition, 3,oriano vs.
Court of )ppeals, ''' ,CR) 9.9, 99% !"**%#A 8rata vs. ?nter2ediate
)ppellate Court, "/9 ,CR) "./, "9' !"**&#A 1aginlin vs. For52en=s
Co2pensation Co22ission, "9* ,CR) *", *: !"*//#A and, ,errano vs.
Court of )ppeals, "%* ,CR) "@*, "/: !"*/9#4. 8ur finding that there
was grave abuse of discretion in the issuance of the assailed resolutions
of public respondent 2erit the allowance of the herein petition.

FDERE;8RE, the petition is GRANTED and the
Resolutions, dated )pril "., "**/ and 0une "*, "**/, both issued by
public respondent -1RC, are hereby SET ASIDE. Private respondent
!Petitioner# Coca Cola Export Corporation is hereby directed to
i22ediately reinstate petitioner !respondent# to her for2er position, if
possible, otherwise, to a substantially e(uivalent position without loss
of seniority rights and with full bac5wages, based on her last 2onthly
salary, to be co2puted fro2 the date of her dis2issal fro2 the service
up to the date of finality of this decision, without any (ualifications or
deductions. -o costs.
!%:#


?ts 2otion for reconsideration having been denied by the Court of )ppeals in its
second i2pugned Resolution dated )ugust *, '&&", petitioner is now before us via the
present recourse with the following assign2ent of errors6

?

BL BE?-G T88 1?BER)1 ?- ;)G8R 8; TDE RE,P8-E-T,
TDE C8<RT 8; )PPE)1, D) EC?E ) M<E,T?8- 8;
,<B,T)-CE -8T ?- )CC8R F?TD 1)F.

??

?- 8?-G ,8, TDE C8<RT 8; )PPE)1, EG?)TE ;R8$
E,T)B1?,DE 8CTR?-E, 18-G ,ETT1E BL C8-,?,TE-T
0<R?,PR<E-CE E-<-C?)TE BL TD?, D8-8R)B1E C8<RT.


8n the procedural issue, petitioner asserts that the Court of )ppeals should have
dis2issed outright the petition for certiorari for being filed out of ti2e and for failure to
co2ply with the re(uire2ents set forth in Rule .' of the Rules of Civil Procedure
2andating that the petition be acco2panied by clear copies of Ball pleadings and other
2aterial portions of the record as would support the 2aterial allegations of the petition.C

$oreover, petitioner contends that the Court of )ppeals gave due course to
respondent=s petition purely on the basis of liberality, and that it anchored its decision on
the general principle that doubts 2ust be interpreted in favor of labor.

?n her Co22ent dated ;ebruary "&, '&&', respondent alleges that the Court of
)ppeals correctly gave due course to her petition as it was actually filed on
ti2e. Respondent states that when her petition was still pending with the Court of )ppeals,
,ection ., Rule :9 of the Rules of Court was a2ended by ,upre2e Court Resolution ).$.
-o. &&+'+&%+,C, which too5 effect on ,epte2ber ", '&&&, whereby the :&+day period
within which to file a petition for certiorari shall now be counted fro2 receipt of the notice
of the denial of the 2otion for reconsideration. )ccording to respondent, she received the
8rder denying her 2otion for reconsideration on )ugust "&, "**/, thus, her filing of the
petition with the Court of )ppeals on 8ctober ', "**/, was well within the :&+day period.

The Court agrees with respondent.

)t the ti2e of the filing of the petition for certiorari before the Court of )ppeals on
,epte2ber ", "**/, ,upre2e Court Circular -o. %*+*/, which a2ended ,ection ., Rule :9
of the "**@ Rules of Civil Procedure, had already ta5en effect on ,epte2ber ", "**/, after
publication in several newspapers of general circulation. The a2ended provision reads6

,EC. .. Where and when petition to be filed. I The petition
2ay be filed not later than sixty 3:&4 days fro2 notice of the >udg2ent,
order or resolution sought to be assailed in the ,upre2e Court or, if it
relates to the acts or o2issions of a lower court or of a corporation,
board, officer or person, in the Regional Trial Court exercising
>urisdiction over the territorial area as defined by the ,upre2e Court. ?t
2ay also be filed in the Court of )ppeals whether or not the sa2e is in
aid of its appellate >urisdiction, or in the ,andiganbayan if it is in aid of
its >urisdiction. ?f it involves the acts or o2issions of a (uasi+>udicial
agency, and unless otherwise provided by law or these Rules, the
petition shall be filed in and cogni7able only by the Court of )ppeals.

If th !t"t"#$% h&' f"(' & )#t"#$ f#% $* t%"&( #%
%+#$,"'%&t"#$ "$ '- t") &ft% $#t"+ #f ,&"' .-'/)$t, #%'% #%
%,#(-t"#$, th !%"#' h%"$ f"0' ,h&(( 1 "$t%%-!t'. If th
)#t"#$ ", '$"', th &//%"2' !&%t3 )&3 f"( th !t"t"#$ *"th"$
th %)&"$"$/ !%"#', 1-t *h"+h ,h&(( $#t 1 (,, th&$ f"2 455 '&3,
"$ &$3 2$t, %+6#$' f%#) $#t"+ #f ,-+h '$"&(. N# 0t$,"#$ #f
t") t# f"( th !t"t"#$ ,h&(( 1 /%&$t' 0+!t f#% th )#,t
+#)!(("$/ %&,#$ &$' "$ $# +&, t# 0+' f"ft$ 4155
'&3,. 3E2phasis supplied.4


The records of the instant case show that respondent ti2ely filed on 0une /, "**/, a
2otion for reconsideration of the -1RC Resolution dated )pril "., "**/, which respondent
received on $ay '/, "**/. ) copy of the Resolution dated 0une "*, "**/ on the denial of
the said 2otion for reconsideration was received by respondent on )ugust "&,
"**/. )pplying the afore(uoted a2end2ent to the given set of dates, "" days had already
elapsed fro2 the date when respondent received the -1RC Resolution dated 0une "*,
"**/. Thus, respondent had a re2aining period of .* days rec5oned fro2 )ugust "", "**/
or until ,epte2ber '/, "**/ within which to file the petition for certiorari.

The Court, however, ta5es note that further a2end2ents were 2ade on the
regle2entary period for filing a petition for certiorari under Rule :9. 8n ,epte2ber ",
'&&&, ,upre2e Court Circular -o. 9:+'&&&
!%@#
too5 effect. The latest a2end2ent of
,ection ., Rule :9 of the "**@ Rules of Civil Procedure reads6

,EC. .. When and where petition filed. I The petition shall
be filed not later than sixty 3:&4 days fro2 notice of the >udg2ent,
order or resolution. I$ +&, & )#t"#$ f#% %+#$,"'%&t"#$ #% $*
t%"&( ", t")(3 f"(', *hth% ,-+h )#t"#$ ", %7-"%' #% $#t, th
,"0t3 4805 '&3 !%"#' ,h&(( 1 +#-$t' f%#) $#t"+ #f th '$"&( #f
th ,&"' )#t"#$.

The petition shall be filed in the ,upre2e Court or, if it
relates to the acts or o2issions of a lower court or of a corporation,
board, officer or person, in the Regional Trial Court exercising
>urisdiction over the territorial area as defined by the ,upre2e Court. ?t
2ay also be filed in the Court of )ppeals whether or not the sa2e is in
the aid of its appellate >urisdiction, or in the ,andiganbayan if it is in
aid of its appellate >urisdiction. ?f it involves the acts or o2issions of a
(uasi+>udicial agency, unless otherwise provided by law or these rules,
the petition shall be filed in and cogni7able only by the Court of
)ppeals.

-o extension of ti2e to file the petition shall be granted
except for co2pelling reason and in no case exceeding fifteen 3"94
days. 3E2phasis supplied.4


;ro2 the foregoing, it is clear that the :&+day period to file a petition
for certiorari should be rec5oned fro2 the date of receipt of the notice of the denial of the
2otion for reconsideration or new trial, if one was filed.

?n a nu2ber of cases,
!%/#
this Court applied retroactively Circular -o. 9:+'&&&. Fe
ruled that a petition for certiorari which had been filed past the :&+day period under
,ection . of Rule :9, as a2ended by Circular -o. %*+*/, was dee2ed seasonably filed
provided it was filed within the :&+day period counted fro2 the date of receipt of the notice
of the denial of the 2otion for reconsideration or new trial.

?nstructive on this point is the discussion of the Court in Narzoles v. National Labor
Relations Commission,
!%*#
viz6

The Court has observed that Circular -o. %*+*/ has
generated tre2endous confusion resulting in the dis2issal of nu2erous
cases for late filing. This 2ay have been because, historically, i.e.,
even before the "**@ revision to the Rules of Civil Procedure, a party
had a fresh period fro2 receipt of the order denying the 2otion for
reconsideration to file a petition for certiorari. Fere it not for the
a2end2ents brought about by Circular -o. %*+*/, the cases so
dis2issed would have been resolved on the 2erits. Dence, the Court
dee2ed it wise to revert to the old rule allowing a party a fresh :&+day
period fro2 notice of the denial of the 2otion for reconsideration to
file a petition for certiorari. Earlier this year, the Court resolved, in
).$. -o. &&+'+&%+,C, to further a2end ,ection ., Rule :9 x x x.

x x x x

The latest a2end2ents too5 effect on ,epte2ber ", '&&&,
following its publication in the $anila Bulletin on )ugust ., '&&& and
in the Philippine aily ?n(uirer on )ugust @, '&&&, two newspapers of
general circulation.

?n view of its purpose, the Resolution further a2ending
,ection ., Rule :9 can only be described as curative in nature, and the
principles governing curative statutes are applicable.

Curative statutes are enacted to cure defects in a prior law or
to validate legal proceedings which would otherwise be void for want
of confor2ity with certain legal re(uire2ents. They are intended to
supply defects, abridge superfluities and curb certain evils. They are
intended to enable persons to carry into effect that which they have
designed or intended, but has failed of expected legal conse(uence by
reason of so2e statutory disability or irregularity in their own
action. They 2a5e valid that which, before the enact2ent of the statute
was invalid. Their purpose is to give validity to acts done that would
have been invalid under existing laws, as if existing laws have been
co2plied with. Curative statutes, therefore, by their very essence, are
retroactive.

)ccordingly, while the Resolution states that the sa2e Bshall
ta5e effect on ,epte2ber ", '&&&, following its publication in two 3'4
newspapers of general circulation,C its retroactive application cannot be
denied. ?n short, the filing of the petition for certiorari in this Court on
"@ ece2ber "**/ is dee2ed to be ti2ely, the sa2e having been 2ade
within the :&+day period provided under the curative Resolution. Fe
reach this conclusion bearing in 2ind that the substantive aspects of
this case involves the rights and benefits, even the livelihood, of
petitioner+e2ployees.


Given the above, respondent had a fresh :&+day period fro2 )ugust "&, "**/, the
date she received a copy of the -1RC Resolution dated 0une "*, "**/, denying her 2otion
for reconsideration. )ccordingly, respondent had :& days fro2 )ugust "&, "**/ within
which to file the petition for certiorari. Thus, when respondent filed the petition with the
Court of )ppeals on 8ctober ', "**/, said petition was seasonably filed within the
regle2entary period provided by the latest a2end2ent to ,ection ., Rule :9 of the "**@
Rules of Civil Procedure.

Fe now proceed to the 2ain issue for resolution in this case, which is whether the
Court of )ppeals co22itted a reversible error in reversing and setting aside the
Resolutions dated )pril "., "**/ and 0une "*, "**/ of the -1RC.

)ccording to the petitioner, respondent=s repeated sub2ission of altered or
ta2pered receipts to support her clai2 for rei2burse2ent constitutes a betrayal of the
e2ployer=s trust and confidence and a serious 2isconduct, thus, giving cause for the
ter2ination of her e2ploy2ent with petitioner.

Petitioner also (uestions the Court of )ppeals= finding that the ter2ination of
respondent was too harsh. Petitioner 2aintains that respondent Bhad clearly been
established to have authored and caused the sub2ission of not only one but three different
receipts which she intentionally altered to >ustify her clai2ed rei2burse2ent,C thus
warranting her dis2issal fro2 the co2pany.

Fe are not convinced.

The 1abor Code 2andates that before an e2ployer 2ay validly dis2iss an e2ployee
fro2 the service, the re(uire2ent of substantial and procedural due process 2ust be
co2plied with. <nder the re(uire2ent of substantial due process, the grounds for
ter2ination of e2ploy2ent 2ust be based on >ust or authori7ed causes. )rticle '/' of the
1abor Code enu2erates the >ust causes for the ter2ination of e2ploy2ent, thus6

)RT. '/'. Termination by employer. + )n e2ployer 2ay
ter2inate an e2ploy2ent for any of the following causes6

3a4 ,erious 2isconduct or willful disobedience by the
e2ployee of the lawful orders of his e2ployer or
representative in connection with his wor5A

3b4 Gross and habitual neglect by the e2ployee of his dutiesA

3c4 ;raud or willful breach by the e2ployee of the trust
reposed in hi2 by his e2ployer or duly authori7ed
representativeA

3d4 Co22ission of a cri2e or offense by the e2ployee against
the person of his e2ployer or any i22ediate 2e2ber of his
fa2ily or his duly authori7ed representativeA and

3e4 8ther causes analogous to the foregoing.


?n ter2ination cases, the burden of proof rests on the e2ployer to show that the
dis2issal was for >ust cause. 8therwise, an e2ployee who is illegally dis2issed Bshall be
entitled to reinstate2ent without loss of seniority rights and other privileges and to his full
bac5wages, inclusive of allowances, and to his other benefits or their 2onetary e(uivalent
co2puted fro2 the ti2e his co2pensation was withheld fro2 hi2 up to the ti2e of his
actual reinstate2ent.C
!.&#


)fter exa2ining the records of the case, this Court finds that respondent=s
dis2issal fro2 e2ploy2ent was not grounded on any of the >ust causes enu2erated under
)rticle '/' of the 1abor Code.

)t the outset, it is i2portant to note that the ter2 Btrust and confidenceC is
restricted to 2anagerial e2ployees.
!."#
?n Samson v. National Labor Relations Commission,
!.'#
the Court, citing ,ection '3b4, Rule ?, Boo5 ??? of the 82nibus Rules ?2ple2enting the
1abor Code, enu2erated the conditions for one to be properly considered a 2anagerial
e2ployee6

3"4 Their pri2ary duty consists of the 2anage2ent of the
establish2ent in which they are e2ployed or of a depart2ent or sub+
division thereofA

3'4 They custo2arily and regularly direct the wor5 of two or
2ore e2ployees thereinA !and#

3%4 They have the authority to hire or fire other e2ployees of
lower ran5A or their suggestions and reco22endations as to the hiring
and firing and as to the pro2otion or any other change of status of other
e2ployees are given particular weight.


?n the instant case, respondent was the ,enior ;inancial )ccountant with the 0ob
escription of a ;inancial Pro>ect )nalyst. Respondent, a2ong others, Bprovides support
in the for2 of financial analyses and evaluation of alternative strategies or action plans to
assist 2anage2ent in strategic and operational decision+2a5ing, x x x liaises with the
Bottler to co2ply with Corporate Bottler financial reporting re(uire2ents and to ensure
Bottler=s plans are aligned with TCCEC=s, x x x and assists 2anage2ent on various
initiatives on ad hoc basis.C
!.%#

?n Noom v. National Labor Relations Commission,
!..#
this Court set the
guidelines for the application of the doctrine of loss of confidence I

3a4 1oss of confidence should not be si2ulatedA

3b4 ?t should not be used as a subterfuge for causes which are
i2proper, illegal or un>ustifiedA

3c4 ?t 2ay not be arbitrarily asserted in the face of overwhel2ing
evidence to the contraryA and

3d4 ?t 2ust be genuine, not a 2ere afterthought to >ustify earlier
action ta5en in bad faith.


?n the instant case, the basis for ter2inating the e2ploy2ent of respondent was
for gross violation of the co2pany=s rules and regulations, as specified in the ter2ination
letter dated )pril ., "**/, to wit6

Based on the facts gathered during the investigation vis!avis 3sic4 the
contradictory explanations you have given when you testified, the
testi2ony of the person who delivered the ,ha5ey=s products you
ordered as well as $conald=s and ,ha5ey=s certifications to the effect
that the ite2s and the dates appearing on the receiptEinvoices issued to
you were the actual ite2s and dates of said invoices and that the
alteration on the face of said invoice were not done at their respective
establish2ents or by any of their e2ployees, 2orally convinced us that
you were the one who caused such alterations for personal gain. Lou
have thereby 5nowingly, willingly, deliberately and fraudulently
sub2itted ta2pered andEor altered receipts to support your petty cash
rei2burse2ents in gross violation of the co2pany=s rules and
regulations which punishes with i22ediate dis2issal the Bfraudulent
sub2ission of any ite2 of expenseC 3Rule ??, -o "93d4.
!.9#


Evidently, no 2ention was 2ade regarding petitioner=s alleged loss of trust and
confidence in respondent. -either was there any explanation nor discussion of the alleged
sensitive and delicate position of respondent re(uiring the ut2ost trust of petitioner.

?t bears e2phasi7ing that the right of an e2ployer to dis2iss its e2ployees on the
ground of loss of trust and confidence 2ust not be exercised arbitrarily. ;or loss of trust
and confidence to be a valid ground for dis2issal, it 2ust be substantial and founded on
clearly established facts. 1oss of confidence 2ust not be used as a subterfuge for causes
which are i2proper, illegal or un>ustifiedA it 2ust be genuine, not a 2ere afterthought, to
>ustify earlier action ta5en in bad faith. Because of its sub>ective nature, this Court has
been very scrutini7ing in cases of dis2issal based on loss of trust and confidence because
the sa2e can easily be concocted by an abusive e2ployer.
!.:#
Thus, when the breach of
trust or loss of confidence theori7ed upon is not borne by clearly established facts, as in the
instant case, such dis2issal on the ground of loss and confidence cannot be countenanced.

?n the instant case, it was only in the Reply to Respondent=s Co22ent
!.@#
dated
8ctober "", '&&', that petitioner 2ade 2ention of another ground for the dis2issal of
respondent, that of serious 2isconduct, when she sub2itted altered or ta2pered receipts to
support her clai2 for rei2burse2ent. ,uch allegation appears to be a 2ere afterthought,
being tardily raised only in the Reply.

?n "arival Trading# $nc. v. National Labor Relations Commission,
!./#
we held,
thus6

$isconduct has been defined as i2proper or wrong
conduct. ?t is the transgression of so2e established and definite rule of
action, a forbidden act, a dereliction of duty, willful character, and
i2plies wrongful intent and not 2ere error of >udg2ent. The
2isconduct to be serious 2ust be of such grave and aggravated
character and not 2erely trivial and uni2portant. ,uch 2isconduct,
however serious, 2ust nevertheless be in connection with the
e2ployee=s wor5 to constitute >ust cause for his separation. Thus, for
2isconduct or i2proper behavior to be a >ust cause for dis2issal, 3a4 it
2ust be seriousA 3b4 2ust relate to the perfor2ance of the e2ployee=s
dutiesA and 3c4 2ust show that the e2ployee has beco2e unfit to
continue wor5ing for the e2ployer. ?ndeed, an e2ployer 2ay not be
co2pelled to continue to e2ploy such person whose continuance in the
service would be patently ini2ical to his e2ployer=s business.
!.*#


?n this light, the alleged infractions of respondent could hardly be considered serious
2isconduct. ?t is well to stress that in order to constitute serious 2isconduct which will
warrant the dis2issal of an e2ployee, it is not sufficient that the act or conduct co2plained
of has violated so2e established rules or policies. ?t is e(ually i2portant and re(uired that
the act or conduct 2ust have been done with wrongful intent. ,uch is, however, lac5ing in
the instant case.

Fhile this Court does not condone respondent=s act of sub2itting altered andEor
ta2pered receipts to support her clai2 for rei2burse2ent, we nevertheless agree with the
finding of the Court of )ppeals that, under the attendant facts, the dis2issal 2eted out on
respondent appears to be too harsh a penalty.

The e2ployer=s right to conduct the affairs of its business, according to its own
discretion and >udg2ent, is well+recogni7ed. )n e2ployer has a free reign and en>oys wide
latitude of discretion to regulate all aspects of e2ploy2ent, including the prerogative to
instill discipline in its e2ployees and to i2pose penalties, including dis2issal, upon erring
e2ployees. This is a 2anage2ent prerogative, where the free will of 2anage2ent to
conduct its own affairs to achieve its purpose ta5es for2. The only criterion to guide the
exercise of its 2anage2ent prerogative is that the policies, rules and regulations on wor5+
related activities of the e2ployees 2ust always be fair and reasonable and the
corresponding penalties, when prescribed, co22ensurate to the offense involved and to the
degree of the infraction.
!9&#

)s respondent=s e2ployer, petitioner has the right to regulate, according to its
discretion and best >udg2ent, wor5 assign2ents, wor5 2ethods, wor5 supervision, and
wor5 regulations, including the hiring, firing and discipline of its e2ployees. ?ndeed,
petitioner has the 2anage2ent prerogative to discipline its e2ployees, li5e herein
respondent, and to i2pose appropriate penalties on erring wor5ers pursuant to co2pany
rules and regulations.
!9"#
This Court upholds these 2anage2ent prerogatives so long as
they are exercised in good faith for the advance2ent of the e2ployer=s interest and not for
the purpose of defeating or circu2venting the rights of the e2ployees under special laws
and valid agree2ents.
!9'#

?n the instant case, petitioner alleged that under its rules and regulations,
respondent=s sub2ission of fraudulent ite2s of expense is punishable by
dis2issal. Dowever, petitioner=s rules cannot preclude the ,tate fro2 in(uiring whether the
strict and rigid application or interpretation thereof would be harsh to the e2ployee. Even
when an e2ployee is found to have transgressed the e2ployer=s rules, in the actual
i2position of penalties upon the erring e2ployee, due consideration 2ust still be given to
his length of service and the nu2ber of violations co22itted during his e2ploy.
!9%#
Respondent had no previous record in her *K years of serviceA this would have been her
first offense. Respondent had also been a recipient of various co22endations attesting to
her co2petence and diligence in the perfor2ance of her duties, not only fro2 petitioner,
but also fro2 petitioner=s counterparts in Poland
!9.#
and Thailand.
!99#
Respondent also
countered that she acted in good faith and with no wrongful intent when she sub2itted the
receipts in support of her clai2 for rei2burse2ent of 2eal allowance. )ccording to
respondent, only the dates or ite2s were altered on the receipts. ,he did not clai2 2ore
than what was allowed as 2eal expense for the days that she rendered overti2e wor5. ,he
believed that the sub2ission of receipts was si2ply for records+5eeping, since she actually
rendered overti2e wor5 on the dates that she clai2ed for 2eal allowance. )ll told, this
Court holds that the penalty of dis2issal i2posed on respondent is unduly oppressive and
disproportionate to the infraction which she co22itted. ) lighter penalty would have been
2ore >ust.

)s correctly held by the Court of )ppeals, by 2andate of the law itself, the
provisions of the 1abor Code are to be construed liberally in favor of labor. Thus,
in %u&itsu Computer 'roducts Corporation of the 'hils. v. Court of (ppeals,
!9:#
we held6

The Court is wont to reiterate that while an e2ployer has its
own interest to protect, and pursuant thereto, it 2ay ter2inate a
2anagerial e2ployee for a >ust cause, such prerogative to dis2iss or
lay+off an e2ployee 2ust be exercised without abuse of discretion. ?ts
i2ple2entation should be te2pered with co2passion and
understanding. The e2ployer should bear in 2ind that, in the
execution of the said prerogative, what is at sta5e is not only the
e2ployee=s position, but his very livelihood. The Constitution does not
condone wrongdoing by the e2ployeeA nevertheless, it urges
2oderation of the sanction that 2ay be applied to hi2. Fhere a
penalty less punitive would suffice, whatever 2issteps 2ay have been
co22itted by the wor5er ought not be visited with a conse(uence so
severe as dis2issal fro2 e2ploy2ent. ?ndeed, the consistent rule is
that if doubts exist between the evidence presented by the e2ployer
and the e2ployee, the scales of >ustice 2ust be tilted in favor of the
latter. The e2ployer 2ust affir2atively show rationally ade(uate
evidence that the dis2issal was for >ustifiable cause.


<nder )rticle '@* of the 1abor Code, an e2ployee who is un>ustly dis2issed fro2
wor5 shall be entitled to reinstate2ent without loss of seniority rights and other privileges
and to his full bac5wages, inclusive of allowances, and to his other benefits or their
2onetary e(uivalent co2puted fro2 the ti2e his co2pensation was withheld fro2 hi2 up
to the ti2e of his actual reinstate2ent.

)fter a finding of illegal dis2issal herein, we apply the foregoing provision entitling
respondent Clarita P. Gacayan to reinstate2ent without loss of seniority rights and other
privileges and full bac5wages, inclusive of allowances and other benefits or their 2onetary
e(uivalent co2puted fro2 the ti2e the co2pensation was not paid up to the ti2e of her
reinstate2ent. Thus, the award of bac5wages by the Court of )ppeals is in
order. Dowever, the Court of )ppeals= period of co2putation of the award of bac5wages
2ust be 2odified. The Court of )ppeals ruled that6

FDERE;8RE, the petition is GRANTED and the
Resolutions, dated )pril "., "**/ and 0une "*, "**/, both issued by
public respondent -1RC, are hereby SET ASIDE. !Petitioner# Coca
Cola Export Corporation is hereby directed to i22ediately reinstate
!respondent# to her for2er position, if possible, otherwise, to a
substantially e(uivalent position without loss of seniority rights and
with full bac5wages, based on her last 2onthly salary, to be co2puted
fro2 the date of her dis2issal fro2 the service up to the date of finality
of this decision, without any (ualifications or deductions. -o costs.
!9@#

?n line with )rticle '@* of the 1abor Code and prevailing >urisprudence,
!9/#
the award
of bac5wages should be 2odified in the sense that bac5wages should be co2puted fro2 the
ti2e the co2pensation was not paid up to the ti2e of reinstate2ent.

9:ERE;ORE, the petition is hereby DENIED. The ecision dated $ay %&,
'&&" and subse(uent Resolution dated )ugust *, '&&" of the Court of )ppeals are
herebyA;;IR<ED 9IT: <ODI;ICATION that bac5wages be awarded fro2 the ti2e
the co2pensation was not paid up to the ti2e of her actual reinstate2ent.

SO ORDERED.
G.R. No. 161615 J.*.r2 30, 2009
ARN/$5O O. ENDICO, Petitioner,
vs
D/AN&/, 5OOD' DI'&RI%/&ION CEN&ER, Respondent,
& E C 7 . 7 E /
CARPIO, J.:
&;e C."e
This is a petition for review
'
of the #1 &ece03er #$$1 &ecision
#
of the Court of
Appeals in CA6-,R, .P /o, )""#", The Court of Appeals reversed the 1' August
#$$' &ecision
1
and the #2 /ove03er #$$' Resolution
4
of the /ational La3or
Relations Co00ission */LRC+, The /LRC affir0ed with 0odification the '%
anuar! #$$$ &ecision
5
of the La3or Ar3iter which held that Puantu0 Boods
&istri3ution Center *Puantu0 Boods+ constructivel! dis0issed Arnulfo E, Endico
*Endico+, The /LRC awarded Endico separation pa!, 3acFwages, 0oral and
e:e0plar! da0ages, and other a0ounts totaling P55",$#',)5,
)
The /LRC also
affir0ed the transfer of possession and ownership of the service vehicle 3ut
ordered Endico to pa! Puantu0 Boods '$L of its purchase price,
&;e 5.:t"
En # anuar! '""5, Puantu0 Boods hired Endico as Bield .upervisor of &avao
Cit!, Puantu0 Boods provided Endico with a service vehicle on the understanding
that after five !ears of continuous service to the co0pan! and upon pa!0ent of
'$L of the vehicle9s 3ooF value, Puantu0 Boods would turn over possession and
ownership of the vehicle to Endico,
7n une '""5, Endico was transferred to Ce3u, En # anuar! '""), Endico was
pro0oted as Area (anager of Ce3u, 7n '""%, in recognition of Endico9s
achieve0ents and contri3utions to Puantu0 Boods, he was awarded A(aster
Awards for .ales E:cellenceA as the 0ost outstanding Area (anager and was also
rewarded with an all6e:pense paid trip to Thailand, 7n the sa0e !ear, Endico was
also given a plaDue of recognition for the elite '$$L Achiever9s Award, 7n '""2,
Endico was again rewarded with an all6e:pense paid trip to Gong Qong for his ver!
good perfor0ance that !ear,
7n '""", due to the econo0ic slowdown and to save on operational costs,
Puantu0 Boods strea0lined its operations through the reduction of the co0pan!9s
contractual 0erchandisers, Endico9s 0erchandisers were reduced fro0 twelve to
five,
7n a fa: 0essage
%
dated '' une '""", Edred Al0ero, /ational .ales (anager of
Puantu0 Boods, instructed Pol G, Acuros *Acuros+, Regional .ales (anager and
Endico9s i00ediate supervisor, to i00ediatel! relieve Endico fro0 his position,
Acuros was also instructed to handle the vacated position and to 3e responsi3le in
the turn over of all co0pan! properties issued to Endico including the service
vehicle, Acuros was liFewise ordered to advise Endico to report to the head office
on '4 une '""", Endico co0plied with the order and proceeded to the head office
in Para8aDue,
7n the show cause 0e0orandu0
2
dated '4 une '""", Puantu0 Boods asFed
Endico to e:plain in writing, within #4 hours, wh! no ad0inistrative action should
3e taFen against hi0 3ecause of Aserious 0isconduct due to 0is0anage0ent of
sales area resulting to lost sales and goodwill with nu03er one 0a@or account,A
The 0e0orandu0 stated that, fro0 ' (a! to '' une '""" at .hoe0art
.uper0arFet, Ce3u *.( account+, Endico violated Rules ')
"
and '%
'$
of Puantu0
Boods9 general policies and procedure,
En the sa0e da!, Endico filed an application for leave of a3sence
''
effective '%
une to # ul! '""",
7n his answer
'#
dated ') une '""", Endico denied that there was serious
0isconduct and 0is0anage0ent in his area as far as the deplo!0ent of
0erchandisers was concerned, Endico said that he properl! coordinated all his
actions with Acuros, Endico presented a letter
'1
dated 1 (a! '""", where he
infor0ed Acuros and the head office that the .( account wanted a 0erchandiser
assigned to it for a whole da! coverage and re@ected the 0erchandiser assigned to
it with a half6da! schedule, 7n another letter
'4
dated % (a! '""", Endico gave the
head office an update on the status of the .( account, Endico added that
Puantu0 Boods did not accord hi0 due process 3ecause he was i00ediatel!
relieved without 3eing given the opportunit! to e:plain his side, En the sa0e da!,
Endico also withdrew his application for leave of a3sence,
'5
En '% une '""", Puantu0 Boods recalled Endico9s application for leave of
a3sence and reDuired hi0 to report to the head office,
')
Puantu0 Boods also
issued a Personnel Action ReDuest
'%
dated '' une '""", which provided for
Endico9s transfer as Area .ales (anager of Ce3u to Area .ales (anager of the
head office effective '4 une '""", Gowever, Endico failed to report for worF, 7n
telegra0s dated 1$ une
'2
and ) ul! '""",
'"
Puantu0 Boods reiterated its
directive for Endico to report to the head office,
Also on '% une '""", Endico, 3elieving that Puantu0 Boods intended to ease hi0
out of the co0pan!, filed a co0plaint
#$
for constructive illegal dis0issal, Endico
also pra!ed for the pa!0ent of separation pa!, 3acFwages, other 0onetar!
3enefits, da0ages, attorne!9s fees and recover! of the service vehicle,
R*li+ o= t;e $.6or Ar6iter
En '% anuar! #$$$, the La3or Ar3iter rendered a decision in Endico9s favor, The
dispositive portion of the '% anuar! #$$$ &ecision provides;
HGEREBERE, pre0ises considered, @udg0ent is here3! rendered declaring as
illegal the constructive dis0issal of co0plainant and ordering the respondent
Puantu0 Boods, 7nc, to pa! hi0 as follows;
'+ .eparation Pa! Php '#',2$$,$$
#+ BacFwages '%),'1),$$
1+ Proportionate '1th 0onth pa! '1,$12,$$
4+ Unused sicF leave 4#,'#$,$$
5+ Unused vacation leave 4#,'#$,$$
)+ Perfor0ance 3onus '$,'5$,$$
%+ Productivit! 3onus ##,21%,5$
2+ (oral and e:e0plar! da0ages 5$,$$$,$$
"+ Attorne!9s fees *'$L+ 5$,2#$,'5
6666666666666666
Total Php 55",$#',)5
#'
The respondent Puantu0 Boods, 7nc, or its authoriIed representative is here3!
ordered to transfer to co0plainant the possession and ownership of one *'+ 0otor
vehicle, a (itsu3ishi L6#$$ with plate no, TTC "14 in a running and servicea3le
condition together with its accessories,
The other clai0s and the case against respondents Cesar Lota, Edred Al0ero and
Rogelio de la CruI are dis0issed for lacF of 0erit,
.E ER&ERE&,
##
The La3or Ar3iter ruled that Puantu0 Boods constructivel! dis0issed Endico
3ecause its actions 0ade Endico9s continued e0plo!0ent i0possi3le,
unreasona3le and unliFel!, The La3or Ar3iter said that Endico was the su3@ect of a
Ahighhanded transfer of assign0entA 3ecause Endico was given neither a cop! of
the order for his relief nor the reason for his i00ediate relief, The La3or Ar3iter
added that Endico was relieved not 3ecause the head office needed his services
3ut as a for0 of disciplinar! action for so0e 3aseless charges, According to the
La3or Ar3iter, the loss of the .( account was due to the decision of Puantu0
Boods to reduce the nu03er of 0erchandisers and its inaction when Endico raised
this concern,
Puantu0 Boods appealed to the /LRC,
R*li+ o= t;e N.tio.l $.6or Rel.tio" Co@@i""io
7n its 1' August #$$' &ecision, the /LRC affir0ed the La3or Ar3iter9s decision with
0odification that Endico pa! '$L of the purchase price of the service vehicle, The
dipositive portion of the 1' August #$$' &ecision provides;
HGEREBERE, in view of the foregoing, the decision of the La3or Ar3iter dated
anuar! '%, #$$$ is here3! ABB7R(E& with a 0odification on the order to transfer
the possession and ownership of the service vehicle, (itsu3ishi L6#$$ with plate
no, TCC "14 to co0plainant, as such co0plainant is liFewise directed to pa!
respondent ten percent *'$L+ of the purchase price thereof,
.E ER&ERE&,
#1
The /LRC agreed with the La3or Ar3iter that Puantu0 Boods constructivel!
dis0issed Endico, The /LRC said that Endico was not @ust recalled 3ut was
i00ediatel! transferred to the head office, which was tanta0ount to dis0issal, The
/LRC ruled that Puantu0 Boods failed to o3serve the twin reDuire0ents of notice
and hearing, The /LRC declared that Endico was i00ediatel! relieved fro0 his
functions and was given the opportunit! to e:plain his side onl! three da!s after
the order for his relief was issued, The /LRC also ruled that the La3or Ar3iter did
not err in awarding separation pa! to Endico since reinstate0ent was no longer
possi3le due to strained relations, Hith respect to the award of unused vacation
and sicF leave credits, perfor0ance 3onus, and productivit! 3onus, the /LRC said
that these should 3e granted 3ecause the! had 3eco0e co0pan! polic! or
practice which could not @ust 3e withdrawn,
Puantu0 Boods filed a 0otion for reconsideration, 7n its #2 /ove03er #$$'
Resolution,
#4
the /LRC denied the 0otion,
Puantu0 Boods filed a petition for certiorari 3efore the Court of Appeals,
R*li+ o= t;e Co*rt o= Appe.l"
7n its #1 &ece03er #$$1 &ecision, the Court of Appeals ruled in favor of Puantu0
Boods, The dispositive portion of the #1 &ece03er #$$1 &ecision provides;
HGEREBERE, the petition is -RA/TE&, The &ecision of the /LRC dated August
1', #$$# as well as its Resolution dated /ove03er #2, #$$' are here3!
RE5ER.E& A/& .ET A.7&E, The co0plaint for illegal dis0issal filed 3! private
respondent is &7.(7..E&,
.E ER&ERE&,
#5
The Court of Appeals declared that the /LRC gravel! a3used its discretion when it
ruled that Endico was constructivel! dis0issed, The Court of Appeals found
nothing in the '' une '""" fa: 0essage and the show6cause 0e0orandu0 that
supported the /LRC9s conclusion that Endico was outrightl! dis0issed, The Court
of Appeals noted that Puantu0 Boods even approved Endico9s application for
leave of a3sence and, after Endico recalled his leave application, ordered Endico
to report to the head office for his new @o3 assign0ent,
The Court of Appeals said that it is settled that the e0plo!er has the prerogative to
transfer and reassign e0plo!ees for valid reasons and according to the
reDuire0ents of its 3usiness, provided that there is no de0otion in ranF or
di0inution of his salar!, 3enefits and other privileges, The Court of Appeals
declared that Puantu0 Boods acted in good faith and was in the legiti0ate pursuit
of its 3est interests when it transferred Endico fro0 Ce3u to the head office, The
Court of Appeals 0aintained that Endico9s clai0 that the transfer would result in a
di0inution of his pa! or 3enefits was unsu3stantiated, The Court of Appeals added
that Puantu0 Boods had !et to decide on the ad0inistrative case when Endico
i00ediatel! filed the co0plaint for constructive dis0issal, The Court of Appeals
concluded that Endico filed the co0plaint in anticipation of what he perceived to 3e
the final outco0e of the ad0inistrative investigation,
Gence, this petition,
&;e I""*e"
Endico raises the following issues;
', Hhether he was constructivel! dis0issedJ
#, Hhether he is entitled to separation pa!, 3acFwages, other 0onetar!
3enefits, da0ages and attorne!9s feesJ and
1, Hhether he is entitled to acDuire the service vehicle,
&;e R*li+ o= t;e Co*rt
The petition has no 0erit,
As a general rule, a petition for review on certiorari under Rule 45 of the Rules of
Court is li0ited to Duestions of law, Gowever, this rule ad0its of e:ceptions, such
as in this case where the findings of the La3or Ar3iter and the /LRC var! fro0 the
findings of the Court of Appeals,
#)
Endico 0aintains that he was constructivel! dis0issed 3ecause he did not co00it
an! offense that would @ustif! his relief, Endico adds that his transfer was intended
to unreasona3l! inconvenience hi0 and his fa0il! 3ecause of its su3stantial effect
on their finances and Dualit! of fa0il! life, which would ulti0atel! force hi0 to Duit,
En the other hand, Puantu0 Boods insists that Endico was not transferred 3ut was
onl! te0poraril! recalled to the head office pending investigation, Puantu0 Boods
argues that if it did transfer Endico, it was 0erel! e:ercising a 0anage0ent
prerogative,
urisprudence recogniIes the e:ercise of 0anage0ent prerogatives, La3or laws
also discourage interference with an e0plo!er9s @udg0ent in the conduct of its
3usiness,
#%
Bor this reason, the Court often declines to interfere in legiti0ate
3usiness decisions of e0plo!ers,
#2
The law 0ust protect not onl! the welfare of
e0plo!ees, 3ut also the right of e0plo!ers,
#"
7n the pursuit of its legiti0ate 3usiness interests, especiall! during adverse
3usiness conditions, 0anage0ent has the prerogative to transfer or assign
e0plo!ees fro0 one office or area of operation to another U provided there is no
de0otion in ranF or di0inution of salar!, 3enefits and other privileges and the
action is not 0otivated 3! discri0ination, 3ad faith, or effected as a for0 of
punish0ent or de0otion without sufficient cause,
1$
This privilege is inherent in the
right of e0plo!ers to control and 0anage their enterprises effectivel!,
1'
The right of
e0plo!ees to securit! of tenure does not give the0 vested rights to their positions
to the e:tent of depriving 0anage0ent of its prerogative to change their
assign0ents or to transfer the0,
1#
(anagerial prerogatives, however, are su3@ect to li0itations provided 3! law,
collective 3argaining agree0ents, and general principles of fair pla! and
@ustice,
11
The test for deter0ining the validit! of the transfer of e0plo!ees was
e:plained in +lue ,air% orporation v. NLR
14
as follows;
LiFe other rights, there are li0its thereto, The 0anagerial prerogative to transfer
personnel 0ust 3e e:ercised without grave a3use of discretion, 3earing in 0ind the
3asic ele0ents of @ustice and fair pla!, Gaving the right should not 3e confused
with the 0anner in which that right is e:ercised, Thus, it cannot 3e used as a
su3terfuge 3! the e0plo!er to rid hi0self of an undesira3le worFer, 7n particular,
the e0plo!er 0ust 3e a3le to show that the transfer is not unreasona3le,
inconvenient or pre@udicial to the e0plo!eeJ nor does it involve a de0otion in ranF
or a di0inution of his salaries, privileges and other 3enefits, .hould the e0plo!er
fail to overco0e this 3urden of proof, the e0plo!ee9s transfer shall 3e tanta0ount
to constructive dis0issal, which has 3een defined as a Duitting 3ecause continued
e0plo!0ent is rendered i0possi3le, unreasona3le or unliFel!J as an offer involving
a de0otion in ranF and di0inution in pa!, LiFewise, constructive dis0issal e:ists
when an act of clear discri0ination, insensi3ilit! or disdain 3! an e0plo!er has
3eco0e so un3eara3le to the e0plo!ee leaving hi0 with no option 3ut to forego
with his continued e0plo!0ent,
15
7n this case, we find no reason to distur3 the conclusion of the Court of Appeals
that there was no constructive dis0issal, Reassign0ents 0ade 3! 0anage0ent
pending investigation of violations of co0pan! policies and procedures allegedl!
co00itted 3! an e0plo!ee fall within the a03it of 0anage0ent prerogative,
1)
The
decision of Puantu0 Boods to transfer Endico pending investigation was a valid
e:ercise of 0anage0ent prerogative to discipline its e0plo!ees, The transfer,
while incidental to the charges against Endico, was not 0eant as a penalt!, 3ut
rather as a preventive 0easure to avoid further loss of sales and the destruction of
Puantu0 Boods9 i0age and goodwill, 7t was not designed to 3e the cul0ination of
the then on6going ad0inistrative investigation against Endico,
/either was there an! de0otion in ranF or an! di0inution of Endico9s salar!,
privileges and other 3enefits, Endico was 3eing transferred to the head office as
area sales 0anager, the sa0e position Endico held in Ce3u,
1%
There was also no
proof that the transfer involved a di0inution of Endico9s salar!, privileges and other
3enefits,
En the alleged inconvenience on Endico and his fa0il! 3ecause of the transfer
fro0 Ce3u to the head office in Para8aDue, we rule that the transfer is valid, there
3eing no showing that there was 3ad faith on the part of Puantu0
Boods,
12
(oreover, we find that Puantu0 Boods, considering the declining sales
and the loss of a 0a@or account in Ce3u, was acting in the legiti0ate pursuit of
what it considered its 3est interest in deciding to transfer Endico to the head office,
.ince we have ruled that Puantu0 Boods did not constructivel! dis0iss Endico,
there is no need to discuss the other issues raised 3! Endico,
3(ERE5ORE, we DEN- the petition, He A55IR, the #1 &ece03er #$$1
&ecision of the Court of Appeals in CA6-,R, .P /o, )""#",
'O ORDERED.
G.R. No. 173882 5e6r*.r2 15, 2012
J*lieB" %.Ee";op .)9or E)+.r Re2e", Petitioners,
vs,
(ENR- ARNAI0, EDGAR NAPA$,

.) Jo.t;. &olore", Respondents,,

& E C 7 . 7 E /
DE$ CA'&I$$O, J.F
(anage0ent has a wide latitude to conduct its own affairs in accordance with the
necessities of its 3usiness, This so6called 0anage0ent prerogative, however,
should 3e e:ercised in accordance with @ustice and fair pla!,
B! this Petition for Review on ertiorari)
'
petitioners ulie9s BaFeshop andCor Edgar
Re!es *Re!es+ assail the .epte03er #1, #$$5 &ecision
#
of the Court of Appeals
*CA+ in CA6-,R, .P /o, 2)#5%, which reversed the Resolutions dated &ece03er
'2, #$$1
1
and April '", #$$4
4
of the /ational La3or Relations Co00ission */LRC+
and ordered petitioners to reinstate respondents Genr! ArnaiI *ArnaiI+, Edgar
/apal */apal+ and onathan Tolores *Tolores+ and to pa! the0 their 3acFwages for
having 3een constructivel! dis0issed, as well as their other 0onetar! 3enefits,
Factual Antecedents
Re!es hired respondents as chief 3aFers in his three franchise 3ranches of ulie9s
BaFeshop in .i3alo0 and .an ose, AntiDue, En anuar! #), #$$$, respondents
filed separate co0plaints against petitioners for underpa!0ent of wages, pa!0ent
of pre0iu0 pa! for holida! and rest da!, service incentive leave pa!, '1th 0onth
pa!, cost of living allowance *CELA+ and attorne!9s fees, These co0plaints were
later on consolidated,
.u3seDuentl!, in a 0e0orandu0 dated Be3ruar! '), #$$$, Re!es reassigned
respondents as utilit!Csecurit! personnel tasFed to clean the outside vicinit! of his
3aFeshops and to 0aintain peace and order in the area, Upon service of the
0e0o, respondents, however, refused to sign the sa0e and liFewise refused to
perfor0 their new assign0ents 3! not reporting for worF,
7n a letter60e0orandu0 dated (arch '1, #$$$, Re!es directed respondents to
report 3acF for worF and to e:plain wh! the! failed to assu0e their duties as
utilit!Csecurit! personnel, A second letter60e0orandu0 of the sa0e tenor dated
(arch #2, #$$$ was also sent to respondents, Respondents did not heed 3oth
0e0oranda,
Proceedings before the Labor Arbiter
(eanwhile, in the preli0inar! conference set on Be3ruar! #', #$$$, respondents
with their counsel, Att!, Ronnie 5, &elicana *Att!, &elicana+, on one hand, and
Re!es on the other, appeared 3efore the La3or Ar3iter to e:plore the possi3ilit! of
an a0ica3le settle0ent, 7t was agreed that the parties would enter into a
co0pro0ise agree0ent on (arch %, #$$$, Gowever, on Be3ruar! #", #$$$,
respondents, who were then represented 3! a different counsel, Att!, (ariano R,
Pefianco *Att!, Pefianco+, a0ended their co0plaints 3! including in their causes of
action illegal dis0issal and a clai0 for reinstate0ent and 3acFwages,
The supposed signing of the co0pro0ise agree0ent *which could have cul0inated
in respondents receiving the total a0ount of P54,'#),$$ as pa!0ent for their '1th
0onth pa! and separation pa!+ was reset to (arch #2, #$$$ 3ecause of
respondents9 non6appearance in the hearing of (arch %, #$$$, En (arch #2,
#$$$, Att!, Pefianco failed to appear despite due notice, En the ne:t hearing
scheduled on April #4, #$$$, 3oth Att!, &elicana and Att!, Pefianco appeared 3ut
the latter ver3all! 0anifested his withdrawal as counsel for respondents, Thus,
respondents, through Att!, &elicana, and Re!es, continued to e:plore the
possi3ilit! of settling the case a0ica3l!, (anifesting that the! need to sleep on the
proposed settle0ent, respondents reDuested for continuance of the hearing on
April #), #$$$, Co0e said date, however, respondents did not appear,
RealiIing the futilit! of further resetting the case to give wa! to a possi3le
settle0ent, the La3or Ar3iter ordered the parties to file their respective position
papers,
&espite his earlier withdrawal as counsel, Att!, Pefianco filed a oint Position
Paper
5
on 3ehalf of respondents alleging that the! were dis0issed fro0
e0plo!0ent on Be3ruar! #', #$$$ without valid cause, As for petitioners, the!
stated in their position paper
)
that respondents were never dis0issed 3ut that the!
a3andoned their @o3s after filing their co0plaints, Petitioners denied that Re!es is
the e0plo!er of ArnaiI and /apal 3ut ad0itted such fact insofar as Tolores is
concerned,
7n his &ecision
%
dated August #5, #$$$, the La3or Ar3iter e:pressed dis0a! over
respondents9 lacF of good faith in negotiating a settle0ent, The La3or Ar3iter
denounced the wa! respondents dealt with Att!, &elicana during their discussions
for a possi3le settle0ent since respondents the0selves later on infor0ed the said
tri3unal that at the ti0e of the said discussions, the! no longer considered Att!,
&elicana as their counsel, &espite this, the La3or Ar3iter still reDuired the parties to
su30it their respective position papers, And as respondents9 position paper was
filed late and no evidence was attached to prove the allegations therein, the La3or
Ar3iter resolved to dis0iss the co0plaints, thus;
HGEREBERE, pre0ises considered the a3ove6entitled cases should 3e, as the!
are here3! dis0issed without pre@udice,
.E ER&ERE&,
2
Proceedings before the National Labor Relations Commission
Respondents filed a @oint appeal
"
with the /LRC, 7n a &ecision
'$
dated anuar! '%,
#$$#, the /LRC overruled the &ecision of the La3or Ar3iter and held that the
3urden of proof lies on herein petitioners as Re!es ad0itted 3eing the e0plo!er of
Tolores, Gence, petitioners not Tolores, had the dut! to advance proof, Hith
respect to ArnaiI and /apal, the /LRC noted that since their alleged e0plo!er was
not i0pleaded, said respondents9 cases should 3e re0anded to the La3or Ar3iter,
and tried as new and separate cases, The dispositive portion of the /LRC9s
&ecision reads;
HGEREBERE, the case is RE(A/&E& for purposes of identif!ing the real
respondents, to 3e separated as discussed, if warranted, and for further
proceedings to 3e conducted,
.E ER&ERE&,
''
Respondents filed a (otion for Reconsideration,
'#
alleging that the /LRC
&ecision violated their right to speed! disposition of their cases, The! also insisted
that Re!es is their e0plo!er as shown 3! his letter60e0orandu0 dated (arch '1,
#$$$ which directed all of the0 to report 3acF for worF, 7n addition, the fact that
Re!es was willing to pa! all the respondents the a0ount of P54,'#),$$ as
settle0ent onl! proves that there is an e0plo!er6e0plo!ee relationship 3etween
the0 and Re!es,
7n a Resolution
'1
dated .epte03er #1, #$$1, the /LRC found 0erit in respondents9
(otion for Reconsideration, 7t held that Re!es failed to present concrete proof of
his allegation that a certain Rodrigo -andiongco is the e0plo!er of ArnaiI and
/apalJ hence, Re!es is still presu0ed to 3e their e0plo!er as franchise owner of
the 3ranches where these e0plo!ees were assigned, The /LRC further ruled that
respondents9 de0otion in ranF fro0 chief 3aFers to utilit!Csecurit! personnel is
tanta0ount to constructive dis0issal which entitles the0 to the reliefs availa3le to
illegall! dis0issed e0plo!ees, As for the 0one! clai0s, the /LRC granted
respondents their salar! differentials, pre0iu0 pa! for rest da!, holida! pa!,
service incentive leave pa!, '1th 0onth pa! and CELA, 7n awarding such
0onetar! awards, the /LRC ratiocinated that the e0plo!er 3ears the 3urden of
proving that the e0plo!ees received their wages and 3enefits, 7n this case,
however, no proof of such pa!0ent was presented 3! the petitioners, The clai0 for
overti0e pa! though was denied since proof of overti0e worF is necessar! to
warrant such award, Lastl!, for Re!es9 un@ustified act done in 3ad faith,
respondents were awarded '$L attorne!9s fees, The /LRC ruled as follows;
HGEREBERE, Eur previous &ecision is 5ACATE& and a new one rendered
declaring co0plainants to have 3een illegall! dis0issed, Co0plainants are to 3e
reinstated to their for0er positions without loss of seniorit! rights, Co0plainants
are further awarded 3acFwages recFoned fro0 the ti0e the! were constructivel!
dis0issed up to the ti0e of their actual reinstate0ent, whether ph!sicall! or on
pa!roll,
Co0plainants 3eing underpaid are to 3e NpaidO their salar! differentials recFoned
three *1+ !ears 3acFwards fro0 the ti0e the! filed the instant co0plaints on
anuar! #), #$$$, pre0iu0 pa! for holida!, pre0iu0 pa! for rest da!, holida! pa!,
service incentive leave pa!, '1th 0onth pa! and CELA, if these have not 3een
paid to the0 !et,
.E ER&ERE&,
'4
Petitioners sought to reconsider this ruling via a (otion for
Reconsideration,
'5
insisting that respondents were not illegall! dis0issed and that
their reassign0ent or transfer as utilit!Csecurit! personnel was indispensa3le,
0ade in good faith and in the e:ercise of a valid 0anage0ent prerogative, Gence,
such reassign0ent does not a0ount to constructive dis0issal, Re!es clai0ed that
it would 3e liFel! for respondents, after filing co0plaints against hi0, to do
so0ething pre@udicial to the 3usiness as chief 3aFers, liFe 0i:ing har0ful
ingredients into the 3read that the! 3aFe, This could 3e ini0ical to the health of the
consu0ing pu3lic, Petitioners averred that respondents9 reassign0ent as
utilit!Csecurit! personnel is a preventive 0easure designed to protect the 3usiness
and its custo0ers, The! liFewise added that the transfer was 0eant to 3e onl!
te0porar! and 3esides, sa0e does not involve an! di0inution in pa!, rights and
privileges of the respondents, Petitioners also alleged that respondents9 wage
of P''5,$$ per da! is in consonance with and is even higher than the 0andated
0ini0u0 wage of P'$5,$$ under Hage Erder /o, RB)6$" for retail and service
esta3lish0ents e0plo!ing not 0ore than '$ worFers as in his 3usiness,
The /LRC, in its Resolution
')
dated &ece03er '2, #$$1, again reconsidered its
own ruling and held that respondents were not dis0issed, either actuall! or
constructivel!, 3ut instead willfull! diso3e!ed the return to worF order of their
e0plo!er, The /LRC upheld petitioners9 prerogative to transfer respondents if onl!
to serve the greater interest, safet! and well63eing of the 3u!ing pu3lic 3!
forestalling irregular acts of said e0plo!ees, The /LRC then put the 3la0e on
respondents for diso3e!ing the lawful orders of their e0plo!er, noting that it was
the sa0e attitude displa!ed 3! the0 in their dealings with their counsel, Att!,
&elicana, in the proceedings 3efore the La3or Ar3iter, 7t also reversed its previous
ruling that respondents were underpaid their wages and ad@udged the0 to 3e even
overpaid 3! P'$,$$ per Hage Erder /o, RB )6$"6A, Thus, respondents9
co0plaints were dis0issed e:cept for their clai0s for pre0iu0 pa! for holida!, and
rest da!, service incentive leave pa!, '1th 0onth pa! and CELA, which awards
would stand onl! if no pa!0ent therefor has !et 3een 0ade,
Respondents filed a (otion for Reconsideration
'%
and sought for the e:ecution of
the /LRC Resolution dated .epte03er #1, #$$1 due to the alleged finalit! of the
ruling, According to the0, petitioners9 pro forma (otion for Reconsideration of the
said resolution did not suspend the running of the period for taFing an appeal, This
0otion was, however, denied in the /LRC Resolution
'2
dated April '", #$$4,
Proceedings before the Court of Appeals
Respondents appealed to the CA through a petition for certiorari)
'"
wherein the!
i0puted grave a3use of discretion on the part of the /LRC in not declaring the0 to
have 3een illegall! dis0issed and entitled to salar! differentials,
The CA, in its &ecision
#$
dated .epte03er #1, #$$5, found 0erit in the petition,
ruling that respondents were constructivel! dis0issed since their designation fro0
chief 3aFers to utilit!Csecurit! personnel is undou3tedl! a de0otion in ranF which
involved Aa drastic change in the nature of worF resulting to a de0eaning and
hu0iliating worF condition,A 7t also held that petitioners9 fear that respondents 0ight
introduce har0ful foreign su3stances in 3aFing 3read is 0ore i0aginar! than real,
Burther, respondents could not 3e held guilt! of a3andon0ent of worF as this was
negated 3! their i00ediate filing of co0plaints to specificall! asF for reinstate0ent,
/evertheless, the CA denied the clai0 for salar! differentials 3! totall! agreeing
with the /LRC9s finding on the 0atter, .aid court then resolved to award
respondents the rest of their 0onetar! clai0s for failure of petitioners to present
proof of pa!0ent and '$L attorne!9s fees as respondents9 dis0issal was attended
with 3ad faith which forced the0 to litigate, vi-;
3(ERE5ORE, in view of the foregoing pre0ises, @udg0ent is here3! rendered 3!
us 'E&&ING A'IDE andREVER'ING the Resolutions dated &ece03er '2, #$$1
and April '", #$$4 in /LRC Case /o, 56$$$%256#$$$, The record of this case is
here3! RE,ANDED to the La3or Ar3iter for the co0putation of 3acFwages,
pre0iu0 pa! for holida!s and rest da!s, holida! pa!, service incentive leave pa!,
'1th 0onth pa! and attorne!9s fees due to the petitioners and, thereafter, for the
pa!0ent thereof 3! the private respondent Re!es,
#'
Petitioners filed a (otion for Reconsideration
##
3ut the sa0e was denied 3! the CA
in a Resolution
#1
dated (a! #5, #$$),
I""*e"
Gence, this present petition raising the following issues for the Court9s
consideration;
7, &7& TGE GE/ERABLE CEURT EB APPEAL., 7/ &7.TURB7/- TGE
B7/&7/-. EB BACT. EB TGE LABER ARB7TER A. HELL A. TGE
/AT7E/AL LABER NRELAT7E/.O CE((7..7E/ HGE GA5E TR7E&
TGE CA.E, NCE((7TO -RA5E ABU.E EB &7.CRET7E/ TA/TA(EU/T
TE LACQ EB UR7.&7CT7E/T
77, &7& TGE GE/ERABLE CEURT EB APPEAL. (A/7BE.TL?
NE5ERLEEQO RELE5A/T BACT. /ET &7.PUTE& B? TGE
RE.PE/&E/T., HG7CG, 7B PREPERL? CE/.7&ERE& CEUL&
U.T7B? A &7BBERE/T CE/CLU.7E/T
777, HA. TGE TRA/.BERCREA..7-/(E/T EB RE.PE/&E/T. TE
A/ETGER PE.7T7E/ H7TGEUT &7(7/UT7E/ 7/ PA? A/& ETGER
PR757LE-E. TA/TA(EU/T TE CE/.TRUCT75E &7.(7..ALT
#4
Petitioners 0aintain that the /LRC, in its Resolution dated &ece03er '2, #$$1,
0erel! upheld the findings of the La3or Ar3iter that there was no constructive
dis0issal 3ecause of the a3sence of an! evidence to prove such allegation, As
such, Re!es9 supposition is that the CA erred in co0ing up with a contrar! finding,
Petitioners insist that the order transferring or reassigning respondents fro0 chief
3aFers to utilit!Csecurit! personnel is a valid e:ercise of 0anage0ent prerogative
for it does not involve an! di0inution in pa! and privileges and that sa0e is in
accordance with the reDuire0ents of the 3usiness, vi-: to protect its goodwill and
reputation as well as the health and welfare of the consu0ing pu3lic,
O*r R*li+
He find no 0erit in the petition,
&he ourt of 'ppeals is correct in reviewin" the fin#in"s of the National La$or
Relations ommission.
Petitioners clai0 that the CA should have accorded respect and finalit! to the
factual findings rendered 3! the /LRC in its &ece03er '2, #$$1 Resolution as the
sa0e 0erel! affir0ed the findings of the La3or Ar3iter, Citing several @urisprudence
on the 0atter, petitioners add that factual findings of la3or officials who acDuired
e:pertise on 0atters within their @urisdiction have conclusive effect,
He re@ect this contention as none of the /LRC divergent rulings affir0ed the
findings of the La3or Ar3iter, To recall, the La3or Ar3iter dis0issed respondents9
co0plaints on a technicalit!, that is, on the ground that respondents9 oint Position
Paper was filed late and that it did not contain an! attach0ents to prove the
allegations therein, Upon appeal, the /LRC rendered its first &ecision on anuar!
'%, #$$# which re0anded the case to the La3or Ar3iter for purposes of identif!ing
the real respondents and separating the consolidated cases if warranted, and for
the conduct of further proceedings due to Re!es9s allegation that ArnaiI and /apal
have a different e0plo!er, The /LRC also disagreed with the La3or Ar3iter9s
ratiocination that it 3ehooved upon respondents to attach proof of their illegal
dis0issal, According to the /LRC, since Re!es ad0itted that he is Tolores9s
e0plo!er, the 3urden to prove that the ter0ination is valid as well as the due
pa!0ent of 0one! clai0s falls upon petitioners, Upon petitioners9 0otion, however,
the /LRC reconsidered this ruling and resolved the case on the 0erits, 7n so
doing, it found the respondents to have 3een constructivel! dis0issed through its
Resolution dated .epte03er #1, #$$1, The /LRC, however, once again reversed
itself in a Resolution dated &ece03er '2, #$$1 upon Re!es9s filing of a (otion for
Reconsideration, This ti0e, the /LRC held that respondents were not illegall!
dis0issed 3ut instead a3andoned their @o3s, 7t was at this point that respondents
sought recourse fro0 the CA,
7ndeed, Afactual findings of la3or officials who are dee0ed to have acDuired
e:pertise in 0atters within their respective @urisdictions are generall! accorded not
onl! respect, 3ut even finalit!,A
#5
7t is a well6entrenched rule that findings of facts of
the /LRC, affir0ing those of the La3or Ar3iter, are accorded respect and due
consideration when supported 3! su3stantial evidence,
#)
He, however, find that
the doctrine of great respect and finalit! has no application to the case at 3ar, As
stated, the La3or Ar3iter dis0issed respondents9 co0plaints on 0ere technicalit!,
The /LRC, upon appeal, then ca0e up with three divergent rulings, At first, it
re0anded the case to the La3or Ar3iter, Gowever, in a su3seDuent resolution, it
decided to resolve the case on the 0erits 3! ruling that respondents were
constructivel! dis0issed, But later on, it again reversed itself in its third and final
resolution of the case and ruled in petitioners9 favor, Therefore, contrar! to Re!es9s
clai0, the /LRC did not, on an! occasion, affir0 an! factual findings of the La3or
Ar3iter, The CA is thus correct in reviewing the entire records of the case to
deter0ine which findings of the /LRC is sound and in accordance with law,
Besides, the CA, at an! rate, 0a! still resolve factual issues 3! e:press 0andate
of the law despite the respect given to ad0inistrative findings of fact,
#%
&he transfer.reassi"nment of respon#ents constitutes constructive #ismissal.
Petitioners contend that the order transferring or reassigning respondents fro0
their poslition as chief 3aFers to utilit!Csecurit! personnel is within the a03it of
0anage0ent prerogative as e0plo!er, The! harp on the fact that no evidence was
presented 3! respondents to show that the! were dis0issed fro0 e0plo!0ent,
He have held that 0anage0ent is free to regulate, according to its own discretion
and @udg0ent, all aspects of e0plo!0ent, including hiring, worF assign0ents,
worFing 0ethods, ti0e, place and 0anner of worF, processes to 3e followed,
supervision of worFers, worFing regulations, transfer of e0plo!ees, worF
supervision, la! off of worFers and discipline, dis0issal and recall of worFers, The
e:ercise of 0anage0ent prerogative, however, is not a3solute as it 0ust 3e
e:ercised in good faith and with due regard to the rights of la3or,
#2
7n constructive dis0issal cases, the e0plo!er has the 3urden of proving that the
transfer of an e0plo!ee is for @ust or valid ground, such as genuine 3usiness
necessit!, The e0plo!er 0ust de0onstrate that the transfer is not unreasona3le,
inconvenient, or pre@udicial to the e0plo!ee and that the transfer does not involve
a de0otion in ranF or a di0inution in salar! and other 3enefits, A7f the e0plo!er
fails to overco0e this 3urden of proof, the e0plo!ee9s transfer is tanta0ount to
unlawful constructive dis0issal,A
#"
7n this case, petitioners insist that the transfer of respondents was a 0easure of
self6preservation and was pro0pted 3! a desire to protect the health of the 3u!ing
pu3lic, clai0ing that respondents should 3e transferred to a position where the!
could not sa3otage the 3usiness pending resolution of their cases, According to
petitioners, the possi3ilit! that respondents 0ight introduce har0ful su3stances to
the 3read while in the perfor0ance of their duties as chief 3aFers is not i0aginar!
3ut real as 3orne out 3! what Tolores did in one of the 3aFeshops in Culasi,
AntiDue where he was assigned as 3aFer,
This postulation is not well6taFen, En the contrar!, petitioners failed to satisf! the
3urden of proving that the transfer was 3ased on @ust or valid ground, Petitioners9
3are assertions of i00inent threat fro0 the respondents are 0ere accusations
which are not su3stantiated 3! an! proof, This Court is proscri3ed fro0 0aFing
conclusions 3ased on 0ere presu0ptions or suppositions, An e0plo!ee9s fate
cannot 3e @ustl! hinged upon con@ectures and sur0ises,
1$
The act attri3uted
against Tolores does not even convince us as he was 0erel! a suspected culprit in
the alleged sa3otage for which no investigation tooF place to esta3lish his guilt or
culpa3ilit!, Besides, Re!es still retained Tolores as an e0plo!ee and chief 3aFer
when he could have dis0issed hi0 for cause if the allegations were indeed found
true, 7n view of these, this Court finds no co0pelling reason to @ustif! the transfer of
respondents fro0 chief 3aFers to utilit!Csecurit! personnel, Hhat appears to this
Court is that respondents9 transfer was an act of retaliation on the part of
petitioners due to the for0er9s filing of co0plaints against the0, and thus, was
clearl! 0ade in 3ad faith, 7n fact, petitioner Re!es even ad0itted that he caused
the reassign0ents due to the pending co0plaints filed against hi0, As the CA aptl!
held;
7n the case at 3ench, respondent Re!es failed to @ustif! petitioners9 transfer fro0
the position of chief 3aFers to utilit!Csecurit! personnel, He find that the threat
3eing alluded to 3! respondent Re!es U that the petitioners 0ight introduce
har0ful foreign su3stances in 3aFing 3read U is i0aginar! and not real, He recall
that what triggered the petitioners9 reassign0ent was the filing of their co0plaints
against private respondents in the /LRC, The petitioners were not even given an
opportunit! to refute the reason for the transfer, The drastic change in petitioners9
nature of worF unDuestiona3l! resulted in, as rightl! perceived 3! the0, a
de0eaning and hu0iliating worF condition, The transfer was a de0otion in ranF,
3e!ond dou3t, There is de0otion when an e0plo!ee is transferred fro0 a position
of dignit! to a servile or 0enial @o3, Ene does not need to stretch the i0agination to
distinguish the worF of a chief 3aFer to that of a securit! cu0 utilit! 0an,
1'
AN&Oe0otion involves a situation in which an e0plo!ee is relegated to a su3ordinate
or less i0portant position constituting a reduction to a lower grade or ranF, with a
corresponding decrease in duties and responsi3ilities, and usuall! acco0panied 3!
a decrease in salar!,A
1#
Hhen there is a de0otion in ranF andCor a di0inution in
pa!J when a clear discri0ination, insensi3ilit! or disdain 3! an e0plo!er 3eco0es
un3eara3le to the e0plo!eeJ or when continued e0plo!0ent is rendered
i0possi3le, unreasona3le or unliFel!, the transfer of an e0plo!ee 0a! constitute
constructive dis0issal,
11
He agree with the CA in ruling that the transfer of respondents a0ounted to a
de0otion, Although there was no di0inution in pa!, there was undou3tedl! a
de0otion in titular ranF, Ene cannot den! the disparit! 3etween the duties and
functions of a chief 3aFer to that of a utilit!Csecurit! personnel tasFed to clean and
0anage the orderliness of the outside pre0ises of the 3aFeshop, Respondents
were even prohi3ited fro0 entering the 3aFeshop, The change in the nature of their
worF undenia3l! resulted to a de0eaning and hu0iliating worF condition,
7n Glo$e &elecom) !nc. v. Floren#o*Flores)
14
we held;
The 0anagerial prerogative to transfer personnel 0ust 3e e:ercised without grave
a3use of discretion, 7t 0ust alwa!s 3ear in 0ind the 3asic ele0ents of @ustice and
fair pla!, Gaving the right 0ust not 3e confused with the 0anner that right is
e:ercised, Thus, it cannot 3e used as a su3terfuge 3! the e0plo!er to rid hi0self
of an undesira3le worFer,
Petitioners9 clai0 that respondents a3andoned their @o3 stands on shallow
grounds,1wphi1 Respondents cannot 3e faulted for refusing to report for worF as
the! were co0pelled to Duit their @o3 due to a de0otion without an! @ust cause,
(oreover, we have consistentl! held that a charge of a3andon0ent is inconsistent
with the filing of a co0plaint for constructive dis0issal,
15
Respondents9 de0and to
0aintain their positions as chief 3aFers 3! filing a case and asFing for the relief of
reinstate0ent 3elies a3andon0ent,
1)
As the transfer proves un3eara3le to respondents as to foreclose an! choice on
their part e:cept to forego continued e0plo!0ent, sa0e a0ounts to constructive
dis0issal for which reinstate0ent without loss of seniorit! rights, full 3acFwages,
inclusive of allowances, and other 3enefits or their 0onetar! eDuivalent, co0puted
fro0 the ti0e their co0pensation was withheld up to the ti0e of their actual
reinstate0ent, should 3e granted,
1%
The CA, therefore, did not err in awarding the
reliefs pra!ed for 3! the respondents as the! were, without a dou3t, constructivel!
dis0issed,
3(ERE5ORE, the petition is DENIED, The .epte03er #1, #$$5 &ecision of the
Court of Appeals in CA6-,R, .P /o, 2)#5% is A55IR,ED.
.E ER&ERE&,
G.R. No. 163269 April 19, 2006
RO$ANDO C. RIVERA, Petitioner,
vs,
'O$ID%AN4 CORPORA&ION, Respondent,
& E C 7 . 7 E /
CA$$EJO, 'R., J.:
Assailed in this Petition for Review on Certiorari is the &ecision
'
of the Court of
Appeals *CA+ in CA6-,R, C5 /o, 5##15 as well as its Resolution
#
den!ing the
(otion for Partial Reconsideration of petitioner Rolando C, Rivera,
Petitioner had 3een worFing for .olid3anF Corporation since ul! ', '"%%,
1
Ge was
initiall! e0plo!ed as an Audit ClerF, then as Credit 7nvestigator, .enior ClerF,
Assistant Accountant, and Assistant (anager, Prior to his retire0ent, he 3eca0e
the (anager of the Credit 7nvestigation and Appraisal &ivision of the Consu0er9s
BanFing -roup, 7n the 0eanti0e, Rivera and his 3rother6in6law put up a poultr!
3usiness in Cavite,
7n &ece03er '""4, .olid3anF offered two retire0ent progra0s to its e0plo!ees;
*a+ the Erdinar! Retire0ent Progra0 *ERP+, under which an e0plo!ee would
receive 25L of his 0onthl! 3asic salar! 0ultiplied 3! the nu03er of !ears in
serviceJ and *3+ the .pecial Retire0ent Progra0 *.RP+, under which a retiring
e0plo!ee would receive #5$L of the gross 0onthl! salar! 0ultiplied 3! the
nu03er of !ears in service,
4
.ince Rivera was onl! 45 !ears old, he was not
Dualified for retire0ent under the ERP, Under the .RP, he was entitled to
receive P',$45,#52,"5 3! wa! of 3enefits,
5
&eciding to devote his ti0e and attention to his poultr! 3usiness in Cavite, Rivera
applied for retire0ent under the .RP, .olid3anF approved the application and
Rivera was entitled to receive the net a0ount of P")1,)'",#2, This a0ount
included his perfor0ance incentive award *P7A+, and his unearned 0edical, dental
and optical allowances in the a0ount of P',))),)%, 0inus his total accounta3ilities
to .olid3anF a0ounting to P'$),"%1,$$,
)
Rivera received the a0ount and
confir0ed his separation fro0 .olid3anF on Be3ruar! #5, '""5,
%
.u3seDuentl!, .olid3anF reDuired Rivera to sign an undated Release, Haiver and
Puitclai0, which was notariIed on (arch ', '""5,
2
Rivera acFnowledged receipt of
the net proceeds of his separation and retire0ent 3enefits and pro0ised that ANheO
would not, at an! ti0e, in an! 0anner whatsoever, directl! or indirectl! engage in
an! unlawful activit! pre@udicial to the interest of .olid3anF, its parent, affiliate or
su3sidiar! co0panies, their stocFholders, officers, directors, agents or e0plo!ees,
and their successors6in6interest and will not disclose an! infor0ation concerning
the 3usiness of .olid3anF, its 0anner or operation, its plans, processes, or data of
an! Find,A
"
Aside fro0 acFnowledging that he had no cause of action against .olid3anF or its
affiliate co0panies, Rivera agreed that the 3anF 0a! 3ring an! action to seeF an
award for da0ages resulting fro0 his 3reach of the Release, Haiver and
Puitclai0, and that such award would include the return of whatever su0s paid to
hi0 3! virtue of his retire0ent under the .RP,
'$
Rivera was liFewise reDuired to
sign an undated UndertaFing as a supple0ent to the Release, Haiver and
Puitclai0 in favor of .olid3anF in which he declared that he received in full his
entitle0ent under the law *salaries, 3enefits, 3onuses and other e0olu0ents+,
including his separation pa! in accordance with the .RP, 7n this UndertaFing, he
pro0ised that ANheO will not seeF e0plo!0ent with a co0petitor 3anF or financial
institution within one *'+ !ear fro0 Be3ruar! #2, '""5, and that an! 3reach of the
UndertaFing or the provisions of the Release, Haiver and Puitclai0 would entitle
.olid3anF to a cause of action against hi0 3efore the appropriate courts of
law,
''
UnliFe the Release, Haiver and Puitclai0, the UndertaFing was not
notariIed,
En (a! ', '""5, the EDuita3le BanFing Corporation *EDuita3le+ e0plo!ed Rivera
as (anager of its Credit 7nvestigation and Appraisal &ivision of its Consu0ers9
BanFing -roup,
'#
Upon discovering this, .olid3anF Birst 5ice6President for Gu0an
Resources &ivision *GR&+ Celia ,L, 5illarosa wrote a letter dated (a! '2, '""5,
infor0ing Rivera that he had violated the UndertaFing, .he liFewise de0anded the
return of all the 0onetar! 3enefits he received in consideration of the .RP within
five *5+ da!s fro0 receiptJ otherwise, appropriate legal action would 3e taFen
against hi0,
'1
Hhen Rivera refused to return the a0ount de0anded within the given period,
.olid3anF filed a co0plaint for .u0 of (one! with Pra!er for Hrit of Preli0inar!
Attach0ent
'4
3efore the Regional Trial Court *RTC+ of (anila on une #), '""5,
.olid3anF, as plaintiff, alleged therein that in accepting e0plo!0ent with a
co0petitor 3anF for the sa0e position he held in .olid3anF 3efore his retire0ent,
Rivera violated his UndertaFing under the .RP, Considering that Rivera accepted
e0plo!0ent with EDuita3le 3arel! three 0onths after e:ecuting the UndertaFing, it
was clear that he had no intention of honoring his co00it0ent under said deed,
.olid3anF pra!ed that Rivera 3e ordered to return the net a0ount of P")1,)'",#2
plus interests therein, and attorne!9s fees, thus;
HGEREBERE, it is respectfull! pra!ed that;
', At the co00ence0ent of this action and upon the filing of a 3ond in
such a0ount as this Gonora3le Court 0a! fi:, a writ of preli0inar!
attach0ent 3e forthwith issued against the properties of the defendant as
satisfaction of an! @udg0ent that plaintiff 0a! secureJ
#, After trial, @udg0ent 3e rendered ordering defendant to pa! plaintiff the
following su0s; /7/E GU/&RE& .7MT?6TGREE TGEU.A/& .7M
GU/&RE& /7/ETEE/ A/& #2C'$$ E/L? *P")1,)'",#2+ PE.E.,
Philippine Currenc!, as of #1 (a! '""5, plus legal interest of '#L per
annu0 until full! paidJ
1, .uch su0 eDuivalent to '$L of plaintiff9s clai0s plus P#,$$$,$$ for
ever! appearance 3! wa! of attorne!9s feesJ and
4, Costs of suit,
PLA7/T7BB pra!s for other reliefs @ust and eDuita3le under the pre0ises,
'5
.olid3anF appended the Affidavit of GR& Birst 5ice6President Celia 5illarosa and a
cop! of the Release, Haiver and Puitclai0 and UndertaFing which Rivera
e:ecuted,
')
7n an Erder dated ul! ), '""5, the trial court issued a Hrit of Preli0inar!
Attach0ent
'%
ordering &eput! .heriff Eduardo Centeno to attach all of Rivera9s
properties not e:e0pt fro0 e:ecution, Thus, the .heriff levied on a parcel of land
owned 3! Rivera,
7n his Answer with Affir0ative &efenses and Counterclai0, Rivera ad0itted that he
received the net a0ount ofP")1,)'",#2 as separation pa!, Gowever, the
e0plo!0ent 3an provision in the UndertaFing was never conve!ed to hi0 until he
was 0ade to sign it on Be3ruar! #2, '""5, Ge e0phasiIed that, prior to said date,
.olid3anF never disclosed an! condition to the retire0ent sche0e, nor did it
i0pose such e0plo!0ent 3an on the 3anF officers and e0plo!ees who had
previousl! availed of the .RP, Ge alleged that the undertaFing not to AseeF
e0plo!0ent with an! co0petitor 3anF or financial institution within one *'+ !ear
fro0 Be3ruar! #2, '""5A was void for 3eing contrar! to the Constitution, the law
and pu3lic polic!, that it was unreasona3le, ar3itrar!, oppressive, discri0inator!,
cruel, un@ust, inhu0an, and violative of his hu0an rights, Ge further clai0ed that
the UndertaFing was a contract of adhesion 3ecause it was prepared solel! 3!
.olid3anF without his participationJ considering his 0oral and econo0ic
disadvantage, it 0ust 3e li3erall! construed in his favor and strictl! against the
3anF,
En August '5, '""5, .olid3anF filed a 5erified (otion for .u00ar! udg0ent,
alleging therein that Rivera raised no genuine issue as to an! 0aterial fact in his
Answer e:cept as to the a0ount of da0ages, 7t pra!ed that the RTC render
su00ar! @udg0ent against Rivera, .olid3anF alleged that whether or not the
e0plo!0ent 3an provision contained in the UndertaFing is unreasona3le, ar3itrar!,
or oppressive is a Duestion of law, 7t insisted that Rivera signed the UndertaFing
voluntaril! and for valua3le considerationJ and under the Release, Haiver and
Puitclai0, he was o3liged to return the P")1,)'",#2 upon accepting e0plo!0ent
fro0 a co0petitor 3anF within the one6!ear proscri3ed period, .olid3anF appended
to its 0otion the Affidavit of 5illarosa, where she declared that Rivera was
e0plo!ed 3! EDuita3le on (a! ', '""5 for the sa0e position he held 3efore his
retire0ent fro0 .olid3anF,
Rivera opposed the 0otion contending that, as gleaned fro0 the pleadings of the
parties as well as 5illarosa9s Affidavit, there are genuine issues as to 0aterial facts
which call for the presentation of evidence, Ge averred that there was a need for
the parties to adduce evidence to prove that he did not sign the UndertaFing
voluntaril!, Ge clai0ed that he would not have 3een allowed to avail of the .RP if
he had not signed it, and conseDuentl!, his retire0ent 3enefits would not have
3een paid, This was what Ed /allas, .olid3anF Assistant 5ice6President for GR&
and Personnel, told hi0 when he received his checF on Be3ruar! #2, '""5, .enior
5ice6President Genr! 5aldeI, his superior in the Consu0ers9 BanFing -roup, also
did not 0ention that he would have to sign such UndertaFing which contained the
assailed provision, Thus, he had no choice 3ut to sign it, Ge insisted that the
Duestion of whether he violated the UndertaFing is a genuine issue of fact which
called for the presentation of evidence during the hearing on the 0erits of the case,
Ge also asserted that he could not cause in@ur! or pre@udice to .olid3anF9s interest
since he never acDuired an! sensitive or delicate infor0ation which could pre@udice
the 3anF9s interest if disclosed,
Rivera averred that he had the right to adduce evidence to prove that he had 3een
faithful to the provisions of the Release, Haiver and Puitclai0, and the
UndertaFing, and had not co00itted an! act or done or said an!thing to cause
in@ur! to .olid3anF,
'2
Rivera appended to his Epposition his Counter6Affidavit in which he reiterated that
he had to sign the UndertaFing containing the e0plo!0ent 3an provision,
otherwise his avail0ent of the .RP would not push through, There was no truth to
the 3anF9s allegation that, Ain e:change for receiving the larger a0ount
of P',$45,#52,"5 under the .RP, instead of the ver! 0uch s0aller a0ount
of P##4,2%5,2' under the ERP, he agreed that he will not seeF e0plo!0ent in a
co0petitor 3anF or financial institution within one !ear fro0 Be3ruar! #2, '""5,A 7t
was the 3anF which conceived the .RP to strea0line its organiIation and all he did
was accept it, Ge stressed that the decision whether to allow hi0 to avail of the
.RP 3elonged solel! to .olid3anF, Ge also pointed out that the e0plo!0ent 3an
provision in the UndertaFing was not a consideration for his avail0ent of the .RP,
and that if he did not avail of the retire0ent progra0, he would have continued
worFing for .olid3anF for at least '5 0ore !ears, earning 0ore than what he
received under the .RP, Ge alleged that he intended to go full ti0e into the poultr!
3usiness, 3ut after a3out two 0onths, found out that, contrar! to his e:pectations,
the 3usiness did not provide inco0e sufficient to support his fa0il!, Being the
3readwinner, he was then forced to looF for a @o3, and considering his training and
e:perience as a for0er 3anF e0plo!ee, the @o3 with EDuita3le was all he could
find, Ge insisted that he had re0ained faithful to .olid3anF and would continue to
do so despite the case against hi0, the attach0ent of his fa0il! ho0e, and the
resulting 0ental anguish, torture and e:pense it has caused the0,
'"
7n his .upple0ental Epposition, Rivera stressed that, 3eing a for0er 3anF
e0plo!ee, it was the onl! Find of worF he Fnew, The 3an was, in fact, practicall!
a3solute since it applied to all financial institutions for one !ear fro0 Be3ruar! #2,
'""5, Ge pointed out that he could not worF in an! other co0pan! 3ecause he did
not have the Dualifications, especiall! considering his age, (oreover, after one
!ear fro0 Be3ruar! #2, '""5, he would no longer have an! 0arFeta3le sFill,
3ecause 3! then, it would have 3een rendered o3solete 3! non6use and rapid
technological advances, Ge insisted that the 3an was not necessar! to protect the
interest of .olid3anF, as, in the first place, he had no access to an! AsecretA
infor0ation which, if revealed would 3e pre@udicial to .olid3anF9s interest, 7n an!
case, he was not one to reveal whatever Fnowledge or infor0ation he 0a! have
acDuired during his e0plo!0ent with said 3anF,
#$
7n its Repl!, .olid3anF averred that the wisdo0 of reDuiring the UndertaFing fro0
the '""5 .RP is purel! a 0anage0ent prerogative, 7t was not for Rivera to
Duestion and decr! the 3anF9s polic! to protect itself fro0 unfair co0petition and
disclosure of its trade secrets, The su3stantial 0onetar! windfall given the retiring
officers was 0eant to tide the0 over the one6!ear period of hiatus, and did not
prevent the0 fro0 engaging in an! Find of 3usiness or 3ar the0 fro0 3eing
e0plo!ed e:cept with co0petitor 3anFsCfinancial institutions,
#'
En &ece03er '2, '""5, the trial court issued an Erder of .u00ar!
udg0ent,
##
The fallo of the decision reads;
HGEREBERE, .U((AR? U&-(E/T is here3! rendered in favor of plaintiff and
against defendant ordering the latter to pa! to plaintiff 3anF the a0ount of /7/E
GU/&RE& .7MT?6TGREE TGEU.A/& .7M GU/&RE& /7/ETEE/ A/& #2C'$$
*P")1,)'",#2+ PE.E., Philippine Currenc!, as of (a! #1, '""5, plus legal interest
at '#L per annu0 until full! paid, and the costs of the suit,
BURTGER, /E5ERTGELE.., 3oth parties are here3! encouraged as the! are
directed to 0eet again and sit down to find out how the! can finall! end this rift and
litigation, all in the na0e of eDuit!, for after all, defendant had worFed for the 3anF
for so0e '2 !ears,
#1
The trial court declared that there was no genuine issue as to a 0atter of fact in the
case since Rivera voluntaril! e:ecuted the Release, Haiver and Puitclai0, and the
UndertaFing, Ge had a choice not to retire, 3ut opted to do so under the .RP, and,
in fact, received the 3enefits under it,
According to the RTC, the prohi3ition incorporated in the UndertaFing was not
unreasona3le, To allow Rivera to 3e e:cused fro0 his undertaFings in said deed
and, at the sa0e ti0e, 3enefit therefro0 would 3e to allow hi0 to enrich hi0self at
the e:pense of .olid3anF, The RTC ruled that Rivera had to return
the P")1,)'",#2 he received fro0 .olid3anF, plus interest of '#L per annu0 fro0
(a! #1, '""2 until full! paid,
Aggrieved, Rivera appealed the ruling to the CA which rendered @udg0ent on une
'4, #$$# partiall! granting the appeal, The fallo of the decision reads;
HGEREBERE, the appeal is PART7ALL? -RA/TE&, The decision appealed fro0
is ABB7R(E& with the 0odification that the attach0ent and lev! upon the fa0il!
ho0e covered 3! TCT /o, 5')#' of the Register of &eeds, Las Pi8as, (etro
(anila, is here3! .ET A.7&E and &7.CGAR-E&,
.E ER&ERE&,
#4
The CA declared that there was no genuine issue regarding an! 0aterial fact
e:cept as to the a0ount of da0ages, 7t ratiocinated that the agree0ent 3etween
Rivera and .olid3anF was the law 3etween the0, and that the interpretation of the
stipulations therein could not 3e left upon the whi0s of Rivera, According to the
CA, Rivera never denied signing the Release, Haiver, and Puitclai0, including the
UndertaFing regarding the e0plo!0ent prohi3ition, Ge even ad0itted @oining
EDuita3le as an e0plo!ee within the proscri3ed one6!ear period, The alleged
defenses of Rivera, the CA declared, could not prevail over the ad0issions in his
pleadings,1avvphil.net(oreover, Rivera9s @ustification for taFing the @o3 with
EDuita3le, Adire necessit!,A was not an accepta3le ground for annulling the
UndertaFing since there were no ear0arFs of coercion, undue influence, or fraud in
its e:ecution, Gaving e:ecuted the said deed and thereafter receiving the 3enefits
under the .RP, he is dee0ed to have waived the right
to assail the sa0e, hence, is estopped fro0 insisting or retaining the said a0ount
of P")1,)'",#2,
Gowever, the CA ruled that the attach0ent 0ade upon Rivera9s fa0il! ho0e was
void, and, pursuant to the 0andate of Article '55, in relation to Article '51 of the
Ba0il! Code, 0ust 3e discharged,
Gence, this recourse to the Court,
Petitioner avers that U
7,
TGE CEURT EB APPEAL. ERRE& 7/ UPGEL&7/- TGE PREPR7ET? EB TGE
.U((AR? U&-(E/T RE/&ERE& B? TGE TR7AL CEURT CE/.7&ER7/-
TGE EM7.TE/CE EB -E/U7/E 7..UE. A. TE (ATER7AL BACT. HG7CG CALL
BER TGE PRE.E/TAT7E/ EB E57&E/CE 7/ A TR7AL E/ TGE (ER7T.,
77,
TGE CEURT EB APPEAL. ERRE& 7/ /ET &ECLAR7/- TGE E/E6?EAR
E(PLE?(E/T BA/ 7(PE.E& B? RE.PE/&E/T .EL7&BA/Q UPE/ GERE7/
PET7T7E/ER /ULL A/& 5E7& BER BE7/- U/REA.E/ABLE A/&
EPPRE..75E A/& BER CE/.T7TUT7/- RE.TRA7/T EB TRA&E HG7CG
57ELATE. PUBL7C PEL7C? A. E/U/C7ATE& 7/ EUR CE/.T7TUT7E/ A/&
LAH.,
777,
TGE CEURT EB APPEAL. ERRE& 7/ ABB7R(7/- TGE TR7AL CEURT9.
&EC7.7E/ ER&ER7/- GERE7/ RE.PE/&E/T TE PA? .EL7&BA/Q TGE
A(EU/T EB P")1,)'",#2 A. EB (A? #1, '""5, PLU. LE-AL 7/TERE.T EB
'#L PER A//U( U/T7L BULL? PA7&,
75,
(ERE .PEC7B7CALL?, TGE CEURT EB APPEAL. ERRE& 7/ ABB7R(7/- TGE
PERT7E/ EB TGE .U((AR? U&-(E/T ER&ER7/- PET7T7E/ER TE PA?
.EL7&BA/Q LE-AL 7/TERE.T EB '#L PER A//U( U/T7L BULL? PA7& E/
TGE ABERE(E/T7E/E& .U( NEBO P")1,)'",#2,
#5
The issues for resolution are; *'+ whether the parties raised a genuine issue in their
pleadings, affidavits, and docu0ents, that is, whether the e0plo!0ent 3an
incorporated in the UndertaFing which petitioner e:ecuted upon his retire0ent is
unreasona3le, oppressive, hence, contrar! to pu3lic polic!J and *#+ whether
petitioner is lia3le to respondent for the restitution of P")1,)'",#2 representing his
retire0ent 3enefits, and interest thereon at '#L per annu0 as of (a! #1, '""5
until pa!0ent of the full a0ount,
En the first issue, petitioner clai0s that, 3ased on the pleadings of the parties, and
the docu0ents and affidavits appended thereto, genuine issues as to 0atters of
fact were raised therein, Ge insists that the resolution of the issue of whether the
e0plo!0ent 3an is unreasona3le reDuires the presentation of evidence on the
circu0stances which led to respondent 3anF9s offer of the .RP and ERP, and
petitioner9s eventual acceptance and signing of the UndertaFing on (arch ', '""5,
There is liFewise a need to adduce evidence on whether the e0plo!0ent 3an is
necessar! to protect respondent9s interest, and whether it is an undue restraint on
petitioner9s constitutional right to earn a living to support his fa0il!, Ge further
insists that respondent is 3urdened to prove that it sustained da0age or in@ur! 3!
reason of his alleged 3reach of the e0plo!0ent 3an since neither the Release,
Haiver and Puitclai0, and UndertaFing he e:ecuted contain an! provision that
respondent is auto0aticall! entitled to the restitution of the P")1,)'",#2, Petitioner
points out that all the deeds provide is that, in case of 3reach thereof, respondent
is entitled to protection 3efore the appropriate courts of law,
En the second issue, petitioner avers that the prohi3ition incorporated in the
Release, Haiver and Puitclai0 3arring hi0 as retiree fro0 engaging directl! or
indirectl! in an! unlawful activit! and disclosing an! infor0ation concerning the
3usiness of respondent 3anF, as well as the e0plo!0ent 3an contained in the
UndertaFing he e:ecuted, are oppressive, unreasona3le, cruel and inhu0an
3ecause of its over3reath, Ge reiterates that it is against pu3lic polic!, an
unreasona3le restraint of trade, 3ecause it prohi3its hi0 to worF for one !ear in the
Philippines, ulti0atel! preventing hi0 fro0 supporting his fa0il!, Ge points out that
a 3readwinner in a fa0il! of four 0inor daughters who are all stud!ing, with a wife
who does not worF, one would have a ver! difficult ti0e 0eeting the financial
o3ligations even with a stead!, regular6pa!ing @o3, Ge insists that the UndertaFing
deprives hi0 of the 0eans to support his fa0il!, and ulti0atel!, his children9s
chance for a good education and future, Ge reiterates that the returns in his poultr!
3usiness fell short of his e:pectations, and unfortunatel!, the 3usiness was totall!
destro!ed 3! t!phoon ARosingA in /ove03er '""5,
Petitioner further 0aintains that respondent9s 0anage0ent prerogative does not
give it a license to entice its e0plo!ees to retire at a ver! !oung age and prohi3it
the0 fro0 seeFing e0plo!0ent in a so6called co0petitor 3anF or financial
institution, thus prevent the0 fro0 worFing and supporting their fa0ilies
*considering that 3anFing is the onl! Find of worF the! Fnow+, Petitioner avers that
A0anage0ent9s prerogative 0ust 3e without a3use of discretion, A line 0ust 3e
drawn 3etween 0anage0ent prerogative regarding 3usiness operations per se
and those which affect the rights of the e0plo!ees, 7n treating its e0plo!ees,
0anage0ent should see to it that its e0plo!ees are at least properl! infor0ed of
its decision or 0odes of action,A
En the last issue, petitioner alleges that the P',$45,#52,"5 he received was his
retire0ent 3enefit which he earned after serving the 3anF for '2 !ears, 7t was not a
0ere gift or gratuit! given 3! respondent 3anF, without the latter giving up
so0ething of value in return, En the contrar!, respondent 3anF received Avalua3le
consideration,A that is, petitioner Duit his @o3 at the relativel! !oung age of 45, thus
ena3ling respondent to effect its reorganiIation plan and forego the salar!,
3enefits, 3onuses, and pro0otions he would have received had he not retired
earl!,
Petitioner avers that, under the UndertaFing, respondent would 3e entitled to a
cause of action against hi0 3efore the appropriate courts of law if he had violated
the e0plo!0ent 3an, Ge avers that respondent 0ust prove its entitle0ent to
the P")1,)'",#2, The UndertaFing contains no provision that he would have to
return the a0ount he received under the .RPJ 0uch less does it provide that he
would have to pa! '#L interest per annu0 on said a0ount, En the other hand, the
Release, Haiver and Puitclai0 does not contain the provision prohi3iting hi0 fro0
3eing e0plo!ed with an! co0petitor 3anF or financial institution within one !ear
fro0 Be3ruar! #2, '""5, Petitioner insists that he acted in good faith when he
received his retire0ent 3enefitsJ hence, he cannot 3e punished 3! 3eing ordered to
return the su0 of P")1,)'",#2 which was given to hi0 for and in consideration of
his earl! retire0ent,
/either can petitioner 3e su3@ected to the penalt! of pa!ing '#L interest per
annu0 on his retire0ent pa! ofP")1,)'",#2 fro0 (a! #1, '""5, as it is i0proper
and oppressive to hi0 and his fa0il!, As of ul! 1, #$$#, the interest alone would
a0ount to P2##,)$",)%, thus dou3ling the a0ount to 3e returned to respondent
3anF under the decision of the RTC and the CA, The i0position of interest has no
3asis 3ecause the Release, Haiver and Puitclai0, and the UndertaFing do not
provide for pa!0ent of interest, The deeds onl! state that 3reach thereof would
entitle respondent to 3ring an action to seeF da0ages, to include the return of the
a0ount that 0a! have 3een paid to petitioner 3! virtue thereof, En the other hand,
an! 3reach of the UndertaFing or the Release, Haiver and Puitclai0 would onl!
entitle respondent to a cause of action 3efore the appropriate courts of law,
Besides, the a0ount received 3! petitioner was not a loan and, therefore, should
not earn interest pursuant to Article '"5) of the Civil Code,
Binall!, petitioner insists that he acted in good faith in seeFing e0plo!0ent with
another 3anF within one !ear fro0 Be3ruar! #2, '""5 3ecause he needed to earn
a living to support his fa0il! and finance his children9s education, Gence, the
i0position of interest, which is a penalt!, is unwarranted,
B! wa! of Co00ent on the petition, respondent avers that the UndertaFing is the
law 3etween it and petitioner, As such, the latter could not assail the deed after
receiving the retire0ent 3enefit under the .RP, As gleaned fro0 the aver0ents in
his petition, petitioner ad0itted that he e:ecuted the UndertaFing after having 3een
infor0ed of the nature and conseDuences of his refusal to sign the sa0e, i,e,, he
would not 3e a3le to receive the retire0ent 3enefit under the .RP,
Respondent 0aintains that courts have no power to relieve parties of o3ligations
voluntaril! entered into si0pl! 3ecause their contracts turned out to 3e disastrous
deeds, Citing the ruling of this Court in Eastern .hipping Lines, 7nc, v, Court of
Appeals,
#)
respondent avers that petitioner is o3liged to pa! '#L per annu0
interest of theP")1,)'",#2 fro0 @udicial or e:tra@udicial de0and,
7n repl!, petitioner asserts that respondent failed to prove that it sustained
da0ages, including the a0ount thereof, and that neither the Release, Haiver and
Puitclai0 nor the UndertaFing o3liged hi0 to pa! interest to respondent,
The petition is 0eritorious,
.ections ' and 1, Rule 14 of the Revised Rules of Civil Procedure provide;
.ection ', .u00ar! @udg0ent for clai0ant, U A part! seeFing to recover upon a
clai0, counterclai0, or cross6clai0 or to o3tain a declarator! relief 0a!, at an! ti0e
after the pleading in answer thereto has 3een served, 0ove with supporting
affidavits, depositions or ad0issions for a su00ar! @udg0ent in his favor upon all
or an! part thereof,
: : : :
.ec, 1, (otion and proceedings thereon, U The 0otion shall 3e served at least ten
*'$+ da!s 3efore the ti0e specified for the hearing, The adverse part! 0a! serve
opposing affidavits, depositions, or ad0issions at least three *1+ da!s 3efore the
hearing, After the hearing, the @udg0ent sought shall 3e rendered forthwith if the
pleadings, supporting affidavits, depositions, and ad0issions on file, show that,
e:cept as to the a0ount of da0ages, there is no genuine issue as to an! 0aterial
fact and that the 0oving part! is entitled to a @udg0ent as a 0atter of law,
Bor a su00ar! @udg0ent to 3e proper, the 0ovant 0ust esta3lish two reDuisites;
*a+ there 0ust 3e no genuine issue as to an! 0aterial fact, e:cept for the a0ount
of da0agesJ and *3+ the part! presenting the 0otion for su00ar! @udg0ent 0ust
3e entitled to a @udg0ent as a 0atter of law,
#%
Hhere, on the 3asis of the pleadings
of a 0oving part!, including docu0ents appended thereto, no genuine issue as to
a 0aterial fact e:ists, the 3urden to produce a genuine issue shifts to the opposing
part!, 7f the opposing part! fails, the 0oving part! is entitled to a su00ar!
@udg0ent,
#2
A genuine issue is an issue of fact which reDuires the presentation of evidence as
distinguished fro0 an issue which is a sha0, fictitious, contrived or a false clai0,
The trial court can deter0ine a genuine issue on the 3asis of the pleadings,
ad0issions, docu0ents, affidavits or counteraffidavits su30itted 3! the parties,
Hhen the facts as pleaded appear uncontested or undisputed, then there is no real
or genuine issue or Duestion as to an! fact and su00ar! @udg0ent called for, En
the other hand, where the facts pleaded 3! the parties are disputed or contested,
proceedings for a su00ar! @udg0ent cannot taFe the place of a trial,
#"
The
evidence on record 0ust 3e viewed in light 0ost favora3le to the part! opposing
the 0otion who 0ust 3e given the 3enefit of all favora3le inferences as can
reasona3l! 3e drawn fro0 the evidence,
1$
Courts 0ust 3e critical of the papers presented 3! the 0oving part! and not of the
papersCdocu0ents in opposition thereto,
1'
Conclusor! assertions are insufficient to
raise an issue of 0aterial fact,
1#
A part! cannot create a genuine dispute of
0aterial fact through 0ere speculations or co0pilation of differences,
11
Ge 0a! not
create an issue of fact through 3ald assertions, unsupported contentions and
conclusor! state0ents,
14
Ge 0ust do 0ore than rel! upon allegations 3ut 0ust
co0e forward with specific facts in support of a clai0, Hhere the factual conte:t
0aFes his clai0 i0plausi3le, he 0ust co0e forward with 0ore persuasive
evidence de0onstrating a genuine issue for trial,
15
Hhere there are no disputed 0aterial facts, the deter0ination of whether a part!
3reached a contract is a Duestion of law and is appropriate for su00ar!
@udg0ent,
1)
Hhen interpreting an a03iguous contract with e:trinsic evidence,
su00ar! @udg0ent is proper so long as the e:trinsic evidence presented to the
court supports onl! one of the conflicting interpretations,
1%
Hhere reasona3le 0en
could differ as to the contentions shown fro0 the evidence, su00ar! @udg0ent
0ight 3e denied,
7n United Rentals */orth A0erica+, 7nc, v, QeiIer,
12
the U,., Circuit Court of Appeals
resolved the issue of whether a su00ar! @udg0ent is proper in a 3reach of
contract action involving the interpretation of such contract, and ruled that;
NAO contract can 3e interpreted 3! the court on su00ar! @udg0ent if *a+ the
contract9s ter0s are clear, or *3+ the evidence supports onl! one construction of the
controverted provision, notwithstanding so0e a03iguit!, : : : 7f the court finds no
a03iguit!, it should proceed to interpret the contract U and it 0a! do so at the
su00ar! @udg0ent stage, 7f, however, the court discerns an a03iguit!, the ne:t
step U involving an e:a0ination of e:trinsic evidence U 3eco0es essential, : : :
.u00ar! @udg0ent 0a! 3e appropriate even if a03iguit! lurFs as long as the
e:trinsic evidence presented to the court supports onl! one of the conflicting
interpretations,
1"
7n this case, there is no dispute 3etween the parties that, in consideration for his
avail0ent of the .RP, petitioner e:ecuted the Release, Haiver and Puitclai0, and
the UndertaFing as supple0ent thereto, and that he received retire0ent pa!
a0ounting to P")1,)'",#2 fro0 respondent, En (a! ', '""5, within the one6!ear
3an and without prior Fnowledge of respondent, petitioner was e0plo!ed 3!
EDuita3le as (anager of its Credit 7nvestigation and Appraisal &ivision,
Consu0ers9 BanFing -roup, &espite de0ands, petitioner failed to return
the P")1,)'",#2 to respondent on the latter9s allegation that he had 3reached the
one6!ear 3an 3! accepting e0plo!0ent fro0 EDuita3le, which according to
respondent was a co0petitor 3anF,
He agree with petitioner9s contention that the issue as to whether the post6
retire0ent co0petitive e0plo!0ent 3an incorporated in the UndertaFing is against
pu3lic polic! is a genuine issue of fact, reDuiring the parties to present evidence to
support their respective clai0s,
As gleaned fro0 the records, petitioner 0ade two undertaFings, The first is
incorporated in the Release, Haiver and Puitclai0 that he signed, to wit;
4, 7 will not, at an! ti0e, in an! 0anner whatsoever, directl! or indirectl! engage in
an! unlawful activit! pre@udicial to the interest of the BA/Q, its parent, affiliate or
su3sidiar! co0panies, their stocFholders, officers, directors, agents or e0plo!ees,
and their successors6in6interest and will not disclose an! infor0ation concerning
the 3usiness of the BA/Q, its 0anner or operation, its plans, processes or data of
an! Find,
4$
The second undertaFing is incorporated in the UndertaFing following petitioner9s
e:ecution of the Release, Haiver and Puitclai0 which reads;
4, That as a supple0ent to the Release and Puitclai0, 7 e:ecuted in favor of
.olid3anF on BEBRUAR? #2, '""5, 7 here3! e:pressl! undertaFe that 7 will not
seeF e0plo!0ent with an! co0petitor 3anF or financial institution within one *'+
!ear fro0 Be3ruar! #2, '""5,
4'
7n the Release, Haiver and Puitclai0, petitioner declared that respondent 0a!
3ring Aan action for da0ages which 0a! include, 3ut not li0ited to the return of
whatever su0s he 0a! have received fro0 respondent under said deed if he
3reaFs his undertaFing therein,A
4#
En the other hand, petitioner declared in the
UndertaFing that Aan! 3reach on his part of said UndertaFing or the ter0s and
conditions of the Release, Haiver and Puitclai0 will entitle respondent to a cause
of action against NpetitionerO for protection 3efore the appropriate courts of law,A
41
Article '1$) of the /ew Civil Code provides that the contracting parties 0a!
esta3lish such stipulations, clauses, ter0s and conditions as the! 0a! dee0
convenient, provided the! are not contrar! to law, 0orals, good custo0s, pu3lic
order or pu3lic polic!, The freedo0 of contract is 3oth a constitutional and statutor!
right,
44
A contract is the law 3etween the parties and courts have no choice 3ut to
enforce such contract as long as it is not contrar! to law, 0orals, good custo0s
and against pu3lic polic!,
The well6entrenched doctrine is that the law does not relieve a part! fro0 the
effects of an unwise, foolish or disastrous contract, entered into with full awareness
of what he was doing and entered into and carried out in good faith, .uch a
contract will not 3e discarded even if there was a 0istaFe of law or fact, Courts
have no @urisdiction to looF into the wisdo0 of the contract entered into 3! and
3etween the parties or to render a decision different therefro0, The! have no
power to relieve parties fro0 o3ligation voluntaril! assailed, si0pl! 3ecause their
contracts turned out to 3e disastrous deals,
45
En the other hand, retire0ent plans, in light of the constitutional 0andate of
affording full protection to la3or, 0ust 3e li3erall! construed in favor of the
e0plo!ee, it 3eing the general rule that pension or retire0ent plans for0ulated 3!
the e0plo!er are to 3e construed against it,
4)
Retire0ent 3enefits, after all, are
intended to help the e0plo!ee en@o! the re0aining !ears of his life, releasing hi0
fro0 the 3urden of worr!ing for his financial support, and are a for0 of reward for
3eing lo!al to the e0plo!er,
4%
7n BerraIIini v, -sell,
42
the Court defined pu3lic polic! in civil law countries and in
the United .tates and the Philippines;
B! Apu3lic polic!,A as defined 3! the courts in the United .tates and England, is
intended that principle of the law which holds that no su3@ect or citiIen can lawfull!
do that which has a tendenc! to 3e in@urious to the pu3lic or against the pu3lic
good, which 0a! 3e ter0ed the Apolic! of the law,A or Apu3lic polic! in relation to
the ad0inistration of the law,A *Hords V Phrases udiciall! &efined, vol, ), p, 52'1,
and cases cited,+ Pu3lic polic! is the principle under which freedo0 of contract or
private dealing is restricted 3! law for the good of the pu3lic, *7d,, 7d,+ 7n
deter0ining whether a contract is contrar! to pu3lic polic! the nature of the su3@ect
0atter deter0ines the source fro0 which such Duestion is to 3e solved, *Gartford
Bire 7ns, Co, v, Chicago, (, V .t, P, R!, Co,, )# Bed, "$4, "$),+
The foregoing is sufficient to show that there is no difference in principle 3etween
the pu3lic polic! *orden pu3lico+ in the two @urisdictions *the United .tates and the
Philippine 7slands+ as deter0ined 3! the Constitution, laws, and @udicial
decisions,
4"
The Court proceeded to define AtradeA as follows;
: : : 7n the 3roader sense, it is an! occupation or 3usiness carried on for
su3sistence or profit, Anderson9s &ictionar! of Law gives the following definition;
A-enerall! eDuivalent to occupation, e0plo!0ent, or 3usiness, whether 0anual or
0ercantileJ an! occupation, e0plo!0ent or 3usiness carried on for profit, gain, or
livelihood, not in the li3eral arts or in the learned professions,A 7n A33ott9s Law
&ictionar!, the word is defined as Aan occupation, e0plo!0ent or 3usiness carried
on for gain or profit,A A0ong the definitions given in the Enc!clopaedic &ictionar! is
the following; AThe 3usiness which a person has learnt, and which he carries on for
su3sistence or profitJ occupationJ particularl! e0plo!0ent, whether 0anual or
0ercantile, as distinguished fro0 the li3eral arts or the learned professions and
agriculture,A Bouvier li0its the 0eaning to co00erce and traffic, and the handicraft
of 0echanics, *7n re PinFne!, 4% Qan,, 2",+ He are inclined to adopt and appl! the
3roader 0eaning given 3! the le:icographers,
5$
7n the present case, the trial court ruled that the prohi3ition against petitioner
accepting e0plo!0ent with a co0petitor 3anF or financial institution within one
!ear fro0 Be3ruar! #2, '""5 is not unreasona3le, The appellate court held that
petitioner was estopped fro0 assailing the post6retire0ent co0petitive e0plo!0ent
3an 3ecause of his ad0ission that he signed the UndertaFing and had alread!
received 3enefits under the .RP,
The rulings of the trial court and the appellate court are incorrect,
There is no factual 3asis for the trial court9s ruling, for the si0ple reason that it
rendered su00ar! @udg0ent and there3! foreclosed the presentation of evidence
3! the parties to prove whether the restrictive covenant is reasona3le or not,
(oreover, on the face of the UndertaFing, the post6retire0ent co0petitive
e0plo!0ent 3an is unreasona3le 3ecause it has no geographical li0itsJ
respondent is 3arred fro0 accepting an! Find of e0plo!0ent in an! co0petitive
3anF within the proscri3ed period, Although the period of one !ear 0a! appear
reasona3le, the 0atter of whether the restriction is reasona3le or unreasona3le
cannot 3e ascertained with finalit! solel! fro0 the ter0s and conditions of the
UndertaFing, or even in tande0 with the Release, Haiver and Puitclai0,
Undenia3l!, petitioner retired under the .RP and received P")1,)'",#2 fro0
respondent, Gowever, petitioner is not proscri3ed, 3! waiver or estoppel, fro0
assailing the post6retire0ent co0petitive e0plo!0ent 3an since under Article '4$"
of the /ew Civil Code, those contracts whose cause, o3@ect or purpose is contrar!
to law, 0orals, good custo0s, pu3lic order or pu3lic polic! are ine:istent or void
fro0 the 3eginning, Estoppel cannot give validit! to an act that is prohi3ited 3! law
or one that is against pu3lic polic!,
5'
Respondent, as e0plo!er, is 3urdened to esta3lish that a restrictive covenant
3arring an e0plo!ee fro0 accepting a co0petitive e0plo!0ent after retire0ent or
resignation is not an unreasona3le or oppressive, or in undue or unreasona3le
restraint of trade, thus, unenforcea3le for 3eing repugnant to pu3lic polic!, As the
Court stated in BerraIIini v, -sell,
5#
cases involving contracts in restraint of trade
are to 3e @udged according to their circu0stances, to wit;
: : : There are two principal grounds on which the doctrine is founded that a
contract in restraint of trade is void as against pu3lic polic!, Ene is, the in@ur! to the
pu3lic 3! 3eing deprived of the restricted part!9s industr!J and the other is, the
in@ur! to the part! hi0self 3! 3eing precluded fro0 pursuing his occupation, and
thus 3eing prevented fro0 supporting hi0self and his fa0il!,
And in -i33s vs, Consolidated -as Co, of Balti0ore, supra, the court stated the
rule thus;
Pu3lic welfare is first considered, and if it 3e not involved, and the restraint upon
one part! is not greater than protection to the other part! reDuires, the contract
0a! 3e sustained, The Duestion is, whether, under the particular circu0stances of
the case and the nature of the particular contract involved in it, the contract is, or is
not, unreasona3le,
51
7n cases where an e0plo!ee assails a contract containing a provision prohi3iting
hi0 or her fro0 accepting co0petitive e0plo!0ent as against pu3lic polic!, the
e0plo!er has to adduce evidence to prove that the restriction is reasona3le and
not greater than necessar! to protect the e0plo!er9s legiti0ate 3usiness
interests,
54
The restraint 0a! not 3e undul! harsh or oppressive in curtailing the
e0plo!ee9s legiti0ate efforts to earn a livelihood and 0ust 3e reasona3le in light of
sound pu3lic polic!,
55
Courts should carefull! scrutiniIe all contracts li0iting a 0an9s natural right to
follow an! trade or profession an!where he pleases and in an! lawful 0anner, But
it is @ust as i0portant to protect the en@o!0ent of an esta3lish0ent in trade or
profession, which its e0plo!er has 3uilt up 3! his own honest application to ever!
da! dut! and the faithful perfor0ance of the tasFs which ever! da! i0poses upon
the ordinar! 0an, Hhat one creates 3! his own la3or is his, Pu3lic polic! does not
intend that another than the producer shall reap the fruits of la3orJ rather, it gives to
hi0 who la3ors the right 3! ever! legiti0ate 0eans to protect the fruits of his la3or
and secure the en@o!0ent of the0 to hi0self,
5)
Breedo0 to contract 0ust not 3e
unreasona3l! a3ridged, /either 0ust the right to protect 3! reasona3le restrictions
that which a 0an 3! industr!, sFill and good @udg0ent has 3uilt up, 3e denied,
5%
The Court reiterates that the deter0ination of reasona3leness is 0ade on the
particular facts and circu0stances of each case,
52
7n Es0erson Electric Co, v,
Rogers,
5"
it was held that the Duestion of reasona3leness of a restraint reDuires a
thorough consideration of surrounding circu0stances, including the su3@ect 0atter
of the contract, the purpose to 3e served, the deter0ination of the parties, the
e:tent of the restraint and the specialiIation of the 3usiness of the e0plo!er, The
court has to consider whether its enforce0ent will 3e in@urious to the pu3lic or
cause undue hardships to the e0plo!ee, and whether the restraint i0posed is
greater than necessar! to protect the e0plo!er, Thus, the court 0ust have 3efore it
evidence relating to the legiti0ate interests of the e0plo!er which 0ight 3e
protected in ter0s of ti0e, space and the t!pes of activit! proscri3ed,
)$
Consideration 0ust 3e given to the e0plo!ee9s right to earn a living and to his
a3ilit! to deter0ine with certaint! the area within which his e0plo!0ent 3an is
restituted, A provision on territorial li0itation is necessar! to guide an e0plo!ee of
what constitutes as violation of a restrictive covenant and whether the geographic
scope is co6e:tensive with that in which the e0plo!er is doing 3usiness, 7n
considering a territorial restriction, the facts and circu0stances surrounding the
case 0ust 3e considered,
)'
Thus, in deter0ining whether the contract is reasona3le or not, the trial court
should consider the following factors; *a+ whether the covenant protects a
legiti0ate 3usiness interest of the e0plo!erJ *3+ whether the covenant creates an
undue 3urden on the e0plo!eeJ *c+ whether the covenant is in@urious to the pu3lic
welfareJ *d+ whether the ti0e and territorial li0itations contained in the covenant
are reasona3leJ and *e+ whether the restraint is reasona3le fro0 the standpoint of
pu3lic polic!,
)#
/ot to 3e ignored is the fact that the 3anFing 3usiness is so i0pressed with pu3lic
interest where the trust and interest of the pu3lic in general is of para0ount
i0portance such that the appropriate standard of diligence 0ust 3e ver! high, if not
the highest degree of diligence,
)1
He are not i0pervious of the distinction 3etween restrictive covenants 3arring an
e0plo!ee to accept a post6e0plo!0ent co0petitive e0plo!0ent or restraint on
trade in e0plo!0ent contracts and restraints on post6retire0ent co0petitive
e0plo!0ent in pension and retire0ent plans either incorporated in e0plo!0ent
contracts or in collective 3argaining agree0ents 3etween the e0plo!er and the
union of e0plo!ees, or separate fro0 said contracts or collective 3argaining
agree0ents which provide that an e0plo!ee who accepts post retire0ent
co0petitive e0plo!0ent will forfeit retire0ent and other 3enefits or will 3e o3liged
to restitute the sa0e to the e0plo!er, The strong weight of authorit! is that
forfeitures for engaging in su3seDuent co0petitive e0plo!0ent included in pension
and retire0ent plans are valid even though unrestricted in ti0e or geograph!, The
raison d9etre is e:plained 3! the United .tates Circuit Court of Appeals in
Rochester Corporation v, H,L, Rochester, r,;
)4
: : : The authorities, though, generall! draw a clear and o3vious distinction
3etween restraints on co0petitive e0plo!0ent in e0plo!0ent contracts and in
pension plans, The strong weight of authorit! holds that forfeitures for engaging in
su3seDuent co0petitive e0plo!0ent, included in pension retire0ent plans, are
valid, even though unrestricted in ti0e or geograph!, The reasoning 3ehind this
conclusion is that the forfeiture, unliFe the restraint included in the e0plo!0ent
contract, is not a prohi3ition on the e0plo!ee9s engaging in co0petitive worF 3ut is
0erel! a denial of the right to participate in the retire0ent plan if he does so
engage, A leading case on this point is 5an Pelt v, Berefco, 7nc,, supra, #$2 /,E,#d
at p, 2)5, where, in passing on a forfeiture provision si0ilar to that here, the Court
said;
AA restriction in the contract which does not preclude the e0plo!ee fro0 engaging
in co0petitive activit!, 3ut si0pl! provides for the loss of rights or privileges if he
does so is not in restraint of trade,A *e0phasis added+
)5
A post6retire0ent co0petitive e0plo!0ent restriction is designed to protect the
e0plo!er against co0petition 3! for0er e0plo!ees who 0a! retire and o3tain
retire0ent or pension 3enefits and, at the sa0e ti0e, engage in co0petitive
e0plo!0ent,
))
He have reviewed the UndertaFing which respondent i0pelled petitioner to sign,
and find that in case of failure to co0pl! with the pro0ise not to accept co0petitive
e0plo!0ent within one !ear fro0 Be3ruar! #2, '""5, respondent will have a cause
of action against petitioner for Aprotection in the courts of law,A The words Acause of
action for protection in the courts of lawA are so 3road and co0prehensive, that
the! 0a! also include a cause of action for prohi3itor! and 0andator! in@unction
against petitioner, specific perfor0ance plus da0ages, or a da0age suit *for
actual, 0oral andCor e:e0plar! da0ages+, all inclusive of the restitution of
the P")1,)'",#2 which petitioner received fro0 respondent, The UndertaFing and
the Release, Haiver and Puitclai0 do not provide for the auto0atic forfeiture of the
3enefits petitioner received under the .RP upon his 3reach of said deeds, Thus,
the post6retire0ent co0petitive e0plo!0ent 3an incorporated in the UndertaFing of
respondent does not, on its face, appear to 3e of the sa0e class or genre as that
conte0plated in Rochester,
7t is settled that actual da0ages or co0pensator! da0ages 0a! 3e awarded for
3reach of contracts, Actual da0ages are pri0aril! intended to si0pl! 0aFe good or
replace the loss covered 3! said 3reach,
)%
The! cannot 3e presu0ed, Even if
petitioner had ad0itted to having 3reached the UndertaFing, respondent 0ust still
prove that it suffered da0ages and the a0ount thereof,
)2
7n deter0ining the
a0ount of actual da0ages, the Court cannot rel! on 0ere assertions,
speculations, con@ectures or guessworF 3ut 0ust depend on co0petent proof and
on the 3est evidence o3taina3le regarding the actual a0ount of losses,
)"
The
3enefit to 3e derived fro0 a contract which one of the parties has a3solutel! failed
to perfor0 is of necessit! to so0e e:tent a 0atter of speculation of the in@ured
part!,
En the assu0ption that the co0petitive e0plo!0ent 3an in the UndertaFing is
valid, petitioner is not auto0aticall! entitled to return the P")1,)'",#2 he received
fro0 respondent, To reiterate, the ter0s of the UndertaFing clearl! state that an!
3reach 3! petitioner of his pro0ise would entitle respondent to a cause of action
for protection in the courts of lawJ as such, restitution of the P")1,)'",#2 will not
follow as a 0atter of course, Respondent is still 3urdened to prove its entitle0ent
to the aforesaid a0ount 3! producing the 3est evidence of which its case is
suscepti3le,
%$
7/ L7-GT EB ALL TGE BERE-E7/-, the petition is -RA/TE&, The &ecision of
the Court of Appeals in CA6-,R, C5 /o, 5##15 is .ET A.7&E, Let this case 3e
RE(A/&E& to the Regional Trial Court of (anila for further proceedings
confor0a3l! with this decision of the Court,
.E ER&ERE&,
G.R. No. 162991 'epte@6er 17, 2001
D/NCAN A''OCIA&ION O5 DE&AI$,AN#P&G3O .) PEDRO A.
&EC'ON, petitioners,
vs,
G$AGO 3E$$CO,E P(I$IPPINE', INC., Respondent,
R E . E L U T 7 E /
&INGA, J.:
Confronting the Court in this petition is a novel Duestion, with constitutional
overtones, involving the validit! of the polic! of a phar0aceutical co0pan!
prohi3iting its e0plo!ees fro0 0arr!ing e0plo!ees of an! co0petitor co0pan!,
This is a /etition for Review on ertiorari assailing the ,ecision
'
dated (a! '",
#$$1 and the Resolution dated (arch #), #$$4 of the Court of Appeals in CA6-,R,
.P /o, )#414,
#
Petitioner Pedro A, Tecson *Tecson+ was hired 3! respondent -la:o Hellco0e
Philippines, 7nc, *-la:o+ as 0edical representative on Ecto3er #4, '""5, after
Tecson had undergone training and orientation,
Thereafter, Tecson signed a contract of e0plo!0ent which stipulates, a0ong
others, that he agrees to stud! and a3ide 3! e:isting co0pan! rulesJ to disclose to
0anage0ent an! e:isting or future relationship 3! consanguinit! or affinit! with co6
e0plo!ees or e0plo!ees of co0peting drug co0panies and should 0anage0ent
find that such relationship poses a possi3le conflict of interest, to resign fro0 the
co0pan!,
The E0plo!ee Code of Conduct of -la:o si0ilarl! provides that an e0plo!ee is
e:pected to infor0 0anage0ent of an! e:isting or future relationship 3!
consanguinit! or affinit! with co6e0plo!ees or e0plo!ees of co0peting drug
co0panies, 7f 0anage0ent perceives a conflict of interest or a potential conflict
3etween such relationship and the e0plo!ee9s e0plo!0ent with the co0pan!, the
0anage0ent and the e0plo!ee will e:plore the possi3ilit! of a Atransfer to another
depart0ent in a non6counterchecFing positionA or preparation for e0plo!0ent
outside the co0pan! after si: 0onths,
Tecson was initiall! assigned to 0arFet -la:o9s products in the Ca0arines .ur6
Ca0arines /orte sales area,
.u3seDuentl!, Tecson entered into a ro0antic relationship with Betts!, an
e0plo!ee of Astra Phar0aceuticals
1
*Astra+, a co0petitor of -la:o, Betts! was
Astra9s Branch Coordinator in Al3a!, .he supervised the district 0anagers and
0edical representatives of her co0pan! and prepared 0arFeting strategies for
Astra in that area,
Even 3efore the! got 0arried, Tecson received several re0inders fro0 his &istrict
(anager regarding the conflict of interest which his relationship with Betts! 0ight
engender, .till, love prevailed, and Tecson 0arried Betts! in .epte03er '""2,
7n anuar! '""", Tecson9s superiors infor0ed hi0 that his 0arriage to Betts! gave
rise to a conflict of interest, Tecson9s superiors re0inded hi0 that he and Betts!
should decide which one of the0 would resign fro0 their @o3s, although the! told
hi0 that the! wanted to retain hi0 as 0uch as possi3le 3ecause he was
perfor0ing his @o3 well,
Tecson reDuested for ti0e to co0pl! with the co0pan! polic! against entering into
a relationship with an e0plo!ee of a co0petitor co0pan!, Ge e:plained that Astra,
Betts!9s e0plo!er, was planning to 0erge with Weneca, another drug co0pan!J
and Betts! was planning to avail of the redundanc! pacFage to 3e offered 3! Astra,
Hith Betts!9s separation fro0 her co0pan!, the potential conflict of interest would
3e eli0inated, At the sa0e ti0e, the! would 3e a3le to avail of the attractive
redundanc! pacFage fro0 Astra,
7n August '""", Tecson again reDuested for 0ore ti0e resolve the pro3le0, 7n
.epte03er '""", Tecson applied for a transfer in -la:o9s 0ilF division, thinFing
that since Astra did not have a 0ilF division, the potential conflict of interest would
3e eli0inated, Gis application was denied in view of -la:o9s Aleast60ove0ent6
possi3leA polic!,
7n /ove03er '""", -la:o transferred Tecson to the Butuan Cit!6.urigao Cit!6
Agusan del .ur sales area, Tecson asFed -la:o to reconsider its decision, 3ut his
reDuest was denied,
Tecson sought -la:o9s reconsideration regarding his transfer and 3rought the
0atter to -la:o9s -rievance Co00ittee, -la:o, however, re0ained fir0 in its
decision and gave Tescon until Be3ruar! %, #$$$ to co0pl! with the transfer order,
Tecson defied the transfer order and continued acting as 0edical representative in
the Ca0arines .ur6Ca0arines /orte sales area,
&uring the pendenc! of the grievance proceedings, Tecson was paid his salar!, 3ut
was not issued sa0ples of products which were co0peting with si0ilar products
0anufactured 3! Astra, Ge was also not included in product conferences regarding
such products,
Because the parties failed to resolve the issue at the grievance 0achiner! level,
the! su30itted the 0atter for voluntar! ar3itration, -la:o offered Tecson a
separation pa! of one6half *X+ 0onth pa! for ever! !ear of service, or a total
of P5$,$$$,$$ 3ut he declined the offer, En /ove03er '5, #$$$, the /ational
Conciliation and (ediation Board */C(B+ rendered its ,ecision declaring as valid
-la:o9s polic! on relationships 3etween its e0plo!ees and persons e0plo!ed with
co0petitor co0panies, and affir0ing -la:o9s right to transfer Tecson to another
sales territor!,
Aggrieved, Tecson filed a /etition for Review with the Court of Appeals assailing
the /C(B ,ecision,
En (a! '", #$$1, the Court of Appeals pro0ulgated its ,ecision den!ing
the /etition for Review on the ground that the /C(B did not err in rendering
its ,ecision, The appellate court held that -la:o9s polic! prohi3iting its e0plo!ees
fro0 having personal relationships with e0plo!ees of co0petitor co0panies is a
valid e:ercise of its 0anage0ent prerogatives,
4
Tecson filed a Motion for Reconsi#eration of the appellate court9s ,ecision) 3ut the
0otion was denied 3! the appellate court in its Resolution dated (arch #), #$$4,
5
Petitioners filed the instant petition, arguing therein that *i+ the Court of Appeals
erred in affir0ing the /C(B9s finding that the -la:o9s polic! prohi3iting its
e0plo!ees fro0 0arr!ing an e0plo!ee of a co0petitor co0pan! is validJ and *ii+
the Court of Appeals also erred in not finding that Tecson was constructivel!
dis0issed when he was transferred to a new sales territor!, and deprived of the
opportunit! to attend products se0inars and training sessions,
)
Petitioners contend that -la:o9s polic! against e0plo!ees 0arr!ing e0plo!ees of
co0petitor co0panies violates the eDual protection clause of the Constitution
3ecause it creates invalid distinctions a0ong e0plo!ees on account onl! of
0arriage, The! clai0 that the polic! restricts the e0plo!ees9 right to 0arr!,
%
The! also argue that Tecson was constructivel! dis0issed as shown 3! the
following circu0stances; *'+ he was transferred fro0 the Ca0arines .ur6
Ca0arines /orte sales area to the Butuan6.urigao6Agusan sales area, *#+ he
suffered a di0inution in pa!, *1+ he was e:cluded fro0 attending se0inars and
training sessions for 0edical representatives, and *4+ he was prohi3ited fro0
pro0oting respondent9s products which were co0peting with Astra9s products,
2
7n its omment on the petition, -la:o argues that the co0pan! polic! prohi3iting its
e0plo!ees fro0 having a relationship with andCor 0arr!ing an e0plo!ee of a
co0petitor co0pan! is a valid e:ercise of its 0anage0ent prerogatives and does
not violate the eDual protection clauseJ and that Tecson9s reassign0ent fro0 the
Ca0arines /orte6Ca0arines .ur sales area to the Butuan Cit!6.urigao Cit! and
Agusan del .ur sales area does not a0ount to constructive dis0issal,
"
-la:o insists that as a co0pan! engaged in the pro0otion and sale of
phar0aceutical products, it has a genuine interest in ensuring that its e0plo!ees
avoid an! activit!, relationship or interest that 0a! conflict with their responsi3ilities
to the co0pan!, Thus, it e:pects its e0plo!ees to avoid having personal or fa0il!
interests in an! co0petitor co0pan! which 0a! influence their actions and
decisions and conseDuentl! deprive -la:o of legiti0ate profits, The polic! is also
ai0ed at preventing a co0petitor co0pan! fro0 gaining access to its secrets,
procedures and policies,
'$
7t liFewise asserts that the polic! does not prohi3it 0arriage per se 3ut onl!
proscri3es e:isting or future relationships with e0plo!ees of co0petitor
co0panies, and is therefore not violative of the eDual protection clause, 7t
0aintains that considering the nature of its 3usiness, the prohi3ition is 3ased on
valid grounds,
''
According to -la:o, Tecson9s 0arriage to Betts!, an e0plo!ee of Astra, posed a
real and potential conflict of interest, Astra9s products were in direct co0petition
with )%L of the products sold 3! -la:o, Gence, -la:o9s enforce0ent of the
foregoing polic! in Tecson9s case was a valid e:ercise of its 0anage0ent
prerogatives,
'#
7n an! case, Tecson was given several 0onths to re0ed! the
situation, and was even encouraged not to resign 3ut to asF his wife to resign for0
Astra instead,
'1
-la:o also points out that Tecson can no longer Duestion the assailed co0pan!
polic! 3ecause when he signed his contract of e0plo!0ent, he was aware that
such polic! was stipulated therein, 7n said contract, he also agreed to resign fro0
respondent if the 0anage0ent finds that his relationship with an e0plo!ee of a
co0petitor co0pan! would 3e detri0ental to the interests of -la:o,
'4
-la:o liFewise insists that Tecson9s reassign0ent to another sales area and his
e:clusion fro0 se0inars regarding respondent9s new products did not a0ount to
constructive dis0issal,
7t clai0s that in view of Tecson9s refusal to resign, he was relocated fro0 the
Ca0arines .ur6Ca0arines /orte sales area to the Butuan Cit!6.urigao Cit! and
Agusan del .ur sales area, -la:o asserts that in effecting the reassign0ent, it also
considered the welfare of Tecson9s fa0il!, .ince Tecson9s ho0etown was in
Agusan del .ur and his wife traces her roots to Butuan Cit!, -la:o assu0ed that
his transfer fro0 the Bicol region to the Butuan Cit! sales area would 3e favora3le
to hi0 and his fa0il! as he would 3e relocating to a fa0iliar territor! and
0ini0iIing his travel e:penses,
'5
7n addition, -la:o avers that Tecson9s e:clusion fro0 the se0inar concerning the
new anti6asth0a drug was due to the fact that said product was in direct
co0petition with a drug which was soon to 3e sold 3! Astra, and hence, would
pose a potential conflict of interest for hi0, Lastl!, the dela! in Tecson9s receipt of
his sales paraphernalia was due to the 0i:6up created 3! his refusal to transfer to
the Butuan Cit! sales area *his paraphernalia was delivered to his new sales area
instead of /aga Cit! 3ecause the supplier thought he alread! transferred to
Butuan+,
')
The Court is tasFed to resolve the following issues; *'+ Hhether the Court of
Appeals erred in ruling that -la:o9s polic! against its e0plo!ees 0arr!ing
e0plo!ees fro0 co0petitor co0panies is valid, and in not holding that said polic!
violates the eDual protection clause of the ConstitutionJ *#+ Hhether Tecson was
constructivel! dis0issed,
The Court finds no 0erit in the petition,
The stipulation in Tecson9s contract of e0plo!0ent with -la:o 3eing Duestioned 3!
petitioners provides;
Y
'$, ?ou agree to disclose to 0anage0ent an! e:isting or future
relationship !ou 0a! have, either 3! consanguinit! or affinit! with co6
e0plo!ees or e0plo!ees of co0peting drug co0panies, .hould it pose a
possi3le conflict of interest in 0anage0ent discretion, !ou agree to resign
voluntaril! fro0 the Co0pan! as a 0atter of Co0pan! polic!,
Y
'%
The sa0e contract also stipulates that Tescon agrees to a3ide 3! the e:isting
co0pan! rules of -la:o, and to stud! and 3eco0e acDuainted with such
policies,
'2
7n this regard, the E0plo!ee Gand3ooF of -la:o e:pressl! infor0s its
e0plo!ees of its rules regarding conflict of interest;
', Conflict of 7nterest
E0plo!ees should avoid an! activit!, invest0ent relationship, or interest
that 0a! run counter to the responsi3ilities which the! owe -la:o
Hellco0e,
.pecificall!, this 0eans that e0plo!ees are e:pected;
a, To avoid having personal or fa0il! interest, financial or
otherwise, in an! co0petitor supplier or other 3usinesses which
0a! consciousl! or unconsciousl! influence their actions or
decisions and thus deprive -la:o Hellco0e of legiti0ate profit,
3, To refrain fro0 using their position in -la:o Hellco0e or
Fnowledge of Co0pan! plans to advance their outside personal
interests, that of their relatives, friends and other 3usinesses,
c, To avoid outside e0plo!0ent or other interests for inco0e
which would i0pair their effective @o3 perfor0ance,
d, To consult with (anage0ent on such activities or relationships
that 0a! lead to conflict of interest,
',', E0plo!ee Relationships
E0plo!ees with e:isting or future relationships either 3! consanguinit! or
affinit! with co6e0plo!ees of co0peting drug co0panies are e:pected to
disclose such relationship to the (anage0ent, 7f 0anage0ent perceives
a conflict or potential conflict of interest, ever! effort shall 3e 0ade,
together 3! 0anage0ent and the e0plo!ee, to arrive at a solution within
si: *)+ 0onths, either 3! transfer to another depart0ent in a non6counter
checFing position, or 3! career preparation toward outside e0plo!0ent
after -la:o Hellco0e, E0plo!ees 0ust 3e prepared for possi3le
resignation within si: *)+ 0onths, if no other solution is feasi3le,
'"
/o reversi3le error can 3e ascri3ed to the Court of Appeals when it ruled that
-la:o9s polic! prohi3iting an e0plo!ee fro0 having a relationship with an
e0plo!ee of a co0petitor co0pan! is a valid e:ercise of 0anage0ent prerogative,
-la:o has a right to guard its trade secrets, 0anufacturing for0ulas, 0arFeting
strategies and other confidential progra0s and infor0ation fro0 co0petitors,
especiall! so that it and Astra are rival co0panies in the highl! co0petitive
phar0aceutical industr!,
The prohi3ition against personal or 0arital relationships with e0plo!ees of
co0petitor co0panies upon -la:o9s e0plo!ees is reasona3le under the
circu0stances 3ecause relationships of that nature 0ight co0pro0ise the interests
of the co0pan!, 7n la!ing down the assailed co0pan! polic!, -la:o onl! ai0s to
protect its interests against the possi3ilit! that a co0petitor co0pan! will gain
access to its secrets and procedures,
That -la:o possesses the right to protect its econo0ic interests cannot 3e denied,
/o less than the Constitution recogniIes the right of enterprises to adopt and
enforce such a polic! to protect its right to reasona3le returns on invest0ents and
to e:pansion and growth,
#$
7ndeed, while our laws endeavor to give life to the
constitutional polic! on social @ustice and the protection of la3or, it does not 0ean
that ever! la3or dispute will 3e decided in favor of the worFers, The law also
recogniIes that 0anage0ent has rights which are also entitled to respect and
enforce0ent in the interest of fair pla!,
#'
As held in a -eorgia, U,.,A case,
##
it is a legiti0ate 3usiness practice to guard
3usiness confidentialit! and protect a co0petitive position 3! even6handedl!
disDualif!ing fro0 @o3s 0ale and fe0ale applicants or e0plo!ees who are 0arried
to a co0petitor, ConseDuentl!, the court ruled than an e0plo!er that discharged an
e0plo!ee who was 0arried to an e0plo!ee of an active co0petitor did not violate
Title 577 of the Civil Rights Act of '")4,
#1
The Court pointed out that the polic! was
applied to 0en and wo0en eDuall!, and noted that the e0plo!er9s 3usiness was
highl! co0petitive and that gaining inside infor0ation would constitute a
co0petitive advantage,
The challenged co0pan! polic! does not violate the eDual protection clause of the
Constitution as petitioners erroneousl! suggest, 7t is a settled principle that the
co00ands of the eDual protection clause are addressed onl! to the state or those
acting under color of its authorit!,
#4
Corollaril!, it has 3een held in a long arra! of
U,., .upre0e Court decisions that the eDual protection clause erects no shield
against 0erel! private conduct, however, discri0inator! or wrongful,
#5
The onl!
e:ception occurs when the state
#"
in an! of its 0anifestations or actions has 3een
found to have 3eco0e entwined or involved in the wrongful private
conduct,
#%
E3viousl!, however, the e:ception is not present in this case,
.ignificantl!, the co0pan! actuall! enforced the polic! after repeated reDuests to
the e0plo!ee to co0pl! with the polic!, 7ndeed, the application of the polic! was
0ade in an i0partial and even6handed 0anner, with due regard for the lot of the
e0plo!ee,
7n an! event, fro0 the wordings of the contractual provision and the polic! in its
e0plo!ee hand3ooF, it is clear that -la:o does not i0pose an a3solute prohi3ition
against relationships 3etween its e0plo!ees and those of co0petitor co0panies,
7ts e0plo!ees are free to cultivate relationships with and 0arr! persons of their
own choosing, Hhat the co0pan! 0erel! seeFs to avoid is a conflict of interest
3etween the e0plo!ee and the co0pan! that 0a! arise out of such relationships,
As succinctl! e:plained 3! the appellate court, thus;
The polic! 3eing Duestioned is not a polic! against 0arriage, An
e0plo!ee of the co0pan! re0ains free to 0arr! an!one of his or her
choosing, The polic! is not ai0ed at restricting a personal prerogative that
3elongs onl! to the individual, Gowever, an e0plo!ee9s personal decision
does not detract the e0plo!er fro0 e:ercising 0anage0ent prerogatives
to ensure 0a:i0u0 profit and 3usiness success, , ,
#2
The Court of Appeals also correctl! noted that the assailed co0pan! polic! which
for0s part of respondent9s E0plo!ee Code of Conduct and of its contracts with its
e0plo!ees, such as that signed 3! Tescon, was 0ade Fnown to hi0 prior to his
e0plo!0ent, Tecson, therefore, was aware of that restriction when he signed his
e0plo!0ent contract and when he entered into a relationship with Betts!, .ince
Tecson Fnowingl! and voluntaril! entered into a contract of e0plo!0ent with
-la:o, the stipulations therein have the force of law 3etween the0 and, thus,
should 3e co0plied with in good faith,A
#"
Ge is therefore estopped fro0 Duestioning
said polic!,
The Court finds no 0erit in petitioners9 contention that Tescon was constructivel!
dis0issed when he was transferred fro0 the Ca0arines /orte6Ca0arines .ur
sales area to the Butuan Cit!6.urigao Cit!6Agusan del .ur sales area, and when
he was e:cluded fro0 attending the co0pan!9s se0inar on new products which
were directl! co0peting with si0ilar products 0anufactured 3! Astra, Constructive
dis0issal is defined as a Duitting, an involuntar! resignation resorted to when
continued e0plo!0ent 3eco0es i0possi3le, unreasona3le, or unliFel!J when there
is a de0otion in ranF or di0inution in pa!J or when a clear discri0ination,
insensi3ilit! or disdain 3! an e0plo!er 3eco0es un3eara3le to the
e0plo!ee,
1$
/one of these conditions are present in the instant case, The record
does not show that Tescon was de0oted or undul! discri0inated upon 3! reason
of such transfer, As found 3! the appellate court, -la:o properl! e:ercised its
0anage0ent prerogative in reassigning Tecson to the Butuan Cit! sales area;
, , , 7n this case, petitioner9s transfer to another place of assign0ent was
0erel! in Feeping with the polic! of the co0pan! in avoidance of conflict
of interest, and thus validY/ote that NTecson9sO wife holds a sensitive
supervisor! position as Branch Coordinator in her e0plo!er6co0pan!
which reDuires her to worF in close coordination with &istrict (anagers
and (edical Representatives, Ger duties include 0onitoring sales of Astra
products, conducting sales drives, esta3lishing and furthering relationship
with custo0ers, collection, 0onitoring and 0anaging Astra9s inventor!Y
she therefore taFes an active participation in the 0arFet war characteriIed
as it is 3! stiff co0petition a0ong phar0aceutical co0panies, (oreover,
and this is significant, petitioner9s sales territor! covers Ca0arines .ur
and Ca0arines /orte while his wife is supervising a 3ranch of her
e0plo!er in Al3a!, The pro:i0it! of their areas of responsi3ilit!, all in the
sa0e Bicol Region, renders the conflict of interest not onl! possi3le, 3ut
actual, as learning 3! one spouse of the other9s 0arFet strategies in the
region would 3e inevita3le, N(anage0ent9sO appreciation of a conflict of
interest is therefore not 0erel! illusor! and wanting in factual 3asisY
1'
7n '$$ott La$oratories */hils.+, !nc. v. National La$or Relations
ommission)
1#
which involved a co0plaint filed 3! a 0edical representative against
his e0plo!er drug co0pan! for illegal dis0issal for allegedl! ter0inating his
e0plo!0ent when he refused to accept his reassign0ent to a new area, the Court
upheld the right of the drug co0pan! to transfer or reassign its e0plo!ee in
accordance with its operational de0ands and reDuire0ents, The ruling of the Court
therein, Duoted hereunder, also finds application in the instant case;
B! the ver! nature of his e0plo!0ent, a drug sales0an or 0edical
representative is e:pected to travel, Ge should anticipate reassign0ent
according to the de0ands of their 3usiness, 7t would 3e a poor drug
corporation which cannot even assign its representatives or detail 0en to
new 0arFets calling for opening or e:pansion or to areas where the need
for pushing its products is great, (ore so if such reassign0ents are part
of the e0plo!0ent contract,
11
As noted earlier, the challenged polic! has 3een i0ple0ented 3! -la:o i0partiall!
and disinterestedl! for a long period of ti0e, 7n the case at 3ar, the record shows
that -la:o gave Tecson several chances to eli0inate the conflict of interest 3rought
a3out 3! his relationship with Betts!, Hhen their relationship was still in its initial
stage, Tecson9s supervisors at -la:o constantl! re0inded hi0 a3out its effects on
his e0plo!0ent with the co0pan! and on the co0pan!9s interests, After Tecson
0arried Betts!, -la:o gave hi0 ti0e to resolve the conflict 3! either resigning fro0
the co0pan! or asFing his wife to resign fro0 Astra, -la:o even e:pressed its
desire to retain Tecson in its e0plo! 3ecause of his satisfactor! perfor0ance and
suggested that he asF Betts! to resign fro0 her co0pan! instead, -la:o liFewise
acceded to his repeated reDuests for 0ore ti0e to resolve the conflict of interest,
Hhen the pro3le0 could not 3e resolved after several !ears of waiting, -la:o was
constrained to reassign Tecson to a sales area different fro0 that handled 3! his
wife for Astra, /ota3l!, the Court did not ter0inate Tecson fro0 e0plo!0ent 3ut
onl! reassigned hi0 to another area where his ho0e province, Agusan del .ur,
was included, 7n effecting Tecson9s transfer, -la:o even considered the welfare of
Tecson9s fa0il!, Clearl!, the foregoing dispels an! suspicion of unfairness and 3ad
faith on the part of -la:o,
14
3(ERE5ORE, the /etition is DENIED for lacF of 0erit, Costs against petitioners,
'O ORDERED.
G.R. No. 161771 April 12, 2006
'&AR PAPER CORPORA&ION, JO'EP(INE ONG'I&CO H
'E%A'&IAN C(/A, Petitioners,
vs,
RONA$DO D. 'I,%O$, 3I$5REDA N. CO,IA H $ORNA E.
E'&RE$$A, Respondents,
& E C 7 . 7 E /
P/NO, J.:
He are called to decide an issue of first i0pression; whether the polic!
of the e0plo!er 3anning spouses fro0 worFing in the sa0e co0pan!
violates the rights of the e0plo!ee under the Constitution and the
La3or Code or is a valid e:ercise of 0anage0ent prerogative,
At 3ar is a Petition for Review on Certiorari of the &ecision of the Court
of Appeals dated August 1, #$$4 in CA6-,R, .P /o, %14%% reversing
the decision of the /ational La3or Relations Co00ission */LRC+
which affir0ed the ruling of the La3or Ar3iter,
Petitioner .tar Paper Corporation *the co0pan!+ is a corporation
engaged in trading U principall! of paper products, osephine Engsitco
is its (anager of the Personnel and Ad0inistration &epart0ent while
.e3astian Chua is its (anaging &irector,
The evidence for the petitioners show that respondents Ronaldo &,
.i03ol *.i03ol+, Hilfreda /, Co0ia *Co0ia+ and Lorna E, Estrella
*Estrella+ were all regular e0plo!ees of the co0pan!,
'
.i03ol was e0plo!ed 3! the co0pan! on Ecto3er #%, '""1, Ge 0et
Al0a &a!rit, also an e0plo!ee of the co0pan!, who0 he 0arried on
une #%, '""2, Prior to the 0arriage, Engsitco advised the couple that
should the! decide to get 0arried, one of the0 should resign pursuant
to a co0pan! polic! pro0ulgated in '""5,
#
vi-.;
', /ew applicants will not 3e allowed to 3e hired if in case
heCshe has NaO relative, up to NtheO 1rd degree of relationship,
alread! e0plo!ed 3! the co0pan!,
#, 7n case of two of our e0plo!ees *3oth singles NsicO, one 0ale
and another fe0ale+ developed a friendl! relationship during
the course of their e0plo!0ent and then decided to get
0arried, one of the0 should resign to preserve the polic!
stated a3ove,
1
.i03ol resigned on une #$, '""2 pursuant to the co0pan! polic!,
4
Co0ia was hired 3! the co0pan! on Be3ruar! 5, '""%, .he 0et
Goward Co0ia, a co6e0plo!ee, who0 she 0arried on une ', #$$$,
Engsitco liFewise re0inded the0 that pursuant to co0pan! polic!, one
0ust resign should the! decide to get 0arried, Co0ia resigned on
une 1$, #$$$,
5
Estrella was hired on ul! #", '""4, .he 0et Luisito Wu8iga *Wu8iga+,
also a co6worFer, Petitioners stated that Wu8iga, a 0arried 0an, got
Estrella pregnant, The co0pan! allegedl! could have ter0inated her
services due to i00oralit! 3ut she opted to resign on &ece03er #',
'""",
)
The respondents each signed a Release and Confir0ation Agree0ent,
The! stated therein that the! have no 0one! and propert!
accounta3ilities in the co0pan! and that the! release the latter of an!
clai0 or de0and of whatever nature,
%
Respondents offer a different version of their dis0issal, .i03ol and
Co0ia allege that the! did not resign voluntaril!J the! were co0pelled
to resign in view of an illegal co0pan! polic!, As to respondent
Estrella, she alleges that she had a relationship with co6worFer Wu8iga
who 0isrepresented hi0self as a 0arried 3ut separated 0an, After he
got her pregnant, she discovered that he was not separated, Thus, she
severed her relationship with hi0 to avoid dis0issal due to the
co0pan! polic!, En /ove03er 1$, '""", she 0et an accident and was
advised 3! the doctor at the Erthopedic Gospital to recuperate for
twent!6one *#'+ da!s, .he returned to worF on &ece03er #', '""" 3ut
she found out that her na0e was on6hold at the gate, .he was denied
entr!, .he was directed to proceed to the personnel office where one
of the staff handed her a 0e0orandu0, The 0e0orandu0 stated that
she was 3eing dis0issed for i00oral conduct, .he refused to sign the
0e0orandu0 3ecause she was on leave for twent!6one *#'+ da!s and
has not 3een given a chance to e:plain, The 0anage0ent asFed her to
write an e:planation, Gowever, after su30ission of the e:planation,
she was nonetheless dis0issed 3! the co0pan!, &ue to her urgent
need for 0one!, she later su30itted a letter of resignation in e:change
for her thirteenth 0onth pa!,
2
Respondents later filed a co0plaint for unfair la3or practice,
constructive dis0issal, separation pa! and attorne!9s fees, The!
averred that the afore0entioned co0pan! polic! is illegal and
contravenes Article '1) of the La3or Code, The! also contended that
the! were dis0issed due to their union 0e03ership,
En (a! 1', #$$', La3or Ar3iter (elDuiades .ol del Rosario dis0issed
the co0plaint for lacF of 0erit, vi-.;
NTOhis co0pan! polic! was decreed pursuant to what the respondent
corporation perceived as 0anage0ent prerogative, This 0anage0ent
prerogative is Duite 3road and enco0passing for it covers hiring, worF
assign0ent, worFing 0ethod, ti0e, place and 0anner of worF, tools to
3e used, processes to 3e followed, supervision of worFers, worFing
regulations, transfer of e0plo!ees, worF supervision, la!6off of worFers
and the discipline, dis0issal and recall of worFers, E:cept as provided
for or li0ited 3! special law, an e0plo!er is free to regulate, according
to his own discretion and @udg0ent all the aspects of
e0plo!0ent,
"
*itations omitte#.+
En appeal to the /LRC, the Co00ission affir0ed the decision of the
La3or Ar3iter on anuar! '', #$$#,
'$
Respondents filed a (otion for Reconsideration 3ut was denied 3! the
/LRC in a Resolution
''
dated August 2, #$$#, The! appealed to
respondent court via Petition for Certiorari,
7n its assailed &ecision dated August 1, #$$4, the Court of Appeals
reversed the /LRC decision, vi-.;
HGEREBERE, pre0ises considered, the (a! 1', #$$# *sic+
'#
&ecision
of the /ational La3or Relations Co00ission is here3! RE5ER.E&
and .ET A.7&E and a new one is entered as follows;
*'+ &eclaring illegal, the petitioners9 dis0issal fro0 e0plo!0ent
and ordering private respondents to reinstate petitioners to
their for0er positions without loss of seniorit! rights with full
3acFwages fro0 the ti0e of their dis0issal until actual
reinstate0entJ and
*#+ Erdering private respondents to pa! petitioners attorne!9s
fees a0ounting to '$L of the award and the cost of this suit,
'1
En appeal to this Court, petitioners contend that the Court of Appeals
erred in holding that;
', : : : the su3@ect '""5 polic!Cregulation is violative of the
constitutional rights towards 0arriage and the fa0il! of
e0plo!ees and of Article '1) of the La3or CodeJ and
#, : : : respondents9 resignations were far fro0 voluntar!,
'4
He affir0,
The '"2% Constitution
'5
states our polic! towards the protection of
la3or under the following provisions, vi-.;
Article 77, .ection '2, The .tate affir0s la3or as a pri0ar! social
econo0ic force, 7t shall protect the rights of worFers and pro0ote their
welfare,
: : :
Article M777, .ec, 1, The .tate shall afford full protection to la3or, local
and overseas, organiIed and unorganiIed, and pro0ote full
e0plo!0ent and eDualit! of e0plo!0ent opportunities for all,
7t shall guarantee the rights of all worFers to self6organiIation,
collective 3argaining and negotiations, and peaceful concerted
activities, including the right to striFe in accordance with law, The! shall
3e entitled to securit! of tenure, hu0ane conditions of worF, and a
living wage, The! shall also participate in polic! and decision60aFing
processes affecting their rights and 3enefits as 0a! 3e provided 3!
law,
The .tate shall pro0ote the principle of shared responsi3ilit! 3etween
worFers and e0plo!ers, recogniIing the right of la3or to its @ust share
in the fruits of production and the right of enterprises to reasona3le
returns on invest0ents, and to e:pansion and growth,
The Civil Code liFewise protects la3or with the following provisions;
Art, '%$$, The relation 3etween capital and la3or are not 0erel!
contractual, The! are so i0pressed with pu3lic interest that la3or
contracts 0ust !ield to the co00on good, Therefore, such contracts
are su3@ect to the special laws on la3or unions, collective 3argaining,
striFes and locFouts, closed shop, wages, worFing conditions, hours of
la3or and si0ilar su3@ects,
Art, '%$#, 7n case of dou3t, all la3or legislation and all la3or contracts
shall 3e construed in favor of the safet! and decent living for the
la3orer,
The La3or Code is the 0ost co0prehensive piece of legislation
protecting la3or, The case at 3ar involves Article '1) of the La3or Code
which provides;
Art, '1), 7t shall 3e unlawful for an e0plo!er to reDuire as a condition
of e0plo!0ent or continuation of e0plo!0ent that a wo0an e0plo!ee
shall not get 0arried, or to stipulate e:pressl! or tacitl! that upon
getting 0arried a wo0an e0plo!ee shall 3e dee0ed resigned or
separated, or to actuall! dis0iss, discharge, discri0inate or otherwise
pre@udice a wo0an e0plo!ee 0erel! 3! reason of her 0arriage,
Respondents su30it that their dis0issal violates the a3ove provision,
Petitioners allege that its polic! A0a! appear to 3e contrar! to Article
'1) of the La3or CodeA 3ut it assu0es a new 0eaning if read together
with the first paragraph of the rule, The rule does not reDuire the
wo0an e0plo!ee to resign, The e0plo!ee spouses have the right to
choose who 3etween the0 should resign, Burther, the! are free to
0arr! persons other than co6e0plo!ees, Gence, it is not the 0arital
status of the e0plo!ee, per se, that is 3eing discri0inated, 7t is onl!
intended to carr! out its no6e0plo!0ent6for6relatives6within6the6third6
degree6polic! which is within the a03it of the prerogatives of
0anage0ent,
')
7t is true that the polic! of petitioners prohi3iting close relatives fro0
worFing in the sa0e co0pan! taFes the nature of an anti6nepotis0
e0plo!0ent polic!, Co0panies adopt these policies to prevent the
hiring of unDualified persons 3ased on their status as a relative, rather
than upon their a3ilit!,
'%
These policies focus upon the potential
e0plo!0ent pro3le0s arising fro0 the perception of favoritis0
e:hi3ited towards relatives,
Hith 0ore wo0en entering the worFforce, e0plo!ers are also enacting
e0plo!0ent policies specificall! prohi3iting spouses fro0 worFing for
the sa0e co0pan!, He note that two t!pes of e0plo!0ent policies
involve spouses; policies 3anning onl! spouses fro0 worFing in the
sa0e co0pan! 7o#"po*"e e@plo2@et poli:ie"8, and those
3anning all i00ediate fa0il! 0e03ers, including spouses, fro0
worFing in the sa0e co0pan! 7.ti#epoti"@ e@plo2@et
poli:ie"8,
'2
UnliFe in our @urisdiction where there is no e:press prohi3ition on
0arital discri0ination,
'"
there are twent! state statutes
#$
in the United
.tates prohi3iting 0arital discri0ination, .o0e state courts
#'
have
3een confronted with the issue of whether no6spouse policies violate
their laws prohi3iting 3oth 0arital status and se: discri0ination,
7n challenging the anti6nepotis0 e0plo!0ent policies in the United
.tates, co0plainants utiliIe two theories of e0plo!0ent discri0ination;
the )i"p.r.te tre.t@et and the )i"p.r.te i@p.:t, Under
the )i"p.r.te tre.t@et ..l2"i", the plaintiff 0ust prove that an
e0plo!0ent polic! is discri0inator! on its face, /o6spouse
e0plo!0ent policies reDuiring an e0plo!ee of a p.rti:*l.r "e? to
either Duit, transfer, or 3e fired are faciall! discri0inator!, Bor e:a0ple,
an e0plo!0ent polic! prohi3iting the e0plo!er fro0 hiring wives of
0ale e0plo!ees, 3ut not hus3ands of fe0ale e0plo!ees, is
discri0inator! on its face,
##
En the other hand, to esta3lish )i"p.r.te i@p.:t, the co0plainants
0ust prove that a faciall! neutral polic! has a disproportionate
effect on a particular class, Bor e:a0ple, although 0ost
e0plo!0ent policies do not e:pressl! indicate which spouse will 3e
reDuired to transfer or leave the co0pan!, the polic! often
disproportionatel! affects one se:,
#1
The state courts9 rulings on the issue depend on their interpretation of
the scope of 0arital status discri0ination within the 0eaning of their
respective civil rights acts, Though the! agree that the ter0 A0arital
statusA enco0passes discri0ination 3ased on a person4s status as
either 0arried, single, divorced, or widowed, the! are divided on
whether the ter0 has a 6ro.)er 0eaning, Thus, their decisions var!,
#4
The courts .rro>l2
#5
interpreting 0arital status to refer onl! to a
person4s status as 0arried, single, divorced, or widowed reason that if
the legislature intended a 3roader definition it would have either
chosen different language or specified its intent, The! hold that the
relevant inDuir! is if one is 0arried rather than to who0 one is 0arried,
The! construe 0arital status discri0ination to include onl! whether a
person is single, 0arried, divorced, or widowed and not the Aidentit!,
occupation, and place of e0plo!0ent of one4s spouse,A These courts
have upheld the Duestioned policies and ruled that the! did not violate
the 0arital status discri0ination provision of their respective state
statutes,
The courts that have 6ro.)l2
#)
construed the ter0 A0arital statusA rule
that it enco0passed the identit!, occupation and e0plo!0ent of one4s
spouse, The! striFe down the no6spouse e0plo!0ent policies 3ased
on the 3road legislative intent of the state statute, The! reason that the
no6spouse e0plo!0ent polic! violate the 0arital status provision
3ecause it ar3itraril! discri0inates against all spouses of present
e0plo!ees without regard to the actual effect on the individual4s
Dualifications or worF perfor0ance,
#%
These courts also find the no6
spouse e0plo!0ent polic! invalid for failure of the e0plo!er to present
an! evidence of 6*"ie"" e:e""it2 other than the general perception
that spouses in the sa0e worFplace 0ight adversel! affect the
3usiness,
#2
The! hold that the a3sence of such a 6o. =i)e
o::*p.tio.l I*.li=i:.tio
#"
invalidates a rule den!ing e0plo!0ent to
one spouse due to the current e0plo!0ent of the other spouse in the
sa0e office,
1$
Thus, the! rule that unless the e0plo!er can prove that
the reasona3le de0ands of the 3usiness reDuire a distinction 3ased on
0arital status and there is no 3etter availa3le or accepta3le polic!
which would 3etter acco0plish the 3usiness purpose, an e0plo!er
0a! not discri0inate against an e0plo!ee 3ased on the identit! of the
e0plo!ee9s spouse,
1'
This is Fnown as the 6o. =i)e o::*p.tio.l
I*.li=i:.tio e?:eptio.
He note that since the finding of a 3ona fide occupational Dualification
@ustifies an e0plo!er9s no6spouse rule, the e:ception is interpreted
strictl! and narrowl! 3! these state courts, There 0ust 3e a co0pelling
3usiness necessit! for which no alternative e:ists other than the
discri0inator! practice,
1#
To @ustif! a 3ona fide occupational
Dualification, the e0plo!er 0ust prove two factors; *'+ that the
e0plo!0ent Dualification is reasona3l! related to the essential
operation of the @o3 involvedJ and, *#+ that there is a factual 3asis for
3elieving that all or su3stantiall! all persons 0eeting the Dualification
would 3e una3le to properl! perfor0 the duties of the @o3,
11
The concept of a 3ona fide occupational Dualification is not foreign in
our @urisdiction, He e0plo! the standard of re."o.6lee"" of the
co0pan! polic! which is parallel to the 3ona fide occupational
Dualification reDuire0ent, 7n the recent case of D*:. A""o:i.tio
o= Det.il@.#P&G3O .) Pe)ro &e:"o !. Gl.?o 3ell:o@e
P;ilippie", I:.,
14
we passed on the validity of the policy of a
phar2aceutical co2pany prohibiting its e2ployees fro2 2arrying e2ployees
of any co2petitor co2pany. Fe held that Glaxo has a right to guard its trade
secrets, 2anufacturing for2ulas, 2ar5eting strategies and other confidential
progra2s and infor2ation fro2 co2petitors. Fe considered the prohibition
against personal or 2arital relationships with e2ployees of co2petitor
co2panies upon Glaxo=s e2ployees %&,#$&1( under the circu2stances
because relationships of that nature 2ight co2pro2ise the interests of Glaxo.
?n laying down the assailed co2pany policy, we recogni7ed that Glaxo only
ai2s to protect its interests against the possibility that a co2petitor co2pany
will gain access to its secrets and procedures.
15
The reDuire0ent that a co0pan! polic! 0ust 3e re."o.6le under the
circu0stances to Dualif! as a valid e:ercise of 0anage0ent
prerogative was also at issue in the '""% case of P;ilippie
&ele+r.p; .) &elep;oe Co@p.2 !. N$RC,
1)
7n said case, the
e0plo!ee was dis0issed in violation of petitioner9s polic! of
disDualif!ing fro0 worF an! wo0an worFer who contracts 0arriage,
He held that the co0pan! polic! violates the right against
discri0ination afforded all wo0en worFers under Article '1) of the
La3or Code, 3ut esta3lished a per0issi3le e:ception, vi-.;
NAO reDuire0ent that a wo0an e0plo!ee 0ust re0ain un0arried could
3e @ustified as a A6o. =i)e o::*p.tio.l I*.li=i:.tio,A or BBEP,
where the particular reDuire0ents of the @o3 would @ustif! the sa0e, 3ut
not on the ground of a general principle, such as the desira3ilit! of
spreading worF in the worFplace, A reDuire0ent of that nature would 3e
valid provided it reflects an inherent Dualit! re."o.6l2 e:e"".r2 for
satisfactor! @o3 perfor0ance,
1%
*0mphases supplie#.+
The cases of D*:. and P&H& instruct us that the reDuire0ent of
reasona3leness 0ust 3e :le.rl2 esta3lished to uphold the Duestioned
e0plo!0ent polic!, The e0plo!er has the 3urden to prove the
e:istence of a reasona3le 3usiness necessit!, The 3urden was
successfull! discharged in &uncan 3ut not in PTVT,
He do not find a reasona3le 3usiness necessit! in the case at 3ar,
Petitioners9 sole contention that Athe co0pan! did not @ust want to have
two *#+ or 0ore of its e0plo!ees related 3etween the third degree 3!
affinit! andCor consanguinit!A
12
is la0e, That the second paragraph was
0eant to give teeth to the first paragraph of the Duestioned rule
1"
is
evidentl! not the valid reasona3le 3usiness necessit! reDuired 3! the
law,
7t is significant to note that in the case at 3ar, respondents were hired
after the! were found fit for the @o3, 3ut were asFed to resign when the!
0arried a co6e0plo!ee, Petitioners failed to show how the 0arriage of
.i03ol, then a .heeting (achine Eperator, to Al0a &a!rit, then an
e0plo!ee of the RepacFing .ection, could 3e detri0ental to its
3usiness operations, /either did petitioners e:plain how this detri0ent
will happen in the case of Hilfreda Co0ia, then a Production Gelper in
the .electing &epart0ent, who 0arried Goward Co0ia, then a helper
in the cutter60achine, The polic! is pre0ised on the 0ere fear that
e0plo!ees 0arried to each other will 3e less efficient, 7f we uphold the
Duestioned rule without valid @ustification, the e0plo!er can create
policies 3ased on an unproven presu0ption of a perceived danger at
the e:pense of an e0plo!ee9s right to securit! of tenure,
Petitioners contend that their polic! will appl! onl! when one e0plo!ee
0arries a co6e0plo!ee, 3ut the! are free to 0arr! persons other than
co6e0plo!ees, The Duestioned polic! 0a! not faciall! violate Article
'1) of the La3or Code 3ut it creates a disproportionate effect and
under the disparate i0pact theor!, the onl! wa! it could pass @udicial
scrutin! is a showing that it is re."o.6le despite the discri0inator!,
al3eit disproportionate, effect, The failure of petitioners to prove a
legiti0ate 3usiness concern in i0posing the Duestioned polic! cannot
pre@udice the e0plo!ee9s right to 3e free fro0 ar3itrar! discri0ination
3ased upon stereot!pes of 0arried persons worFing together in one
co0pan!,
4$
Lastl!, the a3sence of a statute e:pressl! prohi3iting 0arital
discri0ination in our @urisdiction cannot 3enefit the petitioners, The
protection given to la3or in our @urisdiction is vast and e:tensive that
we cannot prudentl! draw inferences fro0 the legislature9s
silence
4'
that 0arried persons are not protected under our Constitution
and declare valid a polic! 3ased on a pre@udice or stereot!pe, Thus, for
failure of petitioners to present undisputed proof of a reasona3le
3usiness necessit!, we rule that the Duestioned polic! is an invalid
e:ercise of 0anage0ent prerogative, Corollaril!, the issue as to
whether respondents .i03ol and Co0ia resigned voluntaril! has
3eco0e 0oot and acade0ic,
As to respondent Estrella, the La3or Ar3iter and the /LRC 3ased their
ruling on the singular fact that her resignation letter was written in her
own handwriting, Both ruled that her resignation was voluntar! and
thus valid, The respondent court failed to categoricall! rule whether
Estrella voluntaril! resigned 3ut ordered that she 3e reinstated along
with .i03ol and Co0ia,
Estrella clai0s that she was pressured to su30it a resignation letter
3ecause she was in dire need of 0one!, He e:a0ined the records of
the case and find Estrella9s contention to 3e 0ore in accord with the
evidence, Hhile findings of fact 3! ad0inistrative tri3unals liFe the
/LRC are generall! given not onl! respect 3ut, at ti0es, finalit!, this
rule ad0its of e:ceptions,
4#
as in the case at 3ar,
Estrella avers that she went 3acF to worF on &ece03er #', '""" 3ut
was dis0issed due to her alleged i00oral conduct, At first, she did not
want to sign the ter0ination papers 3ut she was forced to tender her
resignation letter in e:change for her thirteenth 0onth pa!,
The contention of petitioners that Estrella was pressured to resign
3ecause she got i0pregnated 3! a 0arried 0an and she could not
stand 3eing looFed upon or talFed a3out as i00oral
41
is incredulous, 7f
she reall! wanted to avoid e03arrass0ent and hu0iliation, she would
not have gone 3acF to worF at all, /or would she have filed a suit for
illegal dis0issal and pleaded for reinstate0ent, He have held that in
voluntar! resignation, the e0plo!ee is co0pelled 3! personal
reason*s+ to dissociate hi0self fro0 e0plo!0ent, 7t is done with the
intention of relinDuishing an office, acco0panied 3! the act of
a3andon0ent,
44
Thus, it is illogical for Estrella to resign and then file a
co0plaint for illegal dis0issal, -iven the lacF of sufficient evidence on
the part of petitioners that the resignation was voluntar!, Estrella9s
dis0issal is declared illegal,
IN VIE3 3(EREO5, the &ecision of the Court of Appeals in CA6-,R,
.P /o, %14%% dated August 1, #$$4 isA55IR,ED.1avvphil.net
'O ORDERED.

G.R. No. 118978 ,.2 23, 1997
P(I$IPPINE &E$EGRAP( AND &E$EP(ONE CO,PAN-, Z
petitioner,
vs,
NA&IONA$ $A%OR RE$A&ION' CO,,I''ION .) GRACE DE
G/0,AN, respondents,

REGA$ADO, J.:
.eeFing relief through the e:traordinar! writ of certiorari, petitioner Philippine
Telegraph and Telephone Co0pan! *hereafter, PT V T+ invoFes the alleged
conceal0ent of civil status and defalcation of co0pan! funds as grounds to
ter0inate the services of an e0plo!ee, That e0plo!ee, herein private respondent
-race de -uI0an, contraril! argues that what reall! 0otivated PT V T to ter0inate
her services was her having contracted 0arriage during her e0plo!0ent, which is
prohi3ited 3! petitioner in its co0pan! policies, .he thus clai0s that she was
discri0inated against in gross violation of law, such a proscription 3! an e0plo!er
3eing outlawed 3! Article '1) of the La3or Code,
-race de -uI0an was initiall! hired 3! petitioner as a reliever, specificall! as a
A.upernu0erar! Pro@ect HorFer,A for a fi:ed period fro0 /ove03er #', '""$ until
April #$, '""' vice one C,B, Tenorio who went on 0aternit! leave,
1
Under the
Reliever Agree0ent which she signed with petitioner co0pan!, her e0plo!0ent
was to 3e i00ediatel! ter0inated upon e:piration of the agreed period, Thereafter,
fro0 une '$, '""' to ul! ', '""', and fro0 ul! '", '""' to August 2, '""',
private respondent4s services as reliever were again engaged 3! petitioner, this
ti0e in replace0ent of one Erlinda B, &iIon who went on leave during 3oth
periods,
2
After August 2, '""', and pursuant to their Reliever Agree0ent, her
services were ter0inated,
En .epte03er #, '""', private respondent was once 0ore asFed to @oin petitioner
co0pan! as a pro3ationar! e0plo!ee, the pro3ationar! period to cover '5$ da!s,
7n the @o3 application for0 that was furnished her to 3e filled up for the purpose,
she indicated in the portion for civil status therein that she was single although she
had contracted 0arriage a few 0onths earlier, that is, on (a! #), '""',
3
7t now appears that private respondent had 0ade the sa0e representation in the
two successive reliever agree0ents which she signed on une '$, '""' and ul!
2, '""', Hhen petitioner supposedl! learned a3out the sa0e later, its 3ranch
supervisor in Baguio Cit!, &elia (, Eficial, sent to private respondent a
0e0orandu0 dated anuar! '5, '""# reDuiring her to e:plain the discrepanc!, 7n
that 0e0orandu0, she was re0inded a3out the co0pan!4s polic! of not accepting
0arried wo0en for e0plo!0ent,
1
7n her repl! letter dated anuar! '%, '""#, private respondent stated that she was
not aware of PTVT4s polic! regarding 0arried wo0en at the ti0e, and that all along
she had not deli3eratel! hidden her true civil status,
5
Petitioner nonetheless
re0ained unconvinced 3! her e:planations, Private respondent was dis0issed
fro0 the co0pan! effective anuar! #", '""#,
6
which she readil! contested 3!
initiating a co0plaint for illegal dis0issal, coupled with a clai0 for non6pa!0ent of
cost of living allowances *CELA+, 3efore the Regional Ar3itration Branch of the
/ational La3or Relations Co00ission in Baguio Cit!,
At the preli0inar! conference conducted in connection therewith, private
respondent volunteered the infor0ation, and this was incorporated in the
stipulation of facts 3etween the parties, that she had failed to re0it the a0ount of
P#,12$,%5 of her collections, .he then e:ecuted a pro0issor! note for that a0ount
in favor of petitioner
7
, All of these tooF place in a for0al proceeding and with the
agree0ent of the parties andCor their counsel,
En /ove03er #1, '""1, La3or Ar3iter 7renarco R, Ri0ando handed down a
decision declaring that private respondent, who had alread! gained the status of a
regular e0plo!ee, was illegall! dis0issed 3! petitioner, Ger reinstate0ent, plus
pa!0ent of the corresponding 3acF wages and CELA, was correspondingl!
ordered, the la3or ar3iter 3eing of the fir0l! e:pressed view that the ground relied
upon 3! petitioner in dis0issing private respondent was clearl! insufficient, and
that it was apparent that she had 3een discri0inated against on account of her
having contracted 0arriage in violation of co0pan! rules,
En appeal to the /ational La3or Relations Co00ission */LRC+, said pu3lic
respondent upheld the la3or ar3iter and, in its decision dated April #", '""4, it
ruled that private respondent had indeed 3een the su3@ect of an un@ust and
unlawful discri0ination 3! her e0plo!er, PT V T, Gowever, the decision of the la3or
ar3iter was 0odified with the Dualification that -race de -uI0an deserved to 3e
suspended for three 0onths in view of the dishonest nature of her acts which
should not 3e condoned, 7n all other respects, the /LRC affir0ed the decision of
the la3or ar3iter, including the order for the reinstate0ent of private respondent in
her e0plo!0ent with PT V T,
The su3seDuent 0otion for reconsideration filed 3! petitioner was re3uffed 3!
respondent /LRC in its resolution of /ove03er ", '""4, hence this special civil
action assailing the aforestated decisions of the la3or ar3iter and respondent
/LRC, as well as the denial resolution of the latter,
', &ecreed in the Bi3le itself is the universal nor0 that wo0en should 3e regarded
with love and respect 3ut, through the ages, 0en have responded to that in@unction
with indifference, on the hu3ristic conceit that wo0en constitute the inferior se:,
/owhere has that pre@udice against wo0anFind 3een so pervasive as in the field of
la3or, especiall! on the 0atter of eDual e0plo!0ent opportunities and standards,
7n the Philippine setting, wo0en have traditionall! 3een considered as falling within
the vulnera3le groups or t!pes of worFers who 0ust 3e safeguarded with
preventive and re0edial social legislation against discri0inator! and e:ploitative
practices in hiring, training, 3enefits, pro0otion and retention,
The Constitution, cogniIant of the disparit! in rights 3etween 0en and wo0en in
al0ost all phases of social and political life, provides a ga0ut of protective
provisions, To cite a few of the pri0ordial ones, .ection '4, Article 77
8
on the
&eclaration of Principles and .tate Policies, e:pressl! recogniIes the role of
wo0en in nation63uilding and co00ands the .tate to ensure, at all ti0es, the
funda0ental eDualit! 3efore the law of wo0en and 0en, Corollar! thereto, .ection
1 of Article M777
9
*the progenitor whereof dates 3acF to 3oth the '"15 and '"%1
Constitution+ pointedl! reDuires the .tate to afford full protection to la3or and to
pro0ote full e0plo!0ent and eDualit! of e0plo!0ent opportunities for all, including
an assurance of entitle0ent to tenurial securit! of all worFers, .i0ilarl!, .ection '4
of Article M777
10
0andates that the .tate shall protect worFing wo0en through
provisions for opportunities that would ena3le the0 to reach their full potential,
#, Corrective la3or and social laws on gender ineDualit! have e0erged with 0ore
freDuenc! in the !ears since the La3or Code was enacted on (a! ', '"%4 as
Presidential &ecree /o, 44#, largel! due to our countr!4s co00it0ent as a
signator! to the United /ations Convention on the Eli0ination of All Bor0s of
&iscri0ination Against Ho0en *CE&AH+,
11
Principal a0ong these laws are Repu3lic Act /o, )%#%
12
which e:plicitl! prohi3its
discri0ination against wo0en with respect to ter0s and conditions of e0plo!0ent,
pro0otion, and training opportunitiesJ Repu3lic Act /o, )"55
13
which 3ans the
A0ail6order63rideA practice for a fee and the e:port of fe0ale la3or to countries that
cannot guarantee protection to the rights of wo0en worFersJ Repu3lic Act /o,
%'"#
11
also Fnown as the AHo0en in &evelop0ent and /ation Building Act,A
which affords wo0en eDual opportunities with 0en to act and to enter into
contracts, and for appoint0ent, ad0ission, training, graduation, and
co00issioning in all 0ilitar! or si0ilar schools of the Ar0ed Borces of the
Philippines and the Philippine /ational PoliceJ Repu3lic Act /o, %1##
15
increasing
the 0aternit! 3enefits granted to wo0en in the private sectorJ Repu3lic Act /o,
%2%%
16
which outlaws and punishes se:ual harass0ent in the worFplace and in the
education and training environ0entJ and Repu3lic Act /o, 2$4#,
17
or the A(igrant
HorFers and Everseas Bilipinos Act of '""5,A which prescri3es as a 0atter of
polic!, inter alia, the deplo!0ent of 0igrant worFers, with e0phasis on wo0en,
onl! in countries where their rights are secure, LiFewise, it would not 3e a0iss to
point out that in the Ba0il! Code,
18
wo0en4s rights in the field of civil law have
3een greatl! enhanced and e:panded,
7n the La3or Code, provisions governing the rights of wo0en worFers are found in
Articles '1$ to '12 thereof, Article '1$ involves the right against particular Finds of
night worF while Article '1# ensures the right of wo0en to 3e provided with
facilities and standards which the .ecretar! of La3or 0a! esta3lish to ensure their
health and safet!, Bor purposes of la3or and social legislation, a wo0an worFing in
a nightclu3, cocFtail lounge, 0assage clinic, 3ar or other si0ilar esta3lish0ents
shall 3e considered as an e0plo!ee under Article '12, Article '15, on the other
hand, recogniIes a wo0an4s right against discri0ination with respect to ter0s and
conditions of e0plo!0ent on account si0pl! of se:, Binall!, and this 3rings us to
the issue at hand, Article '1) e:plicitl! prohi3its discri0ination 0erel! 3! reason of
the 0arriage of a fe0ale e0plo!ee,
1, AcFnowledged as para0ount in the due process sche0e is the constitutional
guarantee of protection to la3or and securit! of tenure, Thus, an e0plo!er is
reDuired, as a condition sine 1ua non prior to severance of the e0plo!0ent ties of
an individual under his e0plo!, to convincingl! esta3lish, through su3stantial
evidence, the e:istence of a valid and @ust cause in dispensing with the services of
such e0plo!ee, one4s la3or 3eing regarded as constitutionall! protected propert!,
En the other hand, it is recogniIed that regulation of 0anpower 3! the co0pan!
falls within the so6called 0anage0ent prerogatives, which prescriptions
enco0pass the 0atter of hiring, supervision of worFers, worF assign0ents,
worFing 0ethods and assign0ents, as well as regulations on the transfer of
e0plo!ees, la!6off of worFers, and the discipline, dis0issal, and recall of
e0plo!ees,
19
As put in a case, an e0plo!er is free to regulate, according to his
discretion and 3est 3usiness @udg0ent, all aspects of e0plo!0ent, Afro0 hiring to
firing,A e:cept in cases of unlawful discri0ination or those which 0a! 3e provided
3! law,
20
7n the case at 3ar, petitioner4s polic! of not accepting or considering as disDualified
fro0 worF an! wo0an worFer who contracts 0arriage runs afoul of the test of, and
the right against, discri0ination, afforded all wo0en worFers 3! our la3or laws and
3! no less than the Constitution, Contrar! to petitioner4s assertion that it dis0issed
private respondent fro0 e0plo!0ent on account of her dishonest!, the record
discloses clearl! that her ties with the co0pan! were dissolved principall! 3ecause
of the co0pan!4s polic! that 0arried wo0en are not Dualified for e0plo!0ent in PT
V T, and not 0erel! 3ecause of her supposed acts of dishonest!,
That it was so can easil! 3e seen fro0 the 0e0orandu0 sent to private
respondent 3! &elia (, Eficial, the 3ranch supervisor of the co0pan!, with the
re0inder, in the words of the latter, that A!ou4re full! aware that the co0pan! is not
accepting 0arried wo0en e0plo!ee *sic+, as it was ver3all! instructed to
!ou,A
21
Again, in the ter0ination notice sent to her 3! the sa0e 3ranch supervisor,
private respondent was 0ade to understand that her severance fro0 the service
was not onl! 3! reason of her conceal0ent of her 0arried status 3ut, over and on
top of that, was her violation of the co0pan!4s polic! against 0arriage *Aand even
told !ou that 0arried wo0en e0plo!ees are not applica3le NsicO or accepted in our
co0pan!,A+
22
Parentheticall!, this see0s to 3e the curious reason wh! it was 0ade
to appear in the initiator! pleadings that petitioner was represented in this case
onl! 3! its said supervisor and not 3! its highest ranFing officers who would
otherwise 3e solidaril! lia3le with the corporation,
23
5eril!, private respondent4s act of concealing the true nature of her status fro0 PT
V T could not 3e properl! characteriIed as willful or in 3ad faith as she was 0oved
to act the wa! she did 0ainl! 3ecause she wanted to retain a per0anent @o3 in a
sta3le co0pan!, 7n other words, she was practicall! forced 3! that ver! sa0e
illegal co0pan! polic! into 0isrepresenting her civil status for fear of 3eing
disDualified fro0 worF, Hhile loss of confidence is a @ust cause for ter0ination of
e0plo!0ent, it should not 3e si0ulated,
21
7t 0ust rest on an actual 3reach of dut!
co00itted 3! the e0plo!ee and not on the e0plo!er4s caprices,
25
Burther0ore, it
should never 3e used as a su3terfuge for causes which are i0proper, illegal, or
un@ustified,
26
7n the present controvers!, petitioner4s e:postulations that it dis0issed private
respondent, not 3ecause the latter got 0arried 3ut 3ecause she concealed that
fact, does have a hollow ring, Ger conceal0ent, so it is clai0ed, 3espeaFs
dishonest! hence the conseDuent loss of confidence in her which @ustified her
dis0issal,
Petitioner would asseverate, therefore, that while it has nothing against 0arriage, it
nonetheless taFes u03rage over the conceal0ent of that fact, This i0pro3a3le
reasoning, with interstitial distinctions, pertur3s the Court since private respondent
0a! well 3e 0inded to clai0 that the i0putation of dishonest! should 3e the other
wa! around,
Petitioner would have the Court 3elieve that although private respondent defied its
polic! against its fe0ale e0plo!ees contracting 0arriage, what could 3e an act of
insu3ordination was inconseDuential, Hhat it su30its as unforgiva3le is her
conceal0ent of that 0arriage !et, at the sa0e ti0e, declaring that 0arriage as a
trivial 0atter to which it supposedl! has no o3@ection, 7n other words, PT V T sa!s it
gives its 3lessings to its fe0ale e0plo!ees contracting 0arriage, despite the
0aternit! leaves and other 3enefits it would conseDuentl! respond for and which
o3viousl! it would have wanted to avoid, 7f that e0plo!ee confesses such fact of
0arriage, there will 3e no sanctionJ 3ut if such e0plo!ee conceals the sa0e
instead of proceeding to the confessional, she will 3e dis0issed, This line of
reasoning does not i0press us as reflecting its true 0anage0ent polic! or that we
are 3eing regaled with responsi3le advocac!,
This Court should 3e spared the ennui of strained reasoning and the tediu0 of
propositions which confuse through less than candid argu0ents, 7ndeed, petitioner
glosses over the fact that it was its unlawful polic! against 0arried wo0en, 3oth on
the aspects of Dualification and retention, which co0pelled private respondent to
conceal her supervenient 0arriage, 7t was, however, that ver! polic! alone which
was the cause of private respondent4s secretive conduct now co0plained of, 7t is
then apropos to recall the fa0iliar sa!ing that he who is the cause of the cause is
the cause of the evil caused,
Binall!, petitioner4s collateral insistence on the ad0ission of private respondent that
she supposedl! 0isappropriated co0pan! funds, as an additional ground to
dis0iss her fro0 e0plo!0ent, is so0ewhat insincere and self6serving,
Concededl!, private respondent ad0itted in the course of the proceedings that she
failed to re0it so0e of her collections, 3ut that is an altogether different stor!, The
fact is that she was dis0issed solel! 3ecause of her conceal0ent of her 0arital
status, and not on the 3asis of that supposed defalcation of co0pan! funds, That
the la3or ar3iter would thus consider petitioner4s su30issions on this supposed
dishonest! as a 0ere afterthought, @ust to 3olster its case for dis0issal, is a
perceptive conclusion 3orn of e:perience in la3or cases, Bor, there was no
showing that private respondent deli3eratel! 0isappropriated the a0ount or
whether her failure to re0it the sa0e was through negligence and, if so, whether
the negligence was in nature si0ple or grave, 7n fact, it was 0erel! agreed that
private respondent e:ecute a pro0issor! note to refund the sa0e, which she did,
and the 0atter was dee0ed settled as a peripheral issue in the la3or case,
Private respondent, it 0ust 3e o3served, had gained regular status at the ti0e of
her dis0issal, Hhen she was served her walFing papers on anuar! #", '""#, she
was a3out to co0plete the pro3ationar! period of '5$ da!s as she was contracted
as a pro3ationar! e0plo!ee on .epte03er #, '""', That her dis0issal would 3e
effected @ust when her pro3ationar! period was winding down clearl! raises the
plausi3le conclusion that it was done in order to prevent her fro0 earning securit!
of tenure,
27
En the other hand, her earlier stints with the co0pan! as reliever were
undou3tedl! those of a regular e0plo!ee, even if the sa0e were for fi:ed periods,
as she perfor0ed activities which were essential or necessar! in the usual trade
and 3usiness of PT V T,
28
The pri0ar! standard of deter0ining regular
e0plo!0ent is the reasona3le connection 3etween the activit! perfor0ed 3! the
e0plo!ee in relation to the 3usiness or trade of the e0plo!er,
29
As an e0plo!ee who had therefore gained regular status, and as she had 3een
dis0issed without @ust cause, she is entitled to reinstate0ent without loss of
seniorit! rights and other privileges and to full 3acF wages, inclusive of allowances
and other 3enefits or their 0onetar! eDuivalent,
30
Gowever, as she had undenia3l!
co00itted an act of dishonest! in concealing her status, al3eit under the
co0pulsion of an unlawful i0position of petitioner, the three60onth suspension
i0posed 3! respondent /LRC 0ust 3e upheld to o3viate the i0pression or
inference that such act should 3e condoned, 7t would 3e unfair to the e0plo!er if
she were to return to its fold without an! sanction whatsoever for her act which was
not totall! @ustified, Thus, her entitle0ent to 3acF wages, which shall 3e co0puted
fro0 the ti0e her co0pensation was withheld up to the ti0e of her actual
reinstate0ent, shall 3e reduced 3! deducting therefro0 the a0ount corresponding
to her three 0onths suspension,
4, The govern0ent, to repeat, a3hors an! stipulation or polic! in the nature of that
adopted 3! petitioner PT V T, The La3or Code state, in no uncertain ter0s, as
follows;
Art, '1), Stipulation a"ainst marria"e, R 7t shall 3e unlawful for
an e0plo!er to reDuire as a condition of e0plo!0ent or
continuation of e0plo!0ent that a wo0an shall not get 0arried,
or to stipulate e:pressl! or tacitl! that upon getting 0arried, a
wo0an e0plo!ee shall 3e dee0ed resigned or separated, or to
actuall! dis0iss, discharge, discri0inate or otherwise pre@udice a
wo0an e0plo!ee 0erel! 3! reason of 0arriage,
This provision had a studied histor! for its origin can 3e traced to .ection 2 of
Presidential &ecree /o, '42,
31
3etter Fnown as the AHo0en and
Child La3or Law,A which a0ended paragraph *c+, .ection '# of Repu3lic Act /o,
)%",
32
entitled AAn Act to Regulate the E0plo!0ent of Ho0en and Children, to
Provide Penalties for 5iolations Thereof, and for Ether Purposes,A The forerunner
to Repu3lic Act /o, )%", on the other hand, was Act /o, 1$%' which 3eca0e law
on (arch '), '"#1 and which regulated the e0plo!0ent of wo0en and children in
shops, factories, industrial, agricultural, and 0ercantile esta3lish0ents and other
places of la3or in the then Philippine 7slands,
7t would 3e worthwhile to reflect upon and adopt here the rationaliIation in 2ialcita)
et al, vs, /hilippine 'ir Lines)
33
a decision that e0anated fro0 the Effice of the
President, There, a polic! of Philippine Air Lines reDuiring that prospective flight
attendants 0ust 3e single and that the! will 3e auto0aticall! separated fro0 the
service once the! 0arr! was declared void, it 3eing violative of the clear 0andate
in Article '1) of the La3or Code with regard to discri0ination against 0arried
wo0en, Thus;
Ef first i0pression is the inco0pati3ilit! of the respondent4s
polic! or regulation with the codal provision of law, Respondent
is resolute in its contention that Article '1) of the La3or Code
applies onl! to wo0en e0plo!ed in ordinar! occupations and
that the prohi3ition against 0arriage of wo0en engaged in
e:traordinar! occupations, liFe flight attendants, is fair and
reasona3le, considering the pecularities of their chosen
profession,
He cannot su3scri3e to the line of reasoning pursued 3!
respondent, All along, it Fnew that the controverted polic! has
alread! 0et its doo0 as earl! as (arch '1, '"%1 when
Presidential &ecree /o, '42, otherwise Fnown as the Ho0en
and Child La3or Law, was pro0ulgated, But for the ti0idit! of
those affected or their la3or unions in challenging the validit! of
the polic!, the sa0e was a3le to o3tain a 0o0entar! reprieve, A
close looF at .ection 2 of said decree, which a0ended
paragraph *c+ of .ection '# of Repu3lic Act /o, )%", reveals that
it is e:actl! the sa0e provision reproduced ver3ati0 in Article
'1) of the La3or Code, which was pro0ulgated on (a! ', '"%4
to taFe effect si: *)+ 0onths later, or on /ove03er ', '"%4,
7t cannot 3e gainsaid that, with the reiteration of the sa0e
provision in the new La3or Code, all policies and acts against it
are dee0ed illegal and therefore a3rogated, True, Article '1#
en@oins the .ecretar! of La3or to esta3lish standards that will
ensure the safet! and health of wo0en e0plo!ees and in
appropriate cases shall 3! regulation reDuire e0plo!ers to
deter0ine appropriate 0ini0u0 standards for ter0ination in
special occupations, such as those of flight attendants, 3ut that
is precisel! the factor that 0ilitates against the polic! of
respondent, The standards have not !et 3een esta3lished as set
forth in the first paragraph, nor has the .ecretar! of La3or issued
an! regulation affecting flight attendants,
7t is logical to presu0e that, in the a3sence of said standards or
regulations which are as !et to 3e esta3lished, the polic! of
respondent against 0arriage is patentl! illegal, This finds
support in .ection " of the /ew Constitution, which provides;
.ec, ", The .tate shall afford protection to la3or, pro0ote full
e0plo!0ent and eDualit! in e0plo!0ent, ensure eDual worF
opportunities regardless of se:, race, or creed, and regulate the
relations 3etween worFers and e0plo!ees, The .tate shall
assure the rights of worFers to self6organiIation, collective
3argaining, securit! of tenure, and @ust and hu0ane conditions of
worF , , , ,
(oreover, we cannot agree to the respondent4s proposition that
ter0ination fro0 e0plo!0ent of flight attendants on account of
0arriage is a fair and reasona3le standard designed for their
own health, safet!, protection and welfare, as no 3asis has 3een
laid therefor, Actuall!, respondent clai0s that its concern is not
so 0uch against the continued e0plo!0ent of the flight
attendant 0erel! 3! reason of 0arriage as o3served 3! the
.ecretar! of La3or, 3ut rather on the conseDuence of 0arriage6
pregnanc!, Respondent discussed at length in the instant appeal
the supposed ill effects of pregnanc! on flight attendants in the
course of their e0plo!0ent, He feel that this needs no further
discussion as it had 3een adeDuatel! e:plained 3! the .ecretar!
of La3or in his decision of (a! #, '"%),
7n a vain atte0pt to give 0eaning to its position, respondent
went as far as invoFing the provisions of Articles 5# and #') of
the /ew Civil Code on the preservation of 0arriage as an
inviola3le social institution and the fa0il! as a 3asic social
institution, respectivel!, as 3ases for its polic! of non60arriage,
7n 3oth instances, respondent predicates a3sence of a flight
attendant fro0 her ho0e for long periods of ti0e as contri3utor!
to an unhapp! 0arried life, This is pure con@ecture not 3ased on
actual conditions, considering that, in this 0odern world,
sophisticated technolog! has narrowed the distance fro0 one
place to another, (oreover, respondent overlooFed the fact that
0arried flight attendants can progra0 their lives to adapt to
prevailing circu0stances and events,
Article '1) is not intended to appl! onl! to wo0en e0plo!ed in
ordinar! occupations, or it should have categoricall! e:pressed
so, The sweeping intend0ent of the law, 3e it on special or
ordinar! occupations, is reflected in the whole te:t and
supported 3! Article '15 that speaFs of non6discri0ination on the
e0plo!0ent of wo0en,
The @udg0ent of the Court of Appeals in Gual$erto) et al, vs, Marin#u1ue Minin" 3
!n#ustrial orporation
31
considered as void a polic! of the sa0e nature, 7n said
case, respondent, in dis0issing fro0 the service the co0plainant, invoFed a polic!
of the fir0 to consider fe0ale e0plo!ees in the pro@ect it was undertaFing as
separated the 0o0ent the! get 0arried due to lacF of facilities for 0arried wo0en,
Respondent further clai0ed that co0plainant was e0plo!ed in the pro@ect with an
oral understanding that her services would 3e ter0inated when she gets 0arried,
Branding the polic! of the e0plo!er as an e:a0ple of Adiscri0inator! chauvinis0A
tanta0ount to den!ing eDual e0plo!0ent opportunities to wo0en si0pl! on
account of their se:, the appellate court strucF down said e0plo!er polic! as
unlawful in view of its repugnance to the Civil Code, Presidential &ecree /o, '42
and the Constitution,
Under A0erican @urisprudence, @o3 reDuire0ents which esta3lish e0plo!er
preference or conditions relating to the 0arital status of an e0plo!ee are
categoriIed as a Ase:6plusA discri0ination where it is i0posed on one se: and not
on the other, Burther, the sa0e should 3e evenl! applied and 0ust not inflict
adverse effects on a racial or se:ual group which is protected 3! federal @o3
discri0ination laws, E0plo!0ent rules that for3id or restrict the e0plo!0ent of
0arried wo0en, 3ut do not appl! to 0arried 0en, have 3een held to violate Title
577 of the United .tates Civil Rights Act of '")4, the 0ain federal statute prohi3iting
@o3 discri0ination against e0plo!ees and applicants on the 3asis of, a0ong other
things, se:,
35
Burther, it is not relevant that the rule is not directed against all wo0en 3ut @ust
against 0arried wo0en, And, where the e0plo!er discri0inates against 0arried
wo0en, 3ut not against 0arried 0en, the varia3le is se: and the discri0ination is
unlawful,
36
Upon the other hand, a reDuire0ent that a wo0an e0plo!ee 0ust
re0ain un0arried could 3e @ustified as a A3ona fide occupational Dualification,A or
BBEP, where the particular reDuire0ents of the @o3 would @ustif! the sa0e, 3ut not
on the ground of a general principle, such as the desira3ilit! of spreading worF in
the worFplace, A reDuire0ent of that nature would 3e valid provided it reflects an
inherent Dualit! reasona3l! necessar! for satisfactor! @o3 perfor0ance, Thus, in
one case, a no60arriage rule applica3le to 3oth 0ale and fe0ale flight attendants,
was regarded as unlawful since the restriction was not related to the @o3
perfor0ance of the flight attendants,
37
5, Petitioner4s polic! is not onl! in derogation of the provisions of Article '1) of the
La3or Code on the right of a wo0an to 3e free fro0 an! Find of stipulation against
0arriage in connection with her e0plo!0ent, 3ut it liFewise assaults good 0orals
and pu3lic polic!, tending as it does to deprive a wo0an of the freedo0 to choose
her status, a privilege that 3! all accounts inheres in the individual as an intangi3le
and inaliena3le right,
38
Gence, while it is true that the parties to a contract 0a!
esta3lish an! agree0ents, ter0s, and conditions that the! 0a! dee0 convenient,
the sa0e should not 3e contrar! to law, 0orals, good custo0s, pu3lic order, or
pu3lic polic!,
39
Carried to its logical conseDuences, it 0a! even 3e said that
petitioner4s polic! against legiti0ate 0arital 3onds would encourage illicit or
co00on6law relations and su3vert the sacra0ent of 0arriage,
Parentheticall!, the Civil Code provisions on the contract of la3or state that the
relations 3etween the parties, that is, of capital and la3or, are not 0erel!
contractual, i0pressed as the! are with so 0uch pu3lic interest that the sa0e
should !ield to the co00on good,
10
7t goes on to intone that neither capital nor
la3or should visit acts of oppression against the other, nor i0pair the interest or
convenience of the pu3lic,
11
7n the final recFoning, the danger of @ust such a polic!
against 0arriage followed 3! petitioner PT V T is that it striFes at the ver! essence,
ideals and purpose of 0arriage as an inviola3le social institution and, ulti0atel!, of
the fa0il! as the foundation of the nation,
12
That it 0ust 3e effectivel! interdicted
here in all its indirect, disguised or disse03led for0s as discri0inator! conduct
derogator! of the laws of the land is not onl! in order 3ut i0perativel! reDuired,
E/ TGE BERE-E7/- PRE(7.E., the petition of Philippine Telegraph and
Telephone Co0pan! is here3! &7.(7..E& for lacF of 0erit, with dou3le costs
against petitioner,
.E ER&ERE&,
G.R. No. 115587 O:to6er 26, 2007
EDI#'&A55%/I$DER' IN&ERNA&IONA$, INC., petitioner,
vs,
NA&IONA$ $A%OR RE$A&ION' CO,,I''ION .) E$EA0AR '.
GRAN, respondents,
D E C I ' I O N
VE$A'CO, JR., J.F
&;e C."e
This Petition for Review on Certiorari
'
seeFs to set aside the Ecto3er '2, #$$$
&ecision
#
of the Court of Appeals *CA+ in CA6-,R, .P /o, 5)'#$ which affir0ed
the anuar! '5, '""" &ecision
1
and .epte03er 1$, '""" Resolution
4
rendered 3!
the /ational La3or Relations Co00ission */LRC+ *Third &ivision+ in PEEA A& *L+
"46$)6#'"4, ordering E:pertise .earch 7nternational *E.7+, E&76.taff3uilders
7nternational, 7nc, *E&7+, and E0ar Ah0ed Ali Bin Bechr Est, *EAB+ @ointl! and
severall! to pa! EleaIar ., -ran *-ran+ the a0ount of U.& '),'5$,$$ as unpaid
salaries,
&;e 5.:t"
Petitioner E&7 is a corporation engaged in recruit0ent and place0ent of Everseas
Bilipino HorFers *EBHs+,
5
E.7 is another recruit0ent agenc! which colla3orated
with E&7 to process the docu0entation and deplo!0ent of private respondent to
.audi Ara3ia,
Private respondent -ran was an EBH recruited 3! E&7, and deplo!ed 3! E.7 to
worF for EAB, in Ri!adh, Qingdo0 of .audi Ara3ia,
)
7t appears that EAB asFed E&7 through its Ecto3er 1, '""1 letter for curricula
vitae of Dualified applicants for the position of ACo0puter .pecialist,A
%
7n a facsi0ile
trans0ission dated /ove03er #", '""1, EAB infor0ed E&7 that, fro0 the
applicants4 curricula vitae su30itted to it for evaluation, it selected -ran for the
position of ACo0puter .pecialist,A The fa:ed letter also stated that if -ran agrees
to the ter0s and conditions of e0plo!0ent contained in it, one of which was a
0onthl! salar! of .R *.audi Ri!al+ #,#5$,$$ *U.& )$$,$$+, E&7 0a! arrange for
-ran4s i00ediate dispatch,
2
After accepting EAB4s offer of e0plo!0ent, -ran signed an e0plo!0ent
contract
"
that granted hi0 a 0onthl! salar! of U.& 25$,$$ for a period of two
!ears, -ran was then deplo!ed to Ri!adh, Qingdo0 of .audi Ara3ia on Be3ruar! %,
'""4,
Upon arrival in Ri!adh, -ran Duestioned the discrepanc! in his 0onthl! salar!Rhis
e0plo!0ent contract stated U.& 25$,$$J while his Philippine Everseas
E0plo!0ent Agenc! *PEEA+ 7nfor0ation .heet indicated U.& )$$,$$ onl!,
Gowever, through the assistance of the E&7 office in Ri!adh, EAB agreed to pa!
-ran U.& 25$,$$ a 0onth,
'$
After -ran had 3een worFing for a3out five 0onths for EAB, his e0plo!0ent was
ter0inated through EAB4s ul! ", '""4 letter,
''
on the following grounds;
', /on6co0pliance to contract reDuire0ents 3! the recruit0ent agenc!
pri0aril! on !our salar! and contract duration,
#, /on6co0pliance to pre6Dualification reDuire0ents 3! the recruit0ent
agenc!N,O vide EAB letter ref, B65%5'6"1, dated Ecto3er 1, '""1,
'#
1, 7nsu3ordination or diso3edience to Top (anage0ent Erder andCor
instructions *non6su30ittal of dail! activit! reports despite several
instructions+,
En ul! '', '""4, -ran received fro0 EAB the total a0ount of .R #,"42,$$
representing his final pa!, and on the sa0e da!, he e:ecuted a
&eclaration
'1
releasing EAB fro0 an! financial o3ligation or otherwise, towards
hi0,
After his arrival in the Philippines, -ran instituted a co0plaint, on ul! #', '""4,
against E.7CE&7, EAB, Countr! BanFers 7nsurance Corporation, and Hestern
-uarant! Corporation with the /LRC, /ational Capital Region, PueIon Cit!, which
was docFeted as PEEA A& *L+ "46$)6#'"4 for underpa!0ent of wagesCsalaries
and illegal dis0issal,
&;e R*li+ o= t;e $.6or Ar6iter
7n his Be3ruar! '$, '""2 &ecision,
'4
La3or Ar3iter (anuel R, Cada!, to who0
-ran4s case was assigned, ruled that there was neither underpa!0ent nor illegal
dis0issal,
The La3or Ar3iter reasoned that there was no underpa!0ent of salaries since
according to the PEEA6Everseas Contract HorFer *ECH+ 7nfor0ation .heet,
-ran4s 0onthl! salar! was U.& )$$,$$, and in his Confir0ation of Appoint0ent as
Co0puter .pecialist, his 0onthl! 3asic salar! was fi:ed at .R #,5$$,$$, which was
eDuivalent to U.& )$$,$$,
Ar3iter Cada! also cited the &eclaration e:ecuted 3! -ran, to @ustif! that -ran had
no clai0 for unpaid salaries or wages against EAB,
Hith regard to the issue of illegal dis0issal, the La3or Ar3iter found that -ran failed
to refute E&74s allegationsJ na0el!, *'+ that -ran did not su30it a single activit!
report of his dail! activit! as dictated 3! co0pan! polic!J *#+ that he was not
Dualified for the @o3 as co0puter specialist due to his insufficient Fnowledge in
progra00ing and lacF of Fnowledge in ACA& s!ste0J *1+ that -ran refused to
follow 0anage0ent4s instruction for hi0 to gain 0ore Fnowledge of the @o3 to prove
his worth as co0puter specialistJ *4+ that -ran4s e0plo!0ent contract had never
3een su3stitutedJ *5+ and that -ran was paid a 0onthl! salar! of U.& 25$,$$, and
U.& 15$,$$ 0onthl! as food allowance,
Accordingl!, the La3or Ar3iter decided that -ran was validl! dis0issed fro0 his
worF due to insu3ordination, diso3edience, and his failure to su30it dail! activit!
reports,
Thus, on Be3ruar! '$, '""2, Ar3iter Cada! dis0issed -ran4s co0plaint for lacF of
0erit,
&issatisfied, -ran filed an Appeal
'5
on April ), '""2 with the /LRC, Third &ivision,
Gowever, it appears fro0 the records that -ran failed to furnish E&7 with a cop! of
his Appeal (e0orandu0,
&;e R*li+ o= t;e N$RC
The /LRC held that E&74s see0ingl! har0less transfer of -ran4s contract to E.7 is
actuall! Areprocessing,A which is a prohi3ited transaction under Article 14 *3+ of the
La3or Code, This sche0e constituted 0isrepresentation through the conspirac!
3etween E&7 and E.7 in 0isleading -ran and even PEEA of the actual ter0s and
conditions of the EBH4s e0plo!0ent, 7n addition, it was found that -ran did not
co00it an! act that constituted a legal ground for dis0issal, The alleged non6
co0pliance with contractual stipulations relating to -ran4s salar! and contract
duration, and the a3sence of pre6Dualification reDuire0ents cannot 3e attri3uted to
-ran 3ut to E&7, which dealt directl! with EAB, 7n addition, the charge of
insu3ordination was not su3stantiated, and -ran was not even afforded the
reDuired notice and investigation on his alleged offenses,
Thus, the /LRC reversed the La3or Ar3iter4s &ecision and rendered a new one,
the dispositive portion of which reads;
HGEREBERE, the assailed decision is .ET A.7&E, Respondents
E:pertise .earch 7nternational, 7nc,, E&7 .taff3uilders 7nt4l,, 7nc, and E0ar
Ah0ed Ali Bin Bechr Est, *EAB+ are here3! ordered @ointl! and severall!
lia3le to pa! the co0plainant EleaIar -ran the Philippine peso eDuivalent
at the ti0e of actual pa!0ent of .7MTEE/ TGEU.A/& E/E GU/&RE&
B7BT? U. &ELLAR. *U.['),'5$,$$+ representing his salaries for the
une:pired portion of his contract,
.E ER&ERE&,
')
-ran then filed a (otion for E:ecution of udg0ent
'%
on (arch #", '""" with the
/LRC and petitioner receiving a cop! of this 0otion on the sa0e date,
'2
To prevent the e:ecution, petitioner filed an Epposition
'"
to -ran4s 0otion arguing
that the Hrit of E:ecution cannot issue 3ecause it was not notified of the appellate
proceedings 3efore the /LRC and was not given a cop! of the 0e0orandu0 of
appeal nor an! opportunit! to participate in the appeal,
.eeing that the /LRC did not act on -ran4s 0otion after E&7 had filed its
Epposition, petitioner filed, on August #), '""", a (otion for Reconsideration of
the /LRC &ecision after receiving a cop! of the &ecision on August '), '""",
#$
The /LRC then issued a Resolution
#'
den!ing petitioner4s (otion for
Reconsideration, ratiocinating that the issues and argu0ents raised in the 0otion
Ahad alread! 3een a0pl! discussed, considered, and ruled uponA in the &ecision,
and that there was Ano cogent reason or patent or palpa3le error that warrant an!
distur3ance thereof,A
Unconvinced of the /LRC4s reasoning, E&7 filed a Petition for Certiorari 3efore the
CA, Petitioner clai0ed in its petition that the /LRC co00itted grave a3use of
discretion in giving due course to the appeal despite -ran4s failure to perfect the
appeal,
&;e R*li+ o= t;e Co*rt o= Appe.l"
The CA su3seDuentl! ruled on the procedural and su3stantive issues of E&74s
petition,
En the procedural issue, the appellate court held that AGr.<" =.il*re to =*ri"; .
:op2 o= ;i" .ppe.l @e@or.)*@ Jto EDI >."K . @ere =or@.l l.p"e, .
e?:*".6le e+le:t .) ot . A*ri")i:tio.l )e=e:t >;i:; >o*l) A*"ti=2 t;e
)i"@i"".l o= ;i" .ppe.l.L
##
The court also held that petitioner E&7 failed to prove
that private respondent was ter0inated for a valid cause and in accordance with
due processJ and that -ran4s &eclaration releasing EAB fro0 an! 0onetar!
o3ligation had no force and effect, The appellate court ratiocinated that E&7 had
the 3urden of proving -ran4s inco0petenceJ however, other than the ter0ination
letter, no evidence was presented to show how and wh! -ran was considered to
3e inco0petent, The court held that since the law reDuires the recruit0ent
agencies to su3@ect EBHs to trade tests 3efore deplo!0ent, -ran 0ust have 3een
co0petent and DualifiedJ otherwise, he would not have 3een hired and deplo!ed
a3road,
As for the charge of insu3ordination and diso3edience due to -ran4s failure to
su30it a A&ail! Activit! Report,A the appellate court found that E&7 failed to show
that the su30ission of the A&ail! Activit! ReportA was a part of -ran4s dut! or the
co0pan!4s polic!, &;e :o*rt .l"o ;el) t;.t e!e i= Gr. >." +*ilt2 o=
i"*6or)i.tio, ;e ";o*l) ;.!e A*"t 6ee "*"pe)e) or repri@.)e), 6*t
ot )i"@i""e),
The CA also held that Gr. >." ot .==or)e) )*e pro:e"", given that EAB did
not a3ide 3! the twin notice reDuire0ent, The court found that -ran was
ter0inated on the sa0e da! he received the ter0ination letter, without having 3een
apprised of the 3ases of his dis0issal or afforded an opportunit! to e:plain his
side,
Binall!, the CA held that the &eclaration signed 3! -ran did not 3ar hi0 fro0
de0anding 3enefits to which he was entitled, The appellate court found that the
&eclaration was in the for0 of a Duitclai0, and as such is frowned upon as
contrar! to pu3lic polic! especiall! where the 0onetar! consideration given in the
&eclaration was ver! 0uch less than what he was legall! entitled toRhis
3acFwages a0ounting to U.& '),'5$,$$,
As a result of these findings, on Ecto3er '2, #$$$, the appellate court denied the
petition to set aside the /LRC &ecision,
Gence, this instant petition is 3efore the Court,
&;e I""*e"
Petitioner raises the following issues for our consideration;
7, HGETGER TGE BA7LURE EB -RA/ TE BUR/7.G A CEP? EB G7.
APPEAL (E(ERA/&U( TE PET7T7E/ER E&7 HEUL& CE/.T7TUTE
A UR7.&7CT7E/AL &EBECT A/& A &EPR75AT7E/ EB PET7T7E/ER
E&74. R7-GT TE &UE PRECE.. A. HEUL& U.T7B? TGE
&7.(7..AL EB -RA/4. APPEAL,
77, HGETGER PET7T7E/ER E&7 GA. E.TABL7.GE& B? HA? EB
.UB.TA/T7AL E57&E/CE TGAT -RA/4. TER(7/AT7E/ HA.
U.T7B7ABLE B? REA.E/ EB 7/CE(PETE/CE, CERELLAR?
GERETE, HGETGER TGE PR7ETE 5., /LRC RUL7/-, A. APPL7E&
B? TGE CEURT EB APPEAL., 7. APPL7CABLE 7/ TGE 7/.TA/T
CA.E,
777, HGETGER PET7T7E/ER GA. E.TABL7.GE& B? HA? EB
.UB.TA/T7AL E57&E/CE TGAT -RA/4. TER(7/AT7E/ HA.
U.T7B7ABLE B? REA.E/ EB 7/.UBER&7/AT7E/ A/&
&7.EBE&7E/CE,
75, HGETGER -RA/ HA. ABBER&E& &UE PRECE.. PR7ER TE
TER(7/AT7E/,
5, HGETGER -RA/ 7. E/T7TLE& TE BACQHA-E. BER TGE
U/EMP7RE& PERT7E/ EB G7. CE/TRACT,
#1
&;e Co*rt<" R*li+
The petition lacFs 0erit e:cept with respect to -ran4s failure to furnish E&7 with his
Appeal (e0orandu0 filed with the /LRC,
5ir"t I""*eF N$RC<" D*t2 i" to ReI*ire Re"po)et to Pro!i)e Petitioer .
Cop2 o= t;e Appe.l
Petitioner E&7 clai0s that -ran4s failure to furnish it a cop! of the Appeal
(e0orandu0 constitutes a @urisdictional defect and a deprivation of due process
that would warrant a re@ection of the appeal,
&;i" po"itio i" )e!oi) o= @erit.
7n a catena of cases, it was ruled that =.il*re o= .ppell.t to =*ri"; . :op2 o=
t;e .ppe.l to t;e .)!er"e p.rt2 i" ot =.t.l to t;e .ppe.l.
7n 0stra#a v. National La$or Relations ommission,
#4
this Court set aside the order
of the /LRC which dis0issed an appeal on the sole ground that the appellant did
not furnish the appellee a 0e0orandu0 of appeal contrar! to the reDuire0ents of
Article ##1 of the /ew La3or Code and .ection ", Rule M777 of its 70ple0enting
Rules and Regulations,
Also, in J.,. Ma"pa%o ustoms +ro(era"e orp. v. NLR, the order of dis0issal of
an appeal to the /LRC 3ased on the ground that Athere is no showin" whatsoever
that a cop% of the appeal was serve# $% the appellant on the appelleeA
#5
was
annulled, The Court ratiocinated as follows;
The failure to give a cop! of the appeal to the adverse part! was a 0ere
for0al lapse, an e:cusa3le neglect, Ti0e and again He have acted on
petitions to review decisions of the Court of Appeals even in the a3sence
of proof of service of a cop! thereof to the Court of Appeals as reDuired 3!
.ection ' of Rule 45, Rules of Court, 3e .:t o t;e petitio" .)
"i@pl2 reI*ire t;e petitioer" to :o@pl2 >it; t;e r*le,
#)
*E0phasis
supplied,+
The J.,. Ma"pa%o ruling was reiterated in arnation /hilippines 0mplo%ees La$or
4nion*FF5 v. National La$or Relations ommission)
#%
/a"#onsalan v.
NLR,
#2
and in Sunrise Mannin" '"enc%) !nc. v. NLR,
#"
Thus, the doctrine that evolved fro0 these cases is that failure to furnish the
adverse part! with a cop! of the appeal is treated onl! as a for0al lapse, an
e:cusa3le neglect, and hence, not a @urisdictional defect, Accordingl!, in such a
situation, the appeal should not 3e dis0issedJ however, it should not 3e given due
course either, As enunciated in J.,. Ma"pa%o, t;e )*t2 t;.t i" i@po"e) o t;e
N$RC, i "*:; . :."e, i" to reI*ire t;e .ppell.t to :o@pl2 >it; t;e r*le t;.t
t;e oppo"i+ p.rt2 ";o*l) 6e pro!i)e) >it; . :op2 o= t;e .ppe.l
@e@or.)*@.
Hhile -ran4s failure to furnish E&7 with a cop! of the Appeal (e0orandu0 is
e:cusa3le, the a3@ect failure of the /LRC to order -ran to furnish E&7 with the
Appeal (e0orandu0 constitutes "rave a$use of #iscretion,
The records reveal that the /LRC discovered that -ran failed to furnish E&7 a cop!
of the Appeal (e0orandu0, The /LRC then ordered -ran to present proof of
service, 7n co0pliance with the order, -ran su30itted a cop! of Ca0p Cra0e Post
Effice4s list of 0ailCparcels sent on April %, '""2,
1$
The post office4s list shows that
private respondent -ran sent two pieces of 0ail on the sa0e date; one addressed
to a certain &an E, de -uI0an of Legaspi 5illage, (aFatiJ and the other appears
to 3e addressed to /eil B, -arcia *or -ran+,
1'
of Er0ita, (anilaR3oth of who0 are
not connected with petitioner,
This 0ailing list, however, is not a conclusive proof that E&7 indeed received a
cop! of the Appeal (e0orandu0,
.ec, 5 of the /LRC Rules of Procedure *'""$+ provides for the proof and
co0pleteness of service in proceedings 3efore the /LRC;
.ection 5,
1#
Proof and co0pleteness of service,RThe return is prima
facie proof of the facts indicated therein, 'er!i:e 62 re+i"tere) @.il i"
:o@plete *po re:eipt 62 t;e .))re""ee or ;i" .+etJ 3ut if the
addressee fails to clai0 his 0ail fro0 the post office within five *5+ da!s
fro0 the date of first notice of the post0aster, service shall taFe effect
after such ti0e, *E0phasis supplied,+
Gence, if the service is done through registered 0ail, it is onl! dee0ed co0plete
when the addressee or his agent received the 0ail or after five *5+ da!s fro0 the
date of first notice of the post0aster, Gowever, the /LRC Rules do not state what
would constitute proper proof of service,
.ec, '1, Rule '1 of the Rules of Court, provides for proofs of service;
.ection '1, /roof of service,RProof of personal service shall consist of a
written ad0ission of the part! served or the official return of the server, or
the affidavit of the part! serving, containing a full state0ent of the date,
place and 0anner of service, 7f the service is 3! ordinar! 0ail, proof
thereof shall consist of an affidavit of the person 0ailing of facts showing
co0pliance with section % of this Rule, I= "er!i:e i" @.)e 62 re+i"tere)
@.il, proo= ";.ll 6e @.)e 62 "*:; .==i).!it .) re+i"tr2 re:eipt
i""*e) 62 t;e @.ili+ o==i:e, &;e re+i"tr2 ret*r :.r) ";.ll 6e =ile)
i@@e)i.tel2 *po it" re:eipt 62 t;e "e)er, or i lie* t;ereo= t;e
*:l.i@e) letter to+et;er >it; t;e :erti=ie) or ">or :op2 o= t;e
oti:e +i!e 62 t;e po"t@."ter to t;e .))re""ee*e0phasis supplied+,
Based on the foregoing provision, it is o3vious that the list su30itted 3! -ran is not
conclusive proof that he had served a cop! of his appeal 0e0orandu0 to E&7, nor
is it conclusive proof that E&7 received its cop! of the Appeal (e0orandu0, Ge
should have su30itted an affidavit proving that he 0ailed the Appeal (e0orandu0
together with the registr! receipt issued 3! the post officeJ afterwards, -ran should
have i00ediatel! filed the registr! return card,
Gence, after seeing that -ran failed to attach the proof of service, the /LRC
should not have si0pl! accepted the post office4s list of 0ail and parcels sentJ
3ut it ";o*l) ;.!e reI*ire) Gr. to properl2 =*ri"; t;e oppo"i+ p.rtie"
>it; :opie" o= ;i" Appe.l ,e@or.)*@ ." pre":ri6e) i J.. !agpa"o .)
t;e ot;er :."e", The /LRC should not have proceeded with the ad@udication of
the case, as this constitutes "rave a$use of #iscretion,
The glaring failure of /LRC to ensure that -ran should have furnished petitioner
E&7 a cop! of the Appeal (e0orandu0 3efore rendering @udg0ent reversing the
dis0issal of -ran4s co0plaint constitutes an evasion of the pertinent /LRC Rules
and esta3lished @urisprudence, Horse, this failure deprived E&7 of procedural due
process guaranteed 3! the Constitution which can serve as 3asis for the
nullification of proceedings in the appeal 3efore the /LRC, Ene can onl! sur0ise
the shocF and dis0a! that EAB, E&7, and E.7 e:perienced when the! thought that
the dis0issal of -ran4s co0plaint 3eca0e final, onl! to receive a cop! of -ran4s
(otion for E:ecution of udg0ent which also infor0ed the0 that -ran had
o3tained a favora3le /LRC &ecision, This is not level pla!ing field and a3solutel!
unfair and discri0inator! against the e0plo!er and the @o3 recruiters, The rights of
the e0plo!ers to procedural due process cannot 3e cavalierl! disregarded for the!
too have rights assured under the Constitution,
Gowever, instead of annulling the dispositions of the /LRC and re0anding the
case for further proceedings we will resolve the petition 3ased on the records
3efore us to avoid a protracted litigation,
11
The second and third issues have a co00on 0atterRwhether there was @ust
cause for -ran4s dis0issalRhence, the! will 3e discussed @ointl!,
'e:o) .) &;ir) I""*e"F 3;et;er Gr.<" )i"@i"".l i" A*"ti=i.6le 62 re."o
o= i:o@pete:e, i"*6or)i.tio, .) )i"o6e)ie:e
7n cases involving EBHs, t;e ri+;t" .) o6li+.tio" .@o+ .) 6et>ee t;e
O53, t;e lo:.l re:r*iter9.+et, .) t;e =orei+ e@plo2er9pri:ip.l .re
+o!ere) 62 t;e e@plo2@et :otr.:t, A contract freel! entered into is
considered law 3etween the partiesJ and hence, should 3e respected. I
=or@*l.ti+ t;e :otr.:t, t;e p.rtie" @.2 e"t.6li"; "*:; "tip*l.tio",
:l.*"e", ter@" .) :o)itio" ." t;e2 @.2 )ee@ :o!eiet, pro!i)e) t;e2
.re ot :otr.r2 to l.>, @or.l", +oo) :*"to@", p*6li: or)er, or p*6li:
poli:2.
31
I t;e pre"et :."e, t;e e@plo2@et :otr.:t "i+e) 62 Gr. "pe:i=i:.ll2
"t.te" t;.t '.*)i $.6or $.>" >ill +o!er @.tter" ot pro!i)e) =or i t;e
:otr.:t 7e.+. "pe:i=i: :.*"e" =or ter@i.tio, ter@i.tio pro:e)*re", et:.8.
%ei+ t;e l.> ite)e) 62 t;e p.rtie" 7le# loci intentiones8 to .ppl2 to t;e
:otr.:t, '.*)i $.6or $.>" ";o*l) +o!er .ll @.tter" rel.ti+ to t;e
ter@i.tio o= t;e e@plo2@et o= Gr.,
7n international law, the part! who wants to have a foreign law applied to a dispute
or case has the 3urden of proving the foreign law, The foreign law is treated as a
Duestion of fact to 3e properl! pleaded and proved as the @udge or la3or ar3iter
cannot taFe @udicial notice of a foreign law, Ge is presu0ed to Fnow onl! do0estic
or foru0 law,
15
/=ort*.tel2 =or petitioer, it )i) ot pro!e t;e pertiet '.*)i l.>" o t;e
@.tterM t;*", t;e Iter.tio.l $.> )o:trie o=presumed$identit"
approach or processual presumption :o@e" ito pl.2,
1)
Hhere a foreign law is
not pleaded or, even if pleaded, is not proved, the presu0ption is that foreign law is
the sa0e as ours,
1%
Thus, we appl! Philippine la3or laws in deter0ining the issues
presented 3efore us,
Petitioner E&7 clai0s that it had proven that -ran was legall! dis0issed due to
inco0petence and insu3ordination or diso3edience,
This clai0 has no 0erit,
7n illegal dis0issal cases, it has 3een esta3lished 3! Philippine law and
@urisprudence that the e0plo!er should prove that the dis0issal of e0plo!ees or
personnel is legal and @ust,
.ection 11 of Article #%% of the La3or Code
12
states that;
ART, #%%, (7.CELLA/EEU. PRE57.7E/.
1"
*3+ .u3@ect to the constitutional right of worFers to securit! of tenure and
their right to 3e protected against dis0issal e:cept for a @ust and
authoriIed cause and without pre@udice to the reDuire0ent of notice under
Article #21 of this Code, the e0plo!er shall furnish the worFer whose
e0plo!0ent is sought to 3e ter0inated a written notice containing a
state0ent of the causes for ter0ination and shall afford the latter a0ple
opportunit! to 3e heard and to defend hi0self with the assistance of his
representative if he so desires in accordance with co0pan! rules and
regulations pro0ulgated pursuant to guidelines set 3! the &epart0ent of
La3or and E0plo!0ent, An! decision taFen 3! the e0plo!er shall 3e
without pre@udice to the right of the worFers to contest the validit! or
legalit! of his dis0issal 3! filing a co0plaint with the regional 3ranch of
the /ational La3or Relations Co00ission, &;e 6*r)e o= pro!i+ t;.t
t;e ter@i.tio >." =or . !.li) or .*t;oriCe) :.*"e ";.ll re"t o t;e
e@plo2er, : : :
7n 0an! cases, it has 3een held that in ter0ination disputes or illegal dis0issal
cases, the e0plo!er has the 3urden of proving that the dis0issal is for @ust and
valid causesJ and failure to do so would necessaril! 0ean that the dis0issal was
not @ustified and therefore illegal,
4$
TaFing into account the character of the charges
and the penalt! 0eted to an e0plo!ee, the e0plo!er is 3ound to adduce clear,
accurate, consistent, and convincing evidence to prove that the dis0issal is valid
and legal,
4'
This is consistent with the principle of securit% of tenure as guaranteed
3! the Constitution and reinforced 3! Article #%% *3+ of the La3or Code of the
Philippines,
4#
7n the instant case, petitioner clai0s that private respondent -ran was validl!
dis0issed for @ust cause, due to inco0petence and insu3ordination or
diso3edience, To prove its allegations, E&7 su30itted two letters as evidence, The
first is the ul! ", '""4 ter0ination letter,
41
addressed to -ran, fro0 Andrea E,
/icolaou, (anaging &irector of EAB, The second is an unsigned April '', '""5
letter
44
fro0 EAB addressed to E&7 and E.7, which outlined the reasons wh! EAB
had ter0inated -ran4s e0plo!0ent,
Petitioner clai0s that -ran was inco0petent for the Co0puter .pecialist position
3ecause he had Ainsufficient Fnowledge in progra00ing and Iero Fnowledge of
NtheO ACA& s!ste0,A
45
Petitioner also clai0s that -ran was @ustifia3l! dis0issed
due to insu3ordination or diso3edience 3ecause he continuall! failed to su30it the
reDuired A&ail! Activit! Reports,A
4)
Gowever, other than the a3ove0entioned letters,
no other evidence was presented to show how and wh! -ran was considered
inco0petent, insu3ordinate, or diso3edient, Petitioner E&7 had clearl! failed to
overco0e the 3urden of proving that -ran was validl! dis0issed,
Petitioner4s i0putation of inco0petence on private respondent due to his
Ainsufficient Fnowledge in progra00ing and Iero Fnowledge of the ACA& s!ste0A
3ased onl! on the a3ove 0entioned letters, without an! other evidence, cannot 3e
given credence,
An allegation of inco0petence should have a factual foundation, 7nco0petence
0a! 3e shown 3! weighing it against a standard, 3ench0arF, or criterion,
Gowever, E&7 failed to esta3lish an! such 3ases to show how petitioner found
-ran inco0petent,
7n addition, the ele0ents that 0ust concur for the charge of insu3ordination or
willful diso3edience to prosper were not present,
7n Micro Sales 6peration Networ( v. NLR, we held that;
Bor willful diso3edience to 3e a valid cause for dis0issal, the following
twin ele0ents 0ust concur; *'+ the e0plo!ee4s assailed conduct 0ust
have 3een willful, that is, characteriIed 3! a wrongful and perverse
attitudeJ and *#+ the order violated 0ust have 3een reasona3le, lawful,
0ade Fnown to the e0plo!ee and 0ust pertain to the duties which he had
3een engaged to discharge,
4%
E&7 failed to discharge the 3urden of proving -ran4s insu3ordination or willful
diso3edience, As indicated 3! the second reDuire0ent provided for in Micro Sales
6peration Networ(, in order to @ustif! willful diso3edience, we 0ust deter0ine
whether the order violated 3! the e0plo!ee is reasona3le, lawful, 0ade Fnown to
the e0plo!ee, and pertains to the duties which he had 3een engaged to discharge,
7n the case at 3ar, petitioner failed to show that the order of the co0pan! which
was violatedRthe su30ission of A&ail! Activit! ReportsARwas part of -ran4s duties
as a Co0puter .pecialist, Before the La3or Ar3iter, E&7 should have provided a
cop! of the co0pan! polic!, -ran4s @o3 description, or an! other docu0ent that
would show that the A&ail! Activit! ReportsA were reDuired for su30ission 3! the
e0plo!ees, 0ore particularl! 3! a Co0puter .pecialist,
Even though E&7 andCor E.7 were 0erel! the local e0plo!0ent or recruit0ent
agencies and not the foreign e0plo!er, the! should have adduced additional
evidence to convincingl! show that -ran4s e0plo!0ent was validl! and legall!
ter0inated. &;e 6*r)e )e!ol!e" ot ol2 *po t;e =orei+#6."e) e@plo2er
6*t .l"o o t;e e@plo2@et or re:r*it@et .+e:2 =or t;e l.tter i" ot ol2
. .+et o= t;e =or@er, 6*t i" .l"o "oli).ril2 li.6le >it; t;e =orei+ pri:ip.l
=or .2 :l.i@" or li.6ilitie" .ri"i+ =ro@ t;e )i"@i"".l o= t;e >orEer.
18
Thus, petitioer =.ile) to pro!e t;.t Gr. >." A*"ti=i.6l2 )i"@i""e) )*e to
i:o@pete:e, i"*6or)i.tio, or >ill=*l )i"o6e)ie:e,
Petitioner also raised the issue that /rieto v. NLR,
4"
as used 3! the CA in its
&ecision, is not applica3le to the present case,
7n /rieto, this Court ruled that ANiOt is presu0ed that 3efore their deplo!0ent, the
petitioners were su3@ected to trade tests reDuired 3! law to 3e conducted 3! the
recruiting agenc! to insure e0plo!0ent of onl! technicall! Dualified worFers for the
foreign principal,A
5$
The CA, using the ruling in the said case, ruled that -ran 0ust
have passed the testJ otherwise, he would not have 3een hired, Therefore, E&7
was at fault when it deplo!ed -ran who was allegedl! Ainco0petentA for the @o3,
According to petitioner, the /rieto ruling is not applica3le 3ecause in the case at
hand, -ran 0isrepresented hi0self in hiscurriculum vitae as a Co0puter
.pecialistJ thus, he was not Dualified for the @o3 for which he was hired,
He disagree,
The CA is correct in appl!ing /rieto, The purpose of the reDuired trade test is to
weed out inco0petent applicants fro0 the pool of availa3le worFers, 7t is supposed
to reveal applicants with false educational 3acFgrounds, and e:pose 3ogus
Dualifications, .ince E&7 deplo!ed -ran to Ri!adh, it can 3e presu0ed that -ran
had passed the reDuired trade test and that -ran is Dualified for the @o3, Even if
there was no o3@ective trade test done 3! E&7, it was still E&74s responsi3ilit! to
su3@ect -ran to a trade testJ and its failure to do so onl! weaFened its position 3ut
should not in an! wa! pre@udice -ran, 7n an! case, the issue is rendered 0oot and
acade0ic 3ecause -ran4s inco0petenc! is unproved,
5o*rt; I""*eF Gr. >." ot A==or)e) D*e Pro:e""
As discussed earlier, i t;e .6"e:e o= proo= o= '.*)i l.>", P;ilippie $.6or
l.>" .) re+*l.tio" ";.ll +o!er t;e rel.tio";ip 6et>ee Gr. .) EDI.
&;*", o*r l.>" .) r*le" o t;e reI*i"ite" o= )*e pro:e"" rel.ti+ to
ter@i.tio o= e@plo2@et ";.ll .ppl2.
Petitioner E&7 clai0s that private respondent -ran was afforded due process,
since he was allowed to worF and i0prove his capa3ilities for five 0onths prior to
his ter0ination,
5'
E&7 also clai0s that the reDuire0ents of due process, as
enunciated in Santos) Jr. v. NLR,
5#
and Mala%a Shippin" Services) !nc. v.
NLR,
51
cited 3! the CA in its &ecision, were properl! o3served in the present
case,
This position is untena3le,
7n '"a$on v. NLR,
54
this Court held that;
Procedurall!, *'+ if the dis0issal is 3ased on a @ust cause under Article
#2#, the e0plo!er 0ust give the e0plo!ee two written notices and a
hearing or opportunit! to 3e heard if reDuested 3! the e0plo!ee 3efore
ter0inating the e0plo!0ent; a notice specif!ing the grounds for which
dis0issal is sought a hearing or an opportunit! to 3e heard and after
hearing or opportunit! to 3e heard, a notice of the decision to dis0issJ
and *#+ if the dis0issal is 3ased on authoriIed causes under Articles #21
and #24, the e0plo!er 0ust give the e0plo!ee and the &epart0ent of
La3or and E0plo!0ent written notices 1$ da!s prior to the effectivit! of
his separation,
Under the twin notice reDuire0ent, the e0plo!ees 0ust 3e given two *#+ notices
3efore their e0plo!0ent could 3e ter0inated F 718 . =ir"t oti:e to .ppri"e t;e
e@plo2ee" o= t;eir =.*lt, and *#+ . "e:o) oti:e to :o@@*i:.te to t;e
e@plo2ee" t;.t t;eir e@plo2@et i" 6ei+ ter@i.te). 7n 3etween the first and
second notice, the e0plo!ees should 3e given a hearing or opportunit! to defend
the0selves personall! or 3! counsel of their choice,
55
A careful e:a0ination of the records revealed that, indeed, EAB4s 0anner of
dis0issing -ran fell short of the two notice reDuire0ent, Hhile it furnished -ran
the written notice infor0ing hi0 of his dis0issal, it failed to furnish -ran the written
notice apprising hi0 of the charges against hi0, as prescri3ed 3! the La3or
Code,
5)
ConseDuentl!, he was denied the opportunit! to respond to said notice, 7n
addition, EAB did not schedule a hearing or conference with -ran to defend
hi0self and adduce evidence in support of his defenses, (oreover, the ul! ",
'""4 ter0ination letter was effective on the sa0e da!, This shows that EAB had
alread! conde0ned -ran to dis0issal, even 3efore -ran was furnished the
ter0ination letter, 7t should also 3e pointed out that EAB failed to give -ran the
chance to 3e heard and to defend hi0self with the assistance of a representative in
accordance with Article #%% of the La3or Code, Clearl!, there was no intention to
provide -ran with due process, .u00ing up, -ran was notified and his
e0plo!0ent ar3itraril! ter0inated on the sa0e da!, through the sa0e letter, and
for un@ustified grounds, E3viousl!, Gr. >." ot .==or)e) )*e pro:e"",
Pursuant to the doctrine laid down in '"a$on,
5%
an e0plo!er is lia3le to pa!
no0inal da0ages as inde0nit! for violating the e0plo!ee4s right to statutor! due
process, .ince EAB was in 3reach of the due process reDuire0ents under the
La3or Code and its regulations, EAB, E.7, and E&7, @ointl! and solidaril!, are lia3le
to -ran in the a0ount of PhP 1$,$$$,$$ as inde0nit!,
5i=t; .) $."t I""*eF Gr. i" Etitle) to %.:E>.+e"
He reiterate the rule that with regard to e0plo!ees hired for a fi:ed period of
e0plo!0ent, in cases arising 3efore the effectivit! of R,A, /o, 2$4#
52
*(igrant
HorFers and Everseas Bilipinos Act+ on August #5, '""5, that when the contract is
for a fi:ed ter0 and the e0plo!ees are dis0issed without @ust cause, the! are
entitled to the pa!0ent of their salaries corresponding to the une:pired portion of
their contract,
5"
En the other hand, for cases arising after the effectivit! of R,A, /o,
2$4#, when the ter0ination of e0plo!0ent is without @ust, valid or authoriIed
cause as defined 3! law or contract, the worFer shall 3e entitled to the full
rei03urse0ent of his place0ent fee with interest of twelve percent *'#L+ per
annu0, plus his salaries for the une:pired portion of his e0plo!0ent contract or for
three *1+ 0onths for ever! !ear of the une:pired ter0 whichever is less,
)$
7n the present case, the e0plo!0ent contract provides that the e0plo!0ent
contract shall 3e valid for a period of two *#+ !ears fro0 the date the e0plo!ee
starts to worF with the e0plo!er,
)'
-ran arrived in Ri!adh, .audi Ara3ia and started
to worF on Be3ruar! %, '""4J
)#
hence, his e0plo!0ent contract is until Be3ruar! %,
'""), 'i:e ;e >." ille+.ll2 )i"@i""e) o J*l2 9, 1991, 6e=ore t;e e==e:ti!it2
o= R.A. No. 8012, ;e i" t;ere=ore etitle) to 6.:E>.+e" :orre"po)i+ to t;e
*e?pire) portio o= ;i" :otr.:t, >;i:; >." eI*i!.let to /'D 16,150.
Petitioner E&7 Duestions the legalit! of the award of 3acFwages and 0ainl! relies
on the &eclaration which is clai0ed to have 3een freel! and voluntaril! e:ecuted
3! -ran, The relevant portions of the &eclaration are as follows;
7, ELEAWAR -RA/ *CE(PUTER .PEC7AL7.T+ ABTER RECE757/- (?
B7/AL .ETTLE(E/T E/ TG7. &ATE TGE A(EU/T EB;
.,R, #,"42,$$ *.AU&7 R7?AL. THE TGEU.A/& /7/E
GU/&RE& BERT? E7-GT E/L?+
REPRE.E/T7/- CE(PLETE PA?(E/T *CE(PE/.AT7E/+ BER TGE
.ER57CE. 7 RE/&ERE& TE EAB E.TABL7.G(E/T,
7 GEREB? &ECLARE TGAT EAB E.T, GA. /E B7/A/C7AL
EBL7-AT7E/ 7/ (? BA5EUR ABTER RECE757/- TGE ABE5E
(E/T7E/E& A(EU/T 7/ CA.G,
7 .TATE BURTGER TGAT EAB E.T, GA. /E EBL7-AT7E/ TEHAR&.
(E 7/ HGATE5ER BER(,
7 ATTE.T TE TGE TRUTGBUL/E.. EB TG7. .TATE(E/T B?
ABB7M7/- (? .7-/ATURE 5ELU/TAR7L?,
.7-/E&,
ELEAWAR -RA/
Courts 0ust undertaFe a 0eticulous and rigorous review of Duitclai0s or waivers,
0ore particularl! those e:ecuted 3! e0plo!ees, This reDuire0ent was clearl!
articulated 3! Chief ustice Arte0io 5, Pangani3an in Lan# an# Housin"
,evelopment orporation v. 0s1uillo;
Puitclai0s, releases and other waivers of 3enefits granted 3! laws or
contracts in favor of worFers should 3e strictl! scrutiniIed to protect the
weaF and the disadvantaged. &;e >.i!er" ";o*l) 6e :.re=*ll2
e?.@ie), i re+.r) ot ol2 to t;e >or)" .) ter@" *"e), 6*t .l"o
t;e =.:t*.l :ir:*@"t.:e" *)er >;i:; t;e2 ;.!e 6ee
e?e:*te),
)1
*E0phasis supplied,+
This Court had also outlined in Lan# an# Housin" ,evelopment orporation,
citing /eri1uet v. NLR,
)4
the para0eters for valid co0pro0ise agree0ents,
waivers, and Duitclai0s;
Not .ll >.i!er" .) I*it:l.i@" .re i!.li) ." .+.i"t p*6li: poli:2. I=
t;e .+ree@et >." !ol*t.ril2 etere) ito .) repre"et" .
re."o.6le "ettle@et, it i" 6i)i+ o t;e p.rtie" .) @.2 ot l.ter
6e )i"o>e) "i@pl2 6e:.*"e o= . :;.+e o= @i). It i" ol2 >;ere
t;ere i" :le.r proo= t;.t t;e >.i!er >." >.+le) =ro@ .
*"*"pe:ti+ or +*lli6le per"o, or t;e ter@" o= "ettle@et .re
*:o":io.6le o it" =.:e, t;.t t;e l.> >ill "tep i to .*l t;e
I*e"tio.6le tr.".:tio. %*t >;ere it i" ";o> t;.t t;e per"o
@.Ei+ t;e >.i!er )i) "o !ol*t.ril2, >it; =*ll *)er"t.)i+ o= >;.t
;e >." )oi+, .) t;e :o"i)er.tio =or t;e I*it:l.i@ i" :re)i6le .)
re."o.6le, t;e tr.".:tio @*"t 6e re:o+iCe) ." . !.li) .)
6i)i+ *)ert.Ei+, *E0phasis supplied,+
7s the waiver and Duitclai0 la3eled a &eclaration validT 7t is not,
The Court finds the waiver and Duitclai0 null and void for the following reasons;
', The salar! paid to -ran upon his ter0ination, in the a0ount of .R #,"42,$$, is
unreasona3l! low, As correctl! pointed out 3! the court a 1uo, the pa!0ent of .R
#,"42,$$ is even lower than his 0onthl! salar! of .R 1,'"$,$$ *U.& 25$,$$+, 7n
addition, it is also ver! 0uch less than the U.& '),'5$,$$ which is the a0ount
-ran is legall! entitled to get fro0 petitioner E&7 as 3acFwages,
#, The &eclaration reveals that the pa!0ent of .R #,"42,$$ is actuall! the
pa!0ent for -ran4s salar! for the services he rendered to EAB as Co0puter
.pecialist, 7f the &eclaration is a Duitclai0, then the consideration should 3e 0uch
0uch 0ore than the 0onthl! salar! of .R 1,'"$,$$ *U.& 25$,$$+Ralthough
possi3l! less than the esti0ated -ran4s salaries for the re0aining duration of his
contract and other 3enefits as e0plo!ee of EAB, A Duitclai0 will understanda3l!
3e lower than the su0 total of the a0ounts and 3enefits that can possi3l! 3e
awarded to e0plo!ees or to 3e earned for the re0ainder of the contract period
since it is a co0pro0ise where the e0plo!ees will have to forfeit a certain portion
of the a0ounts the! are clai0ing in e:change for the earl! pa!0ent of a
co0pro0ise a0ount, The court 0a! however step in when such a0ount is
unconsciona3l! low or unreasona3le although the e0plo!ee voluntaril! agreed to
it, 7n the case of the &eclaration, the a0ount is unreasona3l! s0all co0pared to
the future wages of -ran,
1, The factual circu0stances surrounding the e:ecution of the &eclaration would
show that -ran did not voluntaril! and freel! e:ecute the docu0ent, Consider the
following chronolog! of events;
a, En ul! ", '""4, -ran received a cop! of his letter of ter0inationJ
3, En ul! '$, '""4, -ran was instructed to depart .audi Ara3ia and
reDuired to pa! his plane ticFetJ
)5
c, En ul! '', '""4, he signed the &eclarationJ
d, En ul! '#, '""4, -ran departed fro0 Ri!adh, .audi Ara3iaJ and
e, En ul! #', '""4, -ran filed the Co0plaint 3efore the /LRC,
The foregoing events readil! reveal that -ran was AforcedA to sign the &eclaration
and constrained to receive the a0ount of .R #,"42,$$ even if it was against his will
Rsince he was told on ul! '$, '""4 to leave Ri!adh on ul! '#, '""4, Ge had no
other choice 3ut to sign the &eclaration as he needed the a0ount of .R #,"42,$$
for the pa!0ent of his ticFet, Ge could have entertained so0e apprehensions as to
the status of his sta! or safet! in .audi Ara3ia if he would not sign the Duitclai0,
4, The court a 1uo is correct in its finding that the &eclaration is a contract of
adhesion which should 3e construed against the e0plo!er, EAB, An adhesion
contract is contrar! to pu3lic polic! as it leaves the weaFer part!Rthe e0plo!eeR
in a AtaFe6it6or6leave6itA situation, Certainl!, the e0plo!er is 3eing un@ust to the
e0plo!ee as there is no 0eaningful choice on the part of the e0plo!ee while the
ter0s are unreasona3l! favora3le to the e0plo!er,
))
Thus, the &eclaration purporting to 3e a Duitclai0 and waiver is unenforcea3le
under Philippine laws in the a3sence of proof of the applica3le law of .audi Ara3ia,
7n order to prevent disputes on the validit! and enforcea3ilit! of Duitclai0s and
waivers of e0plo!ees under Philippine laws, said agree0ents should contain the
following;
', A fi:ed a0ount as full and final co0pro0ise settle0entJ
#, The 3enefits of the e0plo!ees if possi3le with the corresponding a0ounts,
which the e0plo!ees are giving up in consideration of the fi:ed co0pro0ise
a0ountJ
1, A state0ent that the e0plo!er has clearl! e:plained to the e0plo!ee in English,
Bilipino, or in the dialect Fnown to the e0plo!eesRthat 3! signing the waiver or
Duitclai0, the! are forfeiting or relinDuishing their right to receive the 3enefits which
are due the0 under the lawJ and
4, A state0ent that the e0plo!ees signed and e:ecuted the docu0ent voluntaril!,
and had full! understood the contents of the docu0ent and that their consent was
freel! given without an! threat, violence, duress, inti0idation, or undue influence
e:erted on their person,
7t is advisa3le that the stipulations 3e 0ade in English and Tagalog or in
the )i.le:t Eo> to t;e e@plo2ee, There should 3e two *#+ witnesses to the
e:ecution of the Duitclai0 who 0ust also sign the Duitclai0, The docu0ent should
3e su3scri3ed and sworn to under oath prefera3l! 3efore an! ad0inistering official
of the &epart0ent of La3or and E0plo!0ent or its regional office, the Bureau of
La3or Relations, the /LRC or a la3or attach\ in a foreign countr!, .uch official
shall assist the parties regarding the e:ecution of the Duitclai0 and waiver,
)%
This
co0pro0ise settle0ent 3eco0es final and 3inding under Article ##% of the La3or
Code which provides that;
NAOn! co0pro0ise settle0ent voluntaril! agreed upon with the
assistance of the Bureau of La3or Relations or the regional office of the
&ELE, shall 3e final and 3inding upon the parties and the /LRC or an!
court Ashall not assu0e @urisdiction over issues involved therein e:cept in
case of non6co0pliance thereof or if there is prima facie evidence that the
settle0ent was o3tained through fraud, 0isrepresentation, or coercion,
7t is 0ade clear that the foregoing rules on Duitclai0 or waiver shall appl! onl! to
la3or contracts of EBHs in the a3sence of proof of the laws of the foreign countr!
agreed upon to govern said contracts, Etherwise, the foreign laws shall appl!,
3(ERE5ORE, the petition is DENIED, The Ecto3er '2, #$$$ &ecision in CA6-,R,
.P /o, 5)'#$ of the Court of Appeals affir0ing the anuar! '5, '""" &ecision and
.epte03er 1$, '""" Resolution of the /LRC
is A55IR,ED with the ,ODI5ICA&ION that petitioner E&76.taff3uilders
7nternational, 7nc, shall pa! the a0ount of PhP 1$,$$$,$$ to respondent -ran as
no0inal da0ages for non6co0pliance with statutor! due process,
/o costs,
'O ORDERED,
G.R. No. 188002 5e6r*.r2 1, 2010
GOODRIC( ,AN/5AC&/RING CORPORA&ION H ,R. NI$O C(/A
GO-, Petitioners,
vs,
E,ER$INA A&IVO, $OVI&O 'E%/ANO, ,IC(AE$ 5ERNANDE0,
J/NI5ER
N
CA'A', RO$ANDO I'$A, E$I'EO DE$ RO'ARIO, ,AR4 JON
,AR&IN, EDI'ON GA,IDO, 3ARR- %A$IN&ON, RO%ER& RAGO .)
RO%ER&O ,ENDO0A, Respondents,
& E C 7 . 7 E /
VI$$ARA,A, JR., .:J
This petition for review on certiorari assails the &ecision
'
dated /ove03er #2,
#$$2 and Resolution
#
dated (a! #$, #$$" of the Court of Appeals in CA6-,R, .P
/o, '$1$%2, The appellate court set aside the Be3ruar! #', #$$% &ecision
1
and
anuar! #", #$$2 Resolution
4
of the /ational La3or Relations Co00ission
*/LRC+, and reinstated the /ove03er ##, #$$5 &ecision
5
of the La3or Ar3iter,
The facts follow,
Respondents are for0er e0plo!ees of petitioner -oodrich (anufacturing
Corporation *-oodrich+ assigned as 0achine or 0aintenance operators for the
different sections of the co0pan!, .o0eti0e in the latter part of #$$4, on account
of lingering financial constraints, -oodrich gave all its e0plo!ees the option to
voluntaril! resign fro0 the co0pan!, .everal e0plo!ees, including respondents,
decided to avail of the voluntar! resignation option, En &ece03er #", #$$4,
respondents were paid their separation pa!,
)
En anuar! 1, #$$5, respondents
e:ecuted their respective waivers and Duitclai0s,
%
The following da!, anuar! 4, #$$5, so0e of -oodrich9s for0er e0plo!ees,
including herein respondents, filed co0plaints against -oodrich for illegal dis0issal
with pra!er for pa!0ent of their full 0onetar! 3enefits 3efore the /LRC, &espite
several conferences, no a0ica3le settle0ent was reached 3! the parties,
En /ove03er ##, #$$5, La3or Ar3iter Blorentino R, &arlucio rendered a &ecision
declaring that there was no illegal dis0issal 3ut held that petitioners were still lia3le
to the respondents for their unpaid e0ergenc! cost of living allowance *ECELA+,
'1th 0onth pa!, and service incentive leave *.7L+ pa!, The La3or Ar3iter liFewise
found the separation pa! paid 3! -oodrich to 3e insufficient, The dispositive
portion of the La3or Ar3iter9s decision reads;
HGEREBERE, pre0ises considered, @udg0ent is here3! rendered ordering
respondents -oodrich (anufacturing Corp, to pa! the co0plainants the following;
/a0es .EP,
PA?
'1th
(o,
Pa!
.7LP ECELA .UBTE
TAL
Haiver
V
Puitclai
0
TETAL AHAR&
NE0erli
naO
Ativo
#),$$$,
$$
'",4#",
52
1,%1),
4)
'),1'#,
4$
)5,4%2,
44
#$,42",
52
44,"22,2)
Harr!
Balinto
n
),5$$,$
$
'$,$%5,
$$
',"1%,
5$
",414,'
$
#%,"4),
)$
'$,)#5,
$$
',%1#,')
*sic+
ennife
r
Casas
'",5$$,
$$
'",4#",
52
1,%1),
4)
'),1'#,
4$
52,"%2,
44
#$,$41,
'1
12,"15,1'
(ichae
l
Bernan
deI
'",5$$,
$$
'",4#",
52
1,%1),
4)
'),1'#,
4$
52,"%2,
44
#",$'#,
%)
#",")5,)2
Roland
o 7sla
'1,$$$,
$$
'",4#",
52
1,%1),
4)
'),1'#,
4$
52,"%2,
44
'2,##5,
"#
4$,%5#,5#
(arF
on
(artin
'",5$$,
$$
'",4#",
52
1,%1),
4)
'),1'#,
4$
',"1%,5
$
'),1'#,
4$
#%,"4),
)$
#$,511
,")
%,4'#
,)4
Lovito
.e3ua
no
'",5$$,
$$
'",4#",
52
1,%1),
4)
'),1'#,
4$
52,"%2,
44
#$,14#,
)#
12,)15,
2#
Eliseo
del
Rosari
o
'",5$$,
$$
'",4#",
52
1,%1),
4)
'),1'#,
4$
52,"%2,
44
#1,2'$,
$$
15,')2,
44

Edison
-a0id
o
'),#5$,
$$
'",4#",
52
1,%1),
4)
'),1'#,
4$
55,%#2,
44
'1,'#5,
$$
4#,)$1,
44
'%2,%5
$,$$
'"5,$'
),#5
1%,5$1
,'1
')5,)%
",2$
5%),"4"
,'2
#'1,5"
2,$%


Total
Award
1)5,15
',''

All other clai0s are dis0issed for lacF of 0erit,
.E ER&ERE&,
2
&issatisfied, 3oth parties appealed to the /LRC, En Be3ruar! #', #$$%, the /LRC
reversed and set aside the La3or Ar3iter9s decision, 7n disposing the issue, the
/LRC e:plained;
-oing over the co0plainants9 deeds of waiver and Duitclai0, 3e .re :o!i:e)
Jt;.tK t;e :o"i)er.tio" t;e2 re:ei!e) .re ot *re."o.6le, vis6S6vis the
awards granted NtoO the0 in the assailed &ecision, /ota3l!, t;e .>.r)" e!e
i:l*)e t;e 13t; @ot; p.2" =or 2002 .) 2003 >;i:;, 62 re"po)et"B proo=
7Rollo 219 to 2338 .ppe.r .lre.)2 p.i). He also noted that co0plainants are ot
";o> to ;.!e "i+e) t;e )ee)" o= >.i!er .) I*it:l.i@ i!ol*t.ril2,
>it;o*t *)er"t.)i+ t;e i@pli:.tio .) :o"eI*e:e" t;ereo=, : :
:,1avvphi1
Respondents9 counterclai0 is denied, There is no showing that co0plainants
prosecuted their co0plaint in 3ad faith,
HGEREBERE, pre0ises considered, the &ecision appealed fro0 is here3!
RE5ER.E& and .ET A.7&E and co0plainants9 0onetar! clai0s are here3!
dis0issed,
Respondents9 counterclai0 is also dis0issed for lacF of 0erit,
.E ER&ERE&,
"
Respondents 0oved for reconsideration, 3ut the sa0e was denied for lacF of
0erit,
'$
pro0pting the0 to elevate the 0atter to the Court of Appeals,
''
En /ove03er #2, #$$2, the appellate court rendered its decision in favor of the
respondents, The pertinent portion of the decision reads;
The record is devoid of an! indication that the petitioners were coerced into
resigning fro0 the co0pan!, En the contrar!, the record supports the view that the
petitioners chose to resign without an! ele0ent of coercion attending their option,
The Duitclai0 the! e:ecuted in favor of the co0pan! a0ounts to a valid and
3inding co0pro0ise agree0ent, To allow petitioners to repudiate the sa0e will 3e
to countenance un@ust enrich0ent on their part, The court will not per0it such a
situation,
: : : :
Gowever, He defer to the findings of the NLOa3or NAOr3iter that petitioners are
entitled to their unpaid thirteenth 0onth pa!, ECELA and service incentive leave
pa! *.7L+ at the a0ounts co0puted 3! the NLOa3or NAOr3iter, These are 3enefits to
which petitioners are entitled 3! statute, and which private respondentNsO failed to
disprove,
HGEREBERE, the Duestioned &ecision and Resolution of respondent /ational
La3or Relations Co00ission */LRC+, .econd &ivision, dated Be3ruar! #', #$$%
and anuar! #", #$$2, respectivel!, are here3! .ET A.7&E and the &ecision of
La3or Ar3iter Blorentino &arlucio, dated /ove03er ##, #$$5, NisO RE7/.TATE&,
.E ER&ERE&,
'#
Petitioners are now 3efore this Court raising the sa0e issues; whether the release,
waiver and Duitclai0 signed 3! respondents are valid and 3indingJ and whether
respondents 0a! still receive the deficienc! a0ounts due the0,
Petitioners contend that to allow respondents to recover their 0onetar! clai0s
would render nugator! the legal conseDuences of a valid Duitclai0, The! further
argue that waivers and Duitclai0s, 3! their ver! nature, set aside all the other
clai0s which the e0plo!ee 0a! 3e entitled to 3! the stroFe of a pen,
'1
Petitioners9 argu0ent is 0eritorious,
7t is true that the law looFs with disfavor on Duitclai0s and releases 3! e0plo!ees
who have 3een inveigled or pressured into signing the0 3! unscrupulous
e0plo!ers seeFing to evade their legal responsi3ilities and frustrate @ust clai0s of
e0plo!ees,
'4
7n certain cases, however, the Court has given effect to Duitclai0s
e:ecuted 3! e0plo!ees if the e0plo!er is a3le to prove the following reDuisites, to
witF 718 t;e e@plo2ee e?e:*te" . )ee) o= I*it:l.i@ !ol*t.ril2M 728 t;ere i" o
=r.*) or )e:eit o t;e p.rt o= .2 o= t;e p.rtie"M 738 t;e :o"i)er.tio o= t;e
I*it:l.i@ i" :re)i6le .) re."o.6leM .) 718 t;e :otr.:t i" ot :otr.r2 to
l.>, p*6li: or)er, p*6li: poli:2, @or.l" or +oo) :*"to@", or preA*)i:i.l to .
t;ir) per"o >it; . ri+;t re:o+iCe) 62 l.>,
'5
Eur pronounce0ent in PeriDuet v, /ational La3or Relations Co00ission
')
on this
0atter cannot 3e 0ore e:plicit;
/ot all waivers and Duitclai0s are invalid as against pu3lic polic!, 7f the agree0ent
was voluntaril! entered into and represents a reasona3le settle0ent, it is 3inding
on the parties and 0a! not later 3e disowned si0pl! 3ecause of a change of 0ind,
7t is onl! where there is clear proof that the waiver was wangled fro0 an
unsuspecting or gulli3le person, or the ter0s of settle0ent are unconsciona3le on
its face, that the law will step in to annul the Duestiona3le transaction, But where it
is shown that the person 0aFing the waiver did so voluntaril!, with full
understanding of what he was doing, and the consideration for the Duitclai0 is
credi3le and reasona3le, the transaction 0ust 3e recogniIed as a valid and 3inding
undertaFing,
'%
7n the case at 3ar, 3oth the La3or Ar3iter and the /LRC ruled that respondents
e:ecuted the Duitclai0s a3sent an! coercion fro0 the petitioners following their
voluntar! resignation fro0 the co0pan!,
'2
7n their Co00ent
'"
dated Ecto3er ', #$$", respondents the0selves ad0itted that
the! were not coerced to sign the Duitclai0s,
#$
The!, however, 0aintain that two *#+
reasons 0oved the0 to sign the said docu0ents; first, the! 3elieved -oodrich was
ter0inating its 3usiness on account of financial hardshipJ and second, the! thought
petitioners will pa! the0 the full a0ount of their co0pensation,
#'
Respondents
insist that the! were deceived into signing the Duitclai0s when the! learned that
the! were not paid their full 0onetar! 3enefits and after discovering that the
co0pan! did not reall! close shop, 3ut instead onl! assu0ed a different co0pan!
na0e,
##
He are not persuaded,
Birst, the contents of the Duitclai0 docu0ents that have 3een signed 3! the
respondents are si0ple, clear and uneDuivocal,
#1
The records of the case are
3ereft of an! su3stantial evidence to show that respondents did not Fnow that the!
were relinDuishing their right short of what the! had e:pected to receive and
contrar! to what the! have so declared, Put differentl!, at the ti0e the! were
signing their Duitclai0s, respondents honestl! 3elieved that the a0ounts received
3! the0 were fair and reasona3le settle0ents of the a0ounts which the! would
have received had the! refused to voluntaril! resign fro0 the said co0pan!,
.econd, respondents clai0 that the! were deceived 3ecause petitioners did not
reall! ter0inate their 3usiness since (r, Chua -o! had set up another co0pan!
with the sa0e line of 3usiness as -oodrich, .uch contention, however, was not
proven during the hearing 3efore the La3or Ar3iter and the /LRC, Gence, such
clai0 is 3ased onl! on respondents9 sur0ises and speculations which,
unfortunatel!, can never 3e used as a valid and legal ground to repudiate
respondents9 Duitclai0s,
And third, the considerations received 3! the respondents fro0 -oodrich do not
appear to 3e grossl! inadeDuate vis6S6vis what the! should receive in full, As
correctl! pointed out 3! the /LRC, the total awards co0puted 3! the La3or Ar3iter
will definitel! even 3e lesser after deducting the '1th 0onth pa! for the !ears #$$#
and #$$1, which have alread! 3een received 3! the respondents prior to the filing
of their co0plaints, 3ut which the La3or Ar3iter still included in his co0putation,
The difference 3etween the a0ounts e:pected fro0 those that were received 0a!,
therefore, 3e considered as a fair and reasona3le 3argain on the part of 3oth
parties,
HGEREBERE, the petition is -RA/TE&, The assailed Court of Appeals &ecision
dated /ove03er #2, #$$2 and Resolution dated (a! #$, #$$" in CA6-,R, .P /o,
'$1$%2 are here3! RE5ER.E& and .ET A.7&E, Accordingl!, the /LRC &ecision
dated Be3ruar! #', #$$% is RE7/.TATE&,
'O ORDERED.
G.R. No. 186175 J*e 26, 2013
PO'EIDON IN&ERNA&IONA$ ,ARI&I,E 'ERVICE',
INC., Petitioner,
vs,
&I&O R. &A,A$A, 5E$IPE '. 'A/RIN, JR., AR&E,IO A. %O#OC .)
JOE$ '. 5ERNANDE0, Respondents,
& E C 7 . 7 E /
%RION, J.:
He resolve in this petition for review on certiorari
'
the challenge to the
.epte03er 1$, #$$2 &ecision
#
and the Be3ruar! '', #$$"
1
Resolution
of the Court of Appeals *CA+ in CA6-,R, .P /o, "2%21, These CA
rulings set aside the &ece03er #", #$$) and Be3ruar! '#, #$$%
Resolutions
4
of the /ational La3or Relations Co00ission */LRC+ in
/LRC CA /o, $4"4%"6$), The /LRC, in turn, affir0ed in toto the (a!
#$$) &ecision
5
of the la3or ar3iter *LA+ )i"@i""i+ t;e :o@pl.it =or
ille+.l ter@i.tio o= e@plo2@et filed 3! respondents Tito R,
Ta0ala, Belipe ., .aurin, r,, Arte0io A, Bo6oc and oel ., BernandeI
against petitioner Poseidon 7nternational (ariti0e .ervices, 7nc,
*Poseidon+, and its principal, 5an &oorn Bishing Pt!, Ltd, *5an &oorn+,
The Bactual Antecedents
7n #$$4, Poseidon hired the respondents, in 3ehalf of 5an &oorn, to
0an the fishing vessels of 5an &oorn and those of its partners U &inFo
Tuna Bar0ers Pt!, Ltd, *&inFo+ and .nappertuna Cv, Lda,
*.nappertuna+ 6 at the coastal and offshore area of Cape 5erde
7slands, The respondents9 contracting dates, positions, vessel
assign0ents, duration of the contract, 3asic 0onthl! salaries,
guaranteed overti0e pa! and vacation leave pa!, as reflected in their
approved contracts,
)
are su00ariIed 3elow;
Arte0io A,
Bo6oc
oel .,
BernandeI
Belipe .,
.aurin, r,
Tito R,
Ta0ala
&ate
Contracted
une ', #$$4 une #4, #$$4 ul! '", #$$4
%
Ecto3er #$,
#$$4
Position Third Engineer Chief (ate Third Engineer Erdinar!
.ea0an
5essel
Assign0ent
(C5 ALuForan
&5AA
(C5 ALuForan
&5AA
(C5 ALuForan
CetririA
(C5
ALuForan
&5AA
Contract
&uration
Twelve *'#+
0onths
Twelve *'#+
0onths
Twelve *'#+
0onths
Twelve *'#+
0onths
Basic
(onthl!
.alar!
U.[2$$,$$ U.[','#$,$$ U.[2$$,$$ U.[#2$,$$
-uaranteed
Everti0e
Pa!
U.[#4$,$$C0o U.[11),$$C0o U.[#4$,$$C0o U.[24,$$C0o
5acation
Leave Pa!
U.[)),)) U.["1,11 U.[)),)) U.[#1,11
The fishing operations for which the respondents were hired started on
.epte03er '%, #$$4, En /ove03er #$, #$$4, the operations a3ruptl!
stopped and did not resu0e, En (a! #5, #$$5, 3efore the respondents
dise03arFed fro0 the vessels, -oran EFstro0 of .nappertuna *the
respondents9 i00ediate e0plo!er on 3oard the fishing vessels+ and
the respondents e:ecuted an agree0ent *(a! #5, #$$5 agree0ent+
regarding the respondents9 salaries,
2
The agree0ent provided that the
respondents would get the full or '$$L of their unpaid salaries for the
une:pired portion of their pre6ter0inated contract in accordance with
Philippine laws, The respective a0ounts the respondents would
receive per the (a! #5, #$$5 agree0ent are;
Arte0io A, Bo6oc U.[),$4%,""
oel ., BernandeI U.[%,%)%,"$
Belipe ., .aurin, r, U.[),)4%,""
Tito R, Ta0ala U.[%,$4%,""
En (a! #), #$$5, however, Poseidon and 5an &oorn, with -oran of
.nappertuna and &inFo LuFin of &inFo, entered into another
agree0ent *letter of acceptance+ reducing the previousl! agreed
a0ount to 5$L of the respondents9 unpaid salaries *settle0ent pa!+ for
the une:pired portion of their contract,
"
En (a! #2, #$$5, the
respondents arrived in (anila, En une '$, #$$5, the respondents
received the settle0ent pa! under their letter of acceptance, The
respondents then signed a waiver and Duitclai0
'$
and the
corresponding cash vouchers,
''
En /ove03er '), #$$5, the respondents filed a co0plaint
'#
3efore the
La3or Ar3itration Branch of the /LRC, /ational Capital Region for
illegal ter0ination of e0plo!0ent with pra!er for the pa!0ent of their
salaries for the une:pired portion of their contractsJ and for non6
pa!0ent of salaries, overti0e pa! and vacation leave pa!,
'1
The
respondents also pra!ed for 0oral and e:e0plar! da0ages and
attorne!9s fees,
The respondents anchored their clai0 on their (a! #5, #$$5
agree0ent with -oran, and contended that their su3seDuent e:ecution
of the waiver and Duitclai0 in favor of Poseidon and 5an &oorn should
not 3e given weight nor allowed to serve as a 3ar to their clai0, The
respondents alleged that their dire need for cash for their starving
fa0ilies co0pelled and undul! influenced their decision to sign their
respective waivers and Duitclai0s, 7n addition, the co0plicated
language e0plo!ed in the docu0ent rendered it highl! suspect,
7n their position paper,
'4
Poseidon and 5an &oorn argued that the
respondents had no cause of action to collect the re0aining 5$L of
their unpaid wages, To Poseidon and 5an &oorn, the respondents9
voluntar! and Fnowing agree0ent to the settle0ent pa!, which the!
confir0ed when the! signed the waivers and Duitclai0s, now
effectivel! 3ars their clai0, Poseidon and 5an &oorn su30itted 3efore
the LA the signed letter of acceptance, the waiver and Duitclai0, and
the cash vouchers to support their stance,
7n a &ecision
'5
dated (a! #$$), the LA dis0issed the respondents9
co0plaint for lacF of 0erit, declaring as valid and 3inding their waivers
and Duitclai0s, The LA e:plained that while Duitclai0s e:ecuted 3!
e0plo!ees are generall! frowned upon and do not 3ar the0 fro0
recovering the full 0easure of what is legall! due, e:cepted fro0 this
rule are the waivers Fnowingl! and voluntaril! agreed to 3! the
e0plo!ees, such as the waivers assailed 3! the respondents, Citing
@urisprudence, the LA added that the courts should respect, as the law
3etween the parties, those legiti0ate waivers and Duitclai0s that
represent voluntar! and reasona3le settle0ent of e0plo!ees9 clai0s,
7n the respondents9 case, this pronounce0ent holds 0ore weight, as
the! understood full! well the contents of their waivers and Fnew the
conseDuences of their acts,
The LA did not give pro3ative weight to the (a! #5, #$$5 agree0ent
considering that the entities which contracted the respondents9
services 6 Poseidon and 5an &oorn U did not activel! participate,
(oreover, the LA noted that the respondents9 signed letter of
acceptance superseded this agree0ent, The LA liFewise considered
the respondents9 3elated filing of the co0plaint as a 0ere afterthought,
Binall!, the LA dis0issed the issue of illegal dis0issal, noting that the
respondents alread! a3andoned this issue in their pleadings, The
respondents appealed
')
the LA9s decision 3efore the /LRC,
The Ruling of the /LRC
B! Resolution
'%
dated &ece03er #", #$$), the /LRC affir0ed in toto
the LA9s decision, As the LA did, the /LRC ruled that the respondents9
Fnowing and voluntar! acDuiescence to the settle0ent and their
acceptance of the pa!0ents 0ade 3ind the0 and effectivel! 3ar their
clai0s, The /LRC also regarded the a0ounts the respondents
received as settle0ent pa! to 3e reasona3leJ despite the cessation of
the fishing operations, the respondents were still paid their full wages
fro0 &ece03er #$$4 to anuar! #$$5 and 5$L of their wages fro0
Be3ruar! #$$5 until their repatriation in (a! #$$5,
En Be3ruar! '#, #$$%, the /LRC denied
'2
the respondents9 0otion for
reconsideration,
'"
pro0pting the0 to file with the CA a petition for
certiorari
#$
under Rule )5 of the Rules of Court,
The Ruling of the CA
7n its .epte03er 1$, #$$2 &ecision,
#'
the CA granted the respondents9
petition and ordered Poseidon and 5an &oorn to pa! the respondents
the a0ounts ta3ulated 3elow, representing the difference 3etween the
a0ounts the! were entitled to receive under the (a! #5, #$$5
agree0ent and the a0ounts that the! received as settle0ent pa!;
Arte0io A, Bo6oc U.[1,%$5,$$
oel ., BernandeI U.[4,)11,5%
Belipe ., .aurin, r, U.[4,$$2,)#
Tito R, Ta0ala U.[4,454,#$
7n setting aside the /LRC9s ruling, t;e CA :o"i)ere) t;e >.i!er"
.) I*it:l.i@" i!.li) .) ;i+;l2 "*"pi:io*", The CA noted that the
respondents in fact Duestioned in their pleadings the letter9s due
e:ecution, 7n contrast with the /LRC, t;e CA o6"er!e) t;.t t;e
re"po)et" >ere :oer:e) .) *)*l2 i=l*e:e) ito .::epti+
t;e 50O "ettle@et p.2 .) ito "i+i+ t;e >.i!er" .)
I*it:l.i@" 6e:.*"e o= t;eir =i.:i.l )i"tre"", The CA 0oreover
considered the a0ounts stated in the (a! #5, #$$5 agree0ent with
-oran to 3e 0ore reasona3le and in Feeping with .ection '$ of
Repu3lic Act *R,A,+ /o, 2$4# or the (igrant HorFers and Everseas
Bilipinos Act of '""5,
The CA also pointed out with e0phasis that t;e pre#ter@i.tio o=
t;e re"po)et"B e@plo2@et :otr.:t >." "i@pl2 t;e re"*lt o=
V. DoorB" )e:i"io to "top it" oper.tio".
Binall!, the CA did not consider the respondents9 co0plaint as a 0ere
afterthoughtJ t;e re"po)et" .re pre:i"el2 +i!e *)er t;e $.6or
Co)e . t;ree#2e.r pre":ripti!e perio) to .llo> t;e@ to i"tit*te
"*:; .:tio".
Poseidon filed the present petition after the CA denied its 0otion for
Reconsideration
##
in the CA9s Be3ruar! '', #$$" Resolution,
#1
The Petition
Poseidon9s petition argues that the la3or tri3unals9 findings are not onl!
3inding 3ut are full! supported 3! evidence, Poseidon contends that
the CA9s application of .ection '$ of R,A, /o, 2$4# to @ustif! the
a0ounts it awarded to the respondents is 0isplaced, as the
respondents never raised the issue of illegal dis0issal 3efore the
/LRC and the CA, 7t clai0s that the respondents, in assailing the
/LRC ruling 3efore the CA, 0ainl! Duestioned the validit! of the
waivers and Duitclai0s the! signed and their 3inding effect on the0,
Hhile the respondents raised the issue of illegal dis0issal 3efore the
LA, the! eventuall! a3andoned it in their pleadings U a 0atter the LA
even pointed out in her (a! #$$) &ecision,
Poseidon further argues that the /LRC did not e:ceed its @urisdiction
nor gravel! a3use its discretion in deciding the case in its favor,
pointing out that the respondents raised issues pertaining to 0ere
errors of @udg0ent 3efore the CA, Thus, as 0atters stood, these issues
did not call for the grant of a writ of certiorari as this prerogative writ is
li0ited to the correction of errors of @urisdiction co00itted through
grave a3use of discretion, not errors of @udg0ent,
Binall!, Poseidon 0aintains that it did not illegall! dis0iss the
respondents, Gighlighting the CA9s o3servation and the respondents9
own ad0ission in their various pleadings, Poseidon reiterates that it
si0pl! ceased its fishing operations as a 3usiness decision in the
e:ercise of its 0anage0ent prerogative,
The Case for the Respondents
The respondents point out in their co00ent
#4
that the petition raises
Duestions of fact, which are not proper for a Rule 45 petition, The!
liFewise point out that the petition did not specificall! set forth the
grounds as reDuired under Rule 45 of the Rules of Court, En the
0erits, and rel!ing on the CA ruling, the respondents argue that
Poseidon dis0issed the0 without a valid cause and without the
o3servance of due process,
The 7ssues
At the core of this case are the validit! of the respondents9 waivers and
Duitclai0s and the issue of whether these should 3ar their clai0 for
unpaid salaries, At the co0pletel! legal end is the Duestion of whether
.ection '$ of R,A, /o, 2$4# applies to the respondents9 clai0,
The Court9s Ruling
He resolve to partl! -RA/T the petition,
Preli0inar! considerations
The settled rule is that a petition for review on certiorari under Rule 45
is li0ited to the review of Duestions of law,
#5
i,e,, to legal errors that the
CA 0a! have co00itted in its decision,
#)
in contrast with the review for
@urisdictional errors that we undertaFe in original certiorari actions
under Rule )5,
#%
7n reviewing the legal correctness of a CA decision
rendered under Rule )5 of the Rules of Court, we e:a0ine the CA
decision fro0 the pris0 of whether it correctl! deter0ined the presence
or a3sence of grave a3use of discretion in the /LRC decision 3efore it,
and not strictl! on the 3asis of whether the /LRC decision under
review is intrinsicall! correct,
#2
7n other words, we have to 3e Feenl!
aware that the CA undertooF a Rule )5 review, not a review on appeal,
of the /LRC decision challenged 3efore it,
#"
5iewed in this light, >e )o ot re#e?.@ie t;e =.:t*.l =i)i+" o= t;e
N$RC .) t;e CA, or )o >e "*6"tit*te o*r o> A*)+@et =or
t;eir",
30
." t;eir =i)i+" o= =.:t .re +eer.ll2 :o:l*"i!e o t;i"
Co*rt, He cannot touch on factual Duestions Ae:cept in the course of
deter0ining whether the CA correctl! ruled in deter0ining whether or
not the /LRC co00itted grave a3use of discretion in considering and
appreciating the factual Nissues 3efore itO,A
1'
En the (erits of the Case
The core issue decided 3! the tri3unals 3elow is the validit! of the
respondents9 waivers and Duitclai0s, &;e CA "et ."i)e t;e N$RC
r*li+ =or +r.!e .6*"e o= )i":retioM t;e CA e""eti.ll2 =o*) t;e
>.i!er" .) I*it:l.i@" *re."o.6le .) i!ol*t.ril2 e?e:*te),
.) :o*l) ot ;.!e "*per"e)e) t;e ,.2 25, 2005 .+ree@et, 7n
doing so, and in giving weight to the (a! #5, #$$5 agree0ent, the CA
found @ustification under .ection '$ of R,A, /o, 2$4#,
The respondents are not entitled to
the unpaid portion of their salaries
under .ection '$ of R,A, /o, 2$4#
The application of .ection '$ of R,A, /o, 2$4# presu0es a finding of
illegal dis0issal, The pertinent portion of .ection '$ of R,A, /o, 2$4#
reads;
.EC, '$, (E/E? CLA7(., U : : :
: : : :
I :."e o= ter@i.tio o= o!er"e." e@plo2@et >it;o*t A*"t, !.li)
or .*t;oriCe) :.*"e ." )e=ie) 62 l.> or :otr.:t. Je@p;."i" .)
it.li:" o*r"K
A plain reading of this provision readil! shows that it applies onl! to
cases of illegal dis0issal or dis0issal without an! @ust, authoriIed or
valid cause and finds no application in cases where the overseas
Bilipino worFer was not illegall! dis0issed,
1#
He found the occasion to
appl! this rule in 7nternational (anage0ent .ervices v, Logarta,
11
where
we held that .ection '$ of R,A, /o, 2$4# applies onl! to an illegall!
dis0issed overseas contract worFer or a worFer dis0issed fro0
overseas e0plo!0ent without @ust, valid or authoriIed cause,
14
Hhether the respondents in the present case were illegall! dis0issed
is a Duestion we resolve in the negative for three reasons,
Birst, the respondents9 references to illegal dis0issal in their several
pleadings were 0ere cursor! declarations rather than a definitive
de0and for redress, The LA9s (a! #$$) &ecision clearl! enunciated
this point when she dis0issed the respondents9 clai0 of illegal
dis0issal Aas co0plainants the0selves have lost interest to pursue the
sa0e,A
15
.econd, the respondents, in their 0otion for reconsideration filed
3efore the /LRC, positivel! argued that the fishing operations for
which the! were hired ceased as a result of the 3usiness decision of
5an &oorn and of its partnersJ
1)
thus, negating 3! o0ission an! clai0
for illegal dis0issal,
Third, the CA, in its assailed decision, liFewise 0ade the ver! sa0e
inference U t;.t t;e =i";i+ oper.tio" :e."e) ." . re"*lt o= .
6*"ie"" )e:i"io o= V. Door .) o= it" p.rter". 7n other words,
t;e @.er o= )i"@i"".l >." ot . :ote"te) i""*eJ the records
clearl! showed that the respondents9 e0plo!0ent was ter0inated
3ecause 5an &oorn and its partners si0pl! decided to stop their fishing
operations in the e:ercise of their 0anage0ent prerogative, which
prerogative even our la3or laws recogniIe,
He confir0 in this regard that, 3! law and su3@ect to the .tate9s
corollar! right to review its deter0ination,
1%
0anage0ent has the right to
regulate the 3usiness and control its ever! aspect,
12
7ncluded in this
0anage0ent right is the freedo0 to close or cease its operations for
an! reason, as long as it is done in good faith and the e0plo!er
faithfull! co0plies with the su3stantive and procedural reDuire0ents
laid down 3! law and @urisprudence,
1"
Article #21 of our La3or Code
provides;
Art, #21, Closure of esta3lish0ent and reduction of personnel, 6 &;e
e@plo2er @.2 .l"o ter@i.te t;e e@plo2@et o= .2 e@plo2ee
)*e to t;e i"t.ll.tio o= l.6or#".!i+ )e!i:e", re)*).:2,
retre:;@et to pre!et lo""e" or t;e :lo"i+ or :e"".tio o=
oper.tio o= t;e e"t.6li";@et or *)ert.Ei+ *le"" t;e :lo"i+
i" =or t;e p*rpo"e o= :ir:*@!eti+ t;e pro!i"io" o= t;i" &itle, 62
"er!i+ . >ritte oti:e o t;e >orEer" .) t;e JDep.rt@et o=
$.6or .) E@plo2@etK .t le."t oe 718 @ot; 6e=ore t;e
ite)e) ).te t;ereo=, : : : 7n case of retrench0ent to prevent losses
and in cases of closures or cessation of operations of esta3lish0ent or
undertaFing not due to serious 3usiness losses or financial reverses,
the separation pa! shall 3e eI*i!.let to oe 718 @ot; p.2 or .t
le."t oe#;.l= 71928 @ot; p.2 =or e!er2 2e.r o= "er!i:e, >;i:;e!er
i" ;i+;er. A fraction of at least si: *)+ 0onths shall 3e considered as
one *'+ whole !ear, N7talics, underscores and e0phases oursO
This provision applies in the present case as under the contract the
e0plo!er and the worFers signed and su30itted to the Philippine
Everseas E0plo!0ent Agenc! *PEEA+, the Philippine la3or law
e:pressl! applies,
This legal realit! is reiterated under .ection '26B, paragraph #,
4$
in
relation with .ection #1
4'
of the PEEA .tandard E0plo!0ent Contract
*PEEA6.EC+ *which is dee0ed written into ever! overseas
e0plo!0ent contract+ which recogniIes the validit! of the cessation of
the 3usiness operations as a valid ground for the ter0ination of an
overseas e0plo!0ent, This recognition is su3@ect to co0pliance with
the following reDuisites;
', The decision to :lo"e or :e."e oper.tio" @*"t 6e 6o.
=i)e i :;.r.:terM
#, 'er!i:e o= >ritte oti:e on the affected e0plo!ees and on
the &epart0ent of La3or and E0plo!0ent *&ELE+ at least one
*'+ 0onth prior to the effectivit! of the ter0inationJ and
1, Pa!0ent to the affected e0plo!ees o= ter@i.tio or
"ep.r.tio p.2 eI*i!.let to oe 718 @ot; p.2 or .t le."t
oe#;.l= 71928 @ot; p.2 =or e!er2 2e.r o= "er!i:e,
>;i:;e!er i" ;i+;er.
4#
He are sufficientl! convinced, 3ased on the records, that 5an &oorn9s
ter0ination of the respondents9 e0plo!0ent arising fro0 the cessation
of its fishing operations co0plied with the a3ove reDuisites and is thus
valid,
He o3serve that the records of the case do not show that 5an &oorn
ever intended to defeat the respondents9 rights under our la3or laws
when it undertooF its decision to close its fishing operations on
/ove03er #$, #$$4, Bro0 this date until si: 0onths after, the
undertaFing was at a co0plete halt, That 5an &oorn and its partners
0ight have suffered losses during the si:60onth period is not entirel!
re0ote, ?et, 5an &oorn did not i00ediatel! repatriate the respondents
or hire another group of seafarers to replace the respondents in a
0ove to resu0e its fishing operations, Puite the opposite, the
respondents, although the! were no longer rendering an! service or
doing an! worF, still received their full salar! for /ove03er #$$4 up to
anuar! #$$5, 7n fact, fro0 Be3ruar! #$$5 until the! were repatriated
to the Philippines in (a! #$$5, the respondents still received wages,
al3eit half of their respective 3asic 0onthl! salar! rate, Gad 5an &oorn
intended to stop its fishing operations si0pl! to ter0inate the
respondents9 e0plo!0ent, it would have i00ediatel! repatriated the
respondents to the Philippines soon after, in order that it 0a! hire other
seafarers to replace the0 U a possi3ilit! that did not taFe place,
Considering therefore the a3sence of an! indication that 5an &oorn
stopped its fishing operations to circu0vent the protected rights of the
respondents, our courts have no 3asis to Duestion the reason that
0ight have i0pelled 5an &oorn to reach its closure decision,
41
7n su0, since Poseidon ceased its fishing operations in the valid
e:ercise of its 0anage0ent prerogative, .ection '$ of R,A, /o, 2$4#
finds no application, ConseDuentl!, we find that the CA erroneousl!
i0puted grave a3use of discretion on the part of the /LRC in not
appl!ing .ection '$ of R,A, /o, 2$4# and in awarding the respondents
the unpaid portion of their full salaries,
The waivers and Duitclai0s signed 3!
the respondents are valid and
3inding
He cannot support the CA9s act of giving greater evidentiar! weight to
the (a! #5, #$$5 agree0ent over the respondents9 waivers and
Duitclai0sJ not onl! do we find the latter docu0ents to 3e reasona3le
and dul! e:ecuted, we also find that the! superseded the (a! #5,
#$$5 agree0ent,
-enerall!, this Court looFs with disfavor at Duitclai0s e:ecuted 3!
e0plo!ees for 3eing contrar! to pu3lic polic!,
44
Hhere the person
0aFing the waiver, however, has done so voluntaril!, with a full
understanding of its ter0s and with the pa!0ent of credi3le and
reasona3le consideration, we have no option 3ut to recogniIe the
transaction to 3e valid and 3inding,
45
He find the reDuisites for the validit! of the respondents9 Duitclai0
present in this case, He 3ase this conclusion on the following
o3servations;
Birst, the respondents acFnowledged in their various pleadings, as well
as in the ver! docu0ent deno0inated as Awaiver and Duitclai0,A that
the! !ol*t.ril2 "i+e) t;e )o:*@et .=ter re:ei!i+ t;e .+ree)
"ettle@et p.2.
.econd, the "ettle@et p.2 i" re."o.6le *)er t;e
:ir:*@"t.:e", especiall! when contrasted with the a0ounts to which
the! were respectivel! entitled to receive as ter0ination pa! pursuant
to .ection #1 of the PEEA6.EC and Article #21 of the La3or Code, The
co0parison of these a0ounts is ta3ulated 3elow;
1wphi 1
.ettle0ent Pa! Ter0ination Pa!
oel ., BernandeI U.[1'14,11 U.[''#$,$$
Arte0io A, Bo6oc U.[#14#,1% U.[2$$,$$
Belipe ., .aurin, r, U.[#)1",1% U.[2$$,$$
Tito R, Ta0ala U.[#5"1,%" U.[#2$,$$
Thus, the respondents undenia3l! re:ei!e) @ore t;. >;.t t;e2
>ere etitle) to re:ei!e *)er t;e l.> ." . re"*lt o= t;e :e"".tio
o= t;e =i";i+ oper.tio".
Third, the :otet" o= t;e >.i!er .) I*it:l.i@ .re :le.r,
*eI*i!o:.l .) *:o@pli:.te) "o t;.t t;e re"po)et" :o*l)
=*ll2 *)er"t.) t;e i@port o= >;.t t;e2 >ere "i+i+ .) o= it"
:o"eI*e:e".
4)
/othing in the records shows that what the!
received was different fro0 what the! signed for,
Bourth, the respondents are @.t*re .) itelli+et i)i!i)*.l", >it;
:olle+e )e+ree", and are far fro0 the naive and unlettered individuals
the! portra!ed the0selves to 3e,1wphi1
Bifth, while the respondents contend that the! were coerced and
undul! influenced in their decision to accept the settle0ent pa! and to
sign the waivers and Duitclai0s, t;e re:or)" o= t;e :."e )o ot
"*pport t;i" :l.i@, The respondents9 clai0s that the! were in Adire
need for cashA and that the! would not 3e paid an!thing if the! would
not sign do not constitute the coercion nor Dualif! as the undue
influence conte0plated 3! law sufficient to invalidate a waiver and
Duitclai0,
4%
particularl! in the circu0stances attendant in this case, The
records show that the respondents, along with their other fellow
seafarers, served as each other9s witnesses when the! agreed and
signed their respective waivers and Duitclai0s,
.i:th, the respondents9 voluntar! and Fnowing confor0it! to the
settle0ent pa! was proved not onl! 3! the waiver and Duitclai0, 3ut 3!
the letters of acceptance and the vouchers evidencing pa!0ent, 3it;
t;e"e )o:*@et" o re:or), t;e 6*r)e ";i=t" to t;e re"po)et"
to pro!e :oer:io .) *)*e i=l*e:e ot;er t;. t;ro*+; t;eir
6.re "el=#"er!i+ :l.i@", /o such evidence appeared on record at
an! stage of the proceedings,
I t;e"e li+;t" .) i t;e .6"e:e o= .2 e!i)e:e ";o>i+ t;.t
=r.*), )e:eptio or @i"repre"et.tio .tte)e) t;e e?e:*tio o=
t;e >.i!er .) I*it:l.i@, >e .re "*==i:ietl2 :o!i:e) t;.t .
!.li) tr.".:tio tooE pl.:e. ConseDuentl!, we find that the CA
erroneousl! i0puted grave a3use of discretion in 0isreading the
su30itted evidence, and in rel!ing on the (a! #5, #$$5 agree0ent
and on .ection '$ of R,A, /o, 2$4#,
The respondents are entitled to
no0inal da0ages for failure of 5an
&oorn to o3serve the procedural
reDuisites for the ter0ination of
e0plo!0ent under Article #21 of the
La3or Code
As a final note, we o3serve that while 5an &oorn has a @ust and valid
cause to ter0inate the respondents9 e0plo!0ent, it failed to 0eet the
reDuisite procedural safeguards provided under Article #21 of the
La3or Code, 7n the ter0ination of e0plo!0ent under Article #21, 5an
&oorn, as the e0plo!er, is reDuired to serve a written notice to the
respondents and to the &ELE of the intended ter0ination of
e0plo!0ent at least one 0onth prior to the cessation of its fishing
operations, Poseidon could have easil! filed this notice, in the wa! it
represented 5an &oorn in its dealings in the Philippines, Hhile this
o0ission does not affect the validit! of the ter0ination of e0plo!0ent,
it su3@ects the e0plo!er to the pa!0ent of inde0nit! in the for0 of
no0inal da0ages,
42
Consistent with our ruling in aFa Bood Processing Corporation v,
Pacot,
4"
we dee0 it proper to award the respondents no0inal da0ages
in the a0ount of P1$,$$$,$$ as inde0nit! for the violation of the
reDuired statutor! procedures, Poseidon shall 3e solidaril! lia3le to the
respondents for the pa!0ent of these da0ages,
5$
HGEREBERE, in view of these considerations, we here3! -RA/T in
PART the petition and accordingl! RE5ER.E and .ET A.7&E the
&ecision dated .epte03er 1$, #$$2 and the Resolution dated
Be3ruar! '', #$$" of the Court of Appeals in CA6-,R, .P /o, "2%21,
He RE7/.TATE the Resolution dated &ece03er #", #$$) of the
/ational La3or Relations Co00ission with the (E&7B7CAT7E/ that
petitioner Poseidon 7nternational (ariti0e .ervices, 7nc, is ordered to
pa! each of the respondents no0inal da0ages in the a0ount
of P1$,$$$,$$, Costs against the respondents,
.E ER&ERE&,
G.R. No. 153192 J.*.r2 30, 2009
DEA$CO 5AR,', INC., Petitioner,
vs,
NA&IONA$ $A%OR RE$A&ION' CO,,I''ION 75t; DIVI'ION8, C(ID/I&O
%A'&IDA, .) A$%ER& CA%AN,Respondents,
& E C 7 . 7 E /
NAC(/RA, J.:
Under review are Resolutions
'
of the Court of Appeals *CA+ in CA6-,R, .P /o,
)2"%# den!ing due course to and dis0issing petitioner &ealco Bar0s, 7nc,9s
petition for certiorari,
Petitioner is a corporation engaged in the 3usiness of i0portation, production,
fattening and distri3ution of live cattle for sale to 0eat dealers, 0eat traders, 0eat
processors, canned good 0anufacturers and other dealers in (indanao and in
(etro (anila, Petitioner i0ports cattle 3! the 3oatload fro0 Australia into the ports
of -eneral .antos Cit!, .u3ic, Batangas, or (anila, 7n turn, these i0ported cattle
are transported to, and housed in, petitioner9s far0s in Polo0oloF, .outh Cota3ato,
or in (agalang, Pa0panga, for fattening until the cattle individuall! reach the
0arFet weight of 41$ to 45$ Filogra0s,
Respondents Al3ert Ca3an and ChiDuito Bastida were hired 3! petitioner on une
#5, '""1 and Ecto3er #", '""4, respectivel!, as escorts or Aco03o!sA for the
transit of live cattle fro0 -eneral .antos Cit! to (anila, Respondents9 worF
entailed tending to the cattle during transportation, 7t included feeding and
freDuentl! showering the cattle to prevent deh!dration and to develop heat
resistance, En the whole, respondents ensured that the cattle would 3e safe fro0
har0 or death caused 3! a cattle fight or an! such si0ilar incident,
Upon arrival in (anila, the cattle are turned over to and received 3! the dul!
acFnowledged 3u!ers or custo0ers of petitioner, at which point, respondents9 worF
ceases, Bor ever! round trip travel which lasted an average of '# da!s,
respondents were each paid P',5$$,$$, The '#6da! period is occasionall!
e:tended when petitioner9s custo0ers are dela!ed in receiving the cattle, 7n a
0onth, respondents usuall! 0ade two trips,
En Ecto3er '5, '""", respondents Bastida and Ca3an, together with Ra0on
(aDuinsa! and Roland Parrocha, filed a Co0plaint for illegal dis0issal with clai0s
for separation pa! with full 3acFwages, salar! differentials, service incentive leave
pa!, '1th 0onth pa!, da0ages, and attorne!9s fees against petitioner, &elfin
AlcoriIa
#
and Paciano &anilo Ra0is
1
3efore the /ational La3or Relations
Co00ission */LRC+, .u36Regional Ar3itration Branch /o, M7, -eneral .antos
Cit!, Although the four co0plainants collectivel! filed a case against petitioner,
(aDuinsa! and Parrocha never appeared in an! of the conferences andCor
hearings 3efore the La3or Ar3iter, /either did the! sign the verification page of
co0plainants9 position paper, (ost i0portantl!, (aDuinsa! and Parrocha e:ecuted
affidavits in favor of petitioner pra!ing for the dis0issal of the co0plaint insofar as
the! were concerned,
7t appears that, on August '", '""", respondents were told 3! a i00! 5alenIuela,
a hepe de via@e, that he had 3een instructed 3! Ra0is to i00ediatel! effect their
replace0ent, 5alenIuela proffered no reason for respondents9 replace0ent,
Respondents9 repeated atte0pts to see and 0eet with Ra0is, as well as to write
AlcoriIa, proved futile, co0pelling the0 to file an illegal dis0issal case against
petitioner and its officers,
7n all, respondents alleged in their position paper that; *'+ the! were illegall!
dis0issed, as the! never violated an! of petitioner9s co0pan! rules and policiesJ
*#+ their dis0issal was not due to an! @ust or authoriIed causeJ and *1+ petitioner
did not o3serve due process in effecting their dis0issal, failing to give the0 written
notice thereof, Thus, respondents pra!ed for 0one! clai0s, i,e,, salar!
differentials, service incentive leave pa!, cost of living allowance *CELA+ and '1th
0onth pa!,lavvphi1.ne7
Petitioner, however, paints a different picture, Petitioner asserts that the finished
cattle are sold to traders and 0iddle0en who undertaFe transportation thereof to
(anila for distri3ution to the wet 0arFets, 7n fact, according to petitioner, the
3u!ers and end6users of their finished cattle actuall! purchase the cattle as soon
as the! are considered read! for the 0arFet, Petitioner clai0s that once the
finished cattle are 3ought 3! the 3u!ers, these 3u!ers act separatel! fro0, and
independentl! of, petitioner9s 3usiness, 7n this regard, the 3u!ers the0selves
arrange, through local representatives, for the *a+ hauling fro0 petitioner9s far0 to
the port areaJ *3+ ship0ent of the finished cattle to (anilaJ and *c+ escort or
Aco03o!A services to feed and water the cattle during transit,
7n its position paper, petitioner relates onl! one instance when it engaged the
services of respondents as Aco03o!s,A Petitioner 0aintains that their arrange0ent
with respondents was onl! on a Aper6tripA or Aper6contractA 3asis to escort cattle to
(anila which conte0plated the cessation of the engage0ent upon return of the
ship to the port of origin U the -eneral .antos Cit! port,
Petitioner further narrates that so0eti0e in '""2, and well into '""", its i0port of
cattle fro0 Australia su3stantiall! decreased due to the devalued dollar,
ConseDuentl!, petitioner was forced to downsiIe, and the sale and ship0ents to
(anila were drasticall! reduced, Thus, petitioner andCor its 3u!ers no longer
retained escort or Aco03o!A services,
Ulti0atel!, petitioner denies the e:istence of an e0plo!er6e0plo!ee relationship
with respondents, Petitioner posits that; *a+ respondents are independent
contractors who offer Aco03o!A services to various shippers and traders of cattle,
not onl! to petitionerJ *3+ in the perfor0ance of worF on 3oard the ship,
respondents are free fro0 the control and supervision of the cattle owner since the
latter is interested onl! in the result thereofJ *c+ in the alternative, respondents can
onl! 3e considered as casual e0plo!ees perfor0ing worF not necessar! and
desira3le to the usual 3usiness or trade of petitioner, i,e,, cattle fattening to 0arFet
weight and productionJ and *d+ respondents liFewise failed to co0plete the one6
!ear service period, whether continuous or 3roFen, set forth in Article #2$
4
of the
La3or Code, as petitioner9s ship0ents were su3stantiall! reduced in '""26'""",
there3! li0iting the escort or Aco03o!A activit! for which respondents were
e0plo!ed,
En une 1$, #$$$, the La3or Ar3iter found that respondents were e0plo!ees of
petitioner, thus;
NPetitionerO ad0its having engaged the services of NrespondentsO as caretaFers or
Aco03o!sA *convo!s+ though it Dualifies that it was on a Aper tripA or Aper contractA
3asis, 7t also ad0its pa!ing their re0uneration of P',5$$,$$ per trip, 7t tacitl!
ad0its having ter0inated Nrespondents9O services when it said that NrespondentsO
were a0ong the group of escorts who were no longer acco00odated due to the
decrease in volu0e of i0ports and ship0ents, NPetitionerO also undou3tedl!
e:ercised control and supervision over Nrespondents9O worF as caretaFers
considering that the value of the cattle shipped runs into hundreds of thousands of
pesos, The preparation of the cattle for ship0ent, 0anning and feeding the0 prior
to and during transit, and 0aFing a report upon return to -eneral .antos Cit! to
tall! the records of the cattle shipped out versus cattle that actuall! reached (anila
are certainl! all in accordance with Npetitioner9sO instructions,
Thus, all the four ele0ents in the deter0ination of an e0plo!er6e0plo!ee
relationship 3eing present, N: : :O NrespondentsO were, therefore, e0plo!ees of
NpetitionerO,
: : : NRespondentsO also perfor0ed activities which are usuall! necessar! or
desira3le in the usual 3usiness or trade of NpetitionerO *Art, #2$, La3or Code+,
NPetitioner9sO contention, to the contrar!, is erroneous, Transporting the cattle to its
0ain 0arFet in (anila is an essential and co0ponent aspect of Npetitioner9sO
operation, As held 3! Nthe /LRC9sO Bifth &ivision in one case;
Co0plainant9s tasF of escorting the livestocF shipped to (anila, taFing care of the
livestocF in transit, is an activit! which is necessar! and desira3le in the usual
3usiness or trade of respondent, 7t is of @udicial notice that the 3ulF of the 0arFet
for livestocF of 3ig livestocF raisers such as respondent is in (anila, Gogs do not
swi0, the! are shipped, Hhen in transit *usuall! two6and6one6half da!s+ the! do
not Dueue to the 0ess hall, the! are fed, : : : The caretaFer is a co0ponent of the
3usiness, a part of the sche0e of the operation, */BL and Ricardo -arcia v,
Bi3iana Bar0s, 7nc,, /LRC CA /o, M76$)5$2"6"" *ra36:i6$'65$$#)6"2+J pro0, April
#2, #$$$+,
(ore, it also appears that NrespondentsO had rendered service for 0ore than one
!ear doing the sa0e tasF repeatedl!, thus, even assu0ing the! were casual
e0plo!ees the! 0a! 3e considered regular e0plo!ees with respect to the activit!
in which the! were e0plo!ed and their e0plo!0ent shall continue while such
activit! e:ists *last par, of Art, #2$+, NRespondentsO, in fact, were hired on Ecto3er
#", '""4 *Bastida+ and une #5, '""1 *Ca3an+, a fact which NpetitionerO dis0all!
failed to refute,
-iven the foregoing, Npetitioner9sO contention that NrespondentsO were independent
contractors and free lancers deserves little consideration, 7ts argu0ent that its
usual trade or 3usiness *i0portationCproduction and fattening+ ends in -eneral
.antos Cit!, and does not include transporting the cattle, does not persuade us,
NPetitioner9sO witnesses tried to corro3orate NitsO contention that NrespondentsO also
offered their services to various shippers and traders of cattle, not onl! to
NpetitionerO, Bor0er co0plainants (aDuinsa! and Parrocha 0entioned the na0es
of these tradersC3u!ers or shippers as LoIano Bar0s, Bi3iana Bar0s and other 3ig
cattle feedlot far0s in .EC.AR-E/ *Anne:es AAA and AE,A Npetitioner9sO position
paper,+ But not a 0odicu0 of evidence was adduced to prove pa!0ent of
Nrespondent9sO services 3! an! of these supposed traders or that NrespondentsO
received instructions fro0 the0, There is also no record that shows that the
traderCs actuall! shipped livestocF and engaged the services of caretaFers,
5
Accordingl!, the La3or Ar3iter granted respondents9 clai0 for separation pa!, CELA
and union service fees, The La3or Ar3iter awarded respondents; *a+ separation
pa! of one 0onth for ever! !ear of serviceJ *3+ CELA, as petitioner failed to prove
pa!0ent thereof or its e:e0ption therefro0J and *c+ union service fees fi:ed at
'$L of the total 0onetar! award, The La3or Ar3iter co0puted respondents9 total
0onetar! awards as follows;
/A(E .EPARAT7E/ PA? CELA .UB6TETAL
ChiDuito Bastida P'5,$$$,$$ P#,4$$,$$ P'%,4$$,$$
Al3ert Ca3an '2,$$$,$$ #,4$$,$$ #$,4$$,$$
P1%,2$$,$$
Plus '$L Union .ervice Bees 1,%2$,$$
TETAL 666666 P4',52$,$$
Gowever, the La3or Ar3iter denied respondents9 clai0 for 3acFwages, '1th 0onth
pa!, salar! differential, service incentive leave pa! and da0ages, to wit;
But we den! the Aclai0A for 3acFwages which was 0erel! inserted in the pra!er
portion of Nrespondents9O position paper, Reasons are a3undant wh! we decline to
grant the sa0e, 7n their co0plaint, NrespondentsO pra!ed for separation pa! *not
reinstate0ent with conseDuent 3acFwages+ there3! indicating right fro0 the start
that the! do not want to worF with NpetitionerO again, (ore i0portantl!N,O during the
conference held on anuar! ), #$$$, NpetitionerO 0anifested its willingness to
reinstate NrespondentsO to their for0er worF as Nco03o!sO under the sa0e ter0s
and conditions 3ut NrespondentsO answered that the! do not want to return to worF
and instead are asFing for pa!0ent of their separation pa!, Binall!N,O NrespondentsO
do not dispute that Npetitioner9sO downsiIing of its escorts in '""" was due to a
legiti0ate cause, i,e,, dollar devaluation,
Also to go are Nrespondents9O la3or standard clai0s for '1th 0onth pa! and service
incentive leave pa! as well as the clai0 for da0ages, He also den! the Aclai0A for
salar! differentials,
NRespondentsO are not entitled to their clai0s for '1th 0onth pa! and service
incentive leave pa! 3ecause the! were paid on tasF 3asis, The clai0 for da0ages
is denied for lacF of factual and legal 3asis as there is no showing that respondent
acted in 3ad faith in downsiIing the nu03er of its caretaFers, 7t even appears that
the sa0e is due to a legiti0ate cause, The Aclai0A for salar! differentials is denied
on two grounds; *'+ Nthese areO not pra!ed for in their co0plaintJ and *#+ for lacF of
0erit, 7t taFes not 0ore than 1 da!s for the -en, .antos6(anila trip, Even if we
include counting the return trip that would 3e total of si: *)+ da!s to the 0a:i0u0,
NRespondentsO were paidP',5$$,$$ per trip, Er, since the! 0ade an average of #
tripsC0onth the! were paid P1,$$$,$$ for a twelve *'#+ da!s9 worF *or the
eDuivalent of P#5$,$$Cda!+,
%
En appeal to the /LRC, the Bifth &ivision affir0ed the La3or Ar3iter9s ruling on the
e:istence of an e0plo!er6e0plo!ee relationship 3etween the parties and the total
0onetar! award of P4',52$,$$ representing respondents9 separation pa!, CELA
and union service fees, The /LRC declared;
After a @udicious review of the records of this case, we found no cogent reason to
distur3 the findings of the 3ranch,
The pre"e:e o= t;e =o*r 718 ele@et" i t;e )eter@i.tio o= . e@plo2er#
e@plo2ee rel.tio";ip ;." 6ee :le.rl2 e"t.6li";e) 62 t;e =.:t" .)
e!i)e:e o re:or), starting with the ad0issions of NpetitionerO who
acFnowledged the engage0ent of NrespondentsO as escorts of their cattles shipped
fro0 -eneral .antos to (anila, and the co0pensation of the latter at a fee
of P',5$$,$$ per trip, The dates clai0ed 3! NrespondentsO that the! were engaged
re0ain not disputed 3! NpetitionerO as o3served 3! the 3ranch,
The ele0ent of control, @urisprudentiall! considered the 0ost essential ele0ent of
the four, has not 3een de0olished 3! an! evidence to the contrar!, The 3ranch has
noticed that the preparation of the ship0ent of cattle, 0anning and feeding the0
while in transit, and 0aFing a report upon their return to -eneral .antos that the
cattle shipped and which reached (anila actuall! tallied were all indicators of
instructions, supervision and control 3! NpetitionerO on Nrespondents9O perfor0ance
of worF as escorts for which the! were hired, This we agree on all fourNsO, The
livestocF ship0ent would cost thousands of pesos and the certaint! of it reaching
its destination would 3e the onl! thing an! operator would consider at all Nti0eO and
under all circu0stances, /othing 0ore, nothing less, 7t is illogical for NpetitionerO to
argue that the ship0ent was not necessar! NorO desira3le to their 3usiness, as their
3usiness was 0ainl! livestocF production, 3ecause the! were undenia3l! the
owners of the cattle escorted 3! NrespondentsO, .hould losses of a ship0ent occur
due to Nrespondents9O neglect these would still 3e Npetitioners9O loss, and no3od!
else9s,
At this point, we e0phasiIe the fact that even on appeal NpetitionerO declines to
refute, 3! wa! of evidence, the finding of the 3ranch that the! failed to prove the
pa!0ent of Nrespondents9O services 3! an! of the supposed traders, or that said
traders actuall! shipped livestocF, This is the point where the case of /BL v,
Bi3iana Bar0s cited 3! NpetitionerO differs fro0 the instant case in that 3ills of lading
issued to, thus, in the na0e of the hog shippers were su30itted as proof that said
shippers engaged, co0pensated and supervised the escorts or convo!s in their
worF, and not the hog raisers,
2
Undaunted, petitioner filed a petition for certiorari 3efore the CA, As previousl!
adverted to, the CA denied due course and dis0issed the petition for the following
procedural flaws;
'+ other 0aterial portions of the record referred to in the petition are not
attached thereto such as the Co0plaint for illegal dis0issal and position
papers of the parties, in violation of .ec, 1, Rule 4) of the '""% Rules of
Civil ProcedureJ and
#+ there is no written e:planation wh! personal service was not resorted
to, as reDuired under .ec, '', Rule '1, 73id,
"
Petitioner9s 0otion for reconsideration was, liFewise, denied 3! the appellate court,
Gence, this appeal positing the following issues;
', Hhether the CA gravel! a3used its discretion when it dis0issed the
petition for certiorari 3ased on technical rules of procedure,
#, Hhether the /LRC gravel! a3used its discretion when it affir0ed the
La3or Ar3iter9s ruling on the e:istence of an e0plo!er6e0plo!ee
relationship 3etween the parties,
1, Corollar! thereto, whether the /LRC gravel! erred when it affir0ed the
La3or Ar3iter9s finding that respondents were illegall! dis0issed 3!
petitioner and the conseDuent award of 0one! clai0s to respondents,
At the outset, we o3serve that petitioner raises e:traneous issues which were
o3viousl! not passed upon 3! appellate court when the latter denied due course
and dis0issed outright the petition for certiorari, As such, the instant petition for
review on certiorari directl! assails the /LRC9s decision which 0ainl! involves
factual issues, such as whether respondents were e0plo!ees of petitioner and if
the! are entitled to their 0one! clai0s,
Petitioner is unconcerned with the CA9s reasons for dis0issing the petition and, in
fact, declares that the dis0issal was done with grave a3use of discretion for
sticFing to the provisions of the Rules of Court U a A0ere technicalit!A as petitioner
cavalierl! puts it, Petitioner asseverates that the CA dis0issal AdefeatNsO su3stantial
@ustice considering that NitO has a strong cause of action against NrespondentsO,A 7n
all, petitioner su30its that it had faithfull! co0plied with .ection '', Rule '1 of the
Rules of Court 3! su30itting an e:planation and a dul! notariIed affidavit of
service of (aria Be .o3revega, Petitioner liFewise points out that the E:planation
for the resort to service of the petition for certiorari via registered 0ail is found on
page 1$ thereof, Curiousl!, however, onl! the cop! of the sa0e docu0ent
su30itted to the CA lacFed an E:planation,
He co0pletel! agree with the appellate court9s forthright dis0issal of the petition
for certiorari,
Even if we are to overlooF petitioner9s account on the curious case of the 0issing
E:planation onl! in the CA9s cop! of the petition, petitioner9s non6co0pliance with
the reDuisites for the filing a petition for certiorari re0ains, He detect petitioner9s
plo! to sidestep a 0ore fatal procedural error, i,e,, the failure to attach copies of all
pleadings and docu0ents relevant and pertinent to the petition for certiorari set
forth in paragraph #, .ection ', Rule )5 of the Rules of Court which reads;
The petition shall 3e acco0panied 3! a certified true cop! of the @udg0ent, order or
resolution su3@ect thereof, copies of all pleadings and docu0ents relevant and
pertinent thereto, and a sworn certification of non6foru0 shopping as provided in
the third paragraph of .ection 1, Rule 4),
'$
Corollar! thereto, the second paragraph of .ection ), Rule )5, the first paragraph
of .ection #, Rule 5), and the last paragraph of .ection 1, Rule 4) respectivel!
read;
.EC, ), Erder to co00ent, R : : :
7n petitions for certiorari 3efore the .upre0e Court and the Court of Appeals, the
provisions of .ection #, Rule 5), shall 3e o3served, : : :
.EC, #, Rules applica3le, R The procedure in original cases for certiorari,
prohi3ition, 0anda0us, Duo warranto and ha3eas corpus shall 3e in accordance
with the applica3le provisions of the Constitution, laws, and Rules 4), 42, 4", 5',
5# and this RulesN,O : : :
.EC, 1, Contents and filing of petitionJ effect of non6co0pliance with reDuire0ents,
R : : :
The failure of the petitioner to co0pl! with an! of the foregoing reDuire0ents shall
3e sufficient ground for the dis0issal of the petition,
Puite apparent fro0 the foregoing is that the CA did not err, 0uch less co00it
grave a3use of discretion, in den!ing due course to and dis0issing the petition for
certiorari for its procedural defects, Petitioner9s failure to attach copies of all
pleadings and docu0ents relevant and pertinent to its petition for certiorari
warranted the outright dis0issal thereof,
Petitioner, however, invoFes the righteous ends of su3stantial @ustice as would
e:e0pt it fro0 adherence to procedural rules, Petitioner clai0s that the 0erits of
its case necessitate a li3eral interpretation of the Rules of Court leading to a
reversal of the appellate court9s outright dis0issal of its petition,
Regretta3l!, upon an evaluation of the 0erits of the petition, we do not find cause
to distur3 the findings of the La3or Ar3iter, affir0ed 3! the /LRC, which are
supported 3! su3stantial evidence,
The well6entrenched rule is that factual findings of ad0inistrative or Duasi6@udicial
3odies, which are dee0ed to have acDuired e:pertise in 0atters within their
respective @urisdictions, are generall! accorded not onl! respect 3ut even finalit!,
and 3ind the Court when supported 3! su3stantial evidence,
''
.ection 5, Rule '11
defines su3stantial evidence as Athat a0ount of relevant evidence which a
reasona3le 0ind 0ight accept as adeDuate to @ustif! a conclusion,A1avvphi1.ne7
Consistent therewith is the doctrine that this Court is not a trier of facts, and this is
strictl! adhered to in la3or cases,
'#
He 0a! taFe cogniIance of and resolve factual
issues onl! when the findings of fact and conclusions of law of the La3or Ar3iter
are inconsistent with those of the /LRC and the CA,
'1
7n the case at 3ench, 3oth the La3or Ar3iter and the /LRC were one in their
conclusion that respondents were not independent contractors, 3ut e0plo!ees of
petitioner, 7n deter0ining the e:istence of an e0plo!er6e0plo!ee relationship
3etween the parties, 3oth the La3or Ar3iter and the /LRC e:a0ined and weighed
the circu0stances against the four6fold test which has the following ele0ents; *'+
t;e po>er to ;ire, *#+ t;e p.2@et o= >.+e", *1+ t;e po>er to )i"@i"", and *4+
the po>er to :otrol the e0plo!ees9 conduct, or the so6called Acontrol test,A
'4
Ef
the four, the power of control is the 0ost i0portant ele0ent, (ore i0portantl!, the
control test 0erel! calls for the e:istence of the right to control, and not necessaril!
the e:ercise thereof,
'5
/aturall!, 3oth petitioner9s and respondents9 clai0s are on opposite poles,
Respondents aver that the! were regular e0plo!ees of petitioner, designated as
escorts or Aco03o!sA for the latter9s cattle, Petitioner, on the other hand, denies
that clai0, and si0ultaneousl! asserts that respondents are free lance escorts who
offer their services to the 3u!ers, 0iddle0en and traders of petitioner, Petitioner
further asserts that its 3usiness is onl! confined to the fattening of cattle and their
sale once the! reach the reDuired 0arFet weight, According to petitioner, its
3usiness does not include the ship0ent of cattle, which is undertaFen 3! the
0iddle0en, traders and 3u!ers, who, as owners thereof, engage respondents9
services to care for the cattle while in transit, Thus, petitioner ulti0atel! asserts
that respondents, at that @uncture, were under the control and supervision of these
0iddle0en, traders and 3u!ers,
To support the foregoing contentions, petitioner si0pl! presents the affidavits of
(aDuinsa! and Parrocha, original co0plainants 3efore the La3or Ar3iter, pra!ing
for the withdrawal of the co0plaint for illegal dis0issal insofar as the! are
concerned, (aDuinsa! and Parrocha 3oth allege that their engage0ent with
petitioner is on a Aper6tripA or Aper6contractA 3asis, and that the! and their fellow
Aco03o!sA or escorts, herein respondents, did not offer their services to petitioner
alone,
Pa!ing no heed to petitioner9s narration of the conte0plated arrange0ent with
respondents, the La3or Ar3iter pointed out the following;
N(aDuinsa! and Parrocha, petitioner9sO witnesses, tried to corro3orate Npetitioner9sO
contention that co0plainants also offered their services to various shippers and
traders of cattle, not onl! to NpetitionerO, Bor0er co0plainants (aDuinsa! and
Parrocha 0entioned the na0es of these tradersC3u!ers or shippers as LoIano
Bar0s, Bi3iana Bar0s and other 3ig cattle feedlot far0s in .EC.AR-E/
*Anne:es AAA and ABA, Npetitioner9sO position paper+, But not a 0odicu0 of evidence
was adduced to prove pa!0ent of Nrespondents9O services 3! an! of these
supposed traders or that NrespondentsO received instructions fro0 the0, There is
also no record that the traderCs actuall! shipped livestocF and engaged the
services of caretaFers,
')
Echoing the sa0e o3servation, the /LRC declared, thus;
At this point, we e0phasiIe the fact that even on appeal NpetitionerO decline to
refute, 3! wa! of evidence, the finding of the 3ranch that the! failed to prove the
pa!0ent of Nrespondents9O services 3! an! of the supposed traders, or that said
traders actuall! shipped livestocF, This is the point where the case of /BL v,
Bi3iana Bar0s cited 3! NpetitionerO differ fro0 the instant case in that 3ills of lading
issued to, thus, in the na0e of the hog shippers were su30itted as proof that said
shippers engaged, co0pensated and supervised the escorts or convo!s in their
worF, and not the hog raisers,
'%
?et, petitioner is ada0ant that its lacF of docu0entar! evidence should not 3e
taFen against it since (aDuinsa! and Parrocha, two of the original co0plainants,
attest to the nature of a Aco03o!9sA or escort9s worF,
.ignificantl!, (aDuinsa!9s and Parrocha9s affidavits proffer no reason wh!, in the
first place, the! filed, along with herein respondents, the co0plaint for illegal
dis0issal against petitioner, (aDuinsa! and Parrocha 0ade an a3solute
turnaround and retracted their previous clai0 of regular e0plo!ee status without
proof to support their allegations as against the clai0 of the re0aining
co0plainants, herein respondents,
Convenientl!, for its purposes, petitioner clai0s that (aDuinsa!9s and Parrocha9s
affidavits Asu3stantiate the clai0 of petitioner that indeed shipping arrange0ents
and acco00odation of escorts, which are infor0al in nature and, thus, unrecorded,
are under the responsi3ilit!, control and supervision of the 3u!ers and traders,A
Essentiall!, petitioner insists that the affidavits of (aDuinsa! and Parrocha should
3ear 0ore weight than the clai0s of respondents in their co0plaint and position
paper,
He re@ect petitioner9s self6serving contention, Gaving failed to su3stantiate its
allegation on the relationship 3etween the parties, we sticF to the settled rule in
controversies 3etween a la3orer and his 0aster that dou3ts reasona3l! arising
fro0 the evidence should 3e resolved in the for0er9s favor,
'2
The polic! is reflected
in no less than the Constitution,
'"
La3or Code
#$
and Civil Code,
#'
(oreover, petitioner9s other contention that the ship0ent and the escort of live
cattle is not part of its 3usiness, thus, at 0ost, respondents 0a! onl! 3e
considered as casual e0plo!ees, liFewise fails to persuade,
Birst, Petitioner failed to disprove respondents9 clai0 that the! were hired 3!
petitioner as Aco03o!sA fro0 '""1 and '""4, respectivel!, 7n fact, petitioner ad0its
that respondents were engaged, at one point, as Aco03o!s,A on a Aper tripA or Aper
contractA 3asis, This assertion petitioner failed anew to su3stantiate, /oteworth! is
the fact that (aDuinsa!9s and Parrocha9s affidavit 0erel! contain a state0ent that
the offer of their services as Aco03o!sA or escorts was not li0ited to petitioner
alone, The affidavits si0pl! aver that the!, including herein respondents, were
engaged 3! &ealco on a Aper tripA 3asis, which co00enced upon e03arFation on
a ship for (anila and ter0inated upon their return to the port of origin, (aDuinsa!
and Parrocha did not state that respondents9 engage0ent 3! petitioner was on a
one6ti0e 3asis, As a result, petitioner9s clai0 re0ains an unsu3stantiated and
3are6faced allegation,
.econd, Even assu0ing that respondents9 tasF is not part of petitioner9s regular
course of 3usiness, this does not preclude their attain0ent of regular e0plo!ee
status,
Article #2$ of the La3or Code e:plicitl! provides;
Art, #2$, Regular and Casual E0plo!0ent, R The provisions of written agree0ent
to the contrar! notwithstanding and regardless of the oral agree0ent of the parties,
an e0plo!0ent shall 3e dee0ed to 3e regular where the e0plo!ee has 3een
engaged to perfor0 activities which are usuall! necessar! or desira3le in the usual
3usiness or trade of the e0plo!er, e:cept where the e0plo!0ent has 3een fi:ed
for a specific pro@ect or undertaFing the co0pletion or ter0ination of which has
3een deter0ined at the ti0e of the engage0ent of the e0plo!ee or where the worF
or services to 3e perfor0ed is seasonal in nature and the e0plo!0ent is for the
duration of the season,
An e0plo!0ent shall 3e dee0ed to 3e casual if it is not covered 3! the preceding
paragraph; Provided, That, an! e0plo!ee who has rendered at least one !ear of
service, whether such service is continuous or 3roFen, shall 3e considered a
regular e0plo!ee with respect to the activit! in which he is e0plo!ed and his
e0plo!0ent shall continue while such activit! e:ists,
##
Undou3tedl!, respondents were regular e0plo!ees of petitioner with respect to the
escort or Aco03o!A activit! for which the! had 3een engaged since '""1 and '""4,
respectivel!, without regard to continuit! or 3roFenness of the service,
Lastl!, considering that we have sustained the La3or Ar3iter9s and the /LRC9s
finding of an e0plo!er6e0plo!ee relationship 3etween the parties, we liFewise
sustain the ad0inistrative 3odies9 finding of respondents9 illegal dis0issal,
Accordingl!, we are not wont to distur3 the award of separation pa!, clai0s for
CELA and union service fees fi:ed at '$L of the total 0onetar! award, as these
were 3ased on the finding that respondents were dis0issed without @ust or
authoriIed cause,
HGEREBERE, the petition is &E/7E&, The Resolution dated ul! #", #$$' of the
/LRC in /LRC CA /o, (6$$5"%46#$$$ *RAB6''6'$65$4516""+ is here3!
ABB7R(E&, Costs against the petitioner,
.E ER&ERE&,