REPUBLIC OF THE PHILIPPINES

REGIONAL TRIAL COURT

7TH JUDICIAL REGION
BRANCH ____, CEBU CITY

RJA FOODS, INC. represented by its

President DOMINIANO GERALDIZO
Plaintiff-Appellant, Civil Case No. 33959
-versus-

CESAR MORGIA, et al
Defendant-Appellee.
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MEMORANDUM FOR THE APPELLANT

COMES now Plaintiff-Appellant, through the undersigned counsel,

most respectfully submits the following Memorandum, thus:

STATEMENT OF THE CASE

This is an appeal from the decision of the Municipal Trial Court of

San Fernando, Cebu.

On February 12, 2007, Plaintiff-Appellant filed a case for

EJECTMENT with DAMAGES against Romeo and Mrs. Mercedita Deliña,
Jopit and Mrs. Senaida Tecson, Florentino and Mrs. Estellita Villasan, Zaldy
and Mrs. Amor Tangayan, Sofronio and Mrs. Elvira Paghinayan, Roberto
and Mrs. Sergia Bayal, Cezar Morgia Alfredo and Mrs. Letecia Palero and
Demosthenes Misa.

On September 26, 2007, the Honorable Court rendered judgment

which was received by plaintiff-appellant through counsel on October 26,
2007.

Plaintiff filed a notice of appeal on the said September 26, 2007

decision.

STATEMENT OF MATERIAL DATES

 Plaintiff-appellant received on January 9, 2007

STATEMENT OF FACTS

The parcel of land involved bears the following description:

Tax Dec. No. 0015817; Cadastral Lot No. 1248; Contains an area
of 1, 122 square meters; and located at South Poblacion, San
Fernando.

The plaintiff is the owner of the above-mentioned parcel of

land together with the improvements thereon except the houses,
etc. of the defendants subject of this action.

Plaintiff acquired the parcel of land from its previous owner,

DIONISIO GERALDIZO, the father of its president, a couple of
years back.

During the time of its previous owners, the defendants

squatted the parcel of land, and when confronted about their
illegal acts, they earlier promised but they promised to vacate the
same as soon as the property is sold.

After the plaintiff acquired the parcel of land from the

previous owner, again they demanded from the defendants to
vacate the premises but they only kept on harping and asking for
plaintiff’s tolerance.

Seeing the futility of their demand, the plaintiff thru its

President referred the matter to the Office of the Barangay
Captain and the Lupong Tagapayapa for conciliation, but despite
their confrontation in these offices, the defendants refused to
vacate the premises for which the necessary certification to file
action was issued.

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 Despite the issuance of the certification to file action, the
defendants begged for mercy from the plaintiff claiming they need
a few months within which to vacate the premises.

Despite the lapse of the few months given them, the

defendants still failed and refused to vacate the premises
prompting the plaintiff to engage the services of the undersigned
counsel who sent them the last demand last month, January
2007, giving them fifteen (15) days from receipt thereof within
which to vacate the premises, a machine copy of the Certification
by the Postmaster is hereto attached and marked as Annex “A”,
and made as an integral part of this Position Paper.

Until the preparation of the complaint and despite the lapse

of the period given them, none of the defendants have started to
vacate the premises, forcing the plaintiff to file the complaint.

The reasonable rental of the premises for each defendant is

Two Hundred fifty pesos (P 250.00) a month.

In order to protect its rights, plaintiff was constrained to

engage the services of a counsel, binding itself to pay the sum of
Fifty Thousand Pesos (P 50, 000.00) by way of acceptance fee
aside from Three Thousand Pesos (P 3, 000.00) for every
appearance in court.

Plaintiff foresees that it can spend no less than Twenty

Thousand Pesos (20, 000.00) by way of litigation expenses.

DESISION

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 Plaintiff alleges that: it acquired the aforesaid parcel
of land from its previous owner, Dionisio Geraldizo, the
father of its President, two years ago. Defendants had
been squatting on the said property before it was sold to
the plaintiff and they promised to leave the premises as
soon as the property is sold but the demand by the
plaintiff for them to vacate the property had been futile.
The plaintiff referred the mater to the Office of the
Barangay Captain and the Lupon Tagapamayapa for
conciliation but defendants still failed to vacate the
premises, so as a Certificate to File Action was issued.
Plaintiff’s counsel sent the defendants a demand in
January, 2007 giving them 15 days from receipt within
which to vacate the premises. Plaintiff claims that the
reasonable rental for each defendant is P 200.00 a
month. Plaintiff was constrained to hire the services of
counsel and bound itself to pay P 50, 000.00 as
acceptance fee and P 3,000.00 as appearance every
hearing. Plaintiff estimated its litigation expense at P 20,
000.00.

Appended to the complaint is Tax Declaration No.

0015817 in the name of RJA Food Incorporated. Also
attached to its Position Paper is the Certification dated
July 5, 2007 issued by the Office of the Postmaster in
San Fernando, Cebu, stating that the registered mails
addressed to spouses Roberto and Sergia Bayal, spouses

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Romeo and Mercedita Delina, spouses Sofronio and
Elvira Paghinayan, spouses Alfredo and Letecia Palero,
Cesar Morgia, Deomosthenes Misa, Amor Tangayan,
spouses Jopit and Zenaida Tecson, spouses Florentino
and Estellita Villasan posted on January 22, 2007 were
delivered on same date and were individually received by
each addressee except one which was received by
addressee’s daughter.

In their Answer, spouses Romeo and Mercidita

Delina, spouses Roberto and Sergia Bayal, deny the
allegations of plaintiffs in paragraph 1 to 7. They allege
that after the demise of the previous owner, Dionisio
Geraldizo, the ownership over the property cannot be
ascertained yet as there is a pending case involving
ownership thereof between Domiciano Geraldizo and Joy
Generalao-Lariosa. They allege that during the barangay
conciliation between Domiciano Geraldizo and herein
defendants, they agreed to accept the offer of the plaintiff
to give them P 5, 000.00 as financial assistance, to buy
peace, but the plaintiff did not keep his promise and
instead filed this case against them. They claim that they
had been paying rent to
Dionisio Geraldizo but after he died, the ownership of the
subject land has been the subject of court litigation and
the case is still pending before the Regional Trial Court.
Cebu City.

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 Defendant Cesario Morgia, in his Answer, denies the
allegations of plaintiff and alleges that he has been in
possession of the property pursuant to a lot rental
contract between him and Dionisio Geraldizo for a five-
year period which expired on January 31, 2003.
However, on September 7, 2001, before the expiration of
the said contract, Dionisio Geraldizo, with his
son/representative, Meliciano Geraldizo, signed another
contract with Cesario Morgia and his wife, who deposited
the amount of Seven Thousand Pesos (P 7, 000.00) as
advance deposit for the sale of the lot and the contract
stipulates that upon expiration of the rental contract on
January 31, 2003, no more rent will be paid by
defendant Cesario Morgia and the said deposit of P 7,
000.00 received by the lot owner will be deductible from
the value of the lot occupied by them.

The rest of the defendants, namely: Jopit and

Zenaida Tecson, Florentino and Estellita Villasan,
Sofronio and Elvira Paghinayan. Alfredo and Letecia
Palero and Demosthenes Misa, were duly served with
summons but failed to file their Answer. Pursuant to
Sec. 6 of the Rule on Summary Procedure, the Court
shall render judgment as warranted by the facts alleged
in the complaint.

The issue in this case is whether or not the

defendants can be ejected from the subject premises as
prayed for by the plaintiff.

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 As alleged by the plaintiff, defendants were already
occupying the subject property when plaintiff bought it
from its previous owner, thus, it is not a case of forcible
entry but one of unlawful detainer. Defendant’s
possession of the subject property became unlawful
when they refused to leave after demand was made on
them to vacate the premises respectively occupied by
them.

The only issue to be resolved in an unlawful

detainer case is physical or material possession of the
property involved, independent of any claim of ownership
by any of the parties involved. This being so. The Court
is not persuaded by the contention of defendants Romeo
and Mecidita Delina, spouses Zaldy and Amor Tangayan
and spouses Roberto and Sergia Bayal, that plaintiff’s
complaint is premature as the ownership of the subject
property is still under litigation. This is in line with the
declaration of the Supreme Court in the case of Ross
Rica Sales Center, Inc. vs. Ong, 467 SCRA 35, which
reads: “if what is prayed for is ejectment or recovery of
possession, it does not matter if ownership is claimed by
either party. Therefore, the pending actions for
declaration of nullity of deed of sale and Transfer
Certificate of Title and quieting of Title will not abate the
ejectment case.”

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 Although the issue of ownership is related with the
issue of possession, it must be stressed however, that
the Court will only make a provisional determination of
ownership over the lot in dispute, for the purpose of
resolving the issue of possession, thus said adjudication
would not prejudice the action involving title to the
subject properly between herein plaintiff and Joy
Generalao- Lariosa, which action allegedly is still under
litigation before the Regional Trial Court, Cebu City.

Plaintiff’s Tax Declaration No. 0015817 shows that

the plaintiff is the registered owner of the subject
property. As owner, under Article 428 of the Civil Code, it
has the right to enjoy said property and has the right of
action against the possessors thereof. Plaintiff thus is
entitled to the possession of the property occupied by all
herein defendants except Cesar Morgia, whose
possession of the premises occupied by him has changed
from tenant to that of a buyer. His occupation of the
subject premises was initially by virtue of a contract
executed by the previous owner Dionisio Geraldizo and
defendant Cesario Morgia, but before the expiration of
the said contract with the defendant Cesario Morgia
wherein the latter deposited the amount of Seven
Thousand Pesos (P 7, 000.00) which will be deducted
from the selling price of the lot. This being so, defendant
Morgia therefore, cannot be ejected from the subject
property.

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 WHEREFORE, foregoing considered, judgment is
hereby rendered, as follows:

1. in favor of the defendant Cesar Morgia:

2. against defendants spouses ROMEO and

MERDICTA DELINA, spouses ZALDY and AMOR
TANGAYAN, spouses ROBERTO and SERGIA
BAYAL, JOPIT and ZENAIDA TECSON,
FLORENTINO and ESTELLITA VILLASAN,
SOFRONIO and ELVIRA PAGHINAYAN, ALFREDO
and LETECIA PALERO and DEMOSTHENES
MISA, who are hereby directed to vacate the
subject premises, and to pay a monthly rental
from demand, January 22, 2007 until they vacate
the same, to wit:

o ROMEO and MERDICTA DELINA at P50.00

every month:

o JOPIT and ZENAIDA TECSON at P50.00

every month:

o FLORENTINO and ESTELLITA VILLASAN at

P50.00 every month:

o ZALDY and AMOR TANGAYAN at P50.00

every month:

o SOFRONIO and ELVIRA PAGHINAYAN at

P50.00 every month:

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 o ROBERTO and SERGIA BAYAL at P50.00
every month:

o ALFREDO and LETECIA PALERO at P50.00

every month:

o DEMOSTHENES MISA at P50.00 every

month:

The counterclaim of defendant Cesario Morgia is hereby

dismissed for lack of basis.

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 Plaintiff-appellant received the Notice of Receipt of Records from the
Office of the Clerk of Court on January 9, 2008, thus, it has until January
24, 2008 within which to file this memorandum. This Memorandum is
seasonably filed.

STATEMENT OF FACTS

Complainant Frederick T. Rivera, is a former regular employee of

respondent VECO with residence and Postal address at 461 Tupas St., Cebu
City.

Complainant Henry E. Bacaltos is a former regular employee of

respondent VECO and with residence at 71-G Velez Cmpd. Kamagong St.,

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Lahug, Cebu City.

Respondent Visayan Electric Company (VECO for brevity), is an

electric distribution utility company with its main offices situated at
Banilad, Cebu City. Mr. Alfonso Y. Aboitiz is the Chief Operating Officer
(C0O) of VECO and Mr. Dennis A. Garcia is the President.

STATEMENT OF FACTS

Respondent VECO holds an exclusive franchise, absolutely without

competition, to distribute electric power for the Metro Cebu areas of Cebu
City, Mandaue City and Talisay City, including the towns of Consolacion,
Lilo-an, Minglanilla, Naga and San Fernando, Province of Cebu. It has been
the vital component for the growth and progress of Cebu for the last sixty
(60) years. With an exclusive franchise, VECO had never encountered
business losses. It has consistently declared and shared profits and
dividends to employees and stockholders year after year until the present.

Respondent VECO is a unionized establishment, having a Collective

Bargaining Agreement with its duly recognized collective bargaining agent,
VISAYAN ELECTRIC COMPNAY UNION-ALU.

The salient provisions of the said collective Bargaining Agreement

which respondent VECO and VISAYAN ELECTRIC COMPNAY UNION-ALU
entered into are as follows, to wit:

“ARTICLE II”
“UNION SECURITY”
“SECTION 6. No Retrenchment. During the duration of this
Collective Bargaining Agreement, no retrenchment will take
effect, otherwise, the contractual employees shall be terminated
first prior to retrenchment of regular employees who are first
performing the same function or work. “That in case of
retrenchment due to redundancy or losses prevention, retrenched
employees who have served the Company 25 years to 29 years
shall be given full retirement benefits as per new agreement plus
a light privilege for five (5) years, whereas those who have served
the company below 25 years shall receive the same without light
privilege.”

“ARTICLE IV”
“PREFERENTIAL RIGHTS OF EMPLOYMENT AND FACTORS FOR

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 PROMOTION”
“SECTION 3. Temporary assignment. Any employee, who
may be designated to temporarily take the place of the
incumbent holding the position of higher grade due to the latter’s
absence or incapacity or to temporary fill the vacant position of
higher grade, shall assume such a position in an “Acting”
capacity for a period not exceeding six (6) moths except vacancies
caused by employees who are called for temporarily military
service provided that the employee concerned shall receive the
difference of his present salary; and the minimum rate range of
higher grade but not less that FIFTY (P50.00) PESOS per month in
the form of allowance. In case his temporary assignment exceeds
six months, he shall be considered permanent in the said
position.”

“ARTICLE X”
“PROFIT SHARING AND LONGEVITY PAY”
“SECTION 1. Profit sharing. The share of FOUR (4%)
PERCENT in the company’s profit heretofore granted to and
shared by the employees as provided in the Company’s By-Laws is
hereby incorporated as among the benefits in this Agreement and
shall be delivered on or before the enrollment of the regular
school year.”

“ARTICLE XIII”
“RETIREMENT TRUST PLAN AND SEPARATION OR RESIGNATION
BENEFITS”
“SECTION 1. Retirement Plan. The company agrees to adopt
a trust plan, as “VECO RETIREMENT PLAN”. This plan shall be
handled by a banking or finance institution authorized to engage
in trust business and administered by the Retirement Plan
Committee. The following benefits will be provided in the plan:
a. Retirement benefits at the attainment of the employee’s
retirement age of sixty (60) or has served the company
continuously for thirty years.
b. Death and disability benefits in the event of death and
disability while in the Company’s employ;
c. Separation benefits in the event of termination of
employment to the extent provided herein.”

“All permanent and regular employees who have rendered

services for at least five (5) years are participants of the plan.
Total retirement benefits shall be equivalent to one (1) month pay
for every year of service based upon his latest pay. Years of
service are to be reckoned from his date of employment. Provided,
that those who have completed thirty (30) years continuous
service, or has attained the age of sixty (60) years , or who dies
while in the service of the company shall be paid a retirement
pay of one and half month pay for every year of service. For this
purpose (retirement only), the monthly pay is equivalent to 15/12
multiplied by his latest basic monthly pay (12 moths salary plus
13th and 14th month pay plus Christmas bonus divided by 12)
Cash advances withdrawn by the employee in accordance with
the retirement benefits of 1974 and the previous Collective

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 Bargaining Agreement will be considered as loans.”
Xxx xxxx xxx.
“The company reserves the right to terminate, change or
introduce amendments to the retirement plan with proper
consultation with the union provided that it will not undermine
or impair the existing benefits of the employees.”
“In accordance with its present practice, the company
grants an additional amount of one (1) month pay to each
employee entitled to aforementioned benefits whose length of
service is from five (5) to twenty-nine (29) years and two (2) moths
pay to those whose services have reached thirty (30) years or
more.”

“ARTICLE XX”
“EFFECTIVITY AND DURATION OF AGREEMENT”

“This agreement and the provisions thereof shall become

effective January 1, 2002 and shall remain in full force and
effect without change for five (5) years until December 31, 2006
except the economic provisions which shall be renegotiate for a
new one and provided further that after expiry date as
aforementioned and before a new Agreement is arrived at, this
agreement shall continue in full force and effect. A new contract
to which may be reached shall retroact to the expiry date
aforementioned.”

A copy of the said Collective Bargaining Agreement is hereto attached

as Annex “A” and made as an integral part hereof.

RE: HENRY BACALTOS

Complainant Henry Bacaltos was hired by respondent VECO on

August 15, 1977. He occupied various positions since then and rose from
the ranks and by the year 2000, he was already occupying the position of a
SHIFT SUPERVISOR, a supervisory position.

At the time he was earning a monthly salary of P61,000.00 pesos

RE: FREDERICK RIVERA

Complainant Frederick Rivera was hired by the respondent VECO on

July 1, 1987. He occupied various various positions since then and rose
from the ranks and by the year 2000, he was already occupying the position
of a SHIFT SUPERVISOR, a supervisory position

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 At the time he was earning a monthly salary of P61,000.00 pesos

REVENUE PROTECTION GROUP

On January 24, 2000, a memorandum signed by Mr. Genaro L.

Faelnar, Administration Department Head, was issued directing
complainant Bacaltos and a few others including Complainant Frederick
Riverato report on February 1, 2000 to the Assistant Administration head,
Mr. Huberto V. Ozaraga, to address the unbilled problems and other
administration corners. Aside from the position as Assistant Administration
Head, Mr. Huberto V. Ozaraga was also the assistant comptroller and
internal Audit head of respondent VECO.

It was in this assignment that the Revenue Protection Group (RPG)

was created as evidenced by its Guidelines hereto attached as Annex “B”
and made as an integral part hereof. The said Guidelines denominated as
“Revenue Protection Group Guidelines” was signed by no less than Mr.
Hubert V. Ozaraga, Asst. Department Head of the Administration
Department and Genaro Faelnar, Head of the Administration Department.

Said Guidelines clearly specified the employees who are members of

the said Revenue Protection Group as well as their respective functions and
tasks. The organizational structure of the said Revenue Protection group
was also specified in said guidelines. More specifically, the following are the
member of the said Revenue Protection Group (See Annex B-___), to wit:

1. Supervisor, Revenue Protection Group : BACALTOS, HENRY E.

2. Revenue Protection Staff : ACEBEDO, Bernard, O.
3. Revenue Protection Staff : ALO, Alexander E.
4. Revenue Protection Staff : MALIGON, Louie F.
5. Revenue Protection Staff : OBERES, Arcadio V.
6. Revenue Protection Staff : OCAMPO, Rafael S.
7. Revenue Protection Staff : RIVERA, Frederick T.

The same Guidelines (Annex B-___) specified the functions of the said
Revenue Protection Group, to wit:

1. To find ways on how to reduce the number of monthly

unbilled customers with emphasis on customers unbilled for
more than (2) months to increase the company’s revenue;

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 2. To classify schedule 35 to 49 Active customers by Industry
Code to monitor their monthly kwhr consumption and to
recommend potential clients for re-inspection by Violation of
Contract Team for possible violation of contract [sic];
3. To act as Customer Marketing Representative to convince
clients to continue their existing contracts with the company
with the forth coming expiration of the company’s franchise
and approval of deregulation law allowing the entrance of
other in-coming competitors;
4. To monitor schedule 35 to 49 customers to ensure that they
are accurately and promptly billed;
5. To develop a program that would aid in detecting possible
Violation of Contracts and defective meters;
6. to finds ways on how to eliminate “guess-work” meter
reading to reduce number of rebilling accounts;
7. To monitor activities, measure accomplishments and report
to Management;
8. To handle other functions that may be assigned to the group.

Thus, Annex C, dated February 1, 200) and signed by Genaro L.

Faelnar, also specifally transferred the EDP Assignments of complainat
BAcalos and Rivera “to handle tasks for the Administration Department”.

Needless to say, after the creation of the said Revenue Protection

Group, complainant Henry Bacaltos and Frederick Rivera, together with all
the other member of the team went down to work and performed all their
functions faithfully.

Annex D and D-1 is the list of the apprehended KWHR Meter

Hackers/Tamperers. The said list specifically enumerated the persons
which the Revenue Protection Group have apprehended.

Annex E and E-1 is the list of the expenditures as well as the

amounts received by SPECIAL PROJECT OMEGA, a task force created by
Revenue Protection Group especially created for the surveillance and
capture of Krasker Flores Group, a notorious meter tamperer.

Annex F to F – 11 are receipts of the budget for the Revenue

Protection Group. The amounts received are given by the Administration
Department and represents the operational expenses. The said receipts
covers the period of September through November 2002.

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 Annex G to G- 16 are the receipts of the amounts by the Revenue
Protection Group to the members of the Philippine National Police as well as
their assets.

Annex H is the “Inter Office Memorandum” dated June 3, 2002

addressed to Complainants Bacaltos and Rivera and issued by Miguel
Elumbaring, Personnel Manager of Respondent VECO. Said Memorandum
requested the herein complainants to file a position paper that can
substantiate their claim for alleged irregularities committed by Mr. Julian
Paras together with other personnel at the Customer services Section,
Administrative Department.

RESPONDENT VECO

Since the beginning VECO has been a closed family corporation

controlled by the prominent Garcia, Escano and Sala families of Cebu and
Leyte. The management has seen either one of them as its General Manager
or Chief Operating Officer (COO) alternating one after another. On the other
hand VECO is controlled by Hijos De F. Escano Inc., another family
corporation. Whoever control Hijos controls VECO, thus for a very long time
VECO has been their exclusive domain.

But times are a changing. The realignment of interests foisted by

emerging realities in the electric distribution utility business brought forth
some changes notably the entry of the Aboitizs’ into Hijos De F. Escano Inc.
Little did we know when the Aboitizs’ arguably the more intuitive and highly
respected businessmen, would mustered enough interest to shake the very
foundation of the once formidable alliance of the Garcias’, Escanos’ and the
Salas’ at Hijos and eventually VECO.

In the year of 2003, after the death of the Garcia patriarch, the
illustrious Don Jose “Cheling” E. Garcia, the simmering corporate
dissatisfaction at Hijos exploded into open confrontation which eventually
resulted to the filing of the case by the Aboitizs’ at the RTC in Cebu City
against the Garcias, Hijos and Vivat, a prominent player in the electric
energy and power industry.

The case was eventually settled amicably at the appellate level that
resulted in the Aboitizs’ taking over and gaining control of VECO. Mr.

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Alfonso Y. Aboitiz assumed the position as Chief Operating Officer of VECO.
Mr. Dennis Garcia became the Company President. Complainants as
employees thought the settlement of the case was the dawning of a new day.
But things turned out differently.

Immediately upon taking the reins of management of the company in

April 2004, Mr. Alfonso Y. Aboitiz and Mr. Dennis A Garcia, dangled an offer
to all employees what is now notoriously known as “ x x x VOLUNTARY
EARLY RETIREMENT PROGRAM or VERP” available to all regular and
permanent employees of the company except those who already reached the
age of sixty. A copy of the VERP as attached as Annex A.

The VERP as presented states the benefits, as follows:

“x x x All employees included in the coverage who voluntarily

elect in writing to be retired or separated from the service and
whose retirement has been approved under the provision of this
program shall be paid normal retirement and separation benefits
equivalent to one mo. Salary for each year of service, a fraction
of at least 6 months being considered as one whole year.
Provided, that those who have completed thirty (30) years of
continuous service in the company shall be paid retirement or
separation benefits equivalent to one and one half ( 1 ½ ) month
salary for each year of service. The monthly salary is equivalent
to the basic monthly salary multiplied by 15/12. An additional
amount of one (1) month is granted for each employee entitled to
aforementioned benefits whose length o f service is from five (5)
to twenty (29) nine years and two (2) months pay for whose
services have reached thirty(30) years or more.”

Application for the VERP shall be entertained only if filed within the
period March 16, 2004 to April 30, 2004. The formal offering of the VERP
caught employees off-balance and instantly became a major cause of
apprehension and alarm. But nobody in his right mind was interested on
the VERP; The younger crop of regular employees disdain the VERP, they
are too young to retire; the older ones and would soon retire regularly
considered the VERP as untimely being too old to retire voluntary.
Surprisingly VECO did not discuss the VERP extensively and openly with
the employees. Attached as Annex I is the said VERP.

Moreover, the UNION DID NOT DISCUSS THE VERP FOR THE
GUIDANCE AND BENEFIT OF ITS MEMBERS, EVERYTHING WAS
SEEMINGLY IN THE DARK OR UNDER A CLOUD OF DOUBT, BUT
OBVIOUSLY THE GENERAL SENTIMENT OF THE EMPLOYEES WAS TO

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HOLD ON TO THEIR JOB UNTIL THEIR REGULAR RETIREMENT AS
PROVIDED UNDER THE COLLECTIVE BARGAINING AGREEMENT (CBA),
OTHERWISE STATED, NOBODY APPLIED FOR EARLY RETIREMENT, THE
VERP WAS DOOMED TO FAIL.

The uncertainty was complicated when Mr. Alfonso Y Aboitiz, the

COO, almost simultaneously with the offering of the VERP and apparently
operating under a timetable of his own, took over the day to day operations
of VECO and brought in a team from Davao notably Bienamer Garcia,
Gideon Gavan, Bong Borja, Marcel Mique, Noel Duban, Ronald Chan,
Danny Cabigon, a certain Jaque, Ben Alconcel, Clovis Racho, Maria Ceilita
Aniga, Carlos PAyot, Engr. Lucero, Mr. Saludes, Mr. Modesto, Rey Cabalan,
Ruben Malabar and others, who are NOT EMPLOYEES OF VECO and upon
his direction immediately and effectively occupy, wrested and took over the
reins of the crucial and critical positions in the company namely:
PERSONNEL, FINANCE, TREASURY, ENGINEERING, ACCOUNTING,
PURCHASING, EDP, METER READING, LINE MAINTENANCE, PERSONNEL,
ADMINSTRATION, CUSTOMER SERVICES, AUDIT, etc.

The situation created confusion in the workplace because the new set
up took away what the affected officials were doing routinely the last fifteen,
twenty, twenty years or even thirty years. The bewildered Managers,
Superintendent, Supervisors, Accountants, Foremen, were left practically
empty handed and were required to do other jobs or functions not related to
their usual duties and functions in office. Mr. Aboitiz however was quick to
the draw and saw to it that all his directives were followed to the letter
asserting in the main his power and influence as the new COO.

Moreover the affected officials were made to do menial jobs; their

office tables were transferred or rearranged as if a new office has been set
up. The men under them no longer report to them but to the new
management and technical team who albeit NON VECO employees did
VECO jobs as the behest of Mr. Alfonso Y. Aboitiz. Stripped of their simple
dignity and of their usual and customary duties, these affected VECO
officials who have gained respect and good reputation felt embarrassed,
abused and humiliated before the very eyes of their own people in the office.
For all intents and purposes, they were CONSTRUCTIVELY DISMISSED
FROM WORK.

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 It was a constructive dismissal because the acts of management was
clears discrimination, an obvious showing of insensibility or clear disdain as
an employer which become so unbearable on the part of the employee that it
could foreclose any choice by him except to forego his continued
employment.

Moreover, the act of management in allowing the entry of people who

are NOT employee of VECO to take over the jobs of Managers,
Superintendents, Supervisors and Foremen in the day to day operations of
the company constitute the employment busting or breaking up of the ranks
of employment at VECO. It was a clear abuse of rights; an act of bad faith
highly prejudicial to labor that violates the right to security of tenure of the
employees.

Of course what respondent VECO had done sent a “chilling effect” on

the rank and file employees. It was a clear indication of things to come. If
the VECO management could do this to their superiors, how much more to
the rank and file employees? The dire consequences that may befall them
and to their family who relied upon them for support could be devastating.

One month after the offering of the VERP, or exactly on May 7, 2004,
and because of the cold response by the VECO employees of the VERP, the
president of Respondent VECO, Mr. Dennis Garcia, in a memorandum
announced to all VECO employees that “ x x x x the Management will
undergo a company-wide re-engineering to better address our manpower
needs for the whole operation”. A copy of the Memorandum is hereto
attached as Annex “J” and made as an integral part hereof.”

It is worthy of noting that the benefits to be given by the Respondent

VECO to those employees who will be made victim of the said redundancy
and the benefits to be given by the VERP are exactly the same.

While redundancy and VERP was being dangled by the respondent

VECO in order to get rid of the unwanted employees. Complainants Bacaltos
and Rivera was also under tremendous pressure from the management,
more specifically, by the person or Mr. Oaraga and Faelnar to have them
resign from their respective positions. Tremendous pressure was employed
by the management to have some employees retire or avail of the VERP so
that other employees may follow. In effect, the scheme was just a show-

20
retirement’ with the promise from VECO respondent that they shall be re
hired.

Not only that, the offer of being made as a victim of Redundancy

Program is also dangled to complainants Bacaltos and Rivera. Complainant
were made to believe and enticed that the redundancy program has more
benefits that VERP.

There was also persistent demand by the complainants’ superior in

the person of Mr. Huberto V. Ozaraga to sign documents of their
termination made them understand that the Revenue Protection Group will
be Abolished.

Being driven to the wall and in no position to resist, complainants

Bacaltos and Rivera succumbed to the demand of their Superior Mr.
Huberto Ozaraga.

During the signing of the documents of their termination, Mr. Huberto

V. Ozaraga deceitfully covered the entire contents of the document except
for the portion where complainants affixed their signature.

On the first week of June 2004, complainants Bacaltos and Rivera

were instructed by their superior Mr. Huberto V. Ozaraga not to report to
work without receiving any written notice of their termination and copies of
the documents of their termination they have signed, because securing a
copy is prohibited due to its confidentiality as Mr. Huberto V. Ozaraga had
said.

With the unexpected turn of evens, the proper turnover of the

complainants’ jobs to the incoming new management did not materialize. It
was on the fourth week of June 2004, that they started receiving the
supposedly Retirement Pay from the trust fund stipulated in the VECO
Retirement Plan of the Collective Bargaining Agreement.

Unlike the succeeding batches of terminated employees, the

Department of Labor and Employment did not receive respondent from
VECO the documents of the complainants’ termination that they have
signed.

21
 Instead, complainants obtained a certified true copy of the documents
of the listed redundant positions with our corresponding names in it. See
Annex K to K-___.

What was highly irregular and disturbing is that in the said papers
submitted by the respondent VECO to the Department of Labor and
Employment (DOLE), complainants’ positions are listed therein as Shift
Supervisor (Bacaltos) and Control Clerk “A” (Rivera).

It must be stressed that the complainants Bacaltos and Rivera, by

May 2004, has been occupying the positions Supervisor of Revenue and
Revenue Protection Staff, respectively. Complainant has been occupying
their respective positions since February 1, 2000.

Adding insult to injury, the logbook (See Annex K and K-1) in the
Department of Labor and Employment showed that the document
abovementioned was received on May 14, 2004 to make it appear that the
Respondent VECO company have complied the mandated 30 day notice of
termination before the intended date of termination which was June 15,
2004.

However, it is very clear that the entry in the said logbook was highly
irregular. Whereas all the other entries were made on the very first line and
leaving the large space above empty, the entry of the VECO was made on
the large space above and not on the first line. Also while all the other
entries were number in chronological order with no subnumbers, the
respondent VECO’s entry was entered into as number 5-a.

This is highly irregular and a clear case of tampered entry in the

logbook to make it appear that respondent VECO has complied with the 30-
day requirement in connivance with the records-in-charge.

The positions the complainants held, more specifically Suprevisor,

Revenue Protection Group Revenue Protection Staff were never declared
redundant and accordingly was never abolished as there was no notification
received by the Department of Labor and Employment of the Revenue
Protection Group’s abolition of positions.

22
 What is also highly disturbing is that respondent VECO has re-hired
the following persons who are also member of the Revenue Protection
Group, namely:

1. Peres, Nelson V;

2. Jayme, Lyndon C.

3. Sanchez, Allan Y. and

4. Aguilar, Edgar P.

Also, it must also be stressed that in the year 2003 and 2004, the
respondent VECO never suffered a financial loss whatsoever as its
employees have received a profit share equivalent of 0.4300 of the
employees’ basic salary as of December 31, 2003 in accordance with the
provisions of the Collective Bargaining Agreement.

Annex L and L-1 are offered as proof of what the complainants’ salary
and other benefits.

STATEMENT OF THE ISSUES

1. WHETHER OR NOT COMPLAINANTS WERE ILLEGALLY

DISMISSED;

2. WHETHER OR NOT RESPONDENT SHOULD BE

COMPELLED TO PAY TO THE COMPLAINANT TO PAY
THE LATTER THER MONEY CLAIMS;

3. WHETHER OR NOT COMPLAINANTS ARE ENTITLED TO

ATTORNEYS FEES.

DISCUSSIONS AND ARGUMENTS.

1. WHETHER OR NOT
COMPLAINANTS WERE
ILLEGALLY DISMISSED.

23
 It is the strong contention of the herein complainants that they were
illegally dismissed.

Section 1 of Rule of the Implementing Rules and Regulation of the

Labor Code provides that no worker shall be dismissed except for lack of
work for just or authorized causes provided by law and after due process.

The two facets of this legal provision are: (a) the legality of the act of
dismissal, that is, dismissal under the grounds provided for under Article
282 or Article 283 of the labor Code; and (b) and the legality in the manner
of dismissal.

The illegality of the act of dismissal constitutes discharge without just

or authorized cause while illegality in the manner of dismissal is dismissal
without due process.

Respondent VECO dismissed Complainants Bacaltos and Rivera not

only without just or authorized cause but also without due process.

In the Establishment Termination Report (Annex _____) which

respondent VECO submitted to the Department of Labor and Employment,
respondent listed complainant Bacaltos’ Position as Shift Supervisor while
complainant Rivera’s positionas Control Clerk A.

It must be worth repeating that as early as February 1, 2000,

Complainants have already been occupying positions of Supervisor, Revenue
Protection Group ( Bacaltos) and Revenue Protection Staff (Rivera).
Annexes_______ would confirm that indeed as of May 2004, complainant have
already been performing their positions as Supervisor, Revenue Protection
Group ( Bacaltos) and Revenue Protection Staff (Rivera) for more that four (4)
years.

Also worth stressing is the fact the Collective Bargaining Agreement,

Article IV thereof provides as follows, to wit:

“ARTICLE IV”
“PREFERENTIAL RIGHTS OF EMPLOYMENT AND FACTORS FOR
PROMOTION”

24
 “SECTION 3. Temporary assignment. Any employee, who
may be designated to temporarily take the place of the
incumbent holding the position of higher grade due to the latter’s
absence or incapacity or to temporary fill the vacant position of
higher grade, shall assume such a position in an “Acting”
capacity for a period not exceeding six (6) moths except vacancies
caused by employees who are called for temporarily military
service provided that the employee concerned shall receive the
difference of his present salary; and the minimum rate range of
higher grade but not less that FIFTY (P50.00) PESOS per month in
the form of allowance. In case his temporary assignment exceeds
six months, he shall be considered permanent in the said
position.”

Thus, for all intent and purposes, the complainant are occupying the
positions of Supervisor, revenue Protection Group (Bacaltos) and Revenue
Protection Staff (Rivera) as early as February 1, 2000 and up to the time
they were unceremoniously illegally dismissed.

So that an employee may be legally dismissed due to redundancy, it is

elementary that their position must be legally and validly declared as redundant.

In the case of ORLANDO M. ESCAREAL vs. NATIONAL LABOR

RELATIONS COMMISSION [ G.R. No. 99359,September 2, 1992.], the
Supreme Court reiterated it constant ruling with respect to redundancy, Says the
Supreme Court:

“In Wiltshire File Co., Inc. vs. NLRC, 29 this Court held
that redundancy, for purposes of the Labor Code, exists where
the services of an employee are in excess of what is reasonably
demanded by the actual requirements of the enterprise; a
position is redundant when it is superfluous, and superfluity of a
position or positions may be the outcome of a number of factors,
such as the overhiring of workers, a decreased volume of
business or the dropping of a particular product line or service
activity previously manufactured or undertaken by the
enterprise. Redundancy in an employer's personnel force,
however, does not necessarily or even ordinarily refer to
duplication of work. That no other person was holding the same
position which the dismissed employee held prior to the
termination of his services does not show that his position had
not become redundant.”

“Private respondent PRC had no valid and acceptable basis

to declare the position of Pollution Control and Safety Manager
redundant as the same may not be considered as superfluous; by
the express mandate of the provisions earlier cited, said

25
 positions are required by law. Thus, it cannot be gainsaid that
the services of the petitioner are in excess of what is reasonably
required by the enterprise. Otherwise, PRC would not have
allowed ten (10) long years to pass before opening its eyes to that
fact; neither would it have increased the petitioner's salary to
P23,100.00 a month effective 1 April 1988. The latter by itself is
an unequivocal admission of the specific and special need for the
position and an open recognition of the valuable services
rendered by the petitioner. Such admission and recognition are
inconsistent with the proposition that petitioner's positions are
redundant. It cannot also be argued that the said functions were
duplicative, and hence could be absorbed by the duties pertaining
to the Industrial Engineering Manager. If indeed they were, and
assuming that the Industrial Engineering department of the PRC
had been created earlier, petitioner's positions should not have
been created and filled up. If, on the other hand, the department
was created later, and there is no evidence to this effect, and it
was to absorb the petitioner's positions, then there would be no
reason for the unexplained delay in its implementation, the
restructuring then should have been executed long before the
salary increases in petitioner's favor. That petitioner's positions
were not duplicitous is best evidenced by the PRC's recognition of
their imperative need thereof, this is underscored by the fact that
Miguelito S. Navarro, the company's Industrial Engineering
Manager, was designated as Pollution Control and Safety
Manager on the very same day of petitioner's termination. While
the petitioner had over ten (10) years of experience as a pollution
control and safety officer, Navarro was a virtual greenhorn
lacking the requisite training and experience for the assignment.
A cursory perusal of his bio-data 31 reveals that it was only
several months after his appointment that he attended his first
Occupational Safety & Health Seminar (14-17 November 1988),
moreover, it was only after his second seminar (Loss Control
Management Seminar — 6-9 December 1988) that the PRC
requested his accreditation with the Safety Organization of the
Philippines. 32 In trying to prop up Navarro's competence for the
position, PRC alleges that the former finished from the University
of the Philippines with a degree in Chemical Engineering, took
some units in pollution in the process and had "undergone job
training in pollution in cement firms through the Bureau of
Mines."

In reference to the above quoted Supreme Court ruling, not only was
the positions of the complainant not redundant, because the respondent
VECO have allowed the complainant to stay in their respective positions for
more that four (4) years, the respondent also failed to declare the same as
redundant.

To reiterate, complainant Bacaltos was occupying the position of

Supervisor, Revenue Protection Group since February 1, 2000 while
complainant Rivera was occupying the position of a Revenue Protection Staff
also since February 1, 2000.

26
Due Process

Not only were the Complainants’ dismissal not by virtue of a legal or

authorized cause, complainants were also denied due process when they
were dismissed.

Article 283 of the Labor Code, as amended, reads as follows, to wit:

“ART. 283. Closure of establishment and reduction of

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

Complainant never received any notification of their dismissal, worse,

respondent VECO’s notification with the Department of Labor and
Employment was made rather irregularly.

The logbook of the DOLE with respect Notification received by the said
DOLE, Cebu City (See Annex K and K-1) showed that the document
Establishment Termination Report was received allegedly on May 14, 2004
to make it appear that the Respondent VECO company have complied the
mandated 30 day notice of termination before the intended date of
termination which was June 15, 2004.

However, it is very clear that the entry in the said logbook was highly
irregular. Whereas all the other entries were made on the very first line and
leaving the large space above empty, the entry of the VECO was made on
the large space above and not on the first line. Also while all the other
entries were numbered in chronological order with no subnumbers, the
respondent VECO’s entry was entered into as number 5-a.

27
 This is highly irregular and a clear case of tampered entry in the
logbook to make it appear that respondent VECO has complied with the 30-
day requirement in connivance with the records-in-charge.

Therefore it is very clear that complainants were illegally dismissed by

respondent VECO and not only that, they were also denied due process
when they were unceremoniously illegally dismissed.

2. WHETHER OR NOT
RESPONDENT SHOULD
BE COMPELLED TO PAY
TO THE COMPLAINANT
TO PAY THE LATTER
THER MONEY CLAIMS;

Having exhaustively discussed that the complainants were illegally

dismissed, complainants now endeavors to discuss the effects of illegal
dismissal.

In the case of Rodriguez vs. NRLC [G.R. No. 153947, 2002 Dec 5],
the Supreme Court reiterated their constant ruling in case of illegal
dismissal, to wit:

“Under Art. 279 of the Labor Code, an employee who is

unjustly dismissed is entitled to reinstatement, without loss of
seniority rights and other privileges, and to the payment of his full
backwages, inclusive of allowances, and other benefits or their
monetary equivalent, computed from the time his compensation
was withheld from him (which, as a rule, is from the time of his
illegal dismissal) up to the time of his actual reinstatement.

Thus, based on the foregoing Supreme Court Ruling, since the

complainants were illegally dismissed by the respondent VECO, it is but
logical that VECO shall be condemned by the Honorable Labor Arbiter to
pay the complainants’ money claims, more specifically to:

1. Reinstate complainants Henry Bacaltos and Frederick

Rivera without loss of seniority rights and other
privileges,

28
 2. Pay for the backwages of complainants, inclusive of
allowances, and other benefits or their monetary
equivalent, computed from the time his compensation
was withheld from him (which, as a rule, is from the
time of his illegal dismissal) up to the time of his
actual reinstatement.

More specifically, the respondent VECO shall be condemned to pay the

complainants in the following manner, to wit:

HENRY BACALTOS:

Date Hired : Agust 15, 1977

Date Terminated : June 15, 2004
Length of Service : 27 years
Total Monthly Salary : P61,055.00

From July 15, 2004-Dec 31, 2004

Backwages:

P61,055.00 x 6.5 moths = P396.857.50

Other Benefits:
Unused Sick Leave: None
13th Month Pay : None ( See Section 1, Article IX of CBA)
14 Month Pay
th
: None ( See Section 2, Article IX of CBA)
Christmas Bonus : None ( See Section 3, Article IX of CBA)
Holiday Pay : P9,672.08 (10 days)
Vacation Leave : None (24Working days)
Rice Ration : P10,500.00 (@ P1,500.00per sack /month]
Emergency Leave : P14,508 (6 days) see CBA]
Supervisor Allow. : P26,190.00 (@P4,365.00/month)
Profit Sharing : none

From January 1, 2005 to Dec 31, 2005

[28th year]

Backwages:

P63,693.00 x 12 months = P766,260.00

Other Benefits:
Unused Sick Leave: P60,693.00
13th Month Pay : P63,693.00 ( See Section 1, Article IX of CBA)
14 Month Pay
th
: P63,693.00 ( See Section 2, Article IX of CBA)
Christmas Bonus : P63,693.00 ( See Section 3, Article IX of CBA)
Holiday Pay : P25,289.11 (10 days)
Vacation Leave : P60,693.86 (24Working days)
Rice Ration : P18,000.00 (@ P1,500.00/month, see CBA)
Emergency Leave : P15,173.47 (6 days) see CBA]
Supervisor Allow. : P52,380.00 (@P4,365.00/month)

29
 Profit Sharing : none

From January 1, 2006 to Dec 31, 2006

[29th Year)
Salary P65,655.00]

Backwages:

P61,055.00 x 6.5 moths = P396.857.50

Other Benefits:
Unused Sick Leave: None
13th Month Pay : P61,055.00 ( See Section 1, Article IX of CBA)
14 Month Pay
th
: P61,055.00 ( See Section 2, Article IX of CBA)
Christmas Bonus : P61,055.00 ( See Section 3, Article IX of CBA)
Holiday Pay : P9,672.08 (10 days)
Vacation Leave : P60,693.86 (24Working days)
Rice Ration : P10,500.00 (@ P1,500.00/month, see CBA)
Emergency Leave : P14,508 (6 days) see CBA]
Supervisor Allow. : P26,190.00 (@P4,365.00/month)
Profit Sharing : none

3. WHETHER OR NOT
COMPLAINANTS ARE
ENTITLED TO
ATTORNEYS FEES.

Complainants, because of the wrongful acts of the respondents, were

forced to file the instant action. Complainants were forced to engage the
services of the undersigned counsel and they also incurred expenses aside
from the payment of the professional services of counsel.

By reason of the malevolent acts of the respondents, in the interest of

social and substantial justice, the respondents must be suffered to pay
attorney’s fees in the amount as the Honorable Labor arbiter may deem just
and proper under the circumstances.

PRAYER

Wherefore, premises considered, it is most strongly prayed of this

Honorable Labor Arbiter, to render judgment in favor of the complainant
and against the respondents in the following manner, to wit:

30
 1. Declare that the complainants were illegally dismissed by
the respondents and order the respondent to pay separation
pay and full backwages;

2. Order the respondents to pay the complainants their unpaid

salary, holiday pay, 13th month pay, service incentive leave
pay and holiday;

3. Order the respondent to pay the complainant attorney’s fees.

Other reliefs as are just and equitable are likewise prayed for.

Respectfully submitted, June 8, 2006.

ESCASINAS PARTNERS AND COMPANY

Counsel for the Complainants
Suites 201-205, SRA Building
54 D. Jakosalem Street, Cebu City

By:

FRANCIS GEORGE F. DINOPOL

Roll of Attorneys Number 50084
PTR No. 1339110, 01-09-2006 LapuLapu City
IBP No. 665772, 01-11-2006, Cebu Chapter

NOTICE:

THE CLERK IN CHARGE

RAB VII, Cebu City

Please take submit the foregoing Position Paper for the consideration
of the Honorable Labor Arbiter Jose Gutierrez immediately upon receipt
hereof.

FRANCIS GEORGE F. DINOPOL

Copy furnished:

Atty. Arlan Richard Alvarez

9th Floor, Cebu holdings Center
Cebu Business Park, Cebu City

EXPLANATION

31
 Service was done by registered mail due to distance, which renders
personal service impractical and expensive.

FRANCIS GEORGE F. DINOPOL

32