G.R. No.

L-21189           November 28, 1964

JOSE AVENDAÑO and MARTA AVENDAÑO, petitioners,

vs.
THE HON. FEDERICO C. ALIKPALA, THE SHERIFF OF MANILA, THE MANILA
RAILROAD COMPANY and Luzviminda PARUNGAO SAN PEDRO, respondents..

PAREDES, J.:

This case seeks to test the propriety and validity of an order of Garnishment issued
pursuant to a Writ of Execution of a Judgment for Sum of Money.

On complaint of respondent Luzviminda Paruñgao San Pedro with the Municipal

Court of Manila (Civ. Case No. 95957) against petitioners Jose Avendaño and Marta
Avendaño (husband and wife), the latter were ordered to pay plaintiff therein, the sum
of P2,000.00 plus 12% interest from November 30, 1960, P200.00 as attorney's fees and
another P200.00 for actual damages, and the costs.

The decision of the Municipal Court was appealed to the CFI of Manila (Civil Case, No.
50273) and assigned to the sala of respondent Judge. For failure of defendants to
reproduce their answer and their third-party complaint, they were declared in default
and the evidence of respondent San Pedro was received by the Clerk of Court, as
commissioner. The respondent judge's decision stated:

The promissory notes, however, were all signed alone by defendant Marta
Avendaño and there was no showing that the loans evidenced by said
documents were obtained with the knowledge and consent of the husband.
Accordingly, the other defendant cannot be held liable also to pay the amount
due to plaintiff.

WHEREFORE, judgment is hereby rendered sentencing the defendant Marta

Avendaño  to pay the plaintiff the sum of P2,000.00 with interest thereon at the
rate of 6% per annum from March 6, 1962, the date of the filing of the complaint
until fully paid, plus the amount of P100.00 as and for attorney's fees and the
costs of the suit.

Upon finality of the above judgment, plaintiff San Pedro prayed for the issuance of a
Writ of Execution, on the "goods and chattels of Marta Avendaño which was granted by
respondent Judge on October 30, 1962. Pursuant to said Writ, the respondent Sheriff of
Manila sued out a Writ of Garnishment on the salaries of petitioner Maria Avendaño
with the respondent Manila Railroad Company where she was employed. In effect, the
said Manila Railroad Company, had not delivered her salaries to her since November
15, 1962 up and including April, 1963 (filing of the instant petition). It was only on
November 15, 1962 that petitioner Marta Avendaño came to know of the decision of the
CFI, when her pay was garnished. Petitioners moved for the setting aside of the Order
of Default, and failing to do so, they filed with the Court in the same case, a petition to
have the Writ of Garnishment invalidated on various grounds, to wit:

(1) that the goods and chattels which the writ of execution directed to be seized
are those of petitioner Marta Avendaño alone, whereas the salary being
garnished was "conjugal property" and therefore not covered by the writ;

(2) that garnishment of salaries, is not sanctioned by law in fact, there is a

prohibition to that effect on the ground of public policy;

(3) that even if salary is subject to garnishment, it becomes effective only if it is in

excess for the needs of petitioner and her family.

The petition and the subsequent motion for reconsideration were both denied by the
respondent Judge.

Claiming that respondent Judge, in denying their petition to declare invalid the Writ of
Garnishment and motion for reconsideration, acted without, or in excess of jurisdiction
and/or with grave abuse of discretion, petitioners commenced with this Court, the
present proceedings for Certiorari and Mandamus, with Preliminary Mandatory
Injunction, praying that the Writ of Garnishment be declared null and void; and that
pending the final resolution of the matter, a writ of preliminary injunction be issued.

On April 24, 1963, this Court gave due course to the petition and issued a Writ of
Preliminary Injunction, directing the respondent Sheriff of Manila and the Manila
Railroad Company to refrain from enforcing the Writ of Garnishment with respect to
the salary of petitioner Marta Avendaño until further orders from this Court.

The Manila Railroad Company and San Pedro filed separate answers. The former, after
denying all the allegations in the Petition, for alleged lack of knowledge or information
sufficient to form a belief as to the truth thereof, prayed that judgment be rendered as
justice and equity demanded in the, premises. The latter maintained in her answer that
the salary of petitioner Marta Avendaño is liable for garnishment, provided the same
has already been set side or segregated from the mass of the public fund; that even if
the salary were conjugal, the same could be made liable to answer for the indebtedness
of the spouses.
We are of the opinion that the writ of Garnishment is illegal. It has been shown by
unrebutted proofs, that the salary of petitioner Marta Avendaño was not sufficient for
her expenses and that of her family. Under the Revised Rules, the following, among
others, is declared exempt from execution.

(1) So much of the earnings of the debtor for his personal services within the
month preceding the levy as are necessary for the support of his family (Sec. 12,
Rule 39).

The salary of Marta Avendaño is P200.00 a month, but her take-home pay after the legal
deductions is only P151.50. A summary of her share in the monthly maintenance of the
family is in Annex K-1, which indicates that she should at least contribute P220.00. The
amount garnished is therefore, much less than what she ought to contribute, and
obviously, it is exempt from execution. Being exempt from execution, it should not also
be reached by garnishment. Petitioners have pointed out to the respondent judge the
matter of exemption of Marta Avendaño's salary, in spite of which his Honor denied
their petition to declare the garnishment illegal. There was, therefore grave abuse of
discretion on the part of the, respondent judge in that aspect, and lack or excess of
jurisdiction on the part of the Sheriff in suing out the Writ of Garnishment. In the case
of Garcia vs. Castillo, 43 Phil. 364, it has been held that the issuance of a writ of execution
on P50.00 of the total P65.00 received as monthly salary from the employer, was
premature and unlawful, the court saying:

Only salary "due" the judgment debtor is subject to attachment and execution,
and then only if it is not made to appear by the affidavit of the debtor or
otherwise that such earnings are necessary for the support of his family. ... .

Morever, in the case of Dir. of Commerce and Industry vs. Concepcion, 43 Phil. 384., this
Court ruled:

A rule, which has never been seriously questioned, is that money in the hands of
public officers, although it may be due government employees, is not liable to the
creditors of these employees in the process of garnishment, ... . Another reason is
that moneys sought to be garnished as long as they remain in the hands of the
disbursing officer of the Government, belong to the latter, although the
defendant may be entitled to a specific portion thereof. And still another reason
which covers both of the foregoing is that every consideration of public policy
forbids it.

xxx          xxx          xxx

 To state such a principle is to refute it. No government can sanction it. At all
times it would be found embarrassing, and under some circumstances, it might
be fatal to the public service. ... .

In view of the conclusions hitherto reached, the other questions raised need no longer
be considered.

WHEREFORE, the Writ of Garnishment in question is hereby declared null and void,
and the Writ of Preliminary Injunction earlier issued, is made permanent. No special
pronouncement as to costs.

Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Regala, Makalintal, Bengzon, J.P., and
Zaldivar, JJ., concur.

ROSARIO A. GAA v. CA, GR No. L-44169, 1985-12-03

Facts:

Europhil Industries Corporation was formerly one of the tenants in Trinity Building...
while petitioner Rosario A. Gaa was then the building administrator.

Europhil Industries commenced an action... for damages against petitioner "for having
perpetrated certain acts that Europhil Industries considered a trespass upon its rights,
namely, cutting of its electricity, and removing its name from the building directory
and... gate passes of its officials and employees"... rendered judgment in favor of
respondent Europhil Industries, ordering petitioner to pay the former

The said decision having become final and executory, a writ of garnishment was issued

Petitioner then filed... a motion to lift said garnishment on the ground that her "salaries,
commission and/or remuneration" are exempted from execution under Article 1708 of
the New Civil Code.

Said motion was denied... petitioner filed with the Court of Appeals a petition for
certiorari... the Court of Appeals dismissed the petition for certiorari.

the Court of Appeals held that petitioner is not a mere laborer as contemplated under
Article 1708 as the term laborer does not apply to one who holds a managerial... or
supervisory position like that of petitioner, but only to those "laborers occupying the
lower strata." It also held that the term "wages" means the pay given "as hire or reward
to artisans, mechanics, domestics or menial servants, and laborers employed in
manufactories,... agriculture, mines, and other manual occupation and usually
employed to distinguish the sums paid to persons hired to perform manual labor,
skilled or unskilled, paid at stated times, and measured by the day, week, month, or
season

"wage" in Spanish is "jornal" and one who receives a wage is a "jornalero."

Issues:

commission... and other remuneration due her from the El Grande Hotel do not
constitute wages due a laborer which, under Article 1708 of the Civil Code, are not
subject to execution or attachment.

Ruling:

It is beyond dispute that petitioner is not an ordinary or rank and file laborer but "a
responsibly placed employee,"... of El Grande Hotel, "responsible for planning,
directing, controlling, and coordinating the activities of all housekeeping personnel"

Considering the importance of petitioner's function in El Grande Hotel, it is undeniable

that petitioner is occupying a position... equivalent to that of a managerial or
supervisory position.

In its broadest sense, the word "laborer" includes everyone who performs any kind of
mental or physical labor, but as commonly and customarily used and understood, it
only applies to one engaged in some form of manual or physical labor. That is the sense
in which the courts... generally apply the term as applied in exemption acts, since
persons of that class usually look to the reward of a day's labor for immediate or
present support and so are more in need of the exemption than are other.

in determining whether a particular laborer or employee is really a "laborer," the

character of the work he does must be taken into consideration. He must be classified
not according to the arbitrary... designation given to his calling, but with reference to
the character of the service required of him by his employer... the Court also held that
all men who earn compensation by labor or work of any kind, whether of the head or
hands, including judges, lawyers, bankers, merchants, officers of corporations, and the
like, are in some sense

"laboring men." But they are not "laboring men" in the popular sense of the term, when
used to refer to a man's employment, and that is the sense in which the court must
presume, the legislature used the term.

a laborer, within the statute exempting from garnishment the wages of a "laborer," is
one whose work depends on mere physical power to perform ordinary... manual labor,
and not one engaged in services consisting mainly of work requiring mental skill or
business capacity, and involving the exercise of intellectual faculties.
he Court, in construing an act making stockholders in a corporation liable for debts due
"laborers, servants and apprentices"' for services performed for the corporation, held
that a "laborer" is one who performs menial or... manual services and usually looks to
the reward of a day's labor or services for immediate or present support.

Article 1708 used the word "wages" and not "salary" in relation to "laborer" when it
declared what are to be exempted from attachment and execution. The term "wages" as
distinguished from "salary", applies to the compensation for manual labor, skilled or
unskilled, paid at... stated times, and measured by the day, week, month, or season,
while "salary" denotes a higher degree of employment, or a superior grade of services,
and implies a position of office: by contrast, the term "wages" indicates considerable pay
for a lower and less responsible... character of employment, while "salary" is suggestive
of a larger and more important service

The distinction between wages and salary

"'Wages' are the compensation given to a hired person for service, and the same is true
of 'salary'. The words seem to be synonymous,... convertible terms, though we believe
that use and general acceptation have given to the word 'salary' a significance
somewhat different from the word 'wages' in this: that the former is understood to
relate to position of office, to be the compensation given for official or... other service, as
distinguished from 'wages', the compensation for labor."

G.R. No. L-67880 September 15, 1989

FELIX ESMALIN, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (3rd Division) and CARE
PHILIPPINES, respondents.

Pedro A. Lopez for petitioner.

Eugene A. Tan for private respondent.

FERNAN, C.J.:

Before Us is a petition for review by certiorari 1 of the decision 2 of the National Labor
Relations Commission, Third Division, declaring the petitioner's dismissal from private
respondent, CARE Philippines, justified.
As gathered from the records, the facts of this case are as follows:

The petitioner, Felix Esmalin has been employed by CARE Philippines for almost six (6)
years, three (3) years of which as warehouseman of the company, assigned at Transcon
Warehouse in Bacood, Sta. Mesa, Manila. Among his duties and responsibilities were:
to expedite dispatch of all CARE supplied commodities through monitoring delivery
orders; to dispatch and correct bag count; to coordinate with the shipping clerk on all
details concerning arriving shipments, and to make a report on all arrivals at
TRANSCON. As found by the NLRC, Esmalin was occupying a position of trust. 3

The private respondent, CARE Philippines, is a non-profit organization whose primary

purpose is to facilitate and maximize voluntary gifts or reliefs, rehabilitation and
reconstruction materials and other needed commodities, by individuals and
organizations outside of the Philippines, to individuals and organizations in the
Philippines, designated by the donors. 4

In a series of thefts involving a total of 17,731 bags of relief goods consisting of soy
fortified flour (SFF) and corn soya milk (CSM) belonging to the U.S. government and
stored at the TRANSCON Bodega of respondent Company, the alleged participation of
Esmalin, CARE OIC of said bodega, was summarized by the Tanodbayan, as follows:

Felix Esmalin  was the CARE OIC of TRANSCON Bodega. He cooperated

with John Dupree in retesting in MIT laboratory and in taking samples
even not at random until the original test result of being unfit for human
and unfit for animal was changed to "unfit for human but fit for animal."
Thereafter, Letter Orders were made by John Dupree but only to be
applied to CSM and SFF deposited in TRANSCON, Sta. Mesa bodega.
However, he caused withdrawal in favor of Oliver C. Reyes one truck of
good order milk CSM from Pasig Warehouse and brought them to Binan.
As OIC Warehouseman, he should see to it that in every delivery of relief
goods to ASF, BAI, Alabang he must at the return of every trip, take back
a copy of the DCR and from there he could easily detect where the goods
were brought and who received them. But he did not comply with that
duty, and his unjustified failure facilitated the diversion, a conduct
emphasizing cooperation in the execution of his role in the conspiracy.

Esmalin reported at first a small quantity of damaged SFF and CSM;

however, with the loterance (sic) of Orlando Cabrega, who is the USAID
Program Specialist and godfather of Efren C. Reyes in marriage, and
without the benefit of inspection, check or reclassification, he jacked up
 the number of damaged CSM and SFF and reported/ advised same as due
for donation in order not to contaminate the good order relief goods
coming from "SS Thomas Nelson."

Such act manifest (sic) intent for gain to cooperate with the scheme to
divert good order relief goods in big quantities and Cabrega played the
leading role in that respect. 5 (Emphasis supplied.)

The report on the loss of company commodities as wen as the involvement of Esmalin
therein was transmitted by the Criminal Investigation Services (CIS), Armed Forces of
the Philippines, on March 9, 1981 to the Tanodbayan 6 which in turn found a prima
facie  case against the suspects including Esmalin.

On April 29, 1981, a clearance application for the preventive suspension of Esmalin,
leading to his termination from employment was filed by CARE PHILIPPINES on the
ground that the continued presence of the former poses a serious or imminent danger to
the property of the latter. Thus, on the same day petitioner received from private
respondent, a letter signed by its director, Mr. Henry R. Richards, the pertinent portion
of which reads:

This is to inform you that today we are filing with the Ministry of Labor
and Employment an application for clearance to place you under
preventive suspension.

Considering that there is an ongoing investigation being conducted by the

Criminal Investigation Service of the Philippine Constabulary involving
anomalies in the movement of CARE food commodities; because these
investigations have resulted in strong reasonable suspicion that you are
party to these anomalies considering that as warehouseman you occupy a
sensitive position in relation to the subject of this investigation, CARE is
constrained to place you under preventive suspension pending final
termination of the CIS Investigation.

You are therefore relieved of your duties and responsibilities as

warehouseman effective immediately. 7

The reason for the clearance application to suspend and terminate Esmalin was loss of
trust and confidence. 8

On May 4, 1981, petitioner Esmalin opposed the clearance applied for by private
respondents to place him under preventive suspension, stating that he is not a threat to
the life and property of his employers and co-employees; nor is he a threat to the
normal operations of the company, considering that his job is ministerial and that the
on-going investigation conducted on the reported anomalies has no bearing upon him.

In an Order dated October 22, 1981, the Ministry of Labor, through Director Francisco
Estrella denied the clearance for preventive suspension sought by CARE Philippines
and ordered the latter to immediately reinstate Esmalin to his former position with full
back wages less his salary for two (2) months during which period he was considered to
be under disciplinary suspension. 9

Private respondent appealed 10 the Order of Director Estrella to the Ministry of Labor on

December 14, 1981. The appeal was dismissed for lack of merit 11 on May 24, 1982.

Not satisfied, CARE Philippines filed a Motion for Reconsideration and Opposition to
the Motion for the Issuance of the Writ of Execution 12 dated June 16, 1982. On
September 23, 1982, Deputy Minister of Labor, Vicente Leogardo, Jr., issued an
Order 13 setting aside the Order of May 24, 1982 and remanding the case to the National
Labor Relations Commission, Regional Arbitration Branch for compulsory arbitration.

The Labor Arbiter conducted a hearing and the parties agreed to submit their respective
position papers and documentary evidence, after which the case was deemed submitted
for decision. On April 8, 1983, Labor Arbiter, Manuel B. Lorenzo, rendered a
decision 14 in favor of petitioner, the pertinent portion of which reads:

In the case at bar, there is no showing that complainant had cooperated

and conspired with the several accused charged before the Tanodbayan
and consequently with the Sandiganbayan. True to the incorruptible
saying 'that the innocent is as bold as a lion while the wicked teeth even
no one pursueth. (sic) The complainant had shown his boldness by
pursuing relentlessly his bid for justice because it was very clear that
complainant, Felix Esmalin is not involved in the irregularities.

In view of the foregoing, this Office cannot close his (sic) eyes from the
glaring evidence of the complainant's innocence, hence, we hold that
request for clearance to terminate is DENIED and respondent is hereby
ordered to reinstate the complainant, Felix Esmalin immediately with full
backwages and other benefits attached to his former position without loss
of seniority rights and privileges.

SO ORDERED.
CARE Philippines appealed the decision of the Labor Arbiter to the National Labor
Relations Commission (NLRC). On February 14, 1984, the NLRC promulgated its
decision 15 setting aside the decision of the Labor Arbiter and declaring the dismissal of
petitioner, Felix Esmalin, justified. The ratiocination of the NLRC is stated in its
decision, the pertinent portion of which reads:

We find complainant's dismissal proper. It cannot be denied that Esmalin

was occupying a position of trust in respondent company. As
warehouseman, he had access to the property of his employer. The latter
therefore had every reason to expect from him at all times utmost fidelity
and diligence in dealing with its property. So that, with the finding by the
CIS and the Tanodbayan that Esmalin was involved in a series of thefts of
company property, and his subsequent indictment therefor, one cannot
say that there was no justifiable cause for the company's loss of trust and
confidence in complainant. In the instant case, the complainant, occupying
a position of trust, has been charged in the Sandiganbayan on two counts
for theft of company property worth hundreds of thousands of pesos, and
the evidence against him appears to be strong. His guilt beyond
reasonable doubt or innocence that may be found later by the
Sandiganbayan cannot be the determinative gauge in the final
adjudication of the instant case. It is enough that sufficient substantial
evidence has been established, as this Commission has found, that
complainant violated the trust and confidence reposed in him by his
employers, that a justified dismissal can be pronounced. We cannot,
therefore, in conscience compel the respondent company to take him back
for We cannot guarantee his good behavior in the future.

Felix Esmalin filed a Motion for Reconsideration of the above decision, but it was
denied. Hence the instant petition for review by certiorari ** wherein petitioner sets
forth the following issues:

1. Whether or not public respondent committed grave abuse of discretion

in finding that petitioner's dismissal was justified;

2. Whether or not public respondent decided a question of substance in a

way not in accordance with law and applicable decisions of the Supreme
Court;

3. Whether or not petitioner was denied "due process of law" when he was
arbitrarily relieved of his employment on April 29, 1981. 16
all of which may be synthesized into one single issue, that is, whether or not Esmalin's
dismissal is justified.

Before going into the merits of this case, an important point to consider is the finality of
the assailed order of the Director of Labor dated October 22, 1981 which was the subject
of review by the National Labor Relations Commission whose decision is now before
this Court.

The records show that despite reconsideration of the Order of Deputy Minister of Labor
Vicente Leogardo, Jr. dated May 24, 1982 which affirmed the Order of the Director,
National Capital Region dated October 22, 1981 and dismissed respondent's appeal
relative thereto, the findings of the Office of the Minister on the untimeliness of the
filing of the appeal memorandum are still as follows: [1] that the Order of the Regional
Director appealed from was received and signed by counsel of record on October 31,
1981 and by respondent itself on November 5, 1981; [2] that from November 5, 1981,
respondent was given ten (10) working days within which to appeal the said Order; [3]
that before the expiration of said period, respondent filed an urgent motion for
extension of time to file appeal memorandum on November 16, 1981 praying for 15
days from November 18. 1981 within which to file an appeal memorandum and another
extension from December 4, 1981 to December 13, 1981; and [4] that since December 13,
1981 falls on Sunday, respondent's appeal memorandum was filed on December 14,
1981, which allegedly is within the reglementary period. 17

It is well established that a motion for reconsideration and/or an appeal from a decision,
award or order of the Labor Arbiter must be filed within ten (10) working days from
receipt of such decision, award or order, pursuant to the Labor Code. 18 In
implementation thereof, Section 6, Rule VIII of the Revised Rules of the NLRC provides:
"No extension of period. No motion or request for extension of the period within which
to perfect an appeal shall be entertained." Hence, the Revised Rules of the National
Labor Relations Commission are clear and explicit and leave no room for interpretation,
that the subject Order of the Director of Labor appealed to the Deputy Minister of Labor
has already become final and executory and can no longer be subject to
appeal. 19 Accordingly, the decision of the National Labor Relations is null and void for
lack of jurisdiction and for the same reason, not within the jurisdiction of this Court to
review.

However, even on the merits, a careful review of the records failed to yield a cogent
reason to disturb the assailed Order of Director Estrella dated October 22, 1981.
The bone of contention in this case is the alleged participation of Esmalin, as conspirator
in the theft of a large number of relief goods belonging to the U.S. and intended for
delivery to Alabang Stock Farm, Bureau of Animal Industry, Alabang, Rizal, which
were in fact diverted and delivered to Biñan, Laguna.

CARE submits that as warehouseman, Esmalin has full knowledge of the irregularity
and the fact that the incident took place, only shows that he connived with the other
indictees and expected profit from the transaction if disposed, which in fact was so
disposed. CARE also pointed out that Esmalin was physically present as
warehouseman-representative when the goods subject of the CIS investigation were
taken out of the Transcon Bodega, yet he allowed goods of excellent condition to be
mixed with alleged damaged commodities. 20

On the other hand, Esmalin taking exception to aforesaid charges, maintained that the
PC-CIS investigation itself clearly shows that withdrawals from the Transcon bodega
were covered with the letter-orders from the American officers of CARE and gate passes
prepared by Transcon warehouseman/supervisors. He insists that said withdrawals
were witnessed by CARE and Transcon officers. In fact, there were three (3) letter-
orders submitted covering the delivery of the disputed goods and 35 gate passes
thereof. For this reason, he contends that if there was any "switching of food
commodities" it was not of his own making. According to him, it was a co-employee
Mrs. Adelina Caday who, upon instruction by a superior, prepared the authorization
and D-3 and were the same documents presented to lain for his signature.

Briefly stated, the Regional Director's findings and conclusions read:

Based on the foregoing set of facts, we find that Esmalin's involvement in

the irregularity cited as ground for dismissal has not been clearly and
satisfactorily established. Even the report of the CIS on the incident
happened through the presentation and flow of papers and documents.
Esmalin had only ministerial participation in them. These papers, which
are usually letter- orders and gate passes are not prepared by Esmalin;
certainly, he is not to account for the impropriety of its contents, nor can
stop the flow of goods. He therefore, had no direct hand in the switching
much more in the flow of CARE commodities. Therefore, as the
participation of Esmalin in the irregularity is not sufficiently established,
the clearance application, perforce cannot be sustained. However, for
affixing his signature on a document which he should have studied
carefully and which he did not, he should be meted some kind of penalty.
His suspension for two (2) months appears to be appropriate. 21
In fact, even after compulsory arbitration in the National Labor Relations Commission,
Regional Arbitration Branch, the findings in favor of Esmalin remained unaltered.
Labor Arbiter Manuel B. Lorenzo gave stress on the glaring evidence of the petitioner's
innocence and arrived at the same conclusion, to deny the request for clearance to
terminate and grant full back wages and other benefits to Esmalin. More importantly, in
a resolution dated August 17, 1984, the Sandiganbayan, First Division, acquitted
Esmalin of the accusations filed against him. 22

In addition, in a letter dated April 29, 1981, and signed by Director Henry R. Richards of
CARE Philippines, informing petitioner Esmalin that he shall be placed under
preventive suspension pending the final termination of the CIS investigation, CARE
alleged that it conducted its own investigation as early as July 1980, one (1) year before
petitioner was placed under preventive suspension. But on February 24, 1981 or sixty-
four (64) days before petitioner's suspension, the same Director Richards sent Esmalin a
memorandum 23 increasing his salary to P1,285.00 per month effective January 1, 1981,
in recognition of his continued good work and efforts in behalf of CARE.

If indeed, petitioner was under formal investigation with regard to his alleged
participation in the anomaly, then the action of CARE Philippines in giving petitioner a
merit increase is undoubtedly inconsistent with the said investigation.

Undisputedly, CARE Philippines did not conduct its own investigation on the
petitioner but relied only on the CIS investigation which is in contravention of the
ruling set forth in the case of De Leon vs. NLRC, 100 SCRA 691 [1980], wherein this
Court held:

The act of respondents in dismissing petitioner without first conducting a

formal investigation is arbitrary and unwarranted. The right of an
employer to dismiss an employee differs from and should not be confused
with the manner in which such right is exercised. It must not be
oppressive and abusive since it affects one's person and property.

While it is true that suspension is different from dismissal and that it is only in cases of
dismissal wherein a formal investigation and a prior clearance from the Ministry of
Labor is required, it can be discerned from the records of the case as well as from the
actions taken by CARE Philippines, that indeed they sought not only the suspension of
petitioner Esmalin but also his dismissal.

This can be gleaned from the memorandum submitted to us by private respondent,

which mentioned "an application for Clearance for the termination of the employment
of the petitioner with the Ministry of Labor." 24 Furthermore, although the letter dated
April 29, 1981 speaks of "preventive suspension," its tenor clearly indicates dismissal.
The pertinent portion of the same reads:

You are therefore relieved of your duties and responsibilities as

Warehouseman effective immediately.

Please arrange with the Accounting Office for a proper computation of

any amounts due you from CARE by way of unpaid salaries as of this
date, and for a proper turnover of records and documents in your
custody, including your CARE Identification card.

In addition, said letter refers to an enclosure which is the "Clearance to Dismiss

Employee." 25

Thus, the letter preventively suspending petitioner is in reality a dismissal, considering

that on the same day, private respondent filed with the Ministry of Labor an application
for clearance to dismiss the petitioner.

The Rules and Regulations implementing the Labor Code of the Philippines or P.D.
442 26 then enforced, *** clearly states that no employer may dismiss an employee
without a prior clearance secured from the Ministry of Labor. A dismissal without said
clearance shall be conclusively presumed a termination without a just cause.

According to the case of Bachiller vs. NLRC, 98 SCRA 393 [1980]:

Dismissal of an employee without requisite prior clearance from the

Ministry of Labor is equivalent to arbitrary dismissal.

Verily, it is the prerogative of management to employ the services of a person and

likewise to discharge him. But this is not without limitations and restrictions. The
dismissal of an employee must be done with just cause and without abuse of discretion.
It must NOT be done in an arbitrary and despotic manner. To hold otherwise would
render nugatory the security of tenure clause enshrined in the Constitution.

The right to labor is a constitutional as well as a statutory light. Every man has a natural
right to the fruits of his own industry. A man who has been employed to undertake
certain labor and has put into it his time and effort is entitled to be protected. "The right
of a person to his labor is deemed to be property within the meaning of constitutional
guarantees. That is his means of livelihood. He cannot be deprived of his labor or work
without due process of law. 27
Dismissal of an employee must be done without abuse of discretion. The right of an
employer to freely select or discharge his employees is regulated by the State, because
the preservation of the lives of the citizens is a basic duty of the State, more vital than
the preservation of corporate profit. The protection to labor and social justice provisions
of the Constitution and the labor laws and rules and regulations are interpreted in favor
of the exercise of labor rights. 28

From the records of the case, it can be discerned that reinstatement is no longer viable in
view of the strained relations between petitioner-employee and private respondent-
employer. This is very evident from the vehement and consistent stand of CARE
Philippines in refusing to accept back petitioner Esmalin. Instead, petitioner should be
awarded separation pay as an alternative for reinstatement.

In the case of City Trust Corporation vs. NLRC, 157 SCRA 87 [1988], WE said:

However, in this case, there is no doubt that the relationship of employer

to employee is so strained and ruptured as to preclude a harmonious
working relationship should reinstatement of private respondent be
decreed. Instead, private respondent should be afforded the right to
separation pay so that he can be spared the agony of having to work anew
with petitioner under an atmosphere of antipathy and antagonism and the
petitioner does not have to endure the continued services of private
respondent in whom it has lost confidence.

This principle was formulated in Balaquezon EWTU v. Zamora  (97 SCRA 5) and

subsequently reiterated in Asiaworld Publishing Inc. v. Ople  (152 SCRA 219, G.R. No.
56398, July 23, 1987) and  Bautista vs. Inciong,  (158 SCRA 665 [1988]), wherein it was
stated that: "a monetary award is to be paid to the employee as an alternative to
reinstatement which can no longer be effected in view of the long passage of time or
because of the realities of the situation."

WHEREFORE, in view of the foregoing, the decision appealed from is hereby set aside,
and the decision of the Director of Labor is hereby affirmed with the modification that
in lieu of reinstatement, petitioner shall be given separation pay equivalent to one-half
month pay for every year of service. No costs.
Euro-Linea Phil, Inc. vs. NLRC

Chester Cabalza recommends his visitors to please read the original & full text of
the case cited. Xie xie!

Euro-Linea Phil, Inc. vs. NLRC

G.R. No. 78782
December 1 , 1987

Laborer’s Welfare: Liberal Approach

Facts:

Petitioner Euro-Linea Phil, Inc hired private respondent Pastoral as shipping

expediter on a probationary basis for a period of six months. Prior to hiring by
petitioner, Pastoral had been employed by Fitscher Manufacturing Corporation
also as shipping expediter. On 4 February 1984, Pastoral received a memorandum
terminating his probationary employment in view of his failure “to meet the
performance standards set by the company”. Pastoral filed a complaint for illegal
dismissal against petitioner. On 19 July 1985, the Labor Arbiter found petitioner
guilty of illegal dismissal. Petitioner appealed the decision to the NLRC on 5
August 1985 but the appeal was dismissed. Hence the petition for review seeking
to reverse and set aside the resolution of public respondent NLRC, affirming the
decision of the Labor Arbiter, which ordered the reinstatement of complainant
with six months backwages.

Issue:

Whether or not the National Labor Relations Commission acted with grave abuse
of discretion amounting to excess of jurisdiction in ruling against the dismissal of
the respondent, a temporary or probationary employee, by his employer.

Ruling:

Although a probationary or temporary employee has a limited tenure, he still

enjoys the constitutional protection of security of tenure.

Furthermore, what makes the dismissal highly suspicious is the fact that while
petitioner claims that respondent was inefficient, it retained his services until the
last remaining two weeks of the six months probationary employment. No less
 important is the fact that private respondent had been a shipping expediter for
more than one and a half years before he was absorbed by petitioner. It therefore
appears that the dismissal in question is without sufficient justification.

It must be emphasized that the prerogative of management to dismiss or lay-off an

employee must be done without abuse of discretion, for what is at stake is not only
petitioner's position but also his means of livelihood. The right of an employer to
freely select or discharge his employees is subject to regulation by the State,
basically in the exercise of its paramount police power.

Petition dismissed for lack of merit and decision by the NLRC is affirmed.

G.R. No. 106256 December 28, 1994

MAYA FARMS EMPLOYEES ORGANIZATION, MAYA REALTY AND

LIVESTOCK SUPERVISORY UNION, MAYA FARMS EMPLOYEES
ASSOCIATION, and MAYA FARMS, INC. SUPERVISORY UNION, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, MAYA REALTY & LIVESTOCK,
INC., MAYA FARMS, INC., and LIBERTY FLOUR MILLS, INC., respondents.

Paterno D. Menzon Law Office for petitioners.

Angara, Abello, Concepcion, Regala & Cruz for private respondents.

KAPUNAN, J.:

This petition for review on certiorari  seeks to set aside the decision of public respondent
National Labor Relations Commission (NLRC) which upheld the legality of the
separation of sixty-six (66) employees who are members of petitioner unions, thereby
dismissing petitioners' complaint against private respondents for violation of collective
bargaining agreement (CBA) and unfair labor practice.

Private respondents Maya Farms, Inc. and Maya Realty and Livestock Corporation
belong to the Liberty Mills group of companies whose undertakings include the
operation of a meat processing plant which produces ham, bacon, cold cuts, sausages
and other meat and poultry products.
Petitioners, on the other hand, are the exclusive bargaining agents of the employees of
Maya Farms, Inc. and the Maya Realty and Livestock Corporation.

On April 12, 1991, private respondents announced the adoption of an early retirement
program as a cost-cutting measure considering that their business operations suffered
major setbacks over the years. The program was voluntary and could be availed of only
by employees with at least eight (8) years of service.1 Dialogues were thereafter
conducted to give the parties an opportunity to discuss the details of the program.
Accordingly, the program was amended to reduce the minimum requirement of eight
(8) years of service to only five (5) years.

However, the response to the program was nil. There were only a few takers. To avert
further losses, private respondents were constrained to look into the companies'
organizational set-up in order to streamline operations. Consequently, the early
retirement program was converted into a special redundancy program intended to
reduce the work force to an optimum number so as to make operations more viable.

In December 1991, a total of sixty-nine (69) employees from the two companies availed
of the special redundancy program.

On January 17, 1992, the two companies sent letters to sixty-six (66) employees
informing them that their respective positions had been declared redundant. The
notices likewise stated that their services would be terminated effective thirty (30) days
from receipt thereof. Separation benefits, including the conversion of all earned leave
credits and other benefits due under existing CBAs were thereafter paid to those
affected.

On January 24, 1992, a notice of strike was filed by the petitioners which accused private
respondents, among others, of unfair labor practice, violation of CBA and
discrimination. Conciliation proceedings were held by the National Conciliation and
Mediation Board (NCMB) but the parties failed to arrive at a settlement.

On February 6, 1992, the two companies filed a petition with the Secretary of Labor and
Employment asking the latter to assume jurisdiction over the case and/or certify the
same for compulsory arbitration. Thus, on February 12, 1992, the then Acting Labor
Secretary (now Secretary) Nieves Confesor certified the case to herein public
respondent for compulsory arbitration.

On March 4, 1992, the parties were called to a hearing to identify the issues involved in
the case. Thereafter, they were ordered to submit their respective position papers.
In their position paper, petitioners averred that in the dismissal of
sixty-six (66) union officers and members on the ground of redundancy, private
respondents circumvented the provisions in their CBA, more particularly, Section 2,
Article III thereof. Said provision reads:

Sec. 2. LIFO RULE. — In all cases of lay-off or retrenchment resulting in

termination of employment in the line of work, the
Last-In-First-Out (LIFO) Rule must always be strictly observed.

Petitioners also alleged that the companies' claim that they were in economic crisis was
fabricated because in 1990, a net income of over 83 million pesos was realized by
Liberty Flour Mills Group of Companies.2 Furthermore, with the termination of the
sixty-six (66) employees pursuant to the special redundancy program, the remaining
work force, especially the drivers, became overworked and overburdened so much so
that they found themselves doing overtime work and reporting for duty even during
rest days.

Invoking the workers' constitutional right to security of tenure, petitioners prayed for
the reinstatement of the sixty-six (66) employees and the payment of attorney's fees as
they were constrained to hire the services of counsel in order to protect the workers'
rights.

On their part, private respondents contend that their decision to implement a special
redundancy program was an exercise of management prerogative which could not be
interfered with unless it is shown to be tainted with bad faith and ill motive. Private
respondents explained that they had no choice but to reduce their work force,
otherwise, they would suffer more losses. Furthermore, they denied that the program
violated CBA provisions.

On June 29, 1992, public respondent rendered a decision, 3 the dispositive portion of

which reads:

WHEREFORE, in view of the foregoing, judgment is hereby rendered

confirming the legality of the separation of the 66 employees of
management thereby dismissing the charges of violation of CBA and
unfair labor practice on the part of management. Accordingly, Maya
Farms Incorporated and Maya Realty and Livestocks Inc. are hereby
ordered to comply with its (sic) undertaking per the notice of termination
dated January 17, 1992 issued to the remaining fifty three (53) employees
paying them their respective separation benefits as listed in the attached
 sheet considered part of this Decision. Said awards (sic) is in addition to
other benefits as extended by the companies in the letter of termination.

SO ORDERED.4

Not satisfied with the above-quoted decision, petitioners interposed the instant petition.

Petitioners maintain that public respondent grossly erred and gravely abused its
discretion when it ruled that: (a) the termination of the sixty-six (66) employees was in
accordance with the LIFO rule in the CBA; (b) the termination of the sixty-six (66)
employees was in accordance with Article 283 of the Labor Code; and (c) the payment
or offer of payment can substitute for the 30-day required notice prior to termination.5

A close scrutiny of these assigned errors however, shows that the same primarily deal
with the factual findings of public respondent which we are not at liberty to set aside in
the absence of grave abuse of discretion amounting to lack or in excess of jurisdiction.

This Court has consistently ruled that findings of fact of administrative agencies and
quasi-judicial bodies which have acquired expertise because their jurisdiction is
confined to specific matters are generally accorded not only respect but even
finality6 and are binding upon this Court unless there is a showing of grave abuse of
discretion,7 or where it is clearly shown that they were arrived at arbitrarily or in
disregard of the evidence on record.8

Nevertheless, we will look into the factual findings of public respondent if only to
determine whether there was grave abuse of discretion amounting to lack or in excess
of jurisdiction.

The termination of the sixty-six employees was done in accordance with Article 283 of
the Labor Code. The basis for this was the companies' study to streamline operations so
as to make them more viable. Positions which overlapped each other, or which are in
excess of the requirements of the service, were declared redundant.

Article 283 provides:

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 devises, 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 in the
provisions of this title, by serving a written notice on the workers and the
 Department of Labor and Employment at least one (1) month before the
intended date thereof. In case of retrenchment to prevent losses of
operations of establishment or undertaking not due to serious business
losses or financial reverses, the one (1) month pay or at least
one-half (1/2) pay for every year of service, whichever is higher. A fraction
of at least six (6) months shall be considered one (1) whole year.

We fully agree with the findings and conclusions of the public respondent on the issue
of termination, to wit:

We sustain the companies' prerogative to adopt the alleged

redundancy/retrenchment program to minimize if not, to avert losses in
the conduct of its operations. This has been recognized in a line of cases.
(Wiltshire File Co. vs. NLRC, G.R. No. L-82249, February 7, 1991).
However, the companies' decision on this matter is not absolute. The basis
for such an action must be far from being whimsical and the same must be
proved by substantial evidence. In addition, the implementation of such a
decision or policy must be in accordance with existing laws, rules and
procedure and provisions of the CBA between the parties, if there be any.
Short of any of these conditions, management policy to pursue and
terminate its employees allegedly to avert losses, must fail.

In subject case, the 66 complaining employees were separated from

service as a result of the decision of management to limit its operations
and streamline positions and personnel requirements.

In the case of Maya Farms, Inc. its meat processing department, prior to
the adoption of special redundancy program had four (4) sections each of
which is headed by an assistant superintendent. These 3 sections are: (a)
meat processing; (b) slaughterhouse; (c) packing. With the implementation
of the decision of management to limit meat processing with sausages as
the only output, only one position for assistant superintendent was
retained that of Asst. Superintendent for meat processing held by Lydia
Bandong. (Plantilla attached to the letter of May 24, 1992; also Exh. "E."
Likewise, positions of slicer/seater operator, debonner/skinner, ham and
bacon operative, were scrapped. Similarly, positions for packers were
decreased retaining only five positions out of 21 packers. Also affected
were the positions of egg sorters/stockers as only 4 positions were
retained out of ten (10) positions.
 A close examination of the positions retained by management show that
said positions such as egg sorter, debonner were but the minimal
positions required to sustain the limited functions/operations of the meat
processing department. In the absence of any evidence to prove bad faith
on the part of management in arriving at such decision, which records on
hand failed to show in instant case, the rationality of the act of
management in this regard must be sustained. While it may be true that
the Liberty Flour Mills Group of Companies as a whole posted a net
income of P83.3 Million, it is admitted that with respect to operations of
the meat processing and livestock which were undertaken by herein
companies sustained losses in the sum of P2,257,649.88 (Exh. "3"). This is
the reason, as advanced by management, for its decision to streamline
positions resulting in the reduction of manpower compliment (sic).9

In Abbott Laboratories (Phils.) Inc. vs. NLRC, 10 we had occasion to uphold the employer in
its exercise of what are clearly management prerogatives, thus:

The hiring, firing, transfer, demotion, and promotion of employees has

been traditionally, identified as a management prerogative subject to
limitations found in law, a collective bargaining agreement or general
principles of fair play and justice. This is a function associated with the
employer's inherent right to control and manage effectively its enterprise.
Even as the law is solicitous of the welfare of the employees, it must also
protect the right of an employer to exercise what are clearly management
prerogatives. The free will of management to conduct its own business
affairs to achieve its purpose cannot be denied (see Dangan vs. National
Labor Relations Commission, 127 SCRA 706).

The rule is well-settled that labor laws discourage interference with an employer's
judgment in the conduct of his business. Even as the law is solicitous of the welfare of
employees, it must also protect the right of an employer to exercise what are clearly
management prerogatives. As long as the company's exercise of the same is in good
faith to advance its interest and not for the purpose of defeating or circumventing the
rights of employees under the laws or valid agreements, such exercise will be upheld. 11

The NLRC correctly held that private respondents did not violate the LIFO rule under
Section 2, Article III of the CBA which provides:
 Sec. 2. LIFO RULE. In all cases of lay-off or retrenchment resulting in
termination of employment in the line of work, the
Last-in-First-Out (LIFO) Rule must always be strictly observed.

It is not disputed that the LIFO rule applies to termination of employment in the line of
work. 12 Verily, what is contemplated in the LIFO rule is that when there are two or more
employees occupying the same position in the company affected by the retrenchment
program, the last one employed will necessarily be the first to go.

Moreover, the reason why there was no violation of the LIFO rule was amply explained
by public respondent in this wise:

. . . . The LIFO rule under the CBA is explicit. It is ordained that in cases of
retrenchment resulting in termination of employment in line of work, the
employee who was employed on the latest date must be the first one to go. The
provision speaks of termination in the line of work. This contemplates a situation
where employees occupying the same position in the company are to be affected by
the retrenchment program. Since there ought to be a reduction in the number of
personnel in such positions, the length of service of each employees is the
determining factor, such that the employee who has a longer period of
employment will be retained.

In the case under consideration, specifically with respect to Maya Farms,

several positions were affected by the special involuntary redundancy
program. These are packers, egg sorters/stockers, drivers. In the case of
packers, prior to the involuntary redundancy program,
twenty-one employees occupied the position of packers. Out of this
number, only 5 were retained. In this group of employees, the earliest date
of employment was October 27, 1969, and the latest packer was employed
in 1989. The most senior employees occupying the position of packers
who were retained are as follows:

Santos, Laura C. Oct. 27, 1969

Estrada, Mercedes Aug. 20, 1970
Hortaleza, Lita June 11, 1971
Jimenez, Lolita April 25, 1972
Aquino, Teresita June 25, 1975

All the other packers employed after June 2, 1975 (sic) were separated
from the service.
 The same is true with respect to egg sorters. The egg sorters employed on
or before April 26, 1972 were retained. All those employed after said date
were separated.

With respect to the position of drivers, there were eight drivers prior to
the involuntary redundancy program. Thereafter only 3 positions were
retained. Accordingly, the three drivers who were most senior in terms of
period of employment, were retained. They are: Ceferino D. Narag, Efren
Macaraig and Pablito Macaraig.

The case of Roberta Cabrera and Lydia C. Bandong, Asst. Superintendent

for packing and Asst. Superintendent for meat processing respectively
was presented by the union as an instance where the LIFO rule was not
observed by management. The union pointed out that Lydia Bandong
who was retained by management was employed on a much later date
than Roberta Cabrera, and both are Assistant Superintendent. We cannot
sustain the union's argument. It is indeed true that Roberta Cabrera was
employed earlier (January 28, 1961) and (sic) Lydia Bandong (July 9, 1966).
However, it is maintained that in meat processing department there were
3 Asst. Superintendents assigned as head of the 3 sections thereat. The
reason advanced by the company in retaining Bandong was that as Asst.
Superintendent for meat processing she could "already take care of the
operations of the other sections." The nature of work of each assistant
superintendent as well as experience were taken into account by
management. Such criteria was not shown to be whimsical nor carpricious
(sic). 13 (Emphasis supplied).

Finally, contrary to petitioners' contention, there is nothing on record to show that the
30-day notice of termination to the workers was disregarded and that the same
substituted with separation pay by private respondents. As found by public
respondent, written notices of separation were sent to the employees on January 17,
1992. The notices expressly stated that the termination of employment was to take effect
one month from receipt thereof. Therefore, the allegation that separation pay was given
in lieu of the 30-day notice required by law is baseless.

WHEREFORE, finding no grave abuse of discretion amounting to lack or in excess of

jurisdiction on the part of public respondent, the instant petition is hereby DISMISSED.

SO ORDERED.
Padilla, Davide, Jr., Bellosillo and Quiason, JJ., concur.