[G.R. NO.

171153 : September 12, 2007]

SAN MIGUEL CORPORATION EMPLOYEES UNION PHILIPPINE TRANSPORT AND GENERAL WORKERS
ORGANIZATION (SMCEU PTGWO), Petitioner, v. SAN MIGUEL PACKAGING PRODUCTS EMPLOYEES UNION
PAMBANSANG DIWA NG MANGGAGAWANG PILIPINO (SMPPEU PDMP), Respondent 1 .

DECISION

CHICO-NAZARIO, J.:

In this Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, petitioner SAN MIGUEL CORPORATION
EMPLOYEES UNION-PHILIPPINE TRANSPORT AND GENERAL WORKERS ORGANIZATION (SMCEU-PTGWO) prays that this
Court reverse and set aside the (a) Decision2 dated 9 March 2005 of the Court of Appeals in CA-G.R. SP No. 66200, affirming the Decision 3
dated 19 February 2001 of the Bureau of Labor Relations (BLR) of the Department of Labor and Employment (DOLE) which upheld the
Certificate of Registration of respondent SAN MIGUEL PACKAGING PRODUCTS EMPLOYEES UNION PAMBANSANG DIWA NG
MANGGAGAWANG PILIPINO (SMPPEU PDMP); and (b) the Resolution 4 dated 16 January 2006 of the Court of Appeals in the same case,
denying petitioner's Motion for Reconsideration of the aforementioned Decision.

The following are the antecedent facts:

Petitioner is the incumbent bargaining agent for the bargaining unit comprised of the regular monthly-paid rank and file employees of the three
divisions of San Miguel Corporation (SMC), namely, the San Miguel Corporate Staff Unit (SMCSU), San Miguel Brewing Philippines (SMBP),
and the San Miguel Packaging Products (SMPP), in all offices and plants of SMC, including the Metal Closure and Lithography Plant in
Laguna. It had been the certified bargaining agent for 20 years - from 1987 to 1997.

Respondent is registered as a chapter of Pambansang Diwa ng Manggagawang Pilipino (PDMP). PDMP issued Charter Certificate No. 112 to
respondent on 15 June 1999.5 In compliance with registration requirements, respondent submitted the requisite documents to the BLR for the
purpose of acquiring legal personality.6 Upon submission of its charter certificate and other documents, respondent was issued Certificate of
Creation of Local or Chapter PDMP-01 by the BLR on 6 July 1999. 7 Thereafter, respondent filed with the Med-Arbiter of the DOLE Regional
Officer in the National Capital Region (DOLE-NCR), three separate petitions for certification election to represent SMPP, SMCSU, and SMBP. 8
All three petitions were dismissed, on the ground that the separate petitions fragmented a single bargaining unit. 9

On 17 August 1999, petitioner filed with the DOLE-NCR a petition seeking the cancellation of respondent's registration and its dropping from
the rolls of legitimate labor organizations. In its petition, petitioner accused respondent of committing fraud and falsification, and non-
compliance with registration requirements in obtaining its certificate of registration. It raised allegations that respondent violated Articles 239(a),
(b) and (c)10 and 234(c)11 of the Labor Code. Moreover, petitioner claimed that PDMP is not a legitimate labor organization, but a trade union
center, hence, it cannot directly create a local or chapter. The petition was docketed as Case No. NCR-OD-9908-007-IRD. 12

On 14 July 2000, DOLE-NCR Regional Director Maximo B. Lim issued an Order dismissing the allegations of fraud and misrepresentation, and
irregularity in the submission of documents by respondent. Regional Director Lim further ruled that respondent is allowed to directly create a
local or chapter. However, he found that respondent did not comply with the 20% membership requirement and, thus, ordered the cancellation of
its certificate of registration and removal from the rolls of legitimate labor organizations. 13 Respondent appealed to the BLR. In a Decision dated
19 February 2001, it declared:

As a chartered local union, appellant is not required to submit the number of employees and names of all its members comprising at least 20% of
the employees in the bargaining unit where it seeks to operate. Thus, the revocation of its registration based on non-compliance with the 20%
membership requirement does not have any basis in the rules.

Further, although PDMP is considered as a trade union center, it is a holder of Registration Certificate No. FED-11558-LC issued by the BLR
on 14 February 1991, which bestowed upon it the status of a legitimate labor organization with all the rights and privileges to act as
representative of its members for purposes of collective bargaining agreement. On this basis, PDMP can charter or create a local, in
accordance with the provisions of Department Order No. 9.

WHEREFORE, the appeal is hereby GRANTED. Accordingly, the decision of the Regional Director dated July 14, 2000, canceling the
registration of appellant San Miguel Packaging Products Employees Union-Pambansang Diwa ng Manggagawang Pilipino (SMPPEU-PDMP) is
REVERSED and SET ASIDE. Appellant shall hereby remain in the roster of legitimate labor organizations. 14

While the BLR agreed with the findings of the DOLE Regional Director dismissing the allegations of fraud and misrepresentation, and in
upholding that PDMP can directly create a local or a chapter, it reversed the Regional Director's ruling that the 20% membership is a
requirement for respondent to attain legal personality as a labor organization. Petitioner thereafter filed a Motion for Reconsideration with the
BLR. In a Resolution rendered on 19 June 2001 in BLR-A-C-64-05-9-00 (NCR-OD-9908-007-IRD), the BLR denied the Motion for
Reconsideration and affirmed its Decision dated 19 February 2001.15

Invoking the power of the appellate court to review decisions of quasi-judicial agencies, petitioner filed with the Court of Appeals a Petition for
Certiorari under Rule 65 of the 1997 Rules of Civil Procedure docketed as CA-G.R. SP No. 66200. The Court of Appeals, in a Decision dated 9
March 2005, dismissed the petition and affirmed the Decision of the BLR, ruling as follows:

In Department Order No. 9, a registered federation or national union may directly create a local by submitting to the BLR copies of the charter
certificate, the local's constitution and by-laws, the principal office address of the local, and the names of its officers and their addresses. Upon
complying with the documentary requirements, the local shall be issued a certificate and included in the roster of legitimate labor organizations.
The [herein respondent] is an affiliate of a registered federation PDMP, having been issued a charter certificate. Under the rules we have
reviewed, there is no need for SMPPEU to show a membership of 20% of the employees of the bargaining unit in order to be recognized as a
legitimate labor union.
xxx

In view of the foregoing, the assailed decision and resolution of the BLR are AFFIRMED, and the petition is DISMISSED. 16

Subsequently, in a Resolution dated 16 January 2006, the Court of Appeals denied petitioner's Motion for Reconsideration of the
aforementioned Decision.

Hence, this Petition for Certiorari under Rule 45 of the Revised Rules of Court where petitioner raises the sole issue of:

WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN RULING THAT PRIVATE
RESPONDENT IS NOT REQUIRED TO SUBMIT THE NUMBER OF EMPLOYEES AND NAMES OF ALL ITS MEMBERS
COMPRISING AT LEAST 20% OF THE EMPLOYEES IN THE BARGAINING UNIT WHERE IT SEEKS TO OPERATE.

The present petition questions the legal personality of respondent as a legitimate labor organization.

Petitioner posits that respondent is required to submit a list of members comprising at least 20% of the employees in the bargaining unit before it
may acquire legitimacy, citing Article 234(c) of the Labor Code which stipulates that any applicant labor organization, association or group of
unions or workers shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations
upon issuance of the certificate of registration based on the following requirements:

A. Fifty pesos (P50.00) registration fee;

b. The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and the
list of the workers who participated in such meetings;

c. The names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate;

d. If the applicant union has been in existence for one or more years, copies of its annual financial reports; andcralawlibrary

e. Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification and the list of the members who
participated in it.17

Petitioner also insists that the 20% requirement for registration of respondent must be based not on the number of employees of a single division,
but in all three divisions of the company in all the offices and plants of SMC since they are all part of one bargaining unit. Petitioner refers to
Section 1, Article 1 of the Collective Bargaining Agreement (CBA),18 quoted hereunder:

ARTICLE 1

SCOPE

Section 1. Appropriate Bargaining Unit. The appropriate bargaining unit covered by this Agreement consists of all regular rank and file
employees paid on the basis of fixed salary per month and employed by the COMPANY in its Corporate Staff Units (CSU), San Miguel Brewing
Products (SMBP) and San Miguel Packaging Products (SMPP) and in different operations existing in the City of Manila and suburbs, including
Metal Closure and Lithography Plant located at Canlubang, Laguna subject to the provisions of Article XV of this Agreement provided
however, that if during the term of this Agreement, a plant within the territory covered by this Agreement is transferred outside but within a
radius of fifty (50) kilometers from the Rizal Monument, Rizal Park, Metro Manila, the employees in the transferred plant shall remain in the
bargaining unit covered by this Agreement. (Emphasis supplied.)

Petitioner thus maintains that respondent, in any case, failed to meet this 20% membership requirement since it based its membership on the
number of employees of a single division only, namely, the SMPP.

There is merit in petitioner's contentions.

A legitimate labor organization19 is defined as "any labor organization duly registered with the Department of Labor and Employment, and
includes any branch or local thereof."20 The mandate of the Labor Code is to ensure strict compliance with the requirements on registration
because a legitimate labor organization is entitled to specific rights under the Labor Code, 21 and are involved in activities directly affecting
matters of public interest. Registration requirements are intended to afford a measure of protection to unsuspecting employees who may be lured
into joining unscrupulous or fly-by-night unions whose sole purpose is to control union funds or use the labor organization for illegitimate
ends.22 Legitimate labor organizations have exclusive rights under the law which cannot be exercised by non-legitimate unions, one of which is
the right to be certified as the exclusive representative 23 of all the employees in an appropriate collective bargaining unit for purposes of
collective bargaining.24 The acquisition of rights by any union or labor organization, particularly the right to file a petition for certification
election, first and foremost, depends on whether or not the labor organization has attained the status of a legitimate labor organization. 25

A perusal of the records reveals that respondent is registered with the BLR as a "local" or "chapter" of PDMP and was issued Charter Certificate
No. 112 on 15 June 1999. Hence, respondent was directly chartered by PDMP.

The procedure for registration of a local or chapter of a labor organization is provided in Book V of the Implementing Rules of the Labor Code,
as amended by Department Order No. 9 which took effect on 21 June 1997, and again by Department Order No. 40 dated 17 February 2003. The
Implementing Rules as amended by D.O. No. 9 should govern the resolution of the petition at bar since respondent's petition for certification
election was filed with the BLR in 1999; and that of petitioner on 17 August 1999.26
The applicable Implementing Rules enunciates a two-fold procedure for the creation of a chapter or a local. The first involves the affiliation of
an independent union with a federation or national union or industry union. The second, finding application in the instant petition, involves the
direct creation of a local or a chapter through the process of chartering.27

A duly registered federation or national union may directly create a local or chapter by submitting to the DOLE Regional Office or to the BLR
two copies of the following:

(a) A charter certificate issued by the federation or national union indicating the creation or establishment of the local/chapter;

(b) The names of the local/chapter's officers, their addresses, and the principal office of the local/chapter; andcralawlibrary

(c) The local/chapter's constitution and by-laws; Provided, That where the local/chapter's constitution and by-laws is the same as that of the
federation or national union, this fact shall be indicated accordingly.

All the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of the local/chapter and attested to by
its President.28

The Implementing Rules stipulate that a local or chapter may be directly created by a federation or national union. A duly constituted local or
chapter created in accordance with the foregoing shall acquire legal personality from the date of filing of the complete documents with the
BLR.29 The issuance of the certificate of registration by the BLR or the DOLE Regional Office is not the operative act that vests legal
personality upon a local or a chapter under Department Order No. 9. Such legal personality is acquired from the filing of the complete
documentary requirements enumerated in Section 1, Rule VI.30

Petitioner insists that Section 3 of the Implementing Rules, as amended by Department Order No. 9, violated Article 234 of the Labor Code
when it provided for less stringent requirements for the creation of a chapter or local. This Court disagrees.

Article 234 of the Labor Code provides that an independent labor organization acquires legitimacy only upon its registration with the BLR:

Any applicant labor organization, association or group of unions or workers shall acquire legal personality and shall be entitled to the rights and
privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration based on the following requirements:

(a) Fifty pesos (P50.00) registration fee;

(b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and the
list of the workers who participated in such meetings;

(c) The names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate;

(d) If the applicant union has been in existence for one or more years, copies of its annual financial reports; andcralawlibrary

(e) Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and the list of the members who
participated in it. (Italics supplied.)

It is emphasized that the foregoing pertains to the registration of an independent labor organization, association or group of unions or workers.

However, the creation of a branch, local or chapter is treated differently. This Court, in the landmark case of Progressive Development
Corporation v. Secretary, Department of Labor and Employment,31 declared that when an unregistered union becomes a branch, local or chapter,
some of the aforementioned requirements for registration are no longer necessary or compulsory. Whereas an applicant for registration of an
independent union is mandated to submit, among other things, the number of employees and names of all its members comprising at least 20%
of the employees in the bargaining unit where it seeks to operate, as provided under Article 234 of the Labor Code and Section 2 of Rule III,
Book V of the Implementing Rules, the same is no longer required of a branch, local or chapter. 32 The intent of the law in imposing less
requirements in the case of a branch or local of a registered federation or national union is to encourage the affiliation of a local union with a
federation or national union in order to increase the local union's bargaining powers respecting terms and conditions of labor. 33

Subsequently, in Pagpalain Haulers, Inc. v. Trajano34 where the validity of Department Order No. 9 was directly put in issue, this Court was
unequivocal in finding that there is no inconsistency between the Labor Code and Department Order No. 9.

As to petitioner's claims that respondent obtained its Certificate of Registration through fraud and misrepresentation, this Court finds that the
imputations are not impressed with merit. In the instant case, proof to declare that respondent committed fraud and misrepresentation remains
wanting. This Court had, indeed, on several occasions, pronounced that registration based on false and fraudulent statements and documents
confer no legitimacy upon a labor organization irregularly recognized, which, at best, holds on to a mere scrap of paper. Under such
circumstances, the labor organization, not being a legitimate labor organization, acquires no rights. 35

This Court emphasizes, however, that a direct challenge to the legitimacy of a labor organization based on fraud and misrepresentation in
securing its certificate of registration is a serious allegation which deserves careful scrutiny. Allegations thereof should be compounded with
supporting circumstances and evidence. The records of the case are devoid of such evidence. Furthermore, this Court is not a trier of facts, and
this doctrine applies with greater force in labor cases. Findings of fact of administrative agencies and quasi-judicial bodies, such as the BLR,
which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only great respect but even
finality.36

Still, petitioner postulates that respondent was not validly and legitimately created, for PDMP cannot create a local or chapter as it is not a
legitimate labor organization, it being a trade union center.
Petitioner's argument creates a predicament as it hinges on the legitimacy of PDMP as a labor organization. Firstly, this line of reasoning
attempts to predicate that a trade union center is not a legitimate labor organization. In the process, the legitimacy of PDMP is being impugned,
albeit indirectly. Secondly, the same contention premises that a trade union center cannot directly create a local or chapter through the process of
chartering.

Anent the foregoing, as has been held in a long line of cases, the legal personality of a legitimate labor organization, such as PDMP, cannot be
subject to a collateral attack. The law is very clear on this matter. Article 212 (h) of the Labor Code, as amended, defines a legitimate labor
organization37 as "any labor organization duly registered with the DOLE, and includes any branch or local thereof."38 On the other hand, a trade
union center is any group of registered national unions or federations organized for the mutual aid and protection of its members; for assisting
such members in collective bargaining; or for participating in the formulation of social and employment policies, standards, and programs, and
is duly registered with the DOLE in accordance with Rule III, Section 2 of the Implementing Rules. 39

The Implementing Rules stipulate that a labor organization shall be deemed registered and vested with legal personality on the date of issuance
of its certificate of registration. Once a certificate of registration is issued to a union, its legal personality cannot be subject to collateral attack. 40
It may be questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V, Book V of the Implementing
Rules. The aforementioned provision is enunciated in the following:

Sec. 5. Effect of registration. The labor organization or workers' association shall be deemed registered and vested with legal personality on the
date of issuance of its certificate of registration. Such legal personality cannot thereafter be subject to collateral attack, but may be questioned
only in an independent petition for cancellation in accordance with these Rules.

PDMP was registered as a trade union center and issued Registration Certificate No. FED-11558-LC by the BLR on 14 February 1991. Until the
certificate of registration of PDMP is cancelled, its legal personality as a legitimate labor organization subsists. Once a union acquires legitimate
status as a labor organization, it continues to be recognized as such until its certificate of registration is cancelled or revoked in an independent
action for cancellation. 41 It bears to emphasize that what is being directly challenged is the personality of respondent as a legitimate labor
organization and not that of PDMP. This being a collateral attack, this Court is without jurisdiction to entertain questions indirectly impugning
the legitimacy of PDMP.

Corollarily, PDMP is granted all the rights and privileges appurtenant to a legitimate labor organization, 42 and continues to be recognized as such
until its certificate of registration is successfully impugned and thereafter cancelled or revoked in an independent action for cancellation.

We now proceed to the contention that PDMP cannot directly create a local or a chapter, it being a trade union center.

This Court reverses the finding of the appellate court and BLR on this ground, and rules that PDMP cannot directly create a local or chapter.

After an exhaustive study of the governing labor law provisions, both statutory and regulatory, 43 we find no legal justification to support the
conclusion that a trade union center is allowed to directly create a local or chapter through chartering. Apropos, we take this occasion to reiterate
the first and fundamental duty of this Court, which is to apply the law. The solemn power and duty of the Court to interpret and apply the law
does not include the power to correct by reading into the law what is not written therein. 44

Presidential Decree No. 442, better known as the Labor Code, was enacted in 1972. Being a legislation on social justice, 45 the provisions of the
Labor Code and the Implementing Rules have been subject to several amendments, and they continue to evolve, considering that labor plays a
major role as a socio-economic force. The Labor Code was first amended by Republic Act No. 6715, and recently, by Republic Act No. 9481.
Incidentally, the term trade union center was never mentioned under Presidential Decree No. 442, even as it was amended by Republic Act No.
6715. The term trade union center was first adopted in the Implementing Rules, under Department Order No. 9.

Culling from its definition as provided by Department Order No. 9, a trade union center is any group of registered national unions or federations
organized for the mutual aid and protection of its members; for assisting such members in collective bargaining; or for participating in the
formulation of social and employment policies, standards, and programs, and is duly registered with the DOLE in accordance with Rule III,
Section 2 of the Implementing Rules. 46 The same rule provides that the application for registration of an industry or trade union center shall be
supported by the following:

(a) The list of its member organizations and their respective presidents and, in the case of an industry union, the industry where the union seeks
to operate;

(b) The resolution of membership of each member organization, approved by the Board of Directors of such union;

(c) The name and principal address of the applicant, the names of its officers and their addresses, the minutes of its organizational meeting/s, and
the list of member organizations and their representatives who attended such meeting/s; andcralawlibrary

(d) A copy of its constitution and by-laws and minutes of its ratification by a majority of the presidents of the member organizations, provided
that where the ratification was done simultaneously with the organizational meeting, it shall be sufficient that the fact of ratification be included
in the minutes of the organizational meeting.47

Evidently, while a "national union" or "federation" is a labor organization with at least ten locals or chapters or affiliates, each of which must be
a duly certified or recognized collective bargaining agent;48 a trade union center, on the other hand, is composed of a group of registered national
unions or federations.49

The Implementing Rules, as amended by Department Order No. 9, provide that "a duly registered federation or national union" may directly
create a local or chapter. The provision reads:

Section 1. Chartering and creation of a local/chapter. - A duly registered federation or national union may directly create a local/chapter by
submitting to the Regional Office or to the Bureau two (2) copies of the following:
(a) A charter certificate issued by the federation or national union indicating the creation or establishment of the local/chapter;

(b) The names of the local/chapter's officers, their addresses, and the principal office of the local/chapter; andcralawlibrary

(c) The local/chapter's constitution and by-laws; provided that where the local/chapter's constitution and by-laws is the same as that of the
federation or national union, this fact shall be indicated accordingly.

All the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of the local/chapter and attested to by
its President.50

Department Order No. 9 mentions two labor organizations either of which is allowed to directly create a local or chapter through chartering - a
duly registered federation or a national union. Department Order No. 9 defines a "chartered local" as a labor organization in the private sector
operating at the enterprise level that acquired legal personality through a charter certificate, issued by a duly registered federation or national
union and reported to the Regional Office in accordance with Rule III, Section 2-E of these Rules.51

Republic Act No. 9481 or "An Act Strengthening the Workers' Constitutional Right to Self-Organization, Amending for the Purpose Presidential
Decree No. 442, As Amended, Otherwise Known as the Labor Code of the Philippines" lapsed 52 into law on 25 May 2007 and became effective
on 14 June 2007.53 This law further amends the Labor Code provisions on Labor Relations.

Pertinent amendments read as follows:

SECTION 1. Article 234 of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines, is hereby further
amended to read as follows:

ART. 234. Requirements of Registration. - A federation, national union or industry or trade union center or an independent union shall acquire
legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate
of registration based on the following requirements:

(a) Fifty pesos (P50.00) registration fee;

(b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and the
list of the workers who participated in such meetings;

(c) In case the applicant is an independent union, the names of all its members comprising at least twenty percent (20%) of all the employees in
the bargaining unit where it seeks to operate;

(d) If the applicant union has been in existence for one or more years, copies of its annual financial reports; andcralawlibrary

(e) Four copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and the list of the members who
participated in it.

SECTION 2. A new provision is hereby inserted into the Labor Code as Article 234-A to read as follows:

ART. 234-A. Chartering and Creation of a Local Chapter. - A duly registered federation or national union may directly create a local chapter by
issuing a charter certificate indicating the establishment of the local chapter. The chapter shall acquire legal personality only for purposes of
filing a petition for certification election from the date it was issued a charter certificate.

The chapter shall be entitled to all other rights and privileges of a legitimate labor organization only upon the submission of the following
documents in addition to its charter certificate:

(a) The names of the chapter's officers, their addresses, and the principal office of the chapter; andcralawlibrary

(b) The chapter's constitution and by-laws: Provided, That where the chapter's constitution and by-laws are the same as that of the federation or
the national union, this fact shall be indicated accordingly.

The additional supporting requirements shall be certified under oath by the secretary or treasurer of the chapter and attested by its president.
(Emphasis ours.)

Article 234 now includes the term trade union center, but interestingly, the provision indicating the procedure for chartering or creating a local
or chapter, namely Article 234-A, still makes no mention of a "trade union center."

Also worth emphasizing is that even in the most recent amendment of the implementing rules, 54 there was no mention of a trade union center as
being among the labor organizations allowed to charter.

This Court deems it proper to apply the Latin maxim expressio unius est exclusio alterius. Under this maxim of statutory interpretation, the
expression of one thing is the exclusion of another. When certain persons or things are specified in a law, contract, or will, an intention to
exclude all others from its operation may be inferred. If a statute specifies one exception to a general rule or assumes to specify the effects of a
certain provision, other exceptions or effects are excluded. 55 Where the terms are expressly limited to certain matters, it may not, by
interpretation or construction, be extended to other matters. 56 Such is the case here. If its intent were otherwise, the law could have so easily and
conveniently included "trade union centers" in identifying the labor organizations allowed to charter a chapter or local. Anything that is not
included in the enumeration is excluded therefrom, and a meaning that does not appear nor is intended or reflected in the very language of the
statute cannot be placed therein. 57 The rule is restrictive in the sense that it proceeds from the premise that the legislating body would not have
made specific enumerations in a statute if it had the intention not to restrict its meaning and confine its terms to those expressly mentioned. 58
Expressium facit cessare tacitum.59 What is expressed puts an end to what is implied. Casus omissus pro omisso habendus est. A person, object
or thing omitted must have been omitted intentionally.

Therefore, since under the pertinent status and applicable implementing rules, the power granted to labor organizations to directly create a
chapter or local through chartering is given to a federation or national union, then a trade union center is without authority to charter directly.

The ruling of this Court in the instant case is not a departure from the policy of the law to foster the free and voluntary organization of a strong
and united labor movement,60 and thus assure the rights of workers to self-organization. 61 The mandate of the Labor Code in ensuring strict
compliance with the procedural requirements for registration is not without reason. It has been observed that the formation of a local or chapter
becomes a handy tool for the circumvention of union registration requirements. Absent the institution of safeguards, it becomes a convenient
device for a small group of employees to foist a not-so-desirable federation or union on unsuspecting co-workers and pare the need for
wholehearted voluntariness, which is basic to free unionism.62 As a legitimate labor organization is entitled to specific rights under the Labor
Code and involved in activities directly affecting public interest, it is necessary that the law afford utmost protection to the parties affected. 63
However, as this Court has enunciated in Progressive Development Corporation v. Secretary of Department of Labor and Employment, it is not
this Court's function to augment the requirements prescribed by law. Our only recourse, as previously discussed, is to exact strict compliance
with what the law provides as requisites for local or chapter formation.64

In sum, although PDMP as a trade union center is a legitimate labor organization, it has no power to directly create a local or chapter. Thus,
SMPPEU-PDMP cannot be created under the more lenient requirements for chartering, but must have complied with the more stringent rules for
creation and registration of an independent union, including the 20% membership requirement.

WHEREFORE, the instant Petition is GRANTED. The Decision dated 09 March 2005 of the Court of Appeals in CA-GR SP No. 66200 is
REVERSED and SET ASIDE. The Certificate of Registration of San Miguel Packaging Products Employees Union Pambansang Diwa ng
Manggagawang Pilipino is ORDERED CANCELLED, and SMPPEU-PDMP DROPPED from the rolls of legitimate labor organizations.

Costs against petitioner.

SO ORDERED.

G.R. No. L-53515 February 8, 1989

SAN MIGUEL BREWERY SALES FORCE UNION (PTGWO), petitioner,

vs.
HON. BLAS F. OPLE, as Minister of Labor and SAN MIGUEL CORPORATION, respondents.

Lorenzo F. Miravite for petitioner.

Isidro D. Amoroso for New San Miguel Corp. Sales Force Union.
Siguion Reyna, Montecillo & Ongsiako for private respondent.

GRIÑO-AQUINO, J.:

This is a petition for review of the Order dated February 28, 1980 of the Minister of Labor in Labor Case No. AJML-069-79,
approving the private respondent's marketing scheme, known as the "Complementary Distribution System" (CDS) and dismissing
the petitioner labor union's complaint for unfair labor practice.

On April 17, 1978, a collective bargaining agreement (effective on May 1, 1978 until January 31, 1981) was entered into by
petitioner San Miguel Corporation Sales Force Union (PTGWO), and the private respondent, San Miguel Corporation, Section 1, of
Article IV of which provided as follows:

Art. IV, Section 1. Employees within the appropriate bargaining unit shall be entitled to a basic monthly
compensation plus commission based on their respective sales. (p. 6, Annex A; p. 113, Rollo.)

In September 1979, the company introduced a marketing scheme known as the "Complementary Distribution System" (CDS)
whereby its beer products were offered for sale directly to wholesalers through San Miguel's sales offices.

The labor union (herein petitioner) filed a complaint for unfair labor practice in the Ministry of Labor, with a notice of strike on the
ground that the CDS was contrary to the existing marketing scheme whereby the Route Salesmen were assigned specific
territories within which to sell their stocks of beer, and wholesalers had to buy beer products from them, not from the company. It
was alleged that the new marketing scheme violates Section 1, Article IV of the collective bargaining agreement because the
introduction of the CDS would reduce the take-home pay of the salesmen and their truck helpers for the company would be unfairly
competing with them.

The complaint filed by the petitioner against the respondent company raised two issues: (1) whether the CDS violates the collective
bargaining agreement, and (2) whether it is an indirect way of busting the union.

In its order of February 28, 1980, the Minister of Labor found:

... We see nothing in the record as to suggest that the unilateral action of the employer in inaugurating the new
sales scheme was designed to discourage union organization or diminish its influence, but rather it is undisputable
that the establishment of such scheme was part of its overall plan to improve efficiency and economy and at the
same time gain profit to the highest. While it may be admitted that the introduction of new sales plan somewhat
disturbed the present set-up, the change however was too insignificant as to convince this Office to interpret that
the innovation interferred with the worker's right to self-organization.
 Petitioner's conjecture that the new plan will sow dissatisfaction from its ranks is already a prejudgment of the
plan's viability and effectiveness. It is like saying that the plan will not work out to the workers' [benefit] and
therefore management must adopt a new system of marketing. But what the petitioner failed to consider is the fact
that corollary to the adoption of the assailed marketing technique is the effort of the company to compensate
whatever loss the workers may suffer because of the new plan over and above than what has been provided in the
collective bargaining agreement. To us, this is one indication that the action of the management is devoid of any
anti-union hues. (pp. 24-25, Rollo.)

The dispositive part of the Minister's Order reads:

WHEREFORE, premises considered, the notice of strike filed by the petitioner, San Miguel Brewery Sales Force
Union-PTGWO is hereby dismissed. Management however is hereby ordered to pay an additional three (3) months
back adjustment commissions over and above the adjusted commission under the complementary distribution
system. (p. 26, Rollo.)

The petition has no merit.

Public respondent was correct in holding that the CDS is a valid exercise of management prerogatives:

Except as limited by special laws, an employer is free to regulate, according to his own discretion and judgment, all
aspects of employment, including hiring, work assignments, working methods, time, place and manner of work,
tools to be used, processes to be followed, supervision of workers, working regulations, transfer of employees,
work supervision, lay-off of workers and the discipline, dismissal and recall of work. ... (NLU vs. Insular La Yebana
Co., 2 SCRA 924; Republic Savings Bank vs. CIR 21 SCRA 226, 235.) (Perfecto V. Hernandez, Labor Relations
Law, 1985 Ed., p. 44.) (Emphasis ours.)

Every business enterprise endeavors to increase its profits. In the process, it may adopt or devise means designed towards that
goal. In Abbott Laboratories vs. NLRC, 154 SCRA 713, We ruled:

... 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.

So long as a company's management prerogatives are exercised in good faith for the advancement of the employer's interest and
not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, this
Court will uphold them (LVN Pictures Workers vs. LVN, 35 SCRA 147; Phil. American Embroideries vs. Embroidery and Garment
Workers, 26 SCRA 634; Phil. Refining Co. vs. Garcia, 18 SCRA 110). San Miguel Corporation's offer to compensate the members
of its sales force who will be adversely affected by the implementation of the CDS by paying them a so-called "back adjustment
commission" to make up for the commissions they might lose as a result of the CDS proves the company's good faith and lack of
intention to bust their union.

WHEREFORE, the petition for certiorari is dismissed for lack of merit.

SO ORDERED.

G.R. No. 100641 June 14, 1993

FARLE P. ALMODIEL, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION (FIRST DIVISION), RAYTHEON PHILS., INC., respondents.

Apolinario Lomabao, Jr. for petitioner.

Vicente A. Cruz, Jr., for private respondent.

NOCON, J.:

Subject of this petition for certiorari is the decision dated March 21, 1991 of the National Labor Relations Commission in NLRC
Case No.
00-00645-89 which reversed and set aside the Labor Arbiter's decision dated September 27, 1989 and ordered instead the
payment of separation pay and financial assistance of P100,000.00. Petitioner imputes grave abuse of discretion on the part of the
Commission and prays for the reinstatement of the Labor Arbiter's decision which declared his termination on the ground of
redundancy illegal.

Petitioner Farle P. Almodiel is a certified public accountant who was hired in October, 1987 as Cost Accounting Manager of
respondent Raytheon Philippines, Inc. through a reputable placement firm, John Clements Consultants, Inc. with a starting monthly
salary of P18,000.00. Before said employment, he was the accounts executive of Integrated Microelectronics, Inc. for several
years. He left his lucrative job therein in view of the promising career offered by Raytheon. He started as a probationary or
temporary employee. As Cost Accounting Manager, his major duties were: (1) plan, coordinate and carry out year and physical
inventory; (2) formulate and issue out hard copies of Standard Product costing and other cost/pricing analysis if needed and
required and (3) set up the written Cost Accounting System for the whole company. After a few months, he was given a
regularization increase of P1,600.00 a month. Not long thereafter, his salary was increased to P21,600.00 a month.
On August 17, 1988, he recommended and submitted a Cost Accounting/Finance Reorganization, affecting the whole finance
group but the same was disapproved by the Controller. However, he was assured by the Controller that should his position or
department which was apparently a one-man department with no staff becomes untenable or unable to deliver the needed service
due to manpower constraint, he would be given a three (3) year advance notice.

In the meantime, the standard cost accounting system was installed and used at the Raytheon plants and subsidiaries worldwide. It
was likewise adopted and installed in the Philippine operations. As a consequence, the services of a Cost Accounting Manager
allegedly entailed only the submission of periodic reports that would use computerized forms prescribed and designed by the
international head office of the Raytheon Company in California, USA.

On January 27, 1989, petitioner was summoned by his immediate boss and in the presence of IRD Manager, Mr. Rolando Estrada,
he was told of the abolition of his position on the ground of redundancy. He pleaded with management to defer its action or transfer
him to another department, but he was told that the decision of management was final and that the same has been conveyed to the
Department of Labor and Employment. Thus, he was constrained to file the complaint for illegal dismissal before the Arbitration
Branch of the National Capital Region, NLRC, Department of Labor and Employment.

On September 27, 1989, Labor Arbiter Daisy Cauton-Barcelona rendered a decision, the dispositive portion of which reads as
follows:

WHEREFORE, judgment is hereby rendered declaring that complainant's termination on the ground of redundancy
is highly irregular and without legal and factual basis, thus ordering the respondents to reinstate complainant to his
former position with full backwages without lost of seniority rights and other benefits. Respondents are further
ordered to pay complainant P200,000.00 as moral damages and P20,000.00 as exemplary damages, plus ten
percent (10%) of the total award as attorney's fees.1

Raytheon appealed therefrom on the grounds that the Labor Arbiter committed grave abuse of discretion in denying its rights to
dismiss petitioner on the ground of redundancy, in relying on baseless surmises and self-serving assertions of the petitioner that its
act was tainted with malice and bad faith and in awarding moral and exemplary damages and attorney's fees.

On March 21, 1991, the NLRC reversed the decision and directed Raytheon to pay petitioner the total sum of P100,000.00 as
separation pay/financial assistance. The dispositive portion of which is hereby quoted as follows:

WHEREFORE, the appealed decision is hereby set aside. In its stead, Order is hereby issued directing respondent
to pay complainant the total separation pay/financial assistance of One Hundred Thousand Pesos (P100,000.00).

SO ORDERED.2

From this decision, petitioner filed the instant petition averring that:

The public respondent committed grave abuse of discretion amounting to (lack of) or in excess of jurisdiction in
declaring as valid and justified the termination of petitioner on the ground of redundancy in the face of clearly
established finding that petitioner's termination was tainted with malice, bad faith and irregularity.3

Termination of an employee's services because of redundancy is governed by Article 283 of the Labor Code which provides as
follows:

Art. 283. Closure of establishment and reduction of personnel. — The employer may also terminate the
employment of any employee due to 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 Department
of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to
installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay
equivalent 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 closure or cessation of operations of establishment or undertaking not due to
serious business losses or financial reverses, the separation pay shall be equivalent to at least 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.

There is no dispute that petitioner was duly advised, one (1) month before, of the termination of his employment on the ground of
redundancy in a written notice by his immediate superior, Mrs. Magdalena B.D. Lopez sometime in the afternoon of January 27,
1989. He was issued a check for P54,863.00 representing separation pay but in view of his refusal to acknowledge the notice and
the check, they were sent to him thru registered mail on January 30, 1989. The Department of Labor and Employment was served
a copy of the notice of termination of petitioner in accordance with the pertinent provisions of the Labor Code and the implementing
rules.

The crux of the controversy lies on whether bad faith, malice and irregularity crept in the abolition of petitioner's position of Cost
Accounting Manager on the ground of redundancy. Petitioner claims that the functions of his position were absorbed by the
Payroll/Mis/Finance Department under the management of Danny Ang Tan Chai, a resident alien without any working permit from
the Department of Labor and Employment as required by law. Petitioner relies on the testimony of Raytheon's witness to the effect
that corollary functions appertaining to cost accounting were dispersed to other units in the Finance Department. And granting that
his department has to be declared redundant, he claims that he should have been the Manager of the Payroll/Mis/Finance
Department which handled general accounting, payroll and encoding. As a B. S. Accounting graduate, a CPA with M.B.A. units, 21
years of work experience, and a natural born Filipino, he claims that he is better qualified than Ang Tan Chai, a B.S. Industrial
Engineer, hired merely as a Systems Analyst Programmer or its equivalent in early 1987, promoted as MIS Manager only during
the middle part of 1988 and a resident alien.
On the other hand, Raytheon insists that petitioner's functions as Cost Accounting Manager had not been absorbed by Ang Tan
Chai, a permanent resident born in this country. It claims to have established below that Ang Tan Chai did not displace petitioner or
absorb his functions and duties as they were occupying entirely different and distinct positions requiring different sets of expertise
or qualifications and discharging functions altogether different and foreign from that of petitioner's abolished position. Raytheon
debunks petitioner's reliance on the testimony of Mr. Estrada saying that the same witness testified under oath that the functions of
the Cost Accounting Manager had been completely dispensed with and the position itself had been totally abolished.

Whether petitioner's functions as Cost Accounting Manager have been dispensed with or merely absorbed by another is however
immaterial. Thus, notwithstanding the dearth of evidence on the said question, a resolution of this case can be arrived at without
delving into this matter. For even conceding that the functions of petitioner's position were merely transferred, no malice or bad
faith can be imputed from said act. A survey of existing case law will disclose that in Wiltshire File Co., Inc. v. NLRC,4 the position
of Sales Manager was abolished on the ground of redundancy as the duties previously discharged by the Sales Manager simply
added to the duties of the General Manager to whom the Sales Manager used to report. In adjudging said termination as legal, this
Court said that redundancy, for purposes of our Labor Code, exists where the services of an employee are in excess of what is
reasonably demanded by the actual requirements of the enterprise. The characterization of an employee's services as no longer
necessary or sustainable, and therefore, properly terminable, was an exercise of business judgment on the part of the employer.
The wisdom or soundness of such characterization or decision was not subject to discretionary review on the part of the Labor
Arbiter nor of the NLRC so long, of course, as violation of law or merely arbitrary and malicious action is not shown.

In the case of International Macleod, Inc. v. Intermediate Appellate Court,5 this Court also considered the position of Government
Relations Officer to have become redundant in view of the appointment of the International Heavy Equipment Corporation as the
company's dealer with the government. It held therein that the determination of the need for the phasing out of a department as a
labor and cost saving device because it was no longer economical to retain said services is a management prerogative and the
courts will not interfere with the exercise thereof as long as no abuse of discretion or merely arbitrary or malicious action on the part
of management is shown.

In the same vein, this Court ruled in Bondoc v. People's Bank and Trust Co.,6 that the bank's board of directors possessed the
power to remove a department manager whose position depended on the retention of the trust and confidence of management and
whether there was need for his services. Although some vindictive motivation might have impelled the abolition of his position, this
Court expounded that it is undeniable that the bank's board of directors possessed the power to remove him and to determine
whether the interest of the bank justified the existence of his department.

Indeed, an employer has no legal obligation to keep more employees than are necessary for the operation of its business.
Petitioner does not dispute the fact that a cost accounting system was installed and used at Raytheon subsidiaries and plants
worldwide; and that the functions of his position involve the submission of periodic reports utilizing computerized forms designed
and prescribed by the head office with the installation of said accounting system. Petitioner attempts to controvert these realities by
alleging that some of the functions of his position were still indispensable and were actually dispersed to another department. What
these indispensable functions that were dispersed, he failed however, to specify and point out. Besides, the fact that the functions
of a position were simply added to the duties of another does not affect the legitimacy of the employer's right to abolish a position
when done in the normal exercise of its prerogative to adopt sound business practices in the management of its affairs.

Considering further that petitioner herein held a position which was definitely managerial in character, Raytheon had a broad
latitude of discretion in abolishing his position. An employer has a much wider discretion in terminating employment relationship of
managerial personnel compared to rank and file employees.7 The reason obviously is that officers in such key positions perform
not only functions which by nature require the employer's full trust and confidence but also functions that spell the success or
failure of an enterprise.

Likewise destitute of merit is petitioner's imputation of unlawful discrimination when Raytheon caused corollary functions
appertaining to cost accounting to be absorbed by Danny Ang Tan Chai, a resident alien without a working permit. Article 40 of the
Labor Code which requires employment permit refers to non-resident aliens. The employment permit is required for entry into the
country for employment purposes and is issued after determination of the non-availability of a person in the Philippines who is
competent, able and willing at the time of application to perform the services for which the alien is desired. Since Ang Tan Chai is a
resident alien, he does not fall within the ambit of the provision.

Petitioner also assails Raytheon's choice of Ang Tan Chai to head the Payroll/Mis/Finance Department, claiming that he is better
qualified for the position. It should be noted, however, that Ang Tan Chai was promoted to the position during the middle part of
1988 or before the abolition of petitioner's position in early 1989. Besides the fact that Ang Tan Chai's promotion thereto is a settled
matter, it has been consistently held that an objection founded on the ground that one has better credentials over the appointee is
frowned upon so long as the latter possesses the minimum qualifications for the position. In the case at bar, since petitioner does
not allege that Ang Tan Chai does not qualify for the position, the Court cannot substitute its discretion and judgment for that which
is clearly and exclusively management prerogative. To do so would take away from the employer what rightly belongs to him as
aptly explained in National Federation of Labor Unions v. NLRC:8

It is a well-settled rule that labor laws do not authorize interference with the employer's judgment in the conduct of
his business. The determination of the qualification and fitness of workers for hiring and firing, promotion or
reassignment are exclusive prerogatives of management. The Labor Code and its implementing Rules do not vest
in the Labor Arbiters nor in the different Divisions of the NLRC (nor in the courts) managerial authority. The
employer is free to determine, using his own discretion and business judgment, all elements of employment, "from
hiring to firing" except in cases of unlawful discrimination or those which may be provided by law. There is none in
the instant case.

Finding no grave abuse of discretion on the part of the National Labor Relations Commission in reversing and annulling the
decision of the Labor Arbiter and that on the contrary, the termination of petitioner's employment was anchored on a valid and
authorized cause under Article 283 of the Labor Code, the instant petition for certiorari must fail.

SO ORDERED.
G.R. No. 172724               August 23, 2010

PHARMACIA and UPJOHN, INC. (now PFIZER PHILIPPINES, INC.), ASHLEY MORRIS, ALEDA CHU,
JANE MONTILLA & FELICITO GARCIA, Petitioners,
vs.
RICARDO P. ALBAYDA, JR., Respondent.

DECISION

PERALTA, J.:

Before this Court is a petition for review on certiorari,1 under Rule 45 of the Rules of Court, seeking to set aside the
November 30, 2005 Decision2 and May 5, 2006 Resolution3 of the Court of Appeals (CA), in CA-G.R. SP No. 00386.

The facts of the case are as follows:

Respondent Ricardo P. Albayda, Jr. (respondent) was an employee of Upjohn, Inc. (Upjohn) in 1978 and continued
working there until 1996 when a merger between Pharmacia and Upjohn was created. After the merger, respondent was
designated by petitioner Pharmacia and Upjohn (Pharmacia) as District Sales Manager assigned to District XI in the
Western Visayas area. During the period of his assignment, respondent settled in Bacolod City.

Sometime on August 9, 1999, a district meeting was held in Makati City wherein one of the topics discussed was the
district territorial configuration for the new marketing and sales direction for the year 2000.

In December 1999, respondent received a Memorandum4 announcing the sales force structure for the year 2000. In the
said memorandum, respondent was reassigned as District Sales Manager to District XII in the Northern Mindanao area.
One of the key areas covered in District XII is Cagayan de Oro City.

In response to the memorandum, respondent wrote a letter5 dated December 27,1999 to Felicito M. Garcia (Garcia),
Pharmacia’s Vice-President for Sales and Marketing, questioning his transfer from District XI to District XII.
Respondent said that he has always been assigned to the Western Visayas area and that he felt that he could not improve
the sales of products if he was assigned to an unfamiliar territory. Respondent concluded that his transfer might be a way
for his managers to dismiss him from employment. Respondent added that he could not possibly accept his new
assignment in Cagayan de Oro City because he will be dislocated from his family; his wife runs an established business
in Bacolod City; his eleven- year-old daughter is studying in Bacolod City; and his two-year-old son is under his and his
wife’s direct care.

On January 10, 2000, Garcia wrote a letter6 to respondent denying his request to be reassigned to the Western Visayas
area. Garcia explained that the factors used in determining assignments of managers are to maximize business
opportunities and growth and development of personnel. Garcia stressed that other people  both reprensentatives and
district sales managers  have been re-located in the past and in the year 2000 re-alignment.

On February 16, 2000, respondent wrote a letter7 to Aleda Chu (Chu), Pharmacia’s National Sales and External Business
Manager, reiterating his request to be reassigned to the Western Visayas area. Respondent alleged that during one
conversation, Chu assured him that as long as he hits his sales target by 100%, he would not be transferred. Respondent
again speculated that the real reason behind his transfer was that it was petitioners’ way of terminating his employment.
Respondent harped that his transfer would compel him to lose his free housing and his wife’s compensation of
₱50,000.00 from her business in Bacolod City.

In a letter8 dated March 3, 2000, Chu said that she did not give any assurance or commitment to respondent that he
would not be transferred as long as he achieved his 100% target for 1999. Chu explained to respondent that they are
moving him to Cagayan de Oro City, because of their need of respondent’s expertise to build the business there. Chu
added that the district performed dismally in 1999 and, therefore, they were confident that under respondent’s
leadership, he can implement new ways and develop the sales force to become better and more productive. Moreover,
since respondent has been already in Bacolod and Iloilo for 22 years, Chu said that exposure to a different market
environment and new challenges will contribute to respondent’s development as a manager. Finally, Chu stressed that
the decision to transfer respondent was purely a business decision.

Respondent replied through a letter9 dated March 16, 2000. Respondent likened his transfer to Mindanao as a form of
punishment as he alleged that even Police Chief General Panfilo Lacson transferred erring and non-performing police
officers to Mindanao. Respondent argued that Chu failed to face and address the issues he raised regarding the loss of
his family income, the additional cost of housing and other additional expenses he will incur in Mindanao.

In a memorandum10 dated May 11, 2000, Jane B. Montilla (Montilla), Pharmacia’s Human Resource Manager, notified
respondent that since he has been on sick leave since January 5, 2000 up to the present, he had already consumed all his
sick leave credits for the year 2000. Montilla stated that per company policy, respondent would then be considered on
indefinite sick leave without pay. In another memorandum11 dated May 15, 2000, Montilla informed respondent of the
clinic schedule of the company appointed doctor.

In a letter12 dated May 17, 2000, respondent acknowledged his receipt of the letters from Montilla. Respondent informed
Montilla that his doctors had already declared him fit for work as of May 16, 2000. Respondent stated that he was
already ready to take on his regular assignment as District Sales Manager in Negros Occidental or in any district in the
Western Visayas area.

In a letter13 dated May 17, 2000, Chu expressed her disappointment on the way respondent viewed their reason for
moving his place of assignment. Chu was likewise disappointed with respondent’s opinion that with the movement, he
be given additional remuneration, when in fact, such was never done in the past and never the practice in the industry
and in the Philippines. Chu concluded that it appeared to her that respondent would not accept any reason for the
movement and that nothing is acceptable to him except a Western Visayas assignment. Consequently, Chu referred the
case to the Human Resource Department for appropriate action.

Montilla met with respondent to discuss his situation. After the meeting, Montilla sent respondent a memorandum14
wherein his request to continue his work responsibilities in Negros Occidental or in any district in the Western Visayas
area was denied as there was no vacant position in those areas. Montilla stressed that the company needed respondent in
Cagayan de Oro City, because of his wealth of experience, talent and skills. Respondent, however, was also given an
option to be assigned in Metro Manila as a position in the said territory had recently opened when Joven Rodriguez was
transferred as Government Accounts and Special Projects Manager. Montilla gave respondent until June 2, 2000 to talk
to his family and weigh the pros and cons of his decision on whether to accept a post in Cagayan de Oro City or in
Manila.

In a letter15 dated May 31, 2000, respondent reiterated the concerns he raised in his previous letters.

Montilla sent respondent another memorandum16 dated June 6, 2000, stating that it is in the best interest of the company
for respondent to report to the Makati office to assume his new area of assignment.

In a letter17 dated June 8, 2000, respondent told Montilla that he will be airing his grievance before the National Labor
Relations Commission (NLRC).

In a memorandum18 dated June 15, 2000, Montilla stated that contrary to the opinion of respondent, respondent is
entitled to Relocation Benefits and Allowance pursuant to the company’s Benefits Manual. Montilla directed respondent
to report for work in Manila within 5 working days from receipt of the memorandum.

In another memorandum19 dated June 26, 2000, Montilla stated that she had not heard from respondent since his June 8,
2000 letter and that he has not replied to their last memorandum dated June 15, 2000. Respondent was warned that the
same would be a final notice for him to report for work in Manila within 5 working days from receipt of the memo;
otherwise, his services will be terminated on the basis of being absent without official leave (AWOL).

On July 13, 2000, Montilla sent respondent a memorandum20 notifying him of their decision to terminate his services
after he repeatedly refused to report for work despite due notice, the pertinent portions of which read:

As I mentioned many times in our talks, you are in a Sales position for which you had signed up. Your employment
contract actually states that you are willing to be assigned anywhere else in the Philippines, wherever the company
needs you sees you fit.

Metro Manila is the biggest and most advanced market we have in the Philippines. It is where the success or failure of
our business lies. It is, therefore, the most competitive and significant area for sales. It is the most challenging and most
rewarding of all areas. Only the best field managers are given the opportunity to manage a territory in Metro Manila.
This is why I chose Manila over Cagayan de Oro for you in my letter dated June 6, 2000. And because you had assured
us that you were fit to work, after being on sick leave for about five and a half months, I asked you to assume your new
assignment in Metro Manila before June 16, 2000.

Before June 16, 2000, you wrote us a letter advising us that you can not accept the new assignment in Manila. In
response, we advised you that the assignment in Manila is a business need and for said reason you were requested to
report for work within five working days from receipt of notice. However, you failed to comply. So we issued another
memo dated June 26, 2000, instructing you to report for work and advising you that should you continue to fail to report
for work, the company shall be constrained to terminate your employment.

In view of the foregoing, we have no alternative but to terminate your services on the basis of absence without official
leave (AWOL) and insubordination pursuant to Article 282 of the Labor Code of the Philippines, which shall be
effective on July 19, 2000.21
On August 14, 2000, respondent filed a Complaint22 with the NLRC, Regional Arbitration Branch No. VI, Bacolod City
against Pharmacia, Chu, Montilla and Garcia for constructive dismissal. Also included in the complaint was Ashley
Morris, Pharmacia’s President. Since mandatory conciliation failed between the parties, both sides were directed to
submit their position papers.

On July 12, 2002, the Labor Arbiter (LA) rendered a Decision23 dismissing the case, the dispositive portion of which
reads:

WHEREFORE, premises considered, the complaint against respondents in the above-entitled case is DISMISSED for
lack of merit.

SO ORDERED.24

Respondent appealed to the NLRC. In a Decision25 dated July 26, 2004, the NLRC dismissed the appeal, the dispositive
portion of which reads:

WHEREFORE, premises considered, the appeal of complainant is hereby DISMISSED for lack of merit. The decision
of the Labor Arbiter is AFFIRMED en toto.

SO ORDERED.26

Respondent filed a Motion for Reconsideration,27 which was denied by the NLRC in a Resolution28 dated November 10,
2004.

Aggrieved, respondent filed a Petition for Certiorari29 before the CA.

On November 30, 2005, the CA rendered a Decision ruling in favor of respondent, the dispositive portion of which
reads:

WHEREFORE, premises considered, this petition is hereby given due course and the Resolution dated November 10,
2004 and the Decision dated July 26, 2004 of the NLRC Fourth Division in NLRC Case No. V-000521-2000 (RAB
Case No. 06-08-10650-2000), are hereby REVERSED and SET ASIDE. Accordingly, the case is REMANDED to the
National Labor Relations Commission, Regional Arbitration Branch No. VI, Bacolod City, for the proper determination
of the petitioner’s claims.

SO ORDERED.30

Petitioners filed a Motion for Reconsideration, which was, however, denied by the CA in a Resolution dated May 5,
2006.

Hence, herein petition, with petitioner raising a lone assignment of error to wit:

WHETHER OR NOT THE COURT OF APPEALS (CEBU CITY) CAN REVERSE OR SET ASIDE THE FACTUAL
AND LEGAL FINDINGS OF THE NLRC WHICH WAS BASED ON SUBSTANTIAL EVIDENCE WHEN THERE
IS NO SHOWING OF PALPABLE ERROR OR THAT THE FINDINGS OF FACTS OF THE LABOR ARBITER IS
CONTRARY TO THAT OF THE NLRC.31

The petition is meritorious.

As a general rule, this Court does not entertain factual issues. The scope of our review in petitions filed under Rule 45 is
limited to errors of law or jurisdiction.32 This Court leaves the evaluation of facts to the trial and appellate courts which
are better equipped for this task.

However, there are instances in which factual issues may be resolved by this Court, to wit: (1) the conclusion is a
finding grounded entirely on speculation, surmise and conjecture; (2) the inference made is manifestly mistaken; (3)
there is grave abuse of discretion; (4) the judgment is based on a misapprehension of facts; (5) the findings of fact are
conflicting; (6) the CA goes beyond the issues of the case, and its findings are contrary to the admissions of both
appellant and appellees; (7) the findings of fact of the CA are contrary to those of the trial court; (8) said findings of
fact are conclusions without citation of specific evidence on which they are based; (9) the facts set forth in the petition,
as well as in the petitioner’s main and reply briefs, are not disputed by the respondent; and (10) the findings of fact of
the CA are premised on the supposed absence of evidence and contradicted by the evidence on record.33

In the present case, this Court is prompted to evaluate the findings of the LA, the NLRC, and the CA which are
diametrically opposed.
Petitioners argue that the CA erred when it reversed the factual and legal findings of the NLRC which affirmed the
decision of the LA. Petitioners contend that it is well established that factual findings of administrative agencies and
quasi-judicial bodies are accorded great respect and finality and are not to be disturbed on appeal unless patently
erroneous.

After a judicious examination of the records herein, this Court sustains the findings of the LA and the NLRC which are
more in accord with the facts and law of the case.

On petitioners’ exercise of management prerogative

Jurisprudence recognizes the exercise of management prerogative to transfer or assign employees from one office or
area of operation to another, provided there is no demotion in rank or diminution of salary, benefits, and other
privileges, and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or
demotion without sufficient cause.34

To determine the validity of the transfer of employees, the employer must show that the transfer is not unreasonable,
inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries,
privileges and other benefits. Should the employer fail to overcome this burden of proof, the employee's transfer shall be
tantamount to constructive dismissal.35

Both the LA and the NLRC ruled that the reassignment of respondent was a valid exercise of petitioners’ management
prerogative.

The LA shared petitioners’ posture that the transfer of respondent was a valid exercise of a legitimate management
prerogative to maximize business opportunities, growth and development of personnel and that the expertise of
respondent was needed to build the company’s business in Cagayan de Oro City which dismally performed in 1999.36

In addition, the LA explained that the reassignment of respondent was not a demotion as he will also be assigned as a
District Sales Manager in Mindanao or in Metro Manila and that the notice of his transfer did not indicate that his
emoluments will be reduced. Moreover, the LA mentioned that respondent was entitled to Relocation Benefits and
Allowance in accordance with petitioners’ Benefits Manual.

On respondent’s allegation that his family stands to lose income from his wife’s business, the LA ruled:

The allegation of complainant that his income will be affected because his wife who is doing business in Bacolod City
and earns ₱50,000.00, if true, should not be taken in consideration of his transfer. What is contemplated here is the
diminution of the salary of the complainant but not his wife. Besides, even if complainant may accept his new
assignment in Cagayan de Oro or in Metro Manila, his wife may still continue to do her business in Bacolod City.
Anyway, Bacolod City and Manila is just one (1) hour travel by plane.37

Lastly, the LA pointed out that in respondent’s contract of employment, he agreed to be assigned to any work or
workplace as may be determined by the company whenever the operations require such assignment.

The NLRC affirmed in toto the findings of the LA. The NLRC ruled that petitioners’ restructuring move was a valid
exercise of its management prerogative and authorized under the employment contract of respondent, to wit:

We do not see in the records any evidence to prove that the restructuring move of respondent company was done with ill
motives or with malice and bad faith purposely to constructively terminate complainant’s employment. Such
misinterpretation or misguided supposition by complainant is belied by the fact that respondent’s officers had in several
communications officially sent to complainant, expressly recognized complainant’s expertise and capabilities as a top
sales man and manager for which reason the respondent company needs his services and skills to energize the low-
performing areas in order to maximize business opportunities and to afford complainant an opportunity for further
growth and development. Complainant persistently refused instead of taking this opportunity as a challenge after all, the
nature of employment of a sales man or sales manager is that it is mobile or ambulant being always seeking for possible
areas to market goods and services. He totally forgot the terms and conditions in his employment contract, stated in part,
thus:

xxxx

You agree, during the period of employment, to be assigned to any work or workplace for such period as may be
determined by the company and whenever the operations thereof require such assignment.38

The rule in our jurisdiction is that findings of fact of the NLRC, affirming those of the LA, are entitled to great weight
and will not be disturbed if they are supported by substantial evidence.39 Substantial evidence is an amount of relevant
evidence which a reasonable mind might accept as adequate to justify a conclusion.40 As explained in Ignacio v. Coca-
Cola Bottlers Phils., Inc:41

x x x Factual findings of the NLRC affirming those of the Labor Arbiter, both bodies being deemed to have acquired
expertise in matters within their jurisdictions, when sufficiently supported by evidence on record, are accorded respect if
not finality, and are considered binding on this Court. As long as their decisions are devoid of any unfairness or
arbitrariness in the process of their deduction from the evidence proffered by the parties, all that is left is for the Court to
stamp its affirmation and declare its finality.42

Based on the foregoing, this Court rules that the CA had overstepped its legal mandate by reversing the findings of fact
of the LA and the NLRC as it appears that both decisions were based on substantial evidence. There is no proof of
arbitrariness or abuse of discretion in the process by which each body arrived at its own conclusions. Thus, the CA
should have deferred to such specialized agencies which are considered experts in matters within their jurisdictions.

Moreover, what is objectionable with the CA decision is that in finding that the reassignment of respondent was
arbitrary and unreasonable it had, in effect, imposed on petitioners its own opinion or judgment on what should have
been a purely business decision, to wit:

Discussing the issues jointly, a perusal of the records shows that there was no overwhelming evidence to prove that
petitioner was terminated for a just and valid cause. Public respondent had overlooked the fact that the reassignment of
petitioner was arbitrary and unreasonable as the same was in contrast to the purposes espoused by private respondents.
Undoubtedly, petitioner is a complete alien to the territory and as no established contacts therein, thus, he cannot be
effective nor can he maximize profits. It cannot also contribute to his professional growth and development considering
that he had already made a mark on his territory by virtue of his twenty-two (22) long years of valuable service.
Considering the quality of his performance in his territory, the private respondents cannot therefore reason out that they
are merely exercising their management prerogative for it would be unreasonable since petitioner has not been amiss in
his responsibilities. Furthermore, it would undeniably cause undue inconvenience to herein petitioner who would have
to relocate, disrupting his family’s peaceful living, and with no additional monthly remuneration.43

In the absence of arbitrariness, the CA should not have looked into the wisdom of a management prerogative. It is the
employer’s prerogative, based on its assessment and perception of its employee’s qualifications, aptitudes, and
competence, to move them around in the various areas of its business operations in order to ascertain where they will
function with maximum benefit to the company.44

As a matter of fact, while the CA’s observations may be acceptable to some quarters, it is nevertheless not universal so
as to foreclose another view on what may be a better business decision. While it would be profitable to keep respondent
in an area where he has established contacts and therefore the probability of him reaching and even surpassing his sales
quota is high, on the one hand, one can also make a case that since respondent is one of petitioners’ best district
managers, he is the right person to turn around and improve the sales numbers in Cagayan de Oro City, an area which in
the past had been dismally performing. After all, improving and developing a new market may even be more profitable
than having respondent stay and serve his old market. In addition, one can even make a case and say that the transfer of
respondent is also for his professional growth. Since respondent

has been already assigned in the Western Visayas area for 22 years, it may mean that his market knowledge is very
limited. In another territory, there will be new and more challenges for respondent to face. In addition, one can even
argue that for purposes of future promotions, it would be better to promote a district manager who has experience in
different markets.

The foregoing illustrates why it is dangerous for this Court and even the CA to look into the wisdom of a management
prerogative. Certainly, one can argue for or against the pros and cons of transferring respondent to another territory.
Absent a definite finding that such exercise of prerogative was tainted with arbitrariness and unreasonableness, the CA
should have left the same to petitioners’ better judgment. 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.45

In addition, this Court cannot agree with the findings of the CA that the transfer of respondent was unreasonable,
considering he had not been remiss in his responsibilities. What the CA failed to recognize is that the very nature of a
sales man is that it is mobile and ambulant. On this point, it bears to stress that respondent signed two documents
signifying his assent to be assigned anywhere in the Philippines. In respondent’s Employment Application, 46 he checked
the box which asks, "Are you willing to be relocated anywhere in the Philippines?"47 In addition, in respondent’s
Contract of Employment,48 item (8) reads:
You agree, during the period of your employment, to be assigned to any work or workplace for such period as may be
determined by the company and whenever the operations thereof require such assignment.49

Even if respondent has been performing his duties well it does not mean that petitioners’ hands are tied up that they can
no longer reassign respondent to another territory. And it is precisely because of respondent’s good performance that
petitioners want him to be reassigned to Cagayan de Oro City so that he could improve their business there.

In Abbott Laboratories (Phils.), Inc. v. National Labor Relations Commission,50 which involved a complaint filed by a
medical representative against his employer drug company for illegal dismissal for allegedly terminating his
employment when he refused to accept his reassignment to a new area, the Court upheld the right of the drug company
to transfer or reassign its employee in accordance with its operational demands and requirements. The ruling of the
Court therein, quoted hereunder, also finds application in the instant case:

Therefore, Bobadilla had no valid reason to disobey the order of transfer. He had tacitly given his consent thereto when
he acceded to the petitioners’ policy of hiring sales staff who are willing to be assigned anywhere in the Philippines
which is demanded by petitioners’ business.

By the very nature of his employment, a drug salesman or medical representative is expected to travel. He should
anticipate reassignment according to the demands of their business. It would be a poor drug corporation which cannot
even assign its representatives or detail men to new markets calling for opening or expansion or to areas where the need
for pushing its products is great. More so if such reassignments are part of the employment contract.51

On the existence of grounds to dismiss respondent from the service

Because of respondent’s adamant refusal to be reassigned, the LA ruled that petitioners had valid grounds to terminate
his employment, to wit:

As early as in December 27, 1999, complainant already signified his refusal to accept his new assignment in Cagayan de
Oro. Complainant was on sick leave since January 5, 2000 up to May 11, 2000, for about four (4) months and he already
consumed his leave credits up to March 2000. Hence, starting April 2000 he was already on indefinite leave without
pay.

xxxx

In his letter dated May 17, 2000, addressed to respondent Jane B. Montilla, complainant informed her that his doctors
have already declared him fit for work as of May 16, 2000, and he was ready to assume to his regular assignment as
District Sales Manager of Negros Occidental. This is a strong indication that complainant really does not want to accept
his new assignment either in Cagayan de Oro or in Metro Manila, which is clearly a defiance of the lawful order of his
employer, and a ground to terminate his services pursuant to Article 282 of the Labor Code.

Notwithstanding his adamant refusal to resume working to his new assignment in Metro Manila, complainant was still
given by respondent Montilla another chance to think it over up to June 2, 2000. By way of reply, complainant, in his
letter dated May 31, 2000 to Ms. Montilla, he clearly expressed his disagreement to his transfer and would rather seek
justice elsewhere in another forum.

But still the respondent company, notwithstanding the position taken by complainant in his letter dated May 31, 2000
that he is refusing his transfer gave complainant until June 16, 2000 to reconsider his position. In a letter dated June 5,
2000, respondent Montilla gave complainant a period of five (5) days from receipt thereof to report to Manila, but still
complainant did not comply. Ms. Montilla sent complainant a final notice dated June 26, 2000 for him to report to
Manila within five (5) working days from receipt of the same, with a warning that his failure to do so, the company
would be constraint to terminate his services for being absent without official leave.

Finally, is was only on July 19, 2000, when the services of complainant was terminated by respondent company through
its Human Resource Manager on the ground of absence without leave and insubordination pursuant to Article 282 of the
Labor Code.

Clearly, the complainant had abandoned his work by reason of his being on AWOL as a consequence of vigorous
objection to his transfer to either Cagayan de Oro or Metro Manila. The long period of absence of complainant without
official leave from April to July 19, 2000 is more than sufficient ground to dismiss him. The refusal of complainant to
accept his transfer of assignment is a clear willful disobedience of the lawful order of his employer and a ground to
terminate his services under Article 282, par. (a) of the Labor Code, as amended. The series of chances given
complainant to report for work, coupled by his adamant refusal to report to his new assignment, is a conclusive
indication of willful disobedience of the lawful orders of his employer.52

In addition, the NLRC also ruled that respondent was guilty of insubordination, thus:
Apparently, complainant, by his unjustified acts of refusing to be transferred either to Mindanao or Manila for personal
reasons, absent any bad faith or malice on the part of respondents, has deliberately ignored and defied lawful orders of
his employer. An employee who refuses to be transferred, when such transfer is valid, is guilty of insubordination. x x
x53

Based on the foregoing, this Court rules that the findings of the LA and the NLRC are supported by substantial
evidence. The LA clearly outlined the steps taken by petitioners and the manner by which respondent was eventually
dismissed. The NLRC, for its part, explained why respondent was guilty of insubordination. No abuse of discretion can,
therefore, be attributed to both agencies, and the CA was certainly outside its mandate in reversing such findings.

This Court has long stated that the objection to the transfer being grounded solely upon the personal inconvenience or
hardship that will be caused to the employee by reason of the transfer is not a valid reason to disobey an order of
transfer.54 Such being the case, respondent cannot adamantly refuse to abide by the order of transfer without exposing
himself to the risk of being dismissed. Hence, his dismissal was for just cause in accordance with Article 282(a)55 of the
Labor Code.

The CA, however, ruled that respondent was not guilty of insubordination, to wit:

As to the findings of insubordination, the records show that petitioner was not guilty of such offense. For
insubordination to exist, the order must be reasonable and lawful, sufficiently known to the employee and in connection
to his duties. Where an order or rule is not reasonable, in view of the terms of the contract of employment and the
general right of the parties, a refusal to obey does not constitute a just cause for the employee’s discharge. It is
undeniable that the order given by the company to petitioner to transfer to a place where he has no connections, leaving
his family behind, and with no clear additional remuneration, can be considered unreasonable and petitioner’s actuation
cannot be considered insubordination.56

This Court cannot agree with the findings of the CA, in view of the fact that it was an error for it to substitute its own
judgment and interfere with management prerogatives. No iota of evidence was presented that the reassignment of
respondent was a demotion as he would still be a District Sales Manager in Cagayan de Oro City or in Metro Manila.
Furthermore, he would be given relocation benefits in accordance with the Benefits Manual. If respondent feels that
what he was given is less than what is given to all other district managers who were likewise reassigned, the onus is on
him to prove such fact. Furthermore, records reveal that respondent has been harping on the fact that no additional
remuneration would be given to him with the transfer. However, again, respondent did not present any evidence that
additional remuneration were being given to other district managers who were reassigned to different locations, or that
such was the practice in the company. This Court, therefore, is inclined to believe the statement of Chu in her May 17,
2000 letter to respondent that additional remuneration is never given to people who are reassigned, to wit:

x x x Likewise, I am disappointed that with the movement, you expect to be paid additional remuneration when in fact,
this has never been done in the past and never a practice within the industry and the Philippines.57

Lastly, while it is understandable that respondent does not want to relocate his family, this Court agrees with the NLRC
when it observed that such inconvenience is considered an "employment" or "professional" hazard which forms part of
the concessions an employee is deemed to have offered or sacrificed in the view of his acceptance of a position in sales.

On the observance of due process

The CA ruled that respondent was denied due process in the manner he was dismissed by petitioners, to wit:

Furthermore, the finding that petitioner was afforded due process is bereft of any legal basis. An employee must be
given notice and an ample opportunity, prior to dismissal to adequately prepare for his defense. This is an elementary
rule in labor law that due process in dismissal cases contemplates the twin requisites of notice and hearing. These
procedural requirements have been mandatorily imposed to the employer to accord its employees the right to be heard.
Failure of the employer to comply with such requirements renders its judgment of dismissal void and inexistent. A
written notice from the employer containing the causes for the dismissal must be given. The employee is then given
ample opportunity to be heard and to defend himself, appraising him of his right to counsel if he desires. Lastly, a
written notice informing the employee of the decision of the employer, citing there reasons therefore, is given. The
above procedure was not followed in the instant case and the series of communications and meetings cannot take the
place and is therefore not sufficient to take the place of notice and hearing.58

In termination proceedings of employees, procedural due process consists of the twin requirements of notice and
hearing. The employer must furnish the employee with two written notices before the termination of employment can be
effected: (1) the first apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2)
the second informs the employee of the employer’s decision to dismiss him. The requirement of a hearing is complied
with as long as there was an opportunity to be heard, and not necessarily that an actual hearing was conducted.59
While no actual hearing was conducted before petitioners dismissed respondent, the same is not fatal as only an "ample
opportunity to be heard" is what is required in order to satisfy the requirements of due process.60 Accordingly, this Court
is guided by Solid Development Corporation Workers Association v. Solid Development Corporation61 (Solid), where
the validity of the dismissal of two employees was upheld notwithstanding that no hearing was conducted, to wit:

[W]ell-settled is the dictum that the twin requirements of notice and hearing constitute the essential elements of due
process in the dismissal of employees. It is a cardinal rule in our jurisdiction that the employer must furnish the
employee with two written notices before the termination of employment can be effected: (1) the first apprises the
employee of the particular acts or omissions for which his dismissal is sought; and (2) the second informs the employee
of the employer’s decision to dismiss him. The requirement of a hearing, on the other hand, is complied with as long as
there was an opportunity to be heard, and not necessarily that an actual hearing was conducted.

In separate infraction reports, petitioners were both apprised of the particular acts or omissions constituting the charges
against them. They were also required to submit their written explanation within 12 hours from receipt of the reports.
Yet, neither of them complied. Had they found the 12-hour period too short, they should have requested for an extension
of time. Further, notices of termination were also sent to them informing them of the basis of their dismissal. In fine,
petitioners were given due process before they were dismissed. Even if no hearing was conducted, the requirement of
due process had been met since they were accorded a chance to explain their side of the controversy62

In the case at bar, this Court finds that petitioners had complied with the requirements of law in effecting the dismissal
of respondent. Petitioners sent respondent a first notice in the form of a memorandum63 dated June 26, 2000, warning
him that the same would serve as a final notice for him to report to work in Manila within 5 working days from receipt
thereof, otherwise, his services would be terminated on the basis of AWOL. After receiving the memorandum,
respondent could have requested for a conference with the assistance of counsel, if he so desired. Like in Solid, had
respondent found the time too short, he should have responded to the memorandum asking for more time. It, however,
appears to this Court that respondent made no such requests. On July 13, 2000, petitioners sent another memorandum64
notifying respondent that they are terminating his services effective July 19, 2000, after he repeatedly refused to report
to work despite due notice. Even if no actual hearing was conducted, this Court is of the opinion that petitioners had
complied with the requirements of due process as all that the law requires is an ample opportunity to be heard.

In conclusion, it bears to stress that the CA should not have disturbed the factual findings of the LA and the NLRC in
the absence of arbitrariness or palpable error. The reassignment of respondent to another territory was a valid exercise of
petitioners’ management prerogative and, consequently, his dismissal was for cause and in accordance with the due
process requirement of law.

This Court, however, is not unmindful of previous rulings,65 wherein separation pay has been granted to a validly
dismissed employee after giving considerable weight to long years of employment.661âwphi1

An employee who is dismissed for cause is generally not entitled to any financial assistance. Equity considerations,
however, provide an exception. Equity has been defined as justice outside law, being ethical rather than jural and
belonging to the sphere of morals than of law. It is grounded on the precepts of conscience and not on any sanction of
positive law, for equity finds no room for application where there is law.67

In Philippine Long Distance Telephone Co. v. National Labor Relations Commission,68 the Court laid down the
guidelines in the grant of separation pay to a lawfully dismissed employee, thus:

We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the
employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where
the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft
or illicit sexual relations with a fellow worker, the employer may not be required to give the dismissed employee
separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice.69

In the instant case, this Court rules that an award to respondent of separation pay by way of financial assistance,
equivalent to one-half (1/2) month’s pay for every year of service, is equitable. Although respondent's actions
constituted a valid ground to terminate his services, the same is to this Court's mind not so reprehensible as to warrant
complete disregard of his long years of service. It also appears that the same is respondent's first offense. While it may
be expected that petitioners will argue that respondent has only been in their service for four years since the merger of
Pharmacia and Upjohn took place in 1996, equity considerations dictate that respondent's tenure be computed from
1978, the year when respondent started working for Upjohn.

WHEREFORE, premises considered, the petition is PARTIALLY GRANTED. The November 30, 2005 Decision and
May 5, 2006 Resolution of the Court of Appeals in CA-G.R. SP No. 00386 are REVERSED and SET ASIDE.

In view of the above disquisitions, petitioners are ordered to pay respondent separation pay by way of financial
assistance equivalent to one-half (1/2) month pay for every year of service.
SO ORDERED.

G.R. No. 167291               January 12, 2011

PRINCE TRANSPORT, Inc. and Mr. RENATO CLAROS, Petitioners,

vs.
DIOSDADO GARCIA, LUISITO GARCIA, RODANTE ROMERO, REX BARTOLOME, FELICIANO
GASCO, JR., DANILO ROJO, EDGAR SANFUEGO, AMADO GALANTO, EUTIQUIO LUGTU, JOEL
GRAMATICA, MIEL CERVANTES, TERESITA CABANES, ROE DELA CRUZ, RICHELO BALIDOY,
VILMA PORRAS, MIGUELITO SALCEDO, CRISTINA GARCIA, MARIO NAZARENO, DINDO TORRES,
ESMAEL RAMBOYONG, ROBETO* MANO, ROGELIO BAGAWISAN, ARIEL SNACHEZ, ESTAQULO
VILLAREAL, NELSON MONTERO, GLORIA ORANTE, HARRY TOCA, PABLITO MACASAET and
RONALD GARCITA Respondents.

DECISION

PERALTA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court praying for the annulment of
the Decision1 and Resolution2 of the Court of Appeals (CA) dated December 20, 2004 and February 24, 2005,
respectively, in CA-G.R. SP No. 80953. The assailed Decision reversed and set aside the Resolutions dated May 30,
20033 and September 26, 20034 of the National Labor Relations Commission (NLRC) in CA No. 029059-01, while the
disputed Resolution denied petitioners' Motion for Reconsideration.

The present petition arose from various complaints filed by herein respondents charging petitioners with illegal
dismissal, unfair labor practice and illegal deductions and praying for the award of premium pay for holiday and rest
day, holiday pay, service leave pay, 13th month pay, moral and exemplary damages and attorney's fees.

Respondents alleged in their respective position papers and other related pleadings that they were employees of Prince
Transport, Inc. (PTI), a company engaged in the business of transporting passengers by land; respondents were hired
either as drivers, conductors, mechanics or inspectors, except for respondent Diosdado Garcia (Garcia), who was
assigned as Operations Manager; in addition to their regular monthly income, respondents also received commissions
equivalent to 8 to 10% of their wages; sometime in October 1997, the said commissions were reduced to 7 to 9%; this
led respondents and other employees of PTI to hold a series of meetings to discuss the protection of their interests as
employees; these meetings led petitioner Renato Claros, who is the president of PTI, to suspect that respondents are
about to form a union; he made known to Garcia his objection to the formation of a union; in December 1997, PTI
employees requested for a cash advance, but the same was denied by management which resulted in demoralization on
the employees' ranks; later, PTI acceded to the request of some, but not all, of the employees; the foregoing
circumstances led respondents to form a union for their mutual aid and protection; in order to block the continued
formation of the union, PTI caused the transfer of all union members and sympathizers to one of its sub-companies,
Lubas Transport (Lubas); despite such transfer, the schedule of drivers and conductors, as well as their company
identification cards, were issued by PTI; the daily time records, tickets and reports of the respondents were also filed at
the PTI office; and, all claims for salaries were transacted at the same office; later, the business of Lubas deteriorated
because of the refusal of PTI to maintain and repair the units being used therein, which resulted in the virtual stoppage
of its operations and respondents' loss of employment.

Petitioners, on the other hand, denied the material allegations of the complaints contending that herein respondents were
no longer their employees, since they all transferred to Lubas at their own request; petitioners have nothing to do with
the management and operations of Lubas as well as the control and supervision of the latter's employees; petitioners
were not aware of the existence of any union in their company and came to know of the same only in June 1998 when
they were served a copy of the summons in the petition for certification election filed by the union; that before the union
was registered on April 15, 1998, the complaint subject of the present petition was already filed; that the real motive in
the filing of the complaints was because PTI asked respondents to vacate the bunkhouse where they (respondents) and
their respective families were staying because PTI wanted to renovate the same.

Subsequently, the complaints filed by respondents were consolidated.

On October 25, 2000, the Labor Arbiter rendered a Decision,5 the dispositive portion of which reads as follows:

WHEREFORE, judgment is hereby rendered:

1. Dismissing the complaints for Unfair Labor Practice, non-payment of holiday pay and holiday premium,
service incentive leave pay and 13th month pay;
 Dismissing the complaint of Edgardo Belda for refund of boundary-hulog;

2. Dismissing the complaint for illegal dismissal against the respondents Prince Transport, Inc. and/or Prince
Transport Phils. Corporation, Roberto Buenaventura, Rory Bayona, Ailee Avenue, Nerissa Uy, Mario Feranil
and Peter Buentiempo;

3. Declaring that the complainants named below are illegally dismissed by Lubas Transport; ordering said Lubas
Transport to pay backwages and separation pay in lieu of reinstatement in the following amount:

4. Ordering Lubas Transport to pay attorney's fees equivalent to ten (10%) of the total monetary award; and

6. Ordering the dismissal of the claim for moral and exemplary damages for lack merit.

SO ORDERED.6

The Labor Arbiter ruled that petitioners are not guilty of unfair labor practice in the absence of evidence to show that
they violated respondents’ right to self-organization. The Labor Arbiter also held that Lubas is the respondents’
employer and that it (Lubas) is an entity which is separate, distinct and independent from PTI. Nonetheless, the Labor
Arbiter found that Lubas is guilty of illegally dismissing respondents from their employment.

Respondents filed a Partial Appeal with the NLRC praying, among others, that PTI should also be held equally liable as
Lubas.

In a Resolution dated May 30, 2003, the NLRC modified the Decision of the Labor Arbiter and disposed as follows:

WHEREFORE, premises considered, the appeal is hereby PARTIALLY GRANTED. Accordingly, the Decision
appealed from is SUSTAINED subject to the modification that Complainant-Appellant Edgardo Belda deserves refund
of his boundary-hulog in the amount of ₱446,862.00; and that Complainants-Appellants Danilo Rojo and Danilo Laurel
should be included in the computation of Complainants-Appellants claim as follows:

As regards all other aspects, the Decision appealed from is SUSTAINED.

SO ORDERED.7

Respondents filed a Motion for Reconsideration, but the NLRC denied it in its Resolution8 dated September 26, 2003.

Respondents then filed a special civil action for certiorari with the CA assailing the Decision and Resolution of the
NLRC.

On December 20, 2004, the CA rendered the herein assailed Decision which granted respondents' petition. The CA ruled
that petitioners are guilty of unfair labor practice; that Lubas is a mere instrumentality, agent conduit or adjunct of PTI;
and that petitioners’ act of transferring respondents’ employment to Lubas is indicative of their intent to frustrate the
efforts of respondents to organize themselves into a union. Accordingly, the CA disposed of the case as follows:

WHEREFORE, the Petition for Certiorari is hereby GRANTED. Accordingly, the subject decision is hereby
REVERSED and SET ASIDE and another one ENTERED finding the respondents guilty of unfair labor practice and
ordering them to reinstate the petitioners to their former positions without loss of seniority rights and with full
backwages.

With respect to the portion ordering the inclusion of Danilo Rojo and Danilo Laurel in the computation of petitioner's
claim for backwages and with respect to the portion ordering the refund of Edgardo Belda's boundary-hulog in the
amount of ₱446,862.00, the NLRC decision is affirmed and maintained.

SO ORDERED.9

Petitioners filed a Motion for Reconsideration, but the CA denied it via its Resolution10 dated February 24, 2005.

Hence, the instant petition for review on certiorari based on the following grounds:

THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN GIVING DUE COURSE TO THE
RESPONDENTS' PETITION FOR CERTIORARI
 1. THE COURT OF APPEALS SHOULD HAVE RESPECTED THE FINDINGS OF THE LABOR
ARBITER AND AFFIRMED BY THE NLRC

2. ONLY ONE PETITIONER EXECUTED AND VERIFIED THE PETITION

3. THE COURT OF APPEALS SHOULD NOT HAVE GIVEN DUE COURSE TO THE PETITION
WITH RESPECT TO RESPONDENTS REX BARTOLOME, FELICIANO GASCO, DANILO ROJO,
EUTIQUIO LUGTU, AND NELSON MONTERO AS THEY FAILED TO FILE AN APPEAL TO THE
NLRC

THE COURT OF APPEALS SERIOUSLY ERRED IN DECLARING THAT PETITIONERS PRINCE TRANSPORT,
INC. AND MR. RENATO CLAROS AND LUBAS TRANSPORT ARE ONE AND THE SAME CORPORATION
AND THUS, LIABLE IN SOLIDUM TO RESPONDENTS.

THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN ORDERING THE

REINSTATEMENT OF RESPONDENTS TO THEIR PREVIOUS POSITION WHEN IT IS NOT ONE OF THE
ISSUES RAISED IN RESPONDENTS' PETITION FOR CERTIORARI. 11

Petitioners assert that factual findings of agencies exercising quasi-judicial functions like the NLRC are accorded not
only respect but even finality; that the CA should have outrightly dismissed the petition filed before it because in
certiorari proceedings under Rule 65 of the Rules of Court it is not within the province of the CA to evaluate the
sufficiency of evidence upon which the NLRC based its determination, the inquiry being limited essentially to whether
or not said tribunal has acted without or in excess of its jurisdiction or with grave abuse of discretion. Petitioners assert
that the CA can only pass upon the factual findings of the NLRC if they are not supported by evidence on record, or if
the impugned judgment is based on misapprehension of facts — which circumstances are not present in this case.
Petitioners also emphasize that the NLRC and the Labor Arbiter concurred in their factual findings which were based on
substantial evidence and, therefore, should have been accorded great weight and respect by the CA.

Respondents, on the other hand, aver that the CA neither exceeded its jurisdiction nor committed error in re-evaluating
the NLRC’s factual findings since such findings are not in accord with the evidence on record and the applicable law or
jurisprudence.

The Court agrees with respondents.

The power of the CA to review NLRC decisions via a petition for certiorari under Rule 65 of the Rules of Court has
been settled as early as this Court’s decision in St. Martin Funeral Homes v. NLRC.12 In said case, the Court held that
the proper vehicle for such review is a special civil action for certiorari under Rule 65 of the said Rules, and that the case
should be filed with the CA in strict observance of the doctrine of hierarchy of courts. Moreover, it is already settled that
under Section 9 of Batas Pambansa Blg. 129, as amended by Republic Act No. 7902, the CA — pursuant to the exercise
of its original jurisdiction over petitions for certiorari — is specifically given the power to pass upon the evidence, if and
when necessary, to resolve factual issues.13 Section 9 clearly states:

xxxx

The Court of Appeals shall have the power to try cases and conduct hearings, receive evidence and perform any and all
acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction, including the
power to grant and conduct new trials or further proceedings. x x x

However, equally settled is the rule that factual findings of labor officials, who are deemed to have acquired expertise in
matters within their jurisdiction, are generally accorded not only respect but even finality by the courts when supported
by substantial evidence, i.e., the amount of relevant evidence which a reasonable mind might accept as adequate to
justify a conclusion.14 But these findings are not infallible. When there is a showing that they were arrived at arbitrarily
or in disregard of the evidence on record, they may be examined by the courts.15 The CA can grant the petition for
certiorari if it finds that the NLRC, in its assailed decision or resolution, made a factual finding not supported by
substantial evidence.16 It is within the jurisdiction of the CA, whose jurisdiction over labor cases has been expanded to
review the findings of the NLRC.17

In this case, the NLRC sustained the factual findings of the Labor Arbiter. Thus, these findings are generally binding on
the appellate court, unless there was a showing that they were arrived at arbitrarily or in disregard of the evidence on
record. In respondents' petition for certiorari with the CA, these factual findings were reexamined and reversed by the
appellate court on the ground that they were not in accord with credible evidence presented in this case. To determine if
the CA's reexamination of factual findings and reversal of the NLRC decision are proper and with sufficient basis, it is
incumbent upon this Court to make its own evaluation of the evidence on record.18

After a thorough review of the records at hand, the Court finds that the CA did not commit error in arriving at its own
findings and conclusions for reasons to be discussed hereunder.

Firstly, petitioners posit that the petition filed with the CA is fatally defective, because the attached verification and
certificate against forum shopping was signed only by respondent Garcia.

The Court does not agree.

While the general rule is that the certificate of non-forum shopping must be signed by all the plaintiffs in a case and the
signature of only one of them is insufficient, the Court has stressed that the rules on forum shopping, which were
designed to promote and facilitate the orderly administration of justice, should not be interpreted with such absolute
literalness as to subvert its own ultimate and legitimate objective.19 Strict compliance with the provision regarding the
certificate of non-forum shopping underscores its mandatory nature in that the certification cannot be altogether
dispensed with or its requirements completely disregarded.20 It does not, however, prohibit substantial compliance
therewith under justifiable circumstances, considering especially that although it is obligatory, it is not jurisdictional. 21

In a number of cases, the Court has consistently held that when all the petitioners share a common interest and invoke a
common cause of action or defense, the signature of only one of them in the certification against forum shopping
substantially complies with the rules.22 In the present case, there is no question that respondents share a common interest
and invoke a common cause of action. Hence, the signature of respondent Garcia is a sufficient compliance with the rule
governing certificates of non-forum shopping. In the first place, some of the respondents actually executed a Special
Power of Attorney authorizing Garcia as their attorney-in-fact in filing a petition for certiorari with the CA.23

The Court, likewise, does not agree with petitioners' argument that the CA should not have given due course to the
petition filed before it with respect to some of the respondents, considering that these respondents did not sign the
verification attached to the Memorandum of Partial Appeal earlier filed with the NLRC. Petitioners assert that the
decision of the Labor Arbiter has become final and executory with respect to these respondents and, as a consequence,
they are barred from filing a petition for certiorari with the CA.

With respect to the absence of some of the workers’ signatures in the verification, the verification requirement is
deemed substantially complied with when some of the parties who undoubtedly have sufficient knowledge and belief to
swear to the truth of the allegations in the petition had signed the same. Such verification is deemed a sufficient
assurance that the matters alleged in the petition have been made in good faith or are true and correct, and not merely
speculative. Moreover, respondents' Partial Appeal shows that the appeal stipulated as complainants-appellants "Rizal
Beato, et al.", meaning that there were more than one appellant who were all workers of petitioners.

In any case, the settled rule is that a pleading which is required by the Rules of Court to be verified, may be given due
course even without a verification if the circumstances warrant the suspension of the rules in the interest of justice.24
Indeed, the absence of a verification is not jurisdictional, but only a formal defect, which does not of itself justify a court
in refusing to allow and act on a case.25 Hence, the failure of some of the respondents to sign the verification attached to
their Memorandum of Appeal filed with the NLRC is not fatal to their cause of action.

Petitioners also contend that the CA erred in applying the doctrine of piercing the corporate veil with respect to Lubas,
because the said doctrine is applicable only to corporations and Lubas is not a corporation but a single proprietorship;
that Lubas had been found by the Labor Arbiter and the NLRC to have a personality which is separate and distinct from
that of PTI; that PTI had no hand in the management and operation as well as control and supervision of the employees
of Lubas.

The Court is not persuaded.

On the contrary, the Court agrees with the CA that Lubas is a mere agent, conduit or adjunct of PTI. A settled
formulation of the doctrine of piercing the corporate veil is that when two business enterprises are owned, conducted
and controlled by the same parties, both law and equity will, when necessary to protect the rights of third parties,
disregard the legal fiction that these two entities are distinct and treat them as identical or as one and the same.26 In the
present case, it may be true that Lubas is a single proprietorship and not a corporation. However, petitioners’ attempt to
isolate themselves from and hide behind the supposed separate and distinct personality of Lubas so as to evade their
liabilities is precisely what the classical doctrine of piercing the veil of corporate entity seeks to prevent and remedy.

Thus, the Court agrees with the observations of the CA, to wit:

As correctly pointed out by petitioners, if Lubas were truly a separate entity, how come that it was Prince Transport who
made the decision to transfer its employees to the former? Besides, Prince Transport never regarded Lubas Transport as
a separate entity. In the aforesaid letter, it referred to said entity as "Lubas operations." Moreover, in said letter, it did
not transfer the employees; it "assigned" them. Lastly, the existing funds and 201 file of the employees were turned over
not to a new company but a "new management."27

The Court also agrees with respondents that if Lubas is indeed an entity separate and independent from PTI why is it
that the latter decides which employees shall work in the former?

What is telling is the fact that in a memorandum issued by PTI, dated January 22, 1998, petitioner company admitted
that Lubas is one of its sub-companies.28 In addition, PTI, in its letters to its employees who were transferred to Lubas,
referred to the latter as its "New City Operations Bus."29

Moreover, petitioners failed to refute the contention of respondents that despite the latter’s transfer to Lubas of their
daily time records, reports, daily income remittances of conductors, schedule of drivers and conductors were all made,
performed, filed and kept at the office of PTI. In fact, respondents’ identification cards bear the name of PTI.

It may not be amiss to point out at this juncture that in two separate illegal dismissal cases involving different groups of
employees transferred by PTI to other companies, the Labor Arbiter handling the cases found that these companies and
PTI are one and the same entity; thus, making them solidarily liable for the payment of backwages and other money
claims awarded to the complainants therein.30

Petitioners likewise aver that the CA erred and committed grave abuse of discretion when it ordered petitioners to
reinstate respondents to their former positions, considering that the issue of reinstatement was never brought up before it
and respondents never questioned the award of separation pay to them.

The Court is not persuaded.

It is clear from the complaints filed by respondents that they are seeking reinstatement.31

In any case, Section 2 (c), Rule 7 of the Rules of Court provides that a pleading shall specify the relief sought, but may
add a general prayer for such further or other reliefs as may be deemed just and equitable. Under this rule, a court can
grant the relief warranted by the allegation and the proof even if it is not specifically sought by the injured party; the
inclusion of a general prayer may justify the grant of a remedy different from or together with the specific remedy
sought, if the facts alleged in the complaint and the evidence introduced so warrant.321avvphi1

Moreover, in BPI Family Bank v. Buenaventura,33 this Court ruled that the general prayer is broad enough "to justify
extension of a remedy different from or together with the specific remedy sought." Even without the prayer for a
specific remedy, proper relief may be granted by the court if the facts alleged in the complaint and the evidence
introduced so warrant. The court shall grant relief warranted by the allegations and the proof even if no such relief is
prayed for. The prayer in the complaint for other reliefs equitable and just in the premises justifies the grant of a relief
not otherwise specifically prayed for.34 In the instant case, aside from their specific prayer for reinstatement,
respondents, in their separate complaints, prayed for such reliefs which are deemed just and equitable.

As to whether petitioners are guilty of unfair labor practice, the Court finds no cogent reason to depart from the findings
of the CA that respondents’ transfer of work assignments to Lubas was designed by petitioners as a subterfuge to foil the
former’s right to organize themselves into a union. Under Article 248 (a) and (e) of the Labor Code, an employer is
guilty of unfair labor practice if it interferes with, restrains or coerces its employees in the exercise of their right to self-
organization or if it discriminates in regard to wages, hours of work and other terms and conditions of employment in
order to encourage or discourage membership in any labor organization.

Indeed, evidence of petitioners' unfair labor practice is shown by the established fact that, after respondents' transfer to
Lubas, petitioners left them high and dry insofar as the operations of Lubas was concerned. The Court finds no error in
the findings and conclusion of the CA that petitioners "withheld the necessary financial and logistic support such as
spare parts, and repair and maintenance of the transferred buses until only two units remained in running condition."
This left respondents virtually jobless.

WHEREFORE, the instant petition is denied. The assailed Decision and Resolution of the Court of Appeals, dated
December 20, 2004 and February 24, 2005, respectively, in CA-G.R. SP No. 80953, are AFFIRMED.

SO ORDERED.