ASIAN TRANSMISSION CORPORATION, petitioner, seeks certiorari under Rule 65 of the 1995 Rules of Civil Procedure. Petitioner, Asian Transmission Corporation, seeks nullification of the March 28, 2000 Decision 1 of the Court of Appeals denying its petition to annul. DOLE issued an Explanatory Bulletin dated March 11, 1993, entitled "Workers' Entitlement to Holiday Pay on April 9, 1993, Araw ng Kagitingan and Good Friday"
ASIAN TRANSMISSION CORPORATION, petitioner, seeks certiorari under Rule 65 of the 1995 Rules of Civil Procedure. Petitioner, Asian Transmission Corporation, seeks nullification of the March 28, 2000 Decision 1 of the Court of Appeals denying its petition to annul. DOLE issued an Explanatory Bulletin dated March 11, 1993, entitled "Workers' Entitlement to Holiday Pay on April 9, 1993, Araw ng Kagitingan and Good Friday"
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ASIAN TRANSMISSION CORPORATION, petitioner, seeks certiorari under Rule 65 of the 1995 Rules of Civil Procedure. Petitioner, Asian Transmission Corporation, seeks nullification of the March 28, 2000 Decision 1 of the Court of Appeals denying its petition to annul. DOLE issued an Explanatory Bulletin dated March 11, 1993, entitled "Workers' Entitlement to Holiday Pay on April 9, 1993, Araw ng Kagitingan and Good Friday"
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ASAN TRANSMSSON CORPORATON, petitioner, vs. The Hon. COURT OF APPEALS, Thirteenth Division, HON. FROLAN M. BACUNGAN as Voluntary Arbitrator, KSHN A. LALWAN, Union, Union representative to the Panel Arbitrators; BSG NG ASAN TRANSMSSON LABOR UNON (BATLU); HON. BENVENDO T. LAGUESMA in his capacity as Secretary of Labor and Employment; and DRECTOR CHTA G. CLNDRO in her capacity as Director of Bureau of Working Conditions, respondents. D E C S O N CARPO-MORALES, J.: Petitioner, Asian Transmission Corporation, seeks via petition for certiorari under Rule 65 of the 1995 Rules of Civil Procedure the nullification of the March 28, 2000 Decision 1 of the Court of Appeals denying its petition to annul 1) the March 11, 1993 "Explanatory Bulletin" 2 of the Department of Labor and Employment (DOLE) entitled "Workers' Entitlement to Holiday Pay on April 9, 1993, Araw ng Kagitingan and Good Friday", which bulletin the DOLE reproduced on January 23, 1998, 2) the July 31, 1998 Decision 3 of the Panel of Voluntary Arbitrators ruling that the said explanatory bulletin applied as well to April 9, 1998, and 3) the September 18, 1998 4 Resolution of the Panel of Voluntary Arbitration denying its Motion for Reconsideration. The following facts, as found by the Court of Appeals, are undisputed: The Department of Labor and Employment (DOLE), through Undersecretary Cresenciano B. Trajano, issued an Explanatory Bulletin dated March 11, 1993 wherein it clarified, inter alia, that employees are entitled to 200% of their basic wage on April 9, 1993, whether unworked, which[,] apart from being Good Friday [and, therefore, a legal holiday], is also Araw ng Kagitingan [which is also a legal holiday]. The bulletin reads: "On the correct payment of holiday compensation on April 9, 1993 which apart from being Good Friday is also Araw ng Kagitingan, i.e., two regular holidays falling on the same day, this Department is of the view that the covered employees are entitled to at least two hundred percent (200%) of their basic wage even if said holiday is unworked. The first 100% represents the payment of holiday pay on April 9, 1993 as Good Friday and the second 100% is the payment of holiday pay for the same date as Araw ng Kagitingan. Said bulletin was reproduced on January 23, 1998, when April 9, 1998 was both Maundy Thursday and Araw ng Kagitingan x x x x Despite the explanatory bulletin, petitioner [Asian Transmission Corporation] opted to pay its daily paid employees only 100% of their basic pay on April 9, 1998. Respondent Bisig ng Asian Transmission Labor Union (BATLU) protested. n accordance with Step 6 of the grievance procedure of the Collective Bargaining Agreement (CBA) existing between petitioner and BATLU, the controversy was submitted for voluntary arbitration. x x x x On July 31, 1998, the Office of the Voluntary Arbitrator rendered a decision directing petitioner to pay its covered employees "200% and not just 100% of their regular daily wages for the unworked April 9, 1998 which covers two regular holidays, namely, Araw ng Kagitignan and Maundy Thursday." (Emphasis and underscoring supplied) Subject of interpretation in the case at bar is Article 94 of the Labor Code which reads: ART. 94. Right to holiday pay. - (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers; (b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate; and (c) As used in this Article, "holiday" includes: New Year's Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and thirtieth of December and the day designated by law for holding a general election, which was amended by Executive Order No. 203 issued on June 30, 1987, such that the regular holidays are now: 1. New Year's Day January 1 2. Maundy Thursday Movable Date 3. Good Friday Movable Date 4. Araw ng Kagitingan April 9 (Bataan and Corregidor Day) 5. Labor Day May 1 6. ndependence Day June 12 7. National Heroes Day Last Sunday of August 8. Bonifacio Day November 30 9. Christmas Day December 25 10. Rizal Day December 30 n deciding in favor of the Bisig ng Asian Transmission Labor Union (BATLU), the Voluntary Arbitrator held that Article 94 of the Labor Code provides for holiday pay for every regular holiday, the computation of which is determined by a legal formula which is not changed by the fact that there are two holidays falling on one day, like on April 9, 1998 when it was Araw ng Kagitingan and at the same time was Maundy Thursday; and that that the law, as amended, enumerates ten regular holidays for every year should not be interpreted as authorizing a reduction to nine the number of paid regular holidays "just because April 9 (Araw ng Kagitingan) in certain years, like 1993 and 1998, is also Holy Friday or Maundy Thursday." n the assailed decision, the Court of Appeals upheld the findings of the Voluntary Arbitrator, holding that the Collective Bargaining Agreement (CBA) between petitioner and BATLU, the law governing the relations between them, clearly recognizes their intent to consider Araw ng Kagitingan and Maundy Thursday, on whatever date they may fall in any calendar year, as paid legal holidays during the effectivity of the CBA and that "[t]here is no condition, qualification or exception for any variance from the clear intent that all holidays shall be compensated." 5
The Court of Appeals further held that "in the absence of an explicit provision in law which provides for [a] reduction of holiday pay if two holidays happen to fall on the same day, any doubt in the interpretation and implementation of the Labor Code provisions on holiday pay must be resolved in favor of labor." By the present petition, petitioners raise the following issues:
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMTTED GRAVE ABUSE OF DSCRETON N ERRONEOUSLY NTERPRETNG THE TERMS OF THE COLLECTVE BARGANNG AGREEMENT BETWEEN THE PARTES AND SUBSTTUTNG TS OWN JUDGMENT N PLACE OF THE AGREEMENTS MADE BY THE PARTES THEMSELVES
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMTTED GRAVE ABUSE OF DSCRETON N HOLDNG THAT ANY DOUBTS ABOUT THE VALDTY OF THE POLCES ENUNCATED N THE EXPLANATORY BULLETN WAS LAD TO REST BY THE RESSUANCE OF THE SAD EXPLANATORY BULLETN
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMTTED GRAVE ABUSE OF DSCRETON N UPHOLDNG THE VALDTY OF THE EXPLANATORY BULLETN EVEN WHLE ADMTTNG THAT THE SAD BULLETN WAS NOT AN EXAMPLE OF A JUDCAL, QUAS-JUDCAL, OR ONE OF THE RULES AND REGULATONS THAT [Department of Labor and Employment] DOLE MAY PROMULGATE V WHETHER OR NOT THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE) BY SSUNG EXPLANATORY BULLETN DATED MARCH 11, 1993, N THE GUSE OF PROVDNG GUDELNES ON ART. 94 OF THE LABOR CODE, COMMTTED GRAVE ABUSE OF DSCRETON, AS T LEGSLATED AND NTERPRETED LEGAL PROVSONS N SUCH A MANNER AS TO CREATE OBLGATONS WHERE NONE ARE NTENDED BY THE LAW V WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMTTED GRAVE ABUSE OF DSCRETON N SUSTANNG THE SECRETARY OF THE DEPARTMENT OF LABOR N RETERATNG TS EXPLANATORY BULLETN DATED MARCH 11, 1993 AND N ORDERNG THAT THE SAME POLCY OBTANED FOR APRL 9, 1998 DESPTE THE RULNGS OF THE SUPREME COURT TO THE CONTRARY V WHETHER OR NOT RESPONDENTS' ACTS WLL DEPRVE PETTONER OF PROPERTY WTHOUT DUE PROCESS BY THE "EXPLANATORY BULLETN" AS WELL AS EQUAL PROTECTON OF LAWS The petition is devoid of merit. At the outset, it bears noting that instead of assailing the Court of Appeals Decision by petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, petitioner lodged the present petition for certiorari under Rule 65. [S]ince the Court of Appeals had jurisdiction over the petition under Rule 65, any alleged errors committed by it in the exercise of its jurisdiction would be errors of judgment which are reviewable by timely appeal and not by a special civil action of certiorari. f the aggrieved party fails to do so within the reglementary period, and the decision accordingly becomes final and executory, he cannot avail himself of the writ of certiorari, his predicament being the effect of his deliberate inaction. The appeal from a final disposition of the Court of Appeals is a petition for review under Rule 45 and not a special civil action under Rule 65 of the Rules of Court, now Rule 45 and Rule 65, respectively, of the 1997 Rules of Civil Procedure. Rule 45 is clear that the decisions, final orders or resolutions of the Court of Appeals in any case, i.e., regardless of the nature of the action or proceeding involved, may be appealed to this Court by filing a petition for review, which would be but a continuation of the appellate process over the original case. Under Rule 45 the reglementary period to appeal is fifteen (15) days from notice of judgment or denial of motion for reconsideration. x x x For the writ of certiorari under Rule 65 of the Rules of Court to issue, a petitioner must show that he has no plain, speedy and adequate remedy in the ordinary course of law against its perceived grievance. A remedy is considered "plain, speedy and adequate" if it will promptly relieve the petitioner from the injurious effects of the judgment and the acts of the lower court or agency. n this case, appeal was not only available but also a speedy and adequate remedy. 6
The records of the case show that following petitioner's receipt on August 18, 2000 of a copy of the August 10, 2000 Resolution of the Court of Appeals denying its Motion for Reconsideration, it filed the present petition for certiorari on September 15, 2000, at which time the Court of Appeals decision had become final and executory, the 15-day period to appeal it under Rule 45 having expired. Technicality aside, this Court finds no ground to disturb the assailed decision. Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford protection to labor. 7 ts purpose is not merely "to prevent diminution of the monthly income of the workers on account of work interruptions. n other words, although the worker is forced to take a rest, he earns what he should earn, that is, his holiday pay." 8 t is also intended to enable the worker to participate in the national celebrations held during the days identified as with great historical and cultural significance. ndependence Day (June 12), Araw ng Kagitingan (April 9), National Heroes Day (last Sunday of August), Bonifacio Day (November 30) and Rizal Day (December 30) were declared national holidays to afford Filipinos with a recurring opportunity to commemorate the heroism of the Filipino people, promote national identity, and deepen the spirit of patriotism. Labor Day (May 1) is a day traditionally reserved to celebrate the contributions of the working class to the development of the nation, while the religious holidays designated in Executive Order No. 203 allow the worker to celebrate his faith with his family. As reflected above, Art. 94 of the Labor Code, as amended, affords a worker the enjoyment of ten paid regular holidays. 9 The provision is mandatory, 10
regardless of whether an employee is paid on a monthly or daily basis. 11 Unlike a bonus, which is a management prerogative, 12 holiday pay is a statutory benefit demandable under the law. Since a worker is entitled to the enjoyment of ten paid regular holidays, the fact that two holidays fall on the same date should not operate to reduce to nine the ten holiday pay benefits a worker is entitled to receive. t is elementary, under the rules of statutory construction, that when the language of the law is clear and unequivocal, the law must be taken to mean exactly what it says. 13 n the case at bar, there is nothing in the law which provides or indicates that the entitlement to ten days of holiday pay shall be reduced to nine when two holidays fall on the same day. Petitioner's assertion that ellington v. Trajano 14 has "overruled" the DOLE March 11, 1993 Explanatory Bulletin does not lie. n ellington, the issue was whether monthly-paid employees are entitled to an additional day's pay if a holiday falls on a Sunday. This Court, in answering the issue in the negative, observed that in fixing the monthly salary of its employees, ellington took into account "every working day of the year including the holidays specified by law and excluding only Sunday." n the instant case, the issue is whether daily-paid employees are entitled to be paid for two regular holidays which fall on the same day. 15
n any event, Art. 4 of the Labor Code provides that all doubts in the implementation and interpretation of its provisions, including its implementing rules and regulations, shall be resolved in favor of labor. For the working man's welfare should be the primordial and paramount consideration. 16
Moreover, Sec. 11, Rule V, Book of the Omnibus Rules to mplement the Labor Code provides that "Nothing in the law or the rules shall justify an employer in withdrawing or reducing any benefits, supplements or payments for unworked regular holidays as provided in existing individual or collective agreement or employer practice or policy." 17
From the pertinent provisions of the CBA entered into by the parties, petitioner had obligated itself to pay for the legal holidays as required by law. Thus, the 1997-1998 CBA incorporates the following provision: ARTCLE XV PAD LEGAL HOLDAYS The following legal holidays shall be paid by the COMPANY as required by law: 1. New Year's Day (January 1st) 2. Holy Thursday (moveable) 3. Good Friday (moveable) 4. Araw ng Kagitingan (April 9th) 5. Labor Day (May 1st) 6. ndependence Day (June 12th) 7. Bonifacio Day [November 30] 8. Christmas Day (December 25th) 9. Rizal Day (December 30th) 10. General Election designated by law, if declared public non-working holiday 11. National Heroes Day (Last Sunday of August) Only an employee who works on the day immediately preceding or after a regular holiday shall be entitled to the holiday pay. A paid legal holiday occurring during the scheduled vacation leave will result in holiday payment in addition to normal vacation pay but will not entitle the employee to another vacation leave. Under similar circumstances, the COMPANY will give a day's wage for November 1st and December 31st whenever declared a holiday. When required to work on said days, the employee will be paid according to Art. V, Sec. 3B hereof. 18
WHEREFORE, the petition is hereby DSMSSED. [G.R. No. 146775. January 30, 2002] SAN MGUEL CORPORATON, petitioner, vs. THE HONORABLE COURT OF APPEALS-FORMER THRTEENTH DVSON, HON. UNDERSECRETARY JOSE M. ESPAOL, JR., Hon. CRESENCANO B. TRAJANO, and HON. REGONAL DRECTOR ALLAN M. MACARAYA, respondents. D E C S O N KAPUNAN, J.: Assailed in the petition before us are the decision, promulgated on 08 May 2000, and the resolution, promulgated on 18 October 2000, of the Court of Appeals in CA G.R. SP-53269. The facts of the case are as follows: On 17 October 1992, the Department of Labor and Employment (DOLE), ligan District Office, conducted a routine inspection in the premises of San Miguel Corporation (SMC) in Sta. Filomena, ligan City. n the course of the inspection, it was discovered that there was underpayment by SMC of regular Muslim holiday pay to its employees. DOLE sent a copy of the inspection result to SMC and it was received by and explained to its personnel officer Elena dela Puerta. SMC contested the findings and DOLE conducted summary hearings on 19 November 1992, 28 May 1993 and 4 and 5 October 1993. Still, SMC failed to submit proof that it was paying regular Muslim holiday pay to its employees. Hence, Alan M. Macaraya, Director V of DOLE ligan District Office issued a compliance order, dated 17 December 1993, directing SMC to consider Muslim holidays as regular holidays and to pay both its Muslim and non-Muslim employees holiday pay within thirty (30) days from the receipt of the order. SMC appealed to the DOLE main office in Manila but its appeal was dismissed for having been filed late. The dismissal of the appeal for late filing was later on reconsidered in the order of 17 July 1998 after it was found that the appeal was filed within the reglementary period. However, the appeal was still dismissed for lack of merit and the order of Director Macaraya was affirmed. SMC went to this Court for relief via a petition for certiorari, which this Court referred to the Court of Appeals pursuant to St. Martin Funeral Homes vs. NLRC. The appellate court, in the now questioned decision, promulgated on 08 May 2000, ruled, as follows: WHEREFORE, the Order dated December 17, 1993 of Director Macaraya and Order dated July 17, 1998 of Undersecretary Espaol, Jr. is hereby MODFED with regards the payment of Muslim holiday pay from 200% to 150% of the employee's basic salary. Let this case be remanded to the Regional Director for the proper computation of the said holiday pay. SO ORDERED. ts motion for reconsideration having been denied for lack of merit, SMC filed a petition for certiorari before this Court, alleging that: PUBLC RESPONDENTS SEROUSLY ERRED AND COMMTTED GRAVE ABUSE OF DSCRETON WHEN THEY GRANTED MUSLM HOLDAY PAY TO NON- MUSLM EMPLOYEES OF SMC-LCOCO AND ORDERNG SMC TO PAY THE SAME RETROACTVE FOR ONE (1) YEAR FROM THE DATE OF THE PROMULGATON OF THE COMPLANCE ORDER SSUED ON DECEMBER 17, 1993, T BENG CONTRARY TO THE PROVSONS, NTENT AND PURPOSE OF P.D. 1083 AND PREVALNG JURSPRUDENCE. THE SSUANCE OF THE COMPLANCE ORDER WAS TANTED WTH GRAVE ABUSE OF DSCRETON N THAT SAN MGUEL CORPORATON WAS NOT ACCORDED DUE PROCESS OF LAW; HENCE, THE ASSALED COMPLANCE ORDER AND ALL SUBSEQUENT ORDERS, DECSON AND RESOLUTON OF PUBLC RESPONDENTS WERE ALL SSUED WTH GRAVE ABUSE OF DSCRETON AND ARE VOD AB NTO. THE HON. COURT OF APPEALS COMMTTED GRAVE ABUSE OF DSCRETON WHEN T DECLARED THAT REGONAL DRECTOR MACARAYA, UNDERSECRETARY TRAJANO AND UNDERSECRETARY ESPAOL, JR., WHO ALL LKEWSE ACTED WTH GRAVE ABUSE OF DSCRETON AND WTHOUT OR N EXCESS OF THER JURSDCTON, HAVE JURSDCTON N SSUNG THE ASSALED COMPLANCE ORDER AND SUBSEQUENT ORDERS, WHEN N FACT THEY HAVE NO JURSDCTON OR HAS LOST JURSDCTON OVER THE HEREN LABOR STANDARD CASE. At the outset, petitioner came to this Court via a petition for certiorari under Rule 65 instead of an appeal under Rule 45 of the 1997 Rules of Civil Procedure. n National Irrigation Administration vs. Court of Appeals, the Court declared: x x x (S)ince the Court of Appeals had jurisdiction over the petition under Rule 65, any alleged errors committed by it in the exercise of its jurisdiction would be errors of judgment which are reviewable by timely appeal and not by a special civil action of certiorari. f the aggrieved party fails to do so within the reglementary period, and the decision accordingly becomes final and executory, he cannot avail himself of the writ of certiorari, his predicament being the effect of his deliberate inaction. The appeal from a final disposition of the Court of Appeals is a petition for review under Rule 45 and not a special civil action under Rule 65 of the Rules of Court, now Rule 45 and Rule 65, respectively, of the 1997 Rules of Civil Procedure. Rule 45 is clear that decisions, final orders or resolutions of the Court of Appeals in any case, i.e., regardless of the nature of the action or proceeding involved, may be appealed to this Court by filing a petition for review, which would be but a continuation of the appellate process over the original case. Under Rule 45 the reglementary period to appeal is fifteen (15) days from notice of judgment or denial of motion for reconsideration. x x x For the writ of certiorari under Rule 65 of the Rules of Court to issue, a petitioner must show that he has no plain, speedy and adequate remedy in the ordinary course of law against its perceived grievance. A remedy is considered "plain, speedy and adequate" if it will promptly relieve the petitioner from the injurious effects of the judgment and the acts of the lower court or agency. n this case, appeal was not only available but also a speedy and adequate remedy. Well-settled is the rule that certiorari cannot be availed of as a substitute for a lost appeal. For failure of petitioner to file a timely appeal, the questioned decision of the Court of Appeals had already become final and executory. n any event, the Court finds no reason to reverse the decision of the Court of Appeals. Muslim holidays are provided under Articles 169 and 170, Title , Book V, of Presidential Decree No. 1083, otherwise known as the Code of Muslim Personal Laws, which states: Art. 169. Official Muslim holidays. - The following are hereby recognized as legal Muslim holidays: (a) 'Amun Jadid (New Year), which falls on the first day of the first lunar month of Muharram; (b) Maulid-un-Nabi (Birthday of the Prophet Muhammad), which falls on the twelfth day of the third lunar month of Rabi-ul-Awwal; (c) Lailatul Isr al Mi'rj (Nocturnal Journey and Ascension of the Prophet Muhammad), which falls on the twenty-seventh day of the seventh lunar month of Rajab; (d) 'Id-ul-Fitr (Hari Raya Puasa), which falls on the first day of the tenth lunar month of Shawwal, commemorating the end of the fasting season; and (e) 'Id-l-Adh (Hari Raya Haji),which falls on the tenth day of the twelfth lunar month of Dh'l-Hijja. Art. 170. Provinces and cities where officially observed. - (1) Muslim holidays shall be officially observed in the Provinces of Basilan, Lanao del Norte, Lanao del Sur, Maguindanao, North Cotabato, ligan, Marawi, Pagadian, and Zamboanga and in such other Muslim provinces and cities as may hereafter be created; (2) Upon proclamation by the President of the Philippines, Muslim holidays may also be officially observed in other provinces and cities. The foregoing provisions should be read in conjunction with Article 94 of the Labor Code, which provides: Art. 94. Right to holiday pay. - (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers; (b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate; x x x. Petitioner asserts that Article 3(3) of Presidential Decree No. 1083 provides that "(t)he provisions of this Code shall be applicable only to Muslims x x x. However, there should be no distinction between Muslims and non-Muslims as regards payment of benefits for Muslim holidays. The Court of Appeals did not err in sustaining Undersecretary Espaol who stated: Assuming arguendo that the respondent's position is correct, then by the same token, Muslims throughout the Philippines are also not entitled to holiday pays on Christian holidays declared by law as regular holidays. We must remind the respondent-appellant that wages and other emoluments granted by law to the working man are determined on the basis of the criteria laid down by laws and certainly not on the basis of the worker's faith or religion. At any rate, Article 3(3) of Presidential Decree No. 1083 also declares that "x x x nothing herein shall be construed to operate to the prejudice of a non-Muslim. n addition, the Handbook on orkers' Statutory Benefits, approved by then DOLE Secretary Bienvenido E. Laguesma on 14 December 1999 categorically stated: Considering that all private corporations, offices, agencies, and entities or establishments operating within the designated Muslim provinces and cities are required to observe Muslim holidays, both Muslim and Christians working within the Muslim areas may not report for work on the days designated by law as Muslim holidays. On the question regarding the jurisdiction of the Regional Director Allan M. Macaraya, Article 128, Section B of the Labor Code, as amended by Republic Act No. 7730, provides: "Article 128. Visitorial and enforcement power. - x x x (b) Notwithstanding the provisions of Article 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of the inspection. The Secretary or his duly authorized representative shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection. x x x n the case before us, Regional Director Macaraya acted as the duly authorized representative of the Secretary of Labor and Employment and it was within his power to issue the compliance order to SMC. n addition, the Court agrees with the Solicitor General that the petitioner did not deny that it was not paying Muslim holiday pay to its non-Muslim employees. ndeed, petitioner merely contends that its non-Muslim employees are not entitled to Muslim holiday pay. Hence, the issue could be resolved even without documentary proofs. n any case, there was no indication that Regional Director Macaraya failed to consider any documentary proof presented by SMC in the course of the inspection. Anent the allegation that petitioner was not accorded due process, we sustain the Court of Appeals in finding that SMC was furnished a copy of the inspection order and it was received by and explained to its Personnel Officer. Further, a series of summary hearings were conducted by DOLE on 19 November 1992, 28 May 1993 and 4 and 5 October 1993. Thus, SMC could not claim that it was not given an opportunity to defend itself. Finally, as regards the allegation that the issue on Muslim holiday pay was already resolved in NLRC CA No. M-000915-92 (Napoleon E. Fernan vs. San Miguel Corporation Beer Division and Leopoldo Zaldarriaga), the Court notes that the case was primarily for illegal dismissal and the claim for benefits was only incidental to the main case. n that case, the NLRC Cagayan de Oro City declared, in passing: We also deny the claims for Muslim holiday pay for lack of factual and legal basis. Muslim holidays are legally observed within the area of jurisdiction of the present Autonomous Region for Muslim Mindanao (ARMM), particularly in the provinces of Maguindanao, Lanao del Sur, Sulu and Tawi-Tawi. t is only upon Presidential Proclamation that Muslim holidays may be officially observed outside the Autonomous Region and generally extends to Muslims to enable them the observe said holidays. The decision has no consequence to issues before us, and as aptly declared by Undersecretary Espaol, it "can never be a benchmark nor a guideline to the present case x x x. WHEREFORE, in view of the foregoing, the petition is DSMSSED. G.R. No. 114734 March 31, 2000 VVAN Y. MBUDO, petitioner, vs. NATONAL LABOR RELATONS COMMSSON, NTERNATONAL NFORMATON SERVCES, NC. and GABREL LBRANDO, respondents. BUENA, J.: This special civil action for certiorari seeks to set aside the Decision 1 of the National Labor Relations Commission (NLRC) promulgated on September 27, 1993 and its Order dated January 11, 1994, which denied petitioner's motion for reconsideration. Petitioner was employed as a data encoder by private respondent nternational nformation Services, nc., a domestic corporation engaged in the business of data encoding and keypunching, from August 26, 1988 until October 18, 1991 when her services were terminated. From August 26, 1988 until October 18, 1991, petitioner entered into thirteen (13) separate employment contracts with private respondent, each contract lasting only far a period of three (3) months. Aside from the basic hourly rate, specific job contract number and period of employment, each contract contains the following terms and conditions: a. This Contract is for a specific project/job contract only and shall be effective for the period covered as above- mentioned unless sooner terminated when the job contract is completed earlier or withdrawn by client, or when employee is dismissed for just and lawful causes provided by law. The happening of any of these events will automatically terminate this contract of employment. b. Subject shall abide with the Company's rules and regulations for its employees attached herein to form an integral part hereof. c. The nature of your job may require you to render overtime work with pay so as not to disrupt the Company's commitment of scheduled delivery dates made on said job contract.n September 1991, petitioner and twelve (12) other, employees of private respondent allegedly agreed to the filing of a petition for certification election involving the rank-and-file employees of private respondent. 3 Thus, on October 8, 1991, Lakas Manggagawa sa Pilipinas (LAKAS) filed a petition for certification election with the Bureau of Labor Relations (BLR), docketed as NCR-OD-M-9110-128. 4
Subsequently, on October 18, 1991, petitioner received a termination letter from Edna Kasilag, Administrative Officer of private respondent, allegedly "due to low volume of work." 5
Thus, on May 25, 1992, petitioner filed a complaint for illegal dismissal with prayer for service incentive leave pay and 13th month differential pay, with the National Labor Relations Commission, National Capital Region, Arbitration Branch, docketed as NLRC-NCR Case No. 05-02912-92. 6
n her position paper dated August 3, 1992 and filed before labor arbiter Raul T. Aquino, petitioner alleged that her employment was terminated not due to the alleged low volume of work but because she "signed a petition for certification election among the rank and file employees of respondents," thus charging private respondent with committing unfair labor practices. Petitioner further complained of non-payment of service incentive leave benefits and underpayment of 13th month pay. 7
On the other hand, private respondent, in its position paper filed on July 16, 1992, maintained that it had valid reasons to terminate petitioner's employment and disclaimed any knowledge of the existence or formation of a union among its rank-and-file employees at the time petitioner's services were terminated. 8 Private respondent stressed that its business ". . . relies heavily on companies availing of its services. ts retention by client companies with particular emphasis on data encoding is on a project to project basis," 9 usually lasting for a period of "two (2) to five (5) months." Private respondent further argued that petitioner's employment was for a "specific project with a specified period of engagement." According to private respondent, ". . . the certainty of the expiration of complainant's engagement has been determined at the time of their (sic) engagement (until 27 November 1991) or when the project is earlier completed or when the client withdraws," as provided in the contract. 10 "The happening of the second event [completion of the project] has materialized, thus, her contract of employment is deemed terminated per the Brent School ruling." 11 Finally, private respondent averred that petitioner's "claims for non-payment of overtime time (sic) and service incentive leave [pay] are without factual and legal basis." 12
n a decision dated August 25, 1992, labor arbiter Raul T. Aquino, ruled in favor of petitioner, and accordingly ordered her reinstatement without loss of seniority rights and privileges, and the payment of backwages and service incentive leave pay. The dispositive part of the said decision reads: WHEREFORE, responsive to the foregoing, judgment is hereby rendered ordering respondents to immediately reinstate complainant [petitioner herein] as a regular employee to her former position without loss of seniority rights and privileges and to pay backwages from the time of dismissal up to the date of this decision, the same to continue until complainant ['s] [petitioner herein] actual reinstatement from (sic) the service. Respondents are likewise ordered to pay complainant [petitioner herein] service incentive leave pay computed as follows: Backwages: 10/18/91 - 8/25/92 = 10.23 mos. P118.00 x 26 x 10.23 mos. = P31, 385.64 Service Incentive Leave Pay 1989 = P89.00 x 5 days = P445.00 1990 = 106 x 5 days = P530.00 1991 = 118 x 5 days = P590.00
P 1,565.00 Total P 32,950.64 ========= SO ORDERED. 13
n his decision, the labor arbiter found petitioner to be a regular employee, ruling that "[e]ven if herein complainant [petitioner herein] had been obstensively (sic) hired for a fixed period or for a specific undertaking, she should be considered as [a] regular employee of the respondents in conformity with the provisions (sic) laid down under Article 280 of the Labor Code," 14 after finding that ". . . [i]t is crystal clear that herein complainant [petitioner herein] performed a job which are (sic) usually necessary or desirable in the usual business of respondent [s]." 15 The labor arbiter further denounced ". . . the purpose behind the series of contracts which respondents required complainant to execute as a condition of employment was to evade the true intent and spirit of the labor laws for the workingmen . . . ." 16 Furthermore, the labor arbiter concluded that petitioner was illegally dismissed because the alleged reason for her termination, that is, low volume of work, is "not among the just causes for termination recognized by law," 17 hence, he ordered her immediate reinstatement without loss of seniority rights and with full backwages. With regard to the service incentive leave pay, the labor arbiter decided ". . . to grant the same for failure of the respondents to fully controvert said claims." 18 Lastly, the labor arbiter rejected petitioner's claim for 13th month pay ". . . since complainant [petitioner herein] failed to fully substantiate and argued (sic) the same." On appeal, the NLRC reversed the decision of the labor arbiter in a decision 20 promulgated on September 27, 1993, the dispositive part of which reads: WHEREFORE, the appealed decision is hereby set aside. The complaint for illegal dismissal is hereby dismissed for being without merit. Complainant's [petitioner herein] claim for service incentive leave pay is hereby remanded for further arbitration. SO ORDERED. 21
The NLRC ruled that "[t]here is no question that the complainant [petitioner herein], viewed in relation to said Article 280 of the [Labor] Code, is a regular employee judging from the function and/or work for which she was hired. . . . But this does not necessarily mean that the complainant [petitioner herein] has to be guaranteed a tenurial security beyond the period for which she was hired." 22 The NLRC held that ". . . the complainant [petitioner herein], while hired as a regular worker, is statutorily guaranteed, in her tenurial security, only up to the time the specific project for which she was hired is completed." 23 Hence, the NLRC concluded that "[w]ith the specific project "at RCBC 014" admittedly completed, the complainant [petitioner herein] has therefore no valid basis in charging illegal dismissal for her concomittant (sic) dislocation." 24
n an Order dated January 11, 1994, the NLRC denied petitioner's motion for reconsideration. 25
n this petition for certiorari, petitioner, for and in her behalf, argues that (1) the public respondent "committed grave abuse of discretion when it ignored the findings of Labor Arbiter Raul Aquino based on the evidence presented directly before him, and when it made findings of fact that are contrary to or not supported by evidence," 26 (2) "[p]etitioner was a "regular employee," NOT a "project employee" as found by public respondent NLRC," 27 (3) "[t]he termination of petition (sic) was tainted with unfair labor practice," 28 and (4) the public respondent "committed grave abuse of discretion in remanding the awarded service incentive leave pay for further arbitration." 29
The petition is impressed with merit. We agree with the findings of the NLRC that petitioner is a project employee. The principal test for determining whether an employee is a project employee or a regular employee is whether the project employee was assigned to carry out a specific project or undertaking, the duration and scope of which were specified at the time the employee was engaged for that project. 30 A project employee is one whose employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. 31 n the instant case, petitioner was engaged to perform activities which were usually necessary or desirable in the usual business or trade of the employer, as admittedly, petitioner worked as a data encoder for private respondent, a corporation engaged in the business of data encoding and keypunching, and her employment was fixed for a specific project or undertaking the completion or termination of which had been determined at the time of her engagement, as may be observed from the series of employment contracts 32 between petitioner and private respondent, all of which contained a designation of the specific job contract and a specific period of employment.wphi.nt However, even as we concur with the NLRC's findings that petitioner is a project employee, we have reached a different conclusion. n the recent case of Maraguinot, Jr. vs. NLRC, 33 we held that "[a] project employee or a member of a work pool may acquire the status of a regular employee when the following concur: 1) There is a continuous rehiring of project employees even after [the] cessation of a project; 34 and 2) The tasks performed by the alleged "project employee" are vital, necessary and indispensable to the usual business or trade of the employer. 35
The evidence on record reveals that petitioner was employed by private respondent as a data encoder, performing activities which are usually necessary or desirable in the usual business or trade of her employer, continuously for a period of more than three (3) years, from August 26, 1988 to October 18, 1991 36 and contracted for a total of thirteen (13) successive projects. We have previously ruled that "[h]owever, the length of time during which the employee was continuously re-hired is not controlling, but merely serves as a badge of regular employment." 37 Based on the foregoing, we conclude that petitioner has attained the status of a regular employee of private respondent. At this point, we reiterate with emphasis that: xxx xxx xxx At this time, we wish to allay any fears that this decision unduly burdens an employer by imposing a duty to re- hire a project employee even after completion of the project for which he was hired. The import of this decision is not to impose a positive and sweeping obligation upon the employer to re-hire project employees. hat this decision merely accomplishes is a judicial recognition of the employment status of a project or work pool employee in accordance with what is fait accompli, i.e., the continuous re-hiring by the employer of project or work pool employees who perform tasks necessary or desirable to the employer's usual business or trade. Let it not be said that this decision "coddles" labor, for as Lao 38 has ruled, project or work pool employees who have gained the status of regular employees are subject to the "no work-no pay" principle, to repeat: A work pool may exist although the workers in the pool do not receive salaries and are free to seek other employment during temporary breaks in the business, provided that the worker shall be available when called to report for a project. Although primarily applicable to regular seasonal workers, this set-up can likewise be applied to project workers insofar as the effect of temporary cessation of work is concerned. This is beneficial to both the employer and employee for it prevents the unjust situation of "coddling labor at the expense of capital" and at the same time enables the workers to attain the status of regular employees. The Court's ruling here is meant precisely to give life to the constitutional policy of strengthening the labor sector, but, we stress, not at the expense of management. Lest it be misunderstood, this ruling does not mean that simply because an employee is a project or work pool employee even outside the construction industry, he is deemed, ipso jure, a regular employee. All that we hold today is that once a project or work pool employee has been: () continuously, as opposed to intermittently, re-hired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee must be deemed a regular employee, pursuant to Article 280 of the Labor Code and jurisprudence. To rule otherwise would allow circumvention of labor laws in industries not falling within the ambit of Policy Instruction No. Policy Department Order No. , hence allowing the prevention of acquisition of tenurial security by project or work pool employees who have already gained the status of regular employees by the employer's conduct. 39
(emphasis supplied) Being a regular employee, petitioner is entitled to security of tenure and could only be dismissed for a just or authorized cause, as provided in Article 279 of the Labor Code, as amended: Art. 279. Security of Tenure n cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. The alleged causes of petitioner's dismissal (low volume of work and belatedly, completion of project) are not valid causes for dismissal under Articles 282 and 283 of the Labor Code. Thus, petitioner is entitled to reinstatement without loss of seniority rights and other privileges, and to her full backwages, inclusive of allowances, and to her other benefits or their monetary equivalent computed from the time her compensation was withheld from her up to the time of her actual reinstatement. However, complying with the principles of "suspension of work" and "no work, no pay" between the end of one project and the start of a new one, in computing petitioner's backwages, the amounts corresponding to what could have been earned during the periods from the date petitioner was dismissed until her reinstatement when private respondent was not undertaking any project, should be deducted. With regard to petitioner's claim for service incentive leave pay, we agree with the labor arbiter that petitioner is entitled to service incentive leave pay, as provided in Article 95 of the Labor Code, which reads: Art. 95 Right to service incentive leave (a) Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay. xxx xxx xxx Having already worked for more than three (3) years at the time of her unwarranted dismissal, petitioner is undoubtedly entitled to service incentive leave benefits, computed from 1989 until the date of her actual reinstatement. As we ruled in the recent case of Fernandez vs. NLRC, 40 "[s]ince a service incentive leave is clearly demandable after one year of service whether continuous or broken or its equivalent period, and it is one of the "benefits" which would have accrued if an employee was not otherwise illegally dismissed, it is fair and legal that its computation should be up to the date of reinstatement as provided under Section [Article] 279 of the Labor Code, as amended, which reads: Art. 279. Security of Tenure. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation is withheld from him up to the time of his actual reinstatement." (emphasis supplied). WHEREFORE, the instant petition is GRANTED. The assailed decision of the National Labor Relations Commission in NLRC NCR CA No. 003845-92 dated September 27, 1993, as well as its Order dated January 11, 1994, are hereby ANNULLED and SET ASDE for having been rendered with grave abuse of discretion, and the decision of the Labor Arbiter in NLRC NCR Case No. 05-02912-92 is RENSTATED with MODFCATON as above-stated, with regard to computation of back wages and service incentive leave pay.wphi.nt
Fernandez v. Nlrc
G.R. No. 152427. August 9, 2005 NTEGRATED CONTRACTOR AND PLUMBNG WORKS, NC., Petitioners, vs. NATONAL LABOR RELATONS COMMSSON and GLEN SOLON, Respondent. D E C S O N QUSUMBNG, J.: This petition for review assails the Decision 1 dated October 30, 2001 of the Court of Appeals and its Resolution 2 dated February 28, 2002 in CA-G.R. SP No. 60136, denying the petitioner's motion for reconsideration for lack of merit. The decision affirmed the National Labor Relations Commission (NLRC) which declared private respondent Glen Solon a regular employee of the petitioner and awarded him 13th month pay, service incentive leave pay, reinstatement to his former position with full backwages from the time his salary was withheld until his reinstatement. Petitioner is a plumbing contractor. ts business depends on the number and frequency of the projects it is able to contract with its clients. 3
Private respondent Solon worked for petitioner. His employment records is as follows: December 14, 1994 up to January 14, 1995 St. Charbel Warehouse February 1, 1995 up to April 30, 1995 St. Charbel Warehouse May 23, 1995 up to June 23, 1995 St. Charbel Warehouse August 15, 1995 up to October 31, 1995 St. Charbel Warehouse November 2, 1995 up to January 31, 1996 St. Charbel Warehouse May 13, 1996 up to June 15, 1996 Ayala Triangle August 27, 1996 up to November 30, 1996 St. Charbel Warehouse 4
July 14, 1997 up to November 1997 CPW Warehouse November 1997 up to January 5, 1998 Cathedral Heights January 6, 1998 Rockwell Center 5
On February 23, 1998, while private respondent was about to log out from work, he was informed by the warehouseman that the main office had instructed them to tell him it was his last day of work as he had been terminated. When private respondent went to the petitioner's office on February 24, 1998 to verify his status, he found out that indeed, he had been terminated. He went back to petitioner's office on February 27, 1998 to sign a clearance so he could claim his 13th month pay and tax refunds. However, he had second thoughts and refused to sign the clearance when he read the clearance indicating he had resigned. On March 6, 1998, he filed a complaint alleging that he was illegally dismissed without just cause and without due process. 6
n a Decision dated February 26, 1999, the Labor Arbiter ruled that private respondent was a regular employee and could only be removed for cause. Petitioner was ordered to reinstate private respondent to his former position with full backwages from the time his salary was withheld until his actual reinstatement, and pay him service incentive leave pay, and 13th month pay for three years in the amount of P2,880 and P14,976, respectively. Petitioner appealed to the National Labor Relations Commission (NLRC), which ruled: WHEREFORE, prescinding from the foregoing and in the interest of justice, the decision of the Labor Arbiter is hereby AFFRMED with a MODFCATON that the 13th month pay should be given only for the year 1997 and portion of 1998. Backwages shall be computed from the time he was illegally dismissed up to the time of his actual reinstatement. Likewise, service incentive leave pay for three (3) years is also awarded to appellee in the amount of P2,880.00. SO ORDERED. 7
Petitioner's Motion for Reconsideration was denied. 8
Petitioner appealed to the Court of Appeals, alleging that the NLRC committed grave abuse of discretion in finding that the private respondent was a regular employee and in awarding 13th month pay, service incentive leave pay, and holiday pay to the private respondent despite evidence of payment. The said petition was dismissed for lack of merit. 9
Before us now, petitioner raises the following issues: (1) Whether the respondent is a project employee of the petitioner or a regular employee; and (2) Whether the Court of Appeals erred seriously in awarding 13th month pay for the entire year of 1997 and service incentive leave pay to the respondent and without taking cognizance of the evidence presented by petitioner. 10
The petitioner asserts that the private respondent was a project employee. Thus, when the project was completed and private respondent was not re-assigned to another project, petitioner did not violate any law since it was petitioner's discretion to re-assign the private respondent to other projects. 11
Article 280 of the Labor Code states: The provisions of written agreement of the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. (talics supplied.) We held in Tomas Lao Construction v. NLRC 12 that the principal test in determining whether an employee is a "project employee" or "regular employee," is, whether he is assigned to carry out a "specific project or undertaking," the duration (and scope) of which are specified at the time the employee is engaged in the project. 13 "Project" refers to a particular job or undertaking that is within the regular or usual business of the employer, but which is distinct and separate and identifiable from the undertakings of the company. Such job or undertaking begins and ends at determined or determinable times. 14
n our review of the employment contracts of private respondent, we are convinced he was initially a project employee. The services he rendered, the duration and scope of each project are clear indications that he was hired as a project employee. We concur with the NLRC that while there were several employment contracts between private respondent and petitioner, in all of them, private respondent performed tasks which were usually necessary or desirable in the usual business or trade of petitioner. A review of private respondent's work assignments patently showed he belonged to a work pool tapped from where workers are and assigned whenever their services were needed. n a work pool, the workers do not receive salaries and are free to seek other employment during temporary breaks in the business. They are like regular seasonal workers insofar as the effect of temporary cessation of work is concerned. This arrangement is beneficial to both the employer and employee for it prevents the unjust situation of "coddling labor at the expense of capital" and at the same time enables the workers to attain the status of regular employees. 15 Nonetheless, the pattern of re- hiring and the recurring need for his services are sufficient evidence of the necessity and indispensability of such services to petitioner's business or trade. 16
n Maraguinot, Jr. v. NLRC 17 we ruled that once a project or work pool employee has been: (1) continuously, as opposed to intermittently, re-hired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee must be deemed a regular employee. n this case, did the private respondent become a regular employee then? The test to determine whether employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. Also, if the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability of that activity to the business. 18 Thus, we held that where the employment of project employees is extended long after the supposed project has been finished, the employees are removed from the scope of project employees and are considered regular employees. 19
While length of time may not be the controlling test for project employment, it is vital in determining if the employee was hired for a specific undertaking or tasked to perform functions vital, necessary and indispensable to the usual business or trade of the employer. Here, private respondent had been a project employee several times over. His employment ceased to be coterminous with specific projects when he was repeatedly re-hired due to the demands of petitioner's business. 20 Where from the circumstances it is apparent that periods have been imposed to preclude the acquisition of tenurial security by the employee, they should be struck down as contrary to public policy, morals, good customs or public order. 21
Further, Policy nstructions No. 20 requires employers to submit a report of an employee's termination to the nearest public employment office every time his employment was terminated due to a completion of a project. The failure of the employer to file termination reports is an indication that the employee is not a project employee. 22 Department Order No. 19 superseding Policy nstructions No. 20 also expressly provides that the report of termination is one of the indications of project employment. 23 n the case at bar, there was only one list of terminated workers submitted to the Department of Labor and Employment. 24 f private respondent was a project employee, petitioner should have submitted a termination report for every completion of a project to which the former was assigned. Juxtaposing private respondent's employment history, vis the requirements in the test to determine if he is a regular worker, we are constrained to say he is. As a regular worker, private respondent is entitled to security of tenure under Article 279 of the Labor Code 25
and can only be removed for cause. We found no valid cause attending to private respondent's dismissal and found also that his dismissal was without due process. Additionally, Article 277(b) of the Labor Code provides that ... Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. The failure of the petitioner to comply with these procedural guidelines renders its dismissal of private respondent, illegal. An illegally dismissed employee is entitled to reinstatement with full backwages, inclusive of allowances, and to his other benefits computed from the time his compensation was withheld from him up to the time of his actual reinstatement, pursuant to Article 279 of the Labor Code. However, we note that the private respondent had been paid his 13th month pay for the year 1997. The Court of Appeals erred in granting the same to him. Article 95(a) of the Labor Code governs the award of service incentive leave. t provides that every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay, and Section 3, Rule V, Book of the mplementing Rules and Regulations, defines the term "at least one year of service" to mean service within 12 months, whether continuous or broken reckoned from the date the employee started working, including authorized absences and paid regular holidays, unless the working days in the establishment as a matter of practice or policy, or that provided in the employment contract is less than 12 months, in which case said period shall be considered as one year. Accordingly, private respondent's service incentive leave credits of five days for every year of service, based on the actual service rendered to the petitioner, in accordance with each contract of employment should be computed up to the date of reinstatement pursuant to Article 279 of the Labor Code. 26
WHEREFORE, the assailed Decision dated October 30, 2001 and the Resolution dated February 28, 2002 of the Court of Appeals in CA-G.R. SP No. 60136, are AFFRMED with MODFCATON. The petitioner is hereby ORDERED to (1) reinstate the respondent with no loss of seniority rights and other privileges; and (2) pay respondent his backwages, 13th month pay for the year 1998 and Service ncentive Leave Pay computed from the date of his illegal dismissal up to the date of his actual reinstatement. Costs against petitioner. SO ORDERED. G.R. No. 151966 July 8, 2005 JPL MARKETNG PROMOTONS, Petitioner, vs. COURT OF APPEALS, NATONAL LABOR RELATONS COMMSSON, NOEL GONZALES, RAMON ABESA and FAUSTNO ANNPOT, Respondents. D E C S O N Tinga, J.: This is a petition for review of the Decision 1 of the Court of Appeals in CA-G.R. SP No. 62631 dated 03 October 2001 and its Resolution 2 dated 25 January 2002 denying petitioner's Motion for Reconsideration, affirming the Resolution of the National Labor Relations Commission (NLRC), Second Division, dated 27 July 2000, awarding separation pay, service incentive leave pay, and 13th month pay to private respondents. JPL Marketing and Promotions (hereinafter referred to as "JPL") is a domestic corporation engaged in the business of recruitment and placement of workers. On the other hand, private respondents Noel Gonzales, Ramon Abesa and Faustino Aninipot were employed by JPL as merchandisers on separate dates and assigned at different establishments in Naga City and Daet, Camarines Norte as attendants to the display of California Marketing Corporation (CMC), one of petitioner's clients. On 13 August 1996, JPL notified private respondents that CMC would stop its direct merchandising activity in the Bicol Region, sabela, and Cagayan Valley effective 15 August 1996. 3 They were advised to wait for further notice as they would be transferred to other clients. However, on 17 October 1996, 4 private respondents Abesa and Gonzales filed before the National Labor Relations Commission Regional Arbitration Branch (NLRC) Sub V complaints for illegal dismissal, praying for separation pay, 13th month pay, service incentive leave pay and payment for moral damages. 5 Aninipot filed a similar case thereafter. After the submission of pertinent pleadings by all of the parties and after some clarificatory hearings, the complaints were consolidated and submitted for resolution. Executive Labor Arbiter Gelacio L. Rivera, Jr. dismissed the complaints for lack of merit. 6 The Labor Arbiter found that Gonzales and Abesa applied with and were employed by the store where they were originally assigned by JPL even before the lapse of the six (6)- month period given by law to JPL to provide private respondents a new assignment. Thus, they may be considered to have unilaterally severed their relation with JPL, and cannot charge JPL with illegal dismissal. 7 The Labor Arbiter held that it was incumbent upon private respondents to wait until they were reassigned by JPL, and if after six months they were not reassigned, they can file an action for separation pay but not for illegal dismissal. 8 The claims for 13th month pay and service incentive leave pay was also denied since private respondents were paid way above the applicable minimum wage during their employment. 9
Private respondents appealed to the NLRC. n its Resolution, 10 the Second Division of the NLRC agreed with the Labor Arbiter's finding that when private respondents filed their complaints, the six-month period had not yet expired, and that CMC's decision to stop its operations in the areas was beyond the control of JPL, thus, they were not illegally dismissed. However, it found that despite JPL's effort to look for clients to which private respondents may be reassigned it was unable to do so, and hence they are entitled to separation pay. 11
Setting aside the Labor Arbiter's decision, the NLRC ordered the payment of: 1. Separation pay, based on their last salary rate and counted from the first day of their employment with the respondent JPL up to the finality of this judgment; 2. Service ncentive Leave pay, and 13th month pay, computed as in No.1 hereof. 12
Aggrieved, JPL filed a petition for certiorari under Rule 65 of the Rules of Court with the Court of Appeals, imputing grave abuse of discretion on the part of the NLRC. t claimed that private respondents are not by law entitled to separation pay, service incentive leave pay and 13th month pay. The Court of Appeals dismissed the petition and affirmed in toto the NLRC resolution. While conceding that there was no illegal dismissal, it justified the award of separation pay on the grounds of equity and social justice. 13 The Court of Appeals rejected JPL's argument that the difference in the amounts of private respondents' salaries and the minimum wage in the region should be considered as payment for their service incentive leave and 13th month pay. 14 Notwithstanding the absence of a contractual agreement on the grant of 13th month pay, compliance with the same is mandatory under the law. Moreover, JPL failed to show that it was exempt from paying service incentive leave pay. JPL filed a motion for reconsideration of the said resolution, but the same was denied on 25 January 2002. 15
n the instant petition for review, JPL claims that the Court of Appeals committed reversible error in rendering the assailed Decision and Resolution. 16 The instant case does not fall under any of the instances where separation pay is due, to wit: installation of labor-saving devices, redundancy, retrenchment or closing or cessation of business operation, 17 or disease of an employee whose continued employment is prejudicial to him or co-employees, 18 or illegal dismissal of an employee but reinstatement is no longer feasible. 19
Meanwhile, an employee who voluntarily resigns is not entitled to separation unless stipulated in the employment contract, or the collective bargaining agreement, or is sanctioned by established practice or policy of the employer. 20 t argues that private respondents' good record and length of service, as well as the social justice precept, are not enough to warrant the award of separation pay. Gonzales and Aninipot were employed by JPL for more than four (4) years, while Abesa rendered his services for more than two (2) years, hence, JPL claims that such short period could not have shown their worth to JPL so as to reward them with payment of separation pay. 21
n addition, even assuming arguendo that private respondents are entitled to the benefits awarded, the computation thereof should only be from their first day of employment with JPL up to 15 August 1996, the date of termination of CMC's contract, and not up to the finality of the 27 July 2000 resolution of the NLRC. 22 To compute separation pay, 13th month pay, and service incentive leave pay up to 27 July 2000 would negate the findings of both the Court of Appeals and the NLRC that private respondents were not unlawfully terminated. 23
Additionally, it would be erroneous to compute service incentive leave pay from the first day of their employment up to the finality of the NLRC resolution since an employee has to render at least one (1) year of service before he is entitled to the same. Thus, service incentive leave pay should be counted from the second year of service. 24
On the other hand, private respondents maintain that they are entitled to the benefits being claimed as per the ruling of this Court in Serrano v. NLRC, et al. 25 They claim that their dismissal, while not illegal, was tainted with bad faith. 26 They allege that they were deprived of due process because the notice of termination was sent to them only two (2) days before the actual termination. 27
Likewise, the most that JPL offered to them by way of settlement was the payment of separation pay of seven (7) days for every year of service. 28
Replying to private respondents' allegations, JPL disagrees that the notice it sent to them was a notice of actual termination. The said memo merely notified them of the end of merchandising for CMC, and that they will be transferred to other clients. 29 Moreover, JPL is not bound to observe the thirty (30)-day notice rule as there was no dismissal to speak of. JPL counters that it was private respondents who acted in bad faith when they sought employment with another establishment, without even the courtesy of informing JPL that they were leaving for good, much less tender their resignation. 30 n addition, the offer of seven (7) days per year of service as separation pay was merely an act of magnanimity on its part, even if private respondents are not entitled to a single centavo of separation pay. 31
The case thus presents two major issues, to wit: whether or not private respondents are entitled to separation pay, 13th month pay and service incentive leave pay, and granting that they are so entitled, what should be the reckoning point for computing said awards. Under Arts. 283 and 284 of the Labor Code, separation pay is authorized only in cases of dismissals due to any of these reasons: (a) installation of labor saving devices; (b) redundancy; (c) retrenchment; (d) cessation of the employer's business; and (e) when the employee is suffering from a disease and his continued employment is prohibited by law or is prejudicial to his health and to the health of his co-employees. However, separation pay shall be allowed as a measure of social justice in those cases where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character, but only when he was illegally dismissed. 32 n addition, Sec. 4(b), Rule , Book V of the mplementing Rules to mplement the Labor Code provides for the payment of separation pay to an employee entitled to reinstatement but the establishment where he is to be reinstated has closed or has ceased operations or his present position no longer exists at the time of reinstatement for reasons not attributable to the employer. The common denominator of the instances where payment of separation pay is warranted is that the employee was dismissed by the employer. 33 n the instant case, there was no dismissal to speak of. Private respondents were simply not dismissed at all, whether legally or illegally. What they received from JPL was not a notice of termination of employment, but a memo informing them of the termination of CMC's contract with JPL. More importantly, they were advised that they were to be reassigned. At that time, there was no severance of employment to speak of. Furthermore, Art. 286 of the Labor Code allows the bona fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months, wherein an employee/employees are placed on the so- called "floating status." When that "floating status" of an employee lasts for more than six months, he may be considered to have been illegally dismissed from the service. Thus, he is entitled to the corresponding benefits for his separation, and this would apply to suspension either of the entire business or of a specific component thereof. 34
As clearly borne out by the records of this case, private respondents sought employment from other establishments even before the expiration of the six (6)- month period provided by law. As they admitted in their comment, all three of them applied for and were employed by another establishment after they received the notice from JPL. 35 JPL did not terminate their employment; they themselves severed their relations with JPL. Thus, they are not entitled to separation pay. The Court is not inclined in this case to award separation pay even on the ground of compassionate justice. The Court of Appeals relied on the cases 36 wherein the Court awarded separation pay to legally dismissed employees on the grounds of equity and social consideration. Said cases involved employees who were actually dismissed by their employers, whether for cause or not. Clearly, the principle applies only when the employee is dismissed by the employer, which is not the case in this instance. n seeking and obtaining employment elsewhere, private respondents effectively terminated their employment with JPL. n addition, the doctrine enunciated in the case of Serrano 37 cited by private respondents has already been abandoned by our ruling in Agabon v. National Labor Relations Commission. 38 There we ruled that an employer is liable to pay indemnity in the form of nominal damages to a dismissed employee if, in effecting such dismissal, the employer failed to comply with the requirements of due process. However, private respondents are not entitled to the payment of damages considering that there was no violation of due process in this case. JPL's memo dated 13 August 1996 to private respondents is not a notice of termination, but a mere note informing private respondents of the termination of CMC's contract and their re-assignment to other clients. The thirty (30)-day notice rule does not apply. Nonetheless, JPL cannot escape the payment of 13th month pay and service incentive leave pay to private respondents. Said benefits are mandated by law and should be given to employees as a matter of right. Presidential Decree No. 851, as amended, requires an employer to pay its rank and file employees a 13th month pay not later than 24 December of every year. However, employers not paying their employees a 13th month pay or its equivalent are not covered by said law. 39 The term "its equivalent" was defined by the law's implementing guidelines as including Christmas bonus, mid-year bonus, cash bonuses and other payment amounting to not less than 1/12 of the basic salary but shall not include cash and stock dividends, cost-of-living- allowances and all other allowances regularly enjoyed by the employee, as well as non-monetary benefits. 40
On the other hand, service incentive leave, as provided in Art. 95 of the Labor Code, is a yearly leave benefit of five (5) days with pay, enjoyed by an employee who has rendered at least one year of service. Unless specifically excepted, all establishments are required to grant service incentive leave to their employees. The term "at least one year of service" shall mean service within twelve (12) months, whether continuous or broken reckoned from the date the employee started working. 41
The Court has held in several instances that "service incentive leave is clearly demandable after one year of service." 42
Admittedly, private respondents were not given their 13th month pay and service incentive leave pay while they were under the employ of JPL. nstead, JPL provided salaries which were over and above the minimum wage. The Court rules that the difference between the minimum wage and the actual salary received by private respondents cannot be deemed as their 13th month pay and service incentive leave pay as such difference is not equivalent to or of the same import as the said benefits contemplated by law. Thus, as properly held by the Court of Appeals and by the NLRC, private respondents are entitled to the 13th month pay and service incentive leave pay. However, the Court disagrees with the Court of Appeals' ruling that the 13th month pay and service incentive leave pay should be computed from the start of employment up to the finality of the NLRC resolution. While computation for the 13th month pay should properly begin from the first day of employment, the service incentive leave pay should start a year after commencement of service, for it is only then that the employee is entitled to said benefit. On the other hand, the computation for both benefits should only be up to 15 August 1996, or the last day that private respondents worked for JPL. To extend the period to the date of finality of the NLRC resolution would negate the absence of illegal dismissal, or to be more precise, the want of dismissal in this case. Besides, it would be unfair to require JPL to pay private respondents the said benefits beyond 15 August 1996 when they did not render any service to JPL beyond that date. These benefits are given by law on the basis of the service actually rendered by the employee, and in the particular case of the service incentive leave, is granted as a motivation for the employee to stay longer with the employer. There is no cause for granting said incentive to one who has already terminated his relationship with the employer. The law in protecting the rights of the employees authorizes neither oppression nor self-destruction of the employer. t should be made clear that when the law tilts the scale of justice in favor of labor, it is but recognition of the inherent economic inequality between labor and management. The intent is to balance the scale of justice; to put the two parties on relatively equal positions. There may be cases where the circumstances warrant favoring labor over the interests of management but never should the scale be so tilted if the result is an injustice to the employer. Justitia nemini neganda est (Justice is to be denied to none). 43
WHEREFORE, the petition is GRANTED N PART. The Decision and Resolution of the Court of Appeals in CA- G.R. SP No. 62631 are hereby MODFED. The award of separation pay is deleted. Petitioner is ordered to pay private respondents their 13th month pay commencing from the date of employment up to 15 August 1996, as well as service incentive leave pay from the second year of employment up to 15 August 1996. No pronouncement as to costs. G.R. No. 117460 January 6, 1997 REPUBLC PLANTERS BANK now known as PNB-REPUBLC BANK, petitioner, vs. NATONAL LABOR RELATONS COMMSSON and ANTONO G. SANTOS, respondents. BELLOSLLO, J.: ANTONO G. SANTOS was employed by Republic Planters Bank, now known as PNB-Republic Bank (PNB-RB), for thirty-one (31) years and fifteen (15) days occupying various positions. At the time of his retirement on 31 May 1990 he was a Department Manager with a monthly salary of P8,965.00 and accumulated leave credits of two hundred and seventy-two (272) days. He received a gratuity pay of P434,468.52 out of which P20,615.62 was deducted for taxes due. Santos filed the instant suit for underpayment of gratuity pay, non-payment of accumulated sick and vacation leaves, mid-year and year-end bonuses, financial assistance, at the same time claiming damages and attorney's fees. The Labor Arbiter found for complainant Santos and this finding was affirmed by the National Labor Relations Commission (NLRC) on appeal. PNB-RB alleges in this petition that the resolution of NLRC is contrary to the evidence and existing jurisprudence; that NLRC gravely abused its discretion when it upheld the order of the Labor Arbiter awarding P661,210.63 to Santos; and, that the award to Santos of mid-year and year-end bonuses, moral and exemplary damages and attorney's fees has no legal basis. Petitioner argues that Santos is not entitled to the award as he signed a Release, aiver and Quitclaim therefor when he received his gratuity pay of P434,468.52. We are not unaware that a quitclaim by an employee in favor of his employer amounts to a valid and binding compromise agreement between them. 1 An agreement voluntarily entered into which represents a reasonable settlement is binding on the parties and may not later be disowned simply because of a change of mind. 2
On the other hand, we are not also unmindful of the principle that quitclaims are ineffective to bar recovery for the full measure of the worker's rights 3 and that acceptance thereof does not amount to estoppel. 4
Generally, quitclaims by laborers are frowned upon as contrary to public policy. 5 And the fact that the consideration given in exchange thereof was very much less than the amount claimed renders the quitclaim null and void. 6 n the instant case, the total amount claimed by Santos is P908,022.65 of which only P434,468.52 was received by him. Considering that the Release, aiver and Quitclaim was signed by Santos under protest as found by the Labor Arbiter and the NLRC, and the difference between the amount claimed and that paid cannot in any way be considered negligible, we deem it proper to recompute and determine the exact amount of the retirement benefits due private respondent. We perceive the waiver under the facts of the case to dangerously encroach on the entrenched domain of public policy. Petitioner invokes Periquet v. National Labor Relations Commission 7 to thwart private respondent's claim. Unfortunately, the case does not provide the desired relief. n Periquet, the consideration for the quitclaim was found to be credible and reasonable. n the case before us, we are unable to make such finding for the difference involved is considerably big and substantial. The total of the claim is P908,022.65. Deducting therefrom the amount of P434,468.52 already received by respondent Santos leaves a difference of P473,554.13 which is even more than what he had been given. PNB-RB avers that the NLRC gravely abused its discretion when it computed the gratuity pay of Santos at P661,210.63 based on the salary rate of the next higher rank on the theory that he acquired a vested right over it pursuant to the 1971-1973 Collective Bargaining Agreement (CBA). Petitioner posits that as the CBA had long expired it could no longer be used as basis in computing the gratuity pay of its retiring officers; instead, the computation should be based on the practice and policy of the bank effective at the time of the employee's retirement. We cannot agree. Not so long ago we resolved exactly the same issues in Republic Planters Bank v. National Labor Relations Commissions 8 which, coincidentally, emanated from a similar set of facts. n that case, Macario de Guzman resigned from PNB-RB on 3 June 1985. The following day he filed a complaint with the Department of Labor and Employment for underpayment of gratuity pay, underpayment of unused leaves and non-payment of accrued leave credits. De Guzman bewailed the erroneous computation of his gratuity pay and the cash value of his accumulated leave credits, and maintained that it should have been based on the provisions of the 1971-1973 CBA instead of the 1982- 1985 CBA entered into between PNB-RB and its rank- and-file employees. n finding for de Guzman we ruled
Prior to private respondent's resignation, there were other managerial employees who resigned and/or retired from petitioner's employ who received their corresponding gratuity benefits and the cash value of their accumulated leave credits pursuant to the provisions of the old CBA of 1971-73 despite its expiration in 1976. Among them were Simplicio Manalo and Miguel Calimbas who resigned on 15 March 1977 and 15 July 1978, respectively. With such a practice and policy, petitioner cannot refuse to pay private respondent his gratuity benefits under the old CBA. Under Section 14(a), Rule 1 of the Rules and Regulations mplementing Book V of the Labor Code, it is provided: Sec. 14. Retirement Benefits. (a) An employee who is retired pursuant to a bonafide retirement plan or in accordance with the applicable individual or collective agreement or established employer policy shall be entitled to all the retirement benefits provided therein . . . (Emphasis supplied). The foregoing provision explicitly states that a company practice or policy is a labor standard in determining the retirement benefits of its employees. The petitioner's theory that the computation of the benefits of private respondent should be based on the 1982-85 CBA which was the one enforced at the time of his resignation is untenable. Said CBA was entered into by petitioner with its rank-and-file employees. Private respondent is a managerial employee who, by express provision of law, is excepted from the coverage of the aforesaid contract. Private respondent was not a party thereto and could not be bound thereby. Since no new CBA had been entered into between the managerial employees and petitioner upon the expiration of the said 1971-73 CBA, private respondent has acquired a vested right to the said established policy of petitioner in applying the 1971-73 CBA to retiring or resigning executives of managerial employees. Such right cannot be curtailed or diminished. 9
We maintain the same dictum in the case before us. PNB-RB insists on disowning any practice or policy of granting gratuity pay to its retiring officers based on the salary rate of the next higher rank. t admitted however that it granted gratuity pay on the basis of the salary rate of the next higher rank but only in the case of Simplicio Manalo. As to other instances when it granted gratuity pay based on the salary rate of the next higher rank, PNB-RB explains that those were not voluntarily done but were in lawful compliance with court orders. PNB-RB asserts that our findings in the Republic Planters Bank v. National Labor Relations Commission 10 were definitely erroneous as they were contrary to law and the facts of the case. Thus, the error should not be perpetuated. 11
A punctilious perusal of the records leads us to the same conclusion, i.e., that PNB-RB has adopted the policy of granting gratuity benefits to its retiring officers based on the salary rate of the next higher rank. t continued to adopt this practice even after the expiration of the 1971- 1973 CBA. The grant was consistent and deliberate although petitioner knew fully well that it was not required to give the benefits after the expiration of the 1971-1973 CBA. Under these circumstances, the granting of the gratuity pay on the basis of the salary rate of the rank next higher may be deemed to have ripened into company practice or policy which can no longer be peremptorily withdrawn. 12 Any benefit and supplement being enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by the employer by virtue of Sec. 10 of the Rules and Regulations mplementing P.D. No. 851 and Art. 100 of the Labor Code which prohibit the diminution or elimination by the employer of the employees' existing benefits. 13 Leave credits should likewise be computed based on the upgraded salary rate, i.e., the salary rate of the next higher rank in conformity with the provisions of the 1971-1973 CBA which in part read Sec. 14. The Bank agrees to grant to each regular supervisor employee upon his retirement, resignation or separation without cause after July 1, 1969, the following benefits: a) Gratuity pay equivalent to one (1) month salary plus the corresponding living allowance of the rank next higher than the rank of such supervisor at the time of his retirement, resignation or separation without cause, for every year of service in the Bank, provided that the said supervisor has at least five (5) years of continuous service with the Bank. b) The cash equivalent of the accumulated sick and vacation leaves since the time of his initial employment with the Bank. 14
Under this section, only the gratuity pay is expressly entitled to be computed based on the salary rate of the rank next higher. This however should not be interpreted in isolation. n this instance, it may be worth to look into the reasons which motivated the parties to enter into the above agreement. The conversion of leave credits into their cash equivalent is aimed primarily to encourage workers to work continuously and with dedication for the company. Companies offer incentives, such as the conversion of the accumulated leave credits into their cash equivalent, to lure employees to stay with the company. Leave credits are normally converted into their cash equivalent based on the last prevailing salary received by the employee. Considering all these, the accumulated leave credits should be converted based on the upgraded salary of the retiree, which is the salary rate of the rank next higher. PNB-RB avers that it has sufficiently established that the salary of an officer is pegged to a minimum or maximum depending on his performance appraisal in accordance with the Executive Compensation Salary Structure 15
(ECSS) effective 1 May 1987. Since Santos' latest performance rating was only satisfactory, his gratuity pay should be based on the minimum and not on the maximum amount of the rate of the salary of the rank next higher. n this regard, we quote with approval the Comment of the Solicitor General that Nothing in the provisions of the 1971 CBA from which emanated the one rank higher policy indicates a minimum or maximum range of the next higher rank. nstead, what is provided is an unqualified one rank higher concept. Petitioner is, therefore, precluded from drawing a distinction where none has been stated in the contract. Besides, assuming that an ambiguity does exist, the same must be resolved in the light of Article 1702 of the Civil Code that: n case of doubt, the labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer. Such should be liberally construed in favor of the persons intended to be benefited thereby. Moreover, petitioner, by invoking the salary structure and criteria for promotion as basis for determining the amount of gratuity has confused the two distinct concepts of gratuity and salary. Gratuity pay, unlike salary, is paid to the beneficiary for the past services or favor rendered purely out of the generosity of the giver or grantor. Gratuity, therefore, is not intended to pay a worker for actual services rendered or for actual performance. t is a money benefit or bounty given to the worker, the purpose of which is to reward employees who have rendered satisfactory service to the company. Salary, on the other hand, is a part of labor standard law based on the actual amount of work rendered or the number of days worked over the period of years. Hence, petitioner's attempt to apply the salary structure to determine gratuity would eradicate the very essence of a gratuity award, and make it partake of the character of a wage or salary given on the basis of actual work or performance. Such was never the intendment of the law and would run counter to essential social justice. 16
Additionally, computing the gratuity pay based on the performance rating of the retiring officer is a practice that is very likely susceptible to abuse as he will be placed at the mercy of the members of the performance appraisal committee. Petitioner argues that the claim of Santos for bonuses corresponding to the years 1985, 1986 and mid-year of 1987 has already prescribed. This is correct. Article 291 of the Labor Code states in part All money claims arising from employer-employee relations accruing during the effectivity of this Code shall be filed within three (3) years from the time the cause of action accrued; otherwise they shall be forever barred. Since Santos filed his complaint only on 12 July 1990, his claim for 1985 (mid-year and year-end), 1986 (mid- year and year-end), and 1987 (mid-year) bonuses already prescribed. As regards bonuses for 1987 (year- end), 1988 (mid-year and year-end), 1989 (mid-year and year-end), and 1990 (mid-year), we agree with petitioner that these should be based on the existing salary rate at the time of their accrual. The record shows however that in 1988 Santos was found guilty of an administrative charge. Hence, in consonance with existing company policy, the 1988 (mid-year and year-end) bonus should be forfeited in favor of the Bank. 17
As regards the award of moral and exemplary damages, as well as attorney's fees, we quote with approval the Comment of private respondent thus On the matter of moral and exemplary damages, the same is a must considering that petitioner is guilty of bad faith by its continued refusal to pay his claims despite the final rulings of the Supreme Court in similar other cases earlier cited. By refusing to abide by the doctrinal pronouncements of the Highest Tribunal, petitioner has shown to be anti-labor. This stubborn attitude is not only contemptible but also contrary to morals, good customs and public policy. Regardless of its own thinking on the issues presented vis-a-vis the judicial pronouncements already made, petitioner is duty-bound to respect the Supreme Court decisions which have become part of the law of the land. Consequently, private respondent had suffered mental anguish and sleepless nights and therefore, should be entitled to moral damages. And to serve as example for the public good so that others similarly inclined could be dissuaded from adopting the same detestable practice, petitioner should also be sanctioned in the form of exemplary damages. n addition, petitioner had continuously and openly declared that it will continuously deny the existence of said policy as it was based on erroneous assumption of facts, and private respondent is not at all surprised that petitioner has been throwing all kinds of blockade or obstacle, so as to stop a snowball application of the Supreme Court decision. Such act of the petitioner of arrogantly defying a well-laid down jurisprudence on the issue at hand (resulted) to the great prejudice of private respondent's interest. The delay on the part of the petitioner to rectify its error and grant private respondent what is really due him must have certainly caused undue damages on the part of the latter. Such defiant attitude does not really set good example on how one should abide by the decision of the highest tribunal of the land. xxx xxx xxx Private respondent has been dragged into this case because petitioner refuses and arrogantly defies the doctrine of stare decisis that had long set in, compelling private respondent to litigate. n this regard, private respondent's award for attorney's fees is proper. 18
ACCORDNGLY, the 30 June 1993 Decision of the Labor Arbiter and the 30 August 1994 Resolution of the National Labor Relations Commission are AFFRMED with the modification that petitioner PNB-REPUBLC BANK is ordered to pay private respondent Antonio G. Santos the amount of P423,661.00, less the applicable taxes, computed as follows: Basic gratuity Day: Applicable monthly rate (P15,840.00) x length of service (31 years and 15 days) = P15,840.00 x 31 years P491,040.00 P15,840.00 x 15/251 days 946.00
P491,986.00 Leave credits: P15,840 x 272 x 12/251 205,983.00 Accrued Bonuses: 1987-year-end only P1,300.00 19
G.R. No. 159208 - Rennie Declarador Vs Hon. Salvador S. Gubaton, Et Al. - August 2006 - Philippine Supreme Court Jurisprudence - Chanrobles Virtual Law Library